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Why The Games Industry Is Knackered


JPickford (retired mod)
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I found the link on an industry forum (closed access) and on there there are both developers and publishers represented.  Nobody disagreed with Costigans sentiment.  You know why?    He's right.

I'm not disagreeing with him outright, just his methods/conclusions.

His arguments are based on the assumption that 100% of games made under the current system are not innovative/worthwhile. Instead of looking at games that defy his generalisation and admitting that the conditions of their development are the way forward, he'd rather pretend they don't exist and rant about how the sky is falling.

There's no place for independent developers on consoles any more, but then there barely ever has been.

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I like what I read.

But I want something to bring all this together.

This may seem ludicrous but, GTP, Game Transfer Protocol.

A protocol closly related to http which allows distribution of games through a game browser/web-browser with plugins. Would be made so that excisting electronic shopping is easily integrated. Also a piracy protection system would be needed.

Just think about..

gtp.indiegames.com

gtp.nitendo.com

gtp.play.com

It could be great!

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You seem to have come to the exact wrong conclusion.

Indies are the way forward.  EA just posted a loss.

john, you seem to have missed my point.

the presentation cities the indy movie and music asthetic as an example of where to go - without understanding what indy film is.

who actually owns most of miramax? or lion's gate? the studios (disney and new line respectively). they are major studios who use the indy asthetic as a way to reach another audience. its all just marketing. do you know how many films are made independently that never reach distribution or an audience a year? thousands. breaks my heart, but those are the facts.

it seem to me games and movies are closely interlinked in their business models. the problems developers are worried about now, are the exact same ones filmmakers have faced for decades.

the games industry will evolve, and audience taste's will change. the market will surely go where demand is, no?

of course there is room for low fi games, as much as there is for polish black and white films about poverty and aids. they are just not going to be made for money alone.

some will break through and do well, but most won't.

because that polish film has been made regardless of whether it stood to make money or not.

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john, you seem to have missed my point.

the presentation cities the indy movie and music asthetic as an example of where to go - without understanding what indy film is.

who actually owns most of miramax? or lion's gate? the studios (disney and new line respectively). they are major studios who use the indy asthetic as a way to reach another audience. its all just marketing. do you know how many films are made independently that never reach distribution or an audience a year? thousands. breaks my heart, but those are the facts.

it seem to me games and movies are closely interlinked in their business models. the problems developers are worried about now, are the exact same ones filmmakers have faced for decades.

the games industry will evolve, and audience taste's will change. the market will surely go where demand is, no?

of course there is room for low fi games, as much as there is for polish black and white films about poverty and aids. they are just not going to be made for money alone.

some will break through and do well, but most won't.

because that polish film has been made regardless of whether it stood to make money or not.

I never really like the film/videogame comparisons - not because I think the industries aren't similar, more that the end product you get seem to me to be very different beasts. That polish film you talk about will have a far, far, far longer shelf-life than even the greatest of videogames - obviously down to the media it uses. I'll be able - in one form or another - see that movie for years and years, and it won't date particularly, whilst the nature of videogaming insures that the Half-Life2 of today will be the ugly duckling of the nest in 10 years time. This isn't to say it won't be a good game anymore, just that commercially it's value is near enough extinct.

Which is why downloading games seems to be the obvious and almost only viable way this industry can continue. It won't allow a 10year old HL2 from still becoming a viable source of revenue for the company, but it will allow the product to remain 'there' - always available to those who want to download it, and none of the issues with packaging etc to contend with.

I would far prefer to download older games and know that they'd run without any hassle on my machines, rather than pour over illegal sites in the hope of getting a version which works. I'm not saying I download...stuff...occasionally, but I'm quite prepared to go down a legal route.

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Correct.  Retail isn't dead yet but the prognosis is terminal.

Bearing in mind I know very little about the industry, what about indie games shops? If indie games started cropping up and were supported by the independant game shops, could there not be a viable future in that? I'm really thinking of music shops, where I can go down to ifmusic or whatever and pick up a couple of white labels which they have recommended. Could there not be a similar approach with videogames?

