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Feb 06 2014
By: thefisrtofus Sackboy 480 posts
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Is the gaming industry declining?

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26 replies 739 views Edited Feb 11, 2014

Okay.

Hi guys.


I read an article by developers of Mad Max saying that AAA gaming is at a decline.

But i don't get why it is declining.


I googled the topic, but was somewhat dissatisfied by by it.


First of all, does anyone have any idea in how much games are made.
I mean an accurate price. I read that ME3 was made in 40 million.

Let's still put it around 70 million.


And according to Joystick it sold 3.5 million.

And each game costing 60 dollars.


They earned. 200 million +.


So where is the loss...


And. Games like Last Of Us and Beyond Two Souls are being made and have claimed success ( BTS has mixed. But i like it!)


And other titles also manage to cross the 2 million sales mark.



So... What is declining?



And. Moreover, we can say the next gen is showing good and healthy signs.

And i really don't believe mobile can satisfy the needs of a gamer.

But, yeah. They take away the casuals.

 

 

 

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Lombax Warrior
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Re: Is the gaming industry declining?

[ Edited ]
Feb 6, 2014

Let's still put it around 70 million.


And according to Joystick it sold 3.5 million.

And each game costing 60 dollars.


They earned. 200 million +.


So where is the loss...

________________________________________________________________________________________

 

 

Yes and its all because of the casuals.

 

Also the price tag of $60 a game dosen't all got to the devs. You got to take into account, packaging, retail, any royalties fees, cost for updates/patches, as well as online server cost. All this cuts into that $60 profit margin. So they may only be making only $105 million ($30 a game). When instead they can make Angry Birds: Under the Sea that cost them $20,000 and make $20 million off it.

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Treasure Hunter
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Re: Is the gaming industry declining?

Feb 6, 2014

Advertising costs have to be taken into account for offsetting the take on games sold.

 

Also, sales figures don't adjust for price drops and sales, so, not every game sold is at $60.

 

It's really hard to sell software right now, because there are so many consoles out there.  Publishers want every game on every console with a decent userbase, and that kind of adaptation costs money - money you may not recoup if you don't sell enough copies of that game on that console.

 

Costs to develop are going up, while the relative cost of buying a new game have gone down/stayed the same.  The profit margin shrinks daily, as inflation grows, and the selling price remains the same.

 

That's part of what those guys are talking about, for sure.

 

This may get "easier" once the PS4, Xbox One, and PC are the three main developed-for platforms, as they are all x86 architechture, and, as a result easier to develop simultaneously.

Grindhead_Jim

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VP of Gaming
Registered: 12/08/2000
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Re: Is the gaming industry declining?

Feb 6, 2014

thefisrtofus wrote:
Okay.

Hi guys.


I read an article by developers of Mad Max saying that AAA gaming is at a decline.

But i don't get why it is declining.


I googled the topic, but was somewhat dissatisfied by by it.


First of all, does anyone have any idea in how much games are made.
I mean an accurate price. I read that ME3 was made in 40 million.

Let's still put it around 70 million.


And according to Joystick it sold 3.5 million.

And each game costing 60 dollars.


They earned. 200 million +.


So where is the loss...


And. Games like Last Of Us and Beyond Two Souls are being made and have claimed success ( BTS has mixed. But i like it!)


And other titles also manage to cross the 2 million sales mark.

So... What is declining?


And. Moreover, we can say the next gen is showing good and healthy signs.








And i really don't believe mobile can satisfy the needs of a gamer.

But, yeah. They take away the casuals.

No, but basic English language writing skills are. Dude, I know you think you had a point in there somewhere, but it's absolutely lost in the whole "Net Spacing".

 

Do you know...

 

 

 

 

 

 

 

 

 

 

 

 

how difficult it is to convey properly

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a coherent argument

 

 

 

 

 

 

 

 

 

 

 

 

when you've divded your idea in

 

 

 

 

 

 

 

 

 

 

to a fractured presentation

 

 

 

 

 

 

 

 

 

 

 

of the subject matter?

 

 

 

 

For the reader's sake, paragraphs go a long way.

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Fender Bender
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Re: Is the gaming industry declining?

