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AAA Games are unsustainable.
- Thread starter tusharngf
- Start date
GHG
Member
Hey, at least then we can collectively jack off to "net profit", "ROI" and balance sheets.
Who the fuck wants or needs videogames when you've got all that?
Self_Destructive
Member
You're insufferable.. lmfao.So since we are going down this road should we also talk about the plethora of non AAA games that have failed (not just "it's not enough hur dur", I'm talking bout outright failure) financially? There are plenty of examples to go around, particularly in the GAAS sphere. Should nobody make any games anymore or is it just that the market and customers have grown tired of shitty products?
Separate point - you seem to have a gross misunderstanding of why they would like to make more money (they have been pretty clear in communicating that it's primarily a margin issue they are facing at the moment and that's what they are seeking to fix ASAP). Most successful companies reinvest a high proportion of their working capital regardless of how much they are making. Do you really think that if they were to make more money they wouldn't aslo be reinvesting a similar proportion of what they currently are?
Well shit, they should all just pack it in and make mobile games then right?
If you want to brag about 200% ROI rather than some good games to play then that's where you ought to be focusing your attention.
Nobody said Sony should stop making games.... nobody said AAA game don't make money... The point is the risk is often not worth the reward... so you get what is happening right now. Sony looking to lessen the risk, by increasing the market their games are available to.
And no, I have a perfectly good understanding of why companies want to make more money... lmao... the problem is that they're making very little money for the costs (risk) and time... Of course the more money they make, the more they will reinvest... but uh... that money takes 5+ years now to bear fruit.... and things aren't getting cheaper.. Who knows what will happen during 5+ years of development.
Anyway... Argue with Shawn Layden who literally said that it wasn't sustainable... You'll have to deal with them changing their strategy..... because they aren't successful enough... just like Herman Hulst recently said.... That's literally what's happening right in front of your eyes...
Ass of Can Whooping
Member
I'm aware the margins are shit. I'm just laughing at your tiktoker level take on ETFs
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Lucifers Beard
Member
Yeah, this has been the case for a long time. Budgets are stupid and publishers and stakeholders are greedy.
A game that costs £200m is going to find it very hard to break even unless it's an already established IP or extremely lucky.
I don't even look forward to most AAA games these days as they either end up being absolutely shit or just disappointing in one way or another.
Indie and AA developers seem to actually give a shit about the medium and want to make money making a decent product.
A game that costs £200m is going to find it very hard to break even unless it's an already established IP or extremely lucky.
I don't even look forward to most AAA games these days as they either end up being absolutely shit or just disappointing in one way or another.
Indie and AA developers seem to actually give a shit about the medium and want to make money making a decent product.
Aces High
Member
Put your money where your mouth is and explain.
GHG
Member
You're insufferable.. lmfao.
Nobody said Sony should stop making games.... nobody said AAA game don't make money... The point is the risk is often not worth the reward... so you get what is happening right now. Sony looking to lessen the risk, by increasing the market their games are available to.
And no, I have a perfectly good understanding of why companies want to make more money... lmao... the problem is that they're making very little money for the costs (risk) and time... Of course the more money they make, the more they will reinvest... but uh... that money takes 5+ years now to bear fruit.... and things aren't getting cheaper.. Who knows what will happen during 5+ years of development.
Anyway... Argue with Shawn Layden who literally said that it wasn't sustainable... You'll have to deal with them changing their strategy..... because they aren't successful enough... just like Herman Hulst recently said.... That's literally what's happening right in front of your eyes...
Imagine...... Calling.... Someone..... Else.... "insufferable".
If they felt that their AAA games weren't good enough then they wouldn't be reinvesting in more AAA projects in addition to potential high margin/reward projects on the GAAS and mobile side.
Ass of Can Whooping
Member
Don't worry. You'll get a wakeup call when big tech stops carrying the stock market
Aces High
Member
Stop this stupid crystal ball fortune telling and explain where my statement was wrong.
