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[hybrid_birth]

This describes literally 141,000 people in the United States.

Alot of people are struggling It's sad. I get disability income myself since I'm unable to work due to a disability.

I know a few people who work 2 jobs and are getting a 3rd to make ends meet.

 

 

[Senhua]

Agree, same with the Asian gamer.
No time to play those new AAA and AA games unless it is great (like stellar blade) or unique like steam indies when these kind of games exist to play for free. Not to mention the production value of the these recent gacha games is skyrocketed to chase genshin trend.

also TBA next gen Azur lane (Azur Promilia - open world + some Pokemon mechanics) and GF2 global release

No wonder console games nearly extinct in east asia. Japanese console games outside Nintendo first party (family friendly games) developer too busy to chase western market while literary giving their home market to Chinese and Korea.

Eat you sh*t Capcom, Square Enix and the rest. Keep making boring sterile and ethical console games for western player for the rest of your miserable life.

 

[Gp1]

You cant reduce ROE. Because you need the game to be profitable.

The actual problem is the budget of the game is balooning too much. We arent in a 100m budget these days.

Ghost of tusushima had around 100m budget. The sequal budget will now be higher than that, due to high salary, increase of marketing cost and the technology used to make the game. The higher the dev count, the more money you will have to spend.

Of course you can reduce your RoE prediction and still make money. The problem is that they don't want to (n factors, stakeholders, Investors, etc. It shows that their current business model is UNSUSTAINABLE).

And that budget is ballooned because cost has gone up, but they sure know some one allocated that resource based on a (unrealistic) sales prediction, an unrealistic ROE or both.

That's why his explanation sounds like bonkers, it's simply doesn't make sense when you analyse it.

 

[RickMasters]

The problem isn't that new gamers aren't being born, the problem is the new gamers only play Fortnite, Roblox, Minecraft, Genshin Impact, etc.

They aren't playing FF and Square Enix and also other traditional AAA console/PC game makers have a serious problem because of this

I’ve been saying this for some time. It’s definitely a generationunal thing. Most gen X and younger have much shorter attention spans so the idea of them playing a 20+ hour AAA game let alone a 60 hour RPG…. Let alone a turn based JRPG….. that is probably even longer…just ain’t their thing.

 

[ByWatterson]

Alot of people are struggling It's sad. I get disability income myself since I'm unable to work due to a disability.

I know a few people who work 2 jobs and are getting a 3rd to make ends meet.

 

Yes. But governments simply don't "raise wages." They set the floor, which 34 states go beyond, and employers are struggling to find workers, so "minimum wage jobs" typically pay much, much more.

Almost entirely, the market sets wages, not government.

 

[bitbydeath]

Nintendo, Sony, Capcom, etc. all have sales showing this clearly isn’t the case.

Are you saying you, yourself, would not buy more games if they were cheaper?

 

[Men_in_Boxes]

Slightly off-topic but Sony has recently called this out when it comes to movie prices as well.
Cinema is dying because they are pricing themselves out of business.

I don't buy this.

If it's a binary model (low ticket prices vs high ticket prices) and the high ticket prices are losing money, then they're obviously going to consider lowering.

They're not doing that for good reason.

 

[ShadyAcshuns]

Some think raising the base price is the answer, but imo it would lead to significantly lower sales. The answer, to me, is clear: make more aa games with lower budgets, graphics and development times and stop catering to the higher end of things for consoles. Let the people who want that stuff just choose gaming PCs. Then they wouldn't have to sell 10 million copies or be forced to gut dev teams and studios.

Diminishing returns on power and everything that comes with it, even at $500, just doesn't seem all that attractive to a majority of gamers out there. To me the sweet spot of nice enough graphics and development times was around the PS4 generation, or perhaps somewhere between PS4 and PS5 tech with SSD drives would be a better choice for the masses of console users.

Or we can just stay on the current path and continue down the road of one or less major franchise per gen and GaaS titles and indies...

 

[Fabieter]

He makes it seem like free money, just invest $100m get $200m but ignores that there are no guarantees.

Not only that but the last five years were insane on the stock market.

 

[Doom85]

Are you saying you, yourself, would not buy more games if they were cheaper?

Are you seriously suggesting one individual‘s buying habits is more important to consider than hard sales date and general business/economic sense?

Lowering the price by a major percentage will require a major amount of buyers to make up for that profit loss. A few people enthusiastically raising their hands in a forum going, “ooh, ooh, I’d buy it, me me!” means jack and shit to the actual millions of buyers that are needed.

 

[Dr. Claus]

Software isn’t physical, it doesn’t cost more to sell two items as opposed to one item.