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Games cost 20x as much to make as they did a few years ago.

Games (on average) sell less now.

The retail price is unchanged.

This makes no sense.  It's very hard for the publishers to change tack because they have been promising us (the gamers) every more lavish production values.

Indie developers will save the day.

So it's basically the Scratchware Manifesto in powerpoint then?

I never checked out the PPT you linked to, since I don't have powerpoint, but the Scratchware Manifesto says basically the same thing (I think), and is an extremely good read.

Basically the industry is dying, and it needs to radically change.

EDIT:

I'd just like to point out that my two personal favourite games from the last 12 months are both indies. Alien Hominid by Behemoth (their PDA minigame inclusion was genius and a nice touch), and Katamari Damashii by that student who had his game published by Namco.

I'd like to see more examples like KD, where one guys inspired vision can make it to retail and be a success. Modern games tend to lack a unified vision, resulting in homogenous and fairly dull designs.

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As much as one can sympathise with his sentiments, Greg Costikyan is unfortunately a card-carrying mentalist. He was the guy who slagged off Nintendo at the infamous 'our careers are on the skids, let's have a tantrum!' GDC roundtable a while ago, and the other week was shrieking that games should be heavily censored (in response to the Hot Coffee affair).

While I agree partially with some of your following points, you are SERIOUSLY misrepresenting the man here, and it damages any argument you're making.

His description on what publishers look for in a game pitch is laughably distorted. Yes, publishers look at the quality of the assets. They also closely look at the history, management, financial stability and working practices of the developer. They do this because they want to have a reasonable assurance that the developer is going to still exist a year from now, and that they'll be able to deliver an actual product, preferably well within 200% of the proposed timeframe and budget.

It depends on the publisher and the executive producer commissioning the game. Some are very responsible, others are coke fiends who give rewards to those who bullshit the best.

No-one is going to give you $10-20m to make a game just because you think you're a fucking film director, idiot. (Also, the 'typical' budget for a next-gen game will not be $20m. Not all games, in any generation, require movie-quality assets and 100+ teams. Entire genres have no use for this level of expenditure. Really, he means that fewer people will get to make insanely bloated, risky vanity projects. What a shame.)

Again, this rather aggressive sort of spin is doing you no favours. As for the budgets, it is an open question. What does seem certain though is that the focus is going to rely more and more on yew titles and brands, which will mean a reduced catalogue. That puts more pressure on those key titles to beat expectations and competition, which means better graphics etc. That drives budgets skyward and leaves non-expensive genres forgotten.

Indie games as people like Greg have envisioned them will never succeed, because they do not cater for the player. Innovation does not automatically make a game good, nor are innovation and marketability/genres/licenses incompatible. Look at Resident Evil 4. I doubt Greg C. is going to make a game that good in the rest of his life, even if a major publisher showered him in cash.

And again, misrepresentation. Greg currently develops mostly mobile games, as well as researching the industry, but his canvass is very broad. As a designer, what would be so mind blowingly beyond him or anyone to make resi 4? It's just a linear shooter.

Newsflash: most developers (virtually all Western developers), left to their own devices, have no idea what their customers want. Pissing away your efforts on games that only a tiny minority of people are going to play and learn from is not a good way to foster innovation.

Newsflash: Most customers of any entertainment form don't really know what they want until they see it, so any means that allows proper experimentation without risking the bank is a good thing. The games industry is hardly the first medium to use its independent wing as a source of inspiration.

I do agree that we need to kill (or at least reduce the influence of) the retail channel, but that's inevitably going to happen anyway.

Don't get me wrong, there are terrible injustices in the games industry (ask Ron Gilbert), but empty slogans and a refusal to face up to commercial reality aren't going to help.

I see nothing commercially unrealistic in what he's advocating though. He's advocating a means to return to commercial sanity, where the rest of the industry seems intent on crashing and burning.