Feb 6, 2014
Wow i think that gaming won't ever totally die out because there is to many people who play video games. You now have a group of adults who grew up playing games on the old system and still enjoy playing them with their children. Which will spawn another generation of people who enjoys playing games and in the future consider the current generation of consoles old school. Thus a cycle of people who enjoys games that won't really see an end to.
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Treasure Hunter
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Re: Is the gaming industry declining?

[ Edited ]
Feb 6, 2014

Its like playing poker with your money. Yes you can win millions but a bad game will cost you millions in loss. You can say its a game to make games. With Investors, deadlines and working capital. How many games that may have been a hit became a dud because it was pushed out the door? A few get it right a few get it wrong. Lets just hope more get it right!!


I Enjoy Gaming I don't hate anything about it!
The reason to buy a NEW console is to play NEW Games not old ones.
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Big Daddy
Registered: 03/14/2007
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Re: Is the gaming industry declining?

Feb 6, 2014

thefisrtofus wrote:


Let's still put it around 70 million. And according to Joystick it sold 3.5 million. So where is the loss...


The developer doesn't see the $60, for that fact neither does the publisher. The last article I've seen on the subject put the income for the publisher at $27 for a $60 retail game. Take into account that the publisher needs to profit as does the developer. It's possible that the developer only sees money from the publisher if they make a profit (profit sharing), or they get a flat fee. If a flat fee tehy should make enough profit.

 

Look at the articles for the "Journey developer", they nearly went bankrupt on the game. It was considered a success, but the development costs were so high.

 

Pretty graphics cost money. Game length costs money. Something has to give. We either get fewer games, or something goes missing. Given the situation with DLC, it seems that might be the way forward.

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Treasure Hunter
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Re: Is the gaming industry declining?

Feb 6, 2014

One of the big problems in the industry is that a lot of companies try and make these big blockbuster titles, instead of aiming to be a solid title that appeals to a good core group of people they try to get in on them CoD bucks, so they over budget what they are doing. The ramp up the cost with things like a pointless tacked on online mode to over the top in your face advertising. This in turn means they need to sell impossible amounts to recoup the loss.

 

A perfect example of this from last year was Tomb Raider. Yeah, it gets a lot of praise and is thought pretty much all round to be a good game, but to SquareEnix it was a disappointment because it only (ONLY) sold 3.4 million units, with them expecting it to be nearly double that with 5-6 million. Then you compare that to Dark Souls or PayDay2, they make a game aimed towards a certain audience, budget accordingly, minimal advertising and relying on word of mouth they manage to be a financial success despite only selling 1-2 million units.

 

It is also a reason why franchises like Resident Evil have become something completely different to what made it unique and interesting in the first place. Instead of adapting and improving on the formula it drops it all and tries to appeal to absolutely everyone, which just results in Resident Evil 6, a games that doesn't really know what it is trying to be.

 

I would say that the big budget triple A titles are starting to decline because they are trying to get that massive wide appeal that CoD gets, they are trying to get in on that, but at the same time indie games are starting to get a lot more attention, as are games like Dark Souls and "smaller" (middle tier I guess) titles. They can afford to take more risks and do interesting things because they don't have to worry about selling 5 million units to be successful. Smiley Mad

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Hekseville Citizen
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Re: Is the gaming industry declining?

Feb 6, 2014

It is not declining. They just sold millions of ps4's and millions of xbox 1's. Grand Theft auto just sold record number of copies.

 

In this age of digital download, The manufactures save costs for packaging materials when people buy digitial copies. Plus you cant trade in digital copies or resale the game.

 

So I would say quite the opposite.

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Wastelander
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Re: Is the gaming industry declining?

Feb 6, 2014

In addition to what has been said, don't forget that the market is most likely staturated: there are more games coming out than people's ability to clear them (provided you have a job and that you like multiple genres). So, people can easily wait a couple of years before buying them and, by then, the game price is dirt cheap. If you were to completely stop buying games, how long would it take you to clear your backlog?

 

Also, the "release now, patch later" publisher mentality we have now is not an incentive to buy games at launch price, the one thats gives maximum income for the publishers / developpers. The best example for this Far Cry 3: at launch, it had a game breaking bug where you could no longer use the camera, which was mandatory for progressing through some story missions. By the time it was fixed, the price had already dropped to 40$.

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