Ass of Can Whooping
Member
I just told you. Use your professional investment brain to put 1 and 1 together
Audiophile
Gold Member
Nothing wrong with AAA in itself, however, after current projects are complete I'd be focusing 1/4-1/3 of my current AAA resources towards AA so that they can make 2-3 times as many titles per dollar with that capital. I'd also charge $20 less for them as well to increase overall sales and engagement and bolster stringer foundations for IP going forward / in the long run.
Sony need to be putting out 2 AAA titles a year and 4 AA titles. And there needs to be at least the same coming from third parties. If I'm buying a PS5 and a PS5 Pro, plus a few controllers, a few accessories and paying for PS Plus over the course of a whole gen, I expect my socks to be blown off once or twice a year with a showcase (not just in visuals, but simulation, artistry and of course interesting gameplay). At the same time, I expect a handful of smaller scope titles that I can sink my teeth into to plug the gaps between the big hitters. Then some smaller stuff akin to the older output of thatgamecompany, playdead and housemarque.
Beyond that one or two big AAAA titles a gen which as it stands is limited to Rockstar with the yet to be released GTAVI. Perhaps RDR2 could be called by AAA+.
We should also focus more on inwards world building. Imagine a slightly expanded version of Warren Spector's One City Block concept adapted to a Daredevil game limited entirely to Hell's Kitchen but make it super-dense and heavily simulated.
We need a variety ultimately.
Sony need to be putting out 2 AAA titles a year and 4 AA titles. And there needs to be at least the same coming from third parties. If I'm buying a PS5 and a PS5 Pro, plus a few controllers, a few accessories and paying for PS Plus over the course of a whole gen, I expect my socks to be blown off once or twice a year with a showcase (not just in visuals, but simulation, artistry and of course interesting gameplay). At the same time, I expect a handful of smaller scope titles that I can sink my teeth into to plug the gaps between the big hitters. Then some smaller stuff akin to the older output of thatgamecompany, playdead and housemarque.
Beyond that one or two big AAAA titles a gen which as it stands is limited to Rockstar with the yet to be released GTAVI. Perhaps RDR2 could be called by AAA+.
We should also focus more on inwards world building. Imagine a slightly expanded version of Warren Spector's One City Block concept adapted to a Daredevil game limited entirely to Hell's Kitchen but make it super-dense and heavily simulated.
We need a variety ultimately.
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Topher
Gold Member
Looks to me like this "unsustainable" bullshit comes from the viewpoint of stockholders who are demanding profits exceed prior quarters constantly. The market will crash and reset and start over again. All this shit is cyclical.
I'm looking at the list of games above that are looking to bring in two to three quarters of a billion dollars gross profit and forum financial experts are saying that's not enough.
I'm looking at the list of games above that are looking to bring in two to three quarters of a billion dollars gross profit and forum financial experts are saying that's not enough.
Self_Destructive
Member
GHG
Member
While you're jacking off about your games... reports of more layoffs and diminished quality of AAA games, as well as studio closures will continue to flood gaming outlets...
Don't worry Remij, I jack off to that news as well.
Some of us have the capacity to be eclectic. Crazy, I know.
Self_Destructive
Member
Who said they weren't good enough? What was said is that they aren't sustainable unless Sony makes changes to their business.. That's literally what they are in the process of doing.
AAA game costs are increasing... Sony's console market isn't growing enough to support rising costs and expectations.... I mean, are you not able to see that with your own eyes? They HAVE TO MAKE CHANGES... and that's what we're seeing. And yes, their investors want MORE. They're asking why aren't you doing X and Y... when those games are making tons of money with relatively little investment compared to AAA.
Nobody said AAA games were going away... but that their business has to change to continue to support the increasing costs. SM2 cost 2x what SM1 did.... $300M+.... and it does NOT look 2x better, or is 2x a better game... So please... continue acting like nothing has to change and everything is fine...
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Topher
Gold Member
While you're jacking off about your games... reports of more layoffs and diminished quality of AAA games, as well as studio closures will continue to flood gaming outlets...