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Newsflash: Most customers of any entertainment form don't really know what they want until they see it, so any means that allows proper experimentation without risking the bank is a good thing. The games industry is hardly the first medium to use its independent wing as a source of inspiration.

I think this is a very, very, important point. Back to hollywood again, they've had 100 years experience, and spent a lot more money than video games, trying to pin down the formula for guaranteed commercial success, and they can't do it.

They need TV, indie films etc, as well as looking at other media, as cheap, experinemental arenas for new ideas; the best & most successful of which will be made into big movies.

Video games is increasingly only able to look to other media (licenses, sport, etc) for successful formula, as the expense and risk of making big games leaves no room for experimentation within the medium itself, leaving us as little more than a merchandising arm of hollywood & sports franchises.

I've no real idea if the indie game that John and I are working on is the right idea, and is what the customer wants, and we've never claimed to know this with any of our games. However, its got a *possibility* of capturing the imagination of the audience and being a big success because its something a little bit new and a little bit fresh. However small that possibility is, its there in a way that isn't with the big budget committee driven license games the western publishers specialise in.

What the industry needs is a hundred, or a thousand, other people making funky little games, based on the ideas in their own heads, not on what they think the audience wants, and a few of these games will surprise us all by being exactly what the audience didn't know that they really, really wanted.

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I think this notion of a global games industry "crash" is nonsense - we've already had our crash, which put a good number of the UK's independent (and not-so-independent) developers out of business.

The current market is definitely broken - if you are an independent developer trying to make innovative games. It works very well for EA, Activision, Ubisoft, Take Two, etc. Greg is right to identify the lack of an "indie scene" in game development as a big problem going forward, but it doesn't correlate that this is indicative of an impending crash.

Jpickford: EA posted a loss this quarter during their quietest period of the year, whilst they are investing a massive amount in next-gen technology and recruitment. Let's wait for the FY06 Q3 and Q4 results before predicting the imminent demise of EA, shall we?

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While I agree partially with some of your following points, you are SERIOUSLY misrepresenting the man here, and it damages any argument you're making.

This is unfortunate (and not intentional), but an inevitable result of how he chooses to represent himself - notice that the .ppt doesn't cite any positive examples that he has been involved in.

It depends on the publisher and the executive producer commissioning the game. Some are very responsible, others are coke fiends who give rewards to those who bullshit the best.

So even you will concede that not 100% of publishers are idiots?

Again, this rather aggressive sort of spin is doing you no favours. As for the budgets, it is an open question. What does seem certain though is that the focus is going to rely more and more on yew titles and brands, which will mean a reduced catalogue. That puts more pressure on those key titles to beat expectations and competition, which means better graphics etc. That drives budgets skyward and leaves non-expensive genres forgotten.

Aggression: I'm not the one calling for bloodshed in the streets. It's a fact that not all games require movie-epic budgets. It's wrong to assume that all developers are in the market to make hugely (creative) resource-intensive plot-driven games.

Non-expensive genres (in fact, all genres) are only forgotten when they don't sell. A $20m budget would add no appreciable value to Katamari, or Championship Manager, or The Sims.

And again, misrepresentation. Greg currently develops mostly mobile games, as well as researching the industry, but his canvass is very broad. As a designer, what would be so mind blowingly beyond him or anyone to make resi 4? It's just a linear shooter.

Why hasn't he, or anyone outside of Capcom, made a game in the same genre of even a fraction of the same quality, then?

Newsflash: Most customers of any entertainment form don't really know what they want until they see it, so any means that allows proper experimentation without risking the bank is a good thing. The games industry is hardly the first medium to use its independent wing as a source of inspiration.

This doesn't work unless people are actually encouraged to buy and play the games, which G.C. seems to be militantly against. If you have a great game, but don't get it into people's hands, you have failed. Failing in a more 'artistically legitimate' way is still failing.

I see nothing commercially unrealistic in what he's advocating though. He's advocating a means to return to commercial sanity, where the rest of the industry seems intent on crashing and burning.

No, he isn't. He's shouting slogans and offering no practical solutions whatsoever.

