Are AAA Hardcore Games Doomed?
The costs involved in making profitable, top-notch video games has created a very small niche of companies prepared or able to carry the enormous risks involved. Studios are being closed or radically downsized on a regular basis. Retail console games are operating in an ever-decreasing circle of genres and franchises.
This long console generation is slowly coming to a halt. But with free-to-play in the water, as well as mobile, PC games, and an ever-expanding choice of digital entertainment offerings, the next generation looks to be incredibly risky — most especially for those who’ll be paying up to $100 million per game release to get on board.
In this generation the average two-SKU (Xbox 360 and PlayStation 3) game is costing $20 million plus, and needs to sell about 2 million copies to be profitable. (We’re working with broad strokes, here). But, increasingly, the average games are the ones that lose money, while more ambitious projects seek to hit big. Games can now cost $50 million or even $100 million to develop.
Those costs are likely to increase in the next generation, as developers get to grips with new technology and seek to take advantage of greater capacity.
This is all happening at a time when AAA hardcore gaming is under attack from all quarters. a recent report from DFC Intelligence predicted that the games business would grow over the next five years, from $67 billion to $82 billion, but that “the steadiest” area of that growth will come from PC and mobile, with emerging economies chipping in their fair share.
So what do we mean by AAA games? Generally, titles that are heavily marketed by major games publishers and sold via retail shelves, very often part of a long franchise history. Call of Duty, Assassin’s Creed, Halo, FIFA, Uncharted, Mass Effect. you know them when you see them. and they definitely cost a lot of money to make.
Dan Hay, Far cry 3’s producer told IGN, “There’s no question that when you look at what it takes to pull off a triple-A game, you want to make sure that you’re bringing in the best talent, you’ve got the deepest bench possible. and obviously there’s costs associated with that. you think about the level of artistry that it takes to go into conceptualization and bringing these games out.”
Edmund McMillen makes downloadable games, low-cost and digitally distributed, like Super Meat Boy and The Binding of Isaac. He’s been playing every kind of game for decades but anyone who has played his work understands that he’s not about glitz and glamor. even so, his games are extremely popular. He told IGN, “Most people view AAA as bloated, story-driven RPGs and crazy shooters. I honestly don’t see how they could go any higher [in development costs] than they currently are, the risk at this point is way too much for anybody but companies like EA to attempt.”
Will Wright, creator of The Sims and SimCity agrees. Looking forward to the next generation, he recently told GamesIndustry, “Publishers are much more risk-averse to spending twenty or thirty million dollars on a title. The only people who can really play that game are giant publishers, and they’ll be rolling the dice.”
And that aversion to risk means that many of the most exciting new ideas about games may not come with snazzy new AAA console releases but from downloadable games created by small, nimble teams.
In an email interview with IGN, Jenova Chen, from thatgamecompany (creator of PS3 download hit Journey), said, “If you look at the games that really became overnight successes in the past two years, almost none of them were original AAA titles. I think today’s video game landscape is a lot bigger than the console game market and ideas are more important than budget.”
The games that make up the AAA elite are, it has to be said, extremely gratifying experiences, visually and aurally impressive, amazing renditions of worlds, real or otherwise. These games undoubtedly offer something that cannot be created by small teams working on tight budgets. It takes an enormous amount of skill, money and guts to create an Elder Scrolls V: Skyrim.
But $60 for a video game is still a big ask, especially when so many people are struggling to survive a tough economic climate. Many players are making their games-experiences really last, subscribing to worlds dedicated to their favorite games, like Call of Duty Elite, and focusing on DLC rather than new games. Or, they are spending time with cheaper downloadable, mobile and even free games.
James Gaynor, developer of Gone Home at The Fullbright Company said, “There are a lot of titles out there vying for a small number of $60 payments. That price is a tough sell in general, unless you have a lot of disposable income. It makes it harder for companies to justify the big, extravagant AAA title development costs. and that seems to be getting borne out in the fortunes of a lot of studios that are still doing that stuff.”
As a gamer, he adds, he hopes that those games can find a way through. “I love that kind of experience. There’s no way you can have that excitement without tons of people and tons of money.”