Laying off employees and closing studios are knee jerk reactions by corporate executives who are trying to appease stock holders. Literally a few months ago, "32% of developers surveyed said that acquiring and retaining talent was one of the most difficult parts of game development".
Talent shortages bedevil game development | Perforce
Are you looking to showcase your brand in front of the gaming industry’s top leaders? Learn more about GamesBeat Summit sponsorship opportunities here. Perforce today published its 2023 State of Game Development & Design Report, which collects information from game developers in order to...
venturebeat.com
These corporate executives are simply following a script.
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Aces High
Member
The problem is:Looks to me like this "unsustainable" bullshit comes from the viewpoint of stockholders who are demanding profits exceed prior quarters constantly. The market will crash and reset and start over again. All this shit is cyclical.
I'm looking at the list of games above that are looking to bring in two to three quarters of a billion dollars gross profit and forum financial experts are saying that's not enough.
AAA studios have crazy budgets and crazy dev times.
In order to be profitable, these studios have to target a giant audiences. They sacrifice creativity and develop dull products for the mass markets.
The ROI of these games are shit. We know that from the Insomniac leaks. They're below global market growth.
So in the end of the day it's a situation where everyone loses:
Gamers get shitty games, devs get shitty working conditions, and investor get shitty ROI.
Self_Destructive
Member
And yet.. if affects the business all the same. Like I said.. Shareholders want more... and the company will do it's job to provide it. That's what's happening right before your eyes. The games industry has changed. Sony built up their platform off high cost AAA blockbuster games.. and that's what their fans demand. Except, the costs are rising into the stratosphere.. and yet their console market alone is not growing at the rate they need to sustain it long term. That's why they've got to make changes.Laying off employees and closing studios are knee jerk reactions by corporate executives who are trying to appease stock holders. Literally a few months ago, "32% of developers surveyed said that acquiring and retaining talent was one of the most difficult parts of game development".
Talent shortages bedevil game development | Perforce
Are you looking to showcase your brand in front of the gaming industry’s top leaders? Learn more about GamesBeat Summit sponsorship opportunities here. Perforce today published its 2023 State of Game Development & Design Report, which collects information from game developers in order to...
These corporate executives are simply following a script.
Either they reduce budgets for their AAA games.... leaving their gamers disappointed that the games aren't advancing like they used to... or they expand. We're likely going to see both.
Ass of Can Whooping
Member
Turning AAA games into AA games aint going to appease shareholders you retards lmao
Topher
Gold Member
Which is why Sony is expanding to PC and mobile. Doesn't change anything I said though. Sony is still making big budget AAA games as we speak because they make damn good money for them. The market hit an artificial high from covid and investors are fussy about it coming back down. That's all this is.
ROI is "shit" based on what? We saw numbers from those leaks, but show me who, outside this forum, is saying that the returns on each individual game is shit? That seems like an incredibly hard conclusion to come to without actual historical data on per game ROI.
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AmuroChan
Member
It’s a lazy argument. You can have two AAA games with the exact same scope and quality but one cost twice as much. Many factors impact the budget of a game - geographic location, good management, dev size and skill level, cost of living, etc.
Like with most products, you can make a profitable AAA game if it’s managed properly and you have the right team working on it.
Like with most products, you can make a profitable AAA game if it’s managed properly and you have the right team working on it.
Topher
Gold Member
Ass of Can Whooping
Member
He thinks >70% ROI every 5 years is normal if you invest in the S&P 500 lmao
That's his comparison
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Aces High
Member
It potentially can.
$200m locked away for 6 years is a significant opportunity cost for any business.
Shorter dev cycles mean quicker return on invest. You also have less risk because studios can adapt easier to market changes.
Getting the same 70% ROI with half the budget and half the dev time would be an immense improvement for shareholders because it helps to outperform capital cost.