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I think there are some valid points made in that presentation. I think one of the issues the the games industry has is that there is only one revenue stream for each game.

Day one sales at retail.

Only then does the game justify a second revenue stream if it does well as a budget re-release.

Now the idea of downloadable games is getting more appealing, people are starting to become acustumed that music they download on Itunes will never have a box. The box version is still availible if they want it.

Doom and Half-Life 2 have proved that the download system can work.

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I assume someone has mentioned steam as a way forward then. Completely cutting out the middleman. We will see how its pans out as more games are added to the list. Wouldn't mind knowing the sales on "Sin" when it's released.

Well, more like it replaces one middleman with a nicer one. Hopefully.

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I think there are some valid points made in that presentation. I think one of the issues the the games industry has is that there is only one revenue stream for each game.

Day one sales at retail.

Only then does the game justify a second revenue stream if it does well as a budget re-release.

Now the idea of downloadable games is getting more appealing, people are starting to become acustumed that music they download on Itunes will never have a box. The box version is still availible if they want it.

Doom and Half-Life 2 have proved that the download system can work.

Do you think that by removing companies like GAME from the equation, games will see a much longer life span, with the public caring less whether a title is one week or one year old?

With the internet offering an infinite shelf-space for games, there is no reason for any title to be deleted. Sure newer titles will make the front page of any website or interface, but via a genre, year, company listing any title will be available, creating a much more library interface into accessing titles.

Still the more titles that are released the more muddy the system will come, but an advanced search system and recommendation links (much like Amazon) could help games bring themselves to players through a vetting process worked out from their previous purchases.

A lot of that is obvious and with Amazon and Play, to a certain extent already in action, but the removal of shop shelf and introduction of download, things have to be put forward correctly for the end user to easily find the title that suites them.

What about the continuation of shops, but with more of a production creation upon purchase route. The problem with stores like GAME and the like is that they are often small and can only store so many titles (Most of them now 2nd hand, but that's another argument) so older games have to get pushed out in order to cater for the newer releases. So what if ALL titles were available and burned to disc upon purchase. It's a radical change for the current set up, harking back to the old days of music stores in the 60's (or was it 70's), but a lot has to be said for the state of shelf space.

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EA just posted a loss.

Hardly surprising - it's a quiet quarter in the last year of the current cycle, and the net loss is almost entirely due to the 40% increase in R&D costs.

They have $2.6B in cash, trailing 12 month net revenues are in line with that of a year ago (despite where we are in the console cycle), trailing 12 month operating cash flow is up, growth estimates for next year are about 18%.

I have to admit I'm struggling to understand why anyone would think it's a signal of impending doom and that "indies are the way forward".

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Hardly surprising - it's a quiet quarter in the last year of the current cycle, and the net loss is almost entirely due to the 40% increase in R&D costs.

They have $2.6B in cash, trailing 12 month net revenues are in line with that of a year ago (despite where we are in the console cycle), trailing 12 month operating cash flow is up, growth estimates for next year are about 18%.

I have to admit I'm struggling to understand why anyone would think it's a signal of impending doom and that "indies are the way forward".

I don't think the EA thing is a sign of impending doom, but more from the general morale of the people in the industry. Pissed off and unexcited. I've known people within the last year simply bite the bullet and give up trying to do adventurous things; ending up at EA just to stay in the industry.

One of my mates started up his own company with the idea of getting small games done to keep a constant revenue stream coming in, whilst at the same time could have one team dedicated to a larger project. He was really trying to go back to the days of shareware, where he used to happily create games with a comfortable amount of cash coming in to keep him living. But it struck him that the market has been crushed down to the extent of it being far too risky. He's now at EA working on some yearly updateathon.

EA and the like welcome new titles into their line up, look at Burnout and Battlefield. The problem is that once they sign those titles up, and often purchase the team or sign them in to an yearly update agreement, meaning that the team can no longer pursue any interest of a new title. At worst EA (I'm using them as an example, but it can be any large publisher) will purchase the game rights and disbands the team post production, sending the assets over to an internal team for the sequel. This tactic obviously leaves a lot of disgruntled developers out on their arse, thinking do I really want to bother doing that again.