I'm sure Sony is using much more advanced mertrics to measure performance like NPV and IRR. The NPV (Net Present Value) is usually worse the longer you have to wait for your ROI.
lh032
I cry about Xbox and hate PlayStation.
theres not alot of AA games that can generate high revenue.
th4tguy
Member
Those low margins are because of chasing trends like gaas. Sony can pump out 1 halfway successful gaas and make a ton of money but in the process spend 90% of that money on 8 other failed gaas projects which produced zero to minimum income. Labor size is not an issue as most of the positions let go will be hired back on within a year when the next project scope is decided on. Problem with that is labor doesn’t join a company working at peak efficiency. It takes time to get up to speed and learn how to actually work with the processes and tools of that company.
Not EVERYTIME but a lot, the lay offs happen to boost the current quarter earning reports.
The very next quarter starts and rehires happen. It looks good on paper and helps makes investors happy short term but overall drives up production costs as productivity goes down. Moral goes down. Turnover becomes an issue. Costs balloon. Quality goes down and dev cycles get longer.
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Ass of Can Whooping
Member
They're after growth. Not a safe ROI.
Aces High
Member
They don't have to generate high revenue. They have to generate high ROI.
Instead of a few games with crazy long dev times and crazy high budgets we can have many games with shorter dev times and smaller budgets.
Ass of Can Whooping
Member
Oh yes they fucking do lmao
Topher
Gold Member
Aces High
Member
Growth makes sense for PlayStation as a platform, but not for Insomniac as a game studio.
The modus operandi of PlayStation always was to sell cheap hardware and get the money with software.
If they were okay with not getting money with software, they wouldn't hit the red button now.
Ass of Can Whooping
Member
Insomniac growing contributes to PlayStations overall growth
Of course it makes sense? Lmao what?
Aces High
Member
Insomniac growing contributes to PlayStation's increased capital expenditures and operating expenses.
Ass of Can Whooping
Member
Randall365
Member
The top selling games last year were presumably Fifa, COD, GTAV, Red Dead 2, Spiderman 2, Zelda etc. It will be the same this year - no AAA games come out in the first quarter as it just misses their biggest sales period.
BlitzerRadic
Member
Fn hilarious how people here who dont know shit wanna say AAA is unsustainable lmao
Ass of Can Whooping
Member
You're under some delusion that they're expected to increase ROI and that it's okay if revenue drops as a result
KXVXII9X
Member
So tired of these lazy, cynical, clickbait videos. They all parrot the same talking points while ignoring anything that doesn't fit the AAA bad narrative. I'm all for shorter budget games with great art styles, but there have been some solid AAA titles along with the duds just like how AA and indies have successes and misses. Tekken 8, Like a Dragon Infinite Wealth, and Rebirth are some stronger AAA titles to start the year with more to come. A lot of Japanese titles always seem to be overlooked during AAA discussions.
Aces High
Member
Option A:
1 game, $200m budget, 6y dev time, 70% ROI
Option B:
2 games, $100m budget each, 3y dev time each, 70% ROI each
Both options will have $140m profit.
But with option B you can reinvest $340m after 3 years whereas with option A you can reinvest $340m after 6 years.
Option B is more profitable.
Kokoloko85
Member
Do we need to keep doing this…
I love AA’s and indies. But I also love AAA. Sekiro, Elden Ring, God of War Ragnarok. Death Stranding. RDR2. Resident Evil 8. Baldurs Gate 3. All made good money.
Every PS studio AAA has made a profit. Lets stop this bs that its unsustainable.
I could do with more AA games though
I love AA’s and indies. But I also love AAA. Sekiro, Elden Ring, God of War Ragnarok. Death Stranding. RDR2. Resident Evil 8. Baldurs Gate 3. All made good money.
Every PS studio AAA has made a profit. Lets stop this bs that its unsustainable.
I could do with more AA games though
Ass of Can Whooping
Member
And guess what Insomniac is doing right now
Aces High
Member
Layoffs?
Ass of Can Whooping
Member
Option A
Option B
And Layoffs
The perpetual growth goal doesn't care about safe ROIs
If all these companies decided to just make AA games instead we're still going to end up at the same place
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