Whatever the out come to this scenario is that with each title bought up, there is one less team out there striving to make an original game. Kinda like the fuel industry, what happens when the oil runs dry?

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I don't think the EA thing is a sign of impending doom, but more from the general morale of the people in the industry. Pissed off and unexcited. I've known people within the last year simply bite the bullet and give up trying to do adventurous things; ending up at EA just to stay in the industry.

One of my mates started up his own company with the idea of getting small games done to keep a constant revenue stream coming in, whilst at the same time could have one team dedicated to a larger project. He was really trying to go back to the days of shareware, where he used to happily create games with a comfortable amount of cash coming in to keep him living. But it struck him that the market has been crushed down to the extent of it being far too risky. He's now at EA working on some yearly updateathon.

EA and the like welcome new titles into their line up, look at Burnout and Battlefield. The problem is that once they sign those titles up, and often purchase the team or sign them in to an yearly update agreement, meaning that the team can no longer pursue any interest of a new title. At worst EA (I'm using them as an example, but it can be any large publisher) will purchase the game rights and disbands the team post production, sending the assets over to an internal team for the sequel. This tactic obviously leaves a lot of disgruntled developers out on their arse, thinking do I really want to bother doing that again.

Whatever the out come to this scenario is that with each title bought up, there is one less team out there striving to make an original game. Kinda like the fuel industry, what happens when the oil runs dry?

Morale of some is low? So what?

Some give up safe corporate jobs and attempt to go it alone? So what?

Some fail in their independent endeavours and go back to taking the company shilling? So what?

Small independent companies are bought up by the behemoths? So what?

All of the above simply shows that the games industry is no different to any other.

And the "oil" won't run dry because you'll always have a fresh supply of creative entrepreneurs who think they can come up with something original. A few will succeed, most will fail. Big deal.

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Frankly, I'm really looking forward to the day when I don't need to go to a shop to buy my games. That's pretty much the only way this affects me.

Mainstream, Indie, it's all the same to me. The only difference is that with indies I know my money goes straight to the developer, whereas with mainstream titles I can only hope that my money is noticed by the publisher, so they can decide to make more games like it.

I should add that I rarely buy games that I haven't played before - another point that should be crucial to this new business model. I always wonder where exactly Shareware games went, as there was literally nothing wrong with that model as far as I could see. It's been replaced by demoes that aren't usually very representative of the final product - which isn't a fair trade to me.

Best of luck trying to figure this out to all the luminaries involved, as the way this is eventually worked out will likely decide the future of gaming. It'll likely go the same way as Podcasting though - a technology that's existed for aeons but only just been given a trendy name and entered public consciousness. We'll be waiting a few years to see any major results, during which the publishers will likely continue to hold all the cards.

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Didn't the Gathering of Developers try this who, 'super indie' thing and fail miserably? And Ion Storm?

We're talking about an entirely online content delivery system here, which has proven pretty successful for Valve. GoD still had to box and print discs and get them into stores, which we all know is a heinous task with all the money that goes into buying space in stores/magazines.

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Powerpoint is surely the worst medium for something like that.

They were the notes from his speech which he did at the Freeplay Conference in Melbourne a couple of weeks back. In other words, he was actually speaking and elaborating on what was appearing. It's a fairly standard GDC-esque model, where people release the slides afterwards.

I was speaking at the same conference, and my slides are far less professional. Though I did get a picture of Zodiac Mindwarp into it, which means I win.

KG

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We're talking about an entirely online content delivery system here, which has proven pretty successful for Valve. GoD still had to box and print discs and get them into stores, which we all know is a heinous task with all the money that goes into buying space in stores/magazines.

Ah right. So their games would have become best sellers if they didn't have to worry about putting them in boxes, then? Daikatana would have been a solid gold hit?
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