They could price games at $40, and sell 2x-5x times as many copies, earning millions more dollars in the process.

Let's assume they are priced at 40 USD. That means the store fronts still get 30% of the total price, leading to 28 dollars earned per sale of the game for Square.

Let's say they sold 2x the amount, at 6 million copies at 28 dollars. That is still only 168,000,000. That would not reach the RoI of the mentioned 205 million. Let's say they sold 3x. They would make their money back and then some - but can you guarantee that the game would sell 9 million copies at 40 USD? The games have been on sale for years and FF7 Remake only just recently sold 7 million copies.

But this would also lower the view of the quality of the IP. There is already a stigma among the general populace that games sold for less than full price are shorter, less involved titles or indie/A/AA jankfests. Numerous folks have stated so on this forum alone in recent months.

Reality is, JRPGs are a niche genre. They don't need 200 million dollar budgets to be entertaining or good. There is a reason why most JRPG devs don't push for such high dev costs and do things to keep costs low, like reusing engines, combat systems, and textures when possible.

 

[sachos]

I really want to see one of the big AAA studios do some experiment runs: form small 10-20 person teams, give them AA budget and go make ~8-10hrs $40 games in a 2.5 year dev cycle. Sacrifice production quality enough to achieve that goal, if it has to look like a really polished PS2 game, go for it. Like form a bunch of indie teams between the company. I want to see what kind of game would come out in these conditions from teams like Naughty Dog or Santa Monica Studio.
Then Sony can go and market them, give them a cool tag line or something, "Playstation Sweeties". Then we can fight over who makes the best Sweeties.

 

[Dr. Claus]

Some think raising the base price is the answer, but imo it would lead to significantly lower sales. The answer, to me, is clear: make more aa games with lower budgets, graphics and development times and stop catering to the higher end of things for consoles. Let the people who want that stuff just choose gaming PCs. Then they wouldn't have to sell 10 million copies or be forced to gut dev teams and studios.

Diminishing returns on power and everything that comes with it, even at $500, just doesn't seem all that attractive to a majority of gamers out there. To me the sweet spot of nice enough graphics and development times was around the PS4 generation, or perhaps somewhere between PS4 and PS5 tech with SSD drives would be a better choice for the masses of console users.

Or we can just stay on the current path and continue down the road of one or less major franchise per gen and GaaS titles and indies...

This is the way. You can have a handful of AAA titles like the FF7 Rebirth and FF16 releases, but you need to suplement those development costs with faster, more cost effective releases. A 30,000,000 budget 1:1 remake (essentially a glorified remaster with new graphics, animations, etc) of an old game can help immensely.

Also don't refuse to sell your fucking games physically and make htem stupidly limited will also help. I know hundreds of people who would have bought the FF1-6 Collector's edition and normal editions for PS4/Switch if they didn't' sell out instantly with no chance (at least in the PS4's version case) of restock.

 

[CLW]

IF a publisher got completely rid of microtransactions season passes dlc etc then yeah I’d pay more for the game but the gaming industry went the shit mobile game route. That model does not work as seen by todays incoming crash.

 

[Atrus]

Tell me you don’t know anything about project management and finance without telling me you don’t know anything about project management or finance.

The risk free rate of return is not the stock market.

 

[Fbh]

Chasing high end graphics has really been the downfall of FF.

Their devs can barely keep up, releasing mediocre games where seemingly all the dev time and budget went into the visual presentation (FFXIII, XV and XVI).
Meanwhile their budgets keep increasing while not enough people are buying their games.

If the product you are making isn't profitable with the quantities you are selling at the price you are selling I only see 2 options. You either increase the price (at the risk that it will decrease sales), or you adjust the product so it's profitable at the price you are selling.

 

[Raven117]

Tell me you don’t know anything about project management finance while pretending to claim to know anything about project management finance.

Each company has different ROI measures; different industry sector mix, different project risks, anticipated growth rates, and different long term goals.

Setting the hurdle rate based on some metric like ex-post 20/20 hindsight clarity of an arbitrary period of a total market return that was not guaranteed ex-ante is absolutely stupid and lacking any sort of nuance

Nope. That’s not how it works.

It’s a bench mark for the time value of money. (Which is what he is saying). He is saying that say if it costs 100 bucks to make a game… it has to make 110 bucks (10 percent, which is the average increase in the market a year, give or take) to break even or they “lost money.”

That said, we aren’t going to be able to guess Square’s financial projections based on one quote.

 

[Raven117]

The risk free rate of return is not the stock market.

I know. But I’m 100 percent positive he was using it as an example. (Rise free rate of return is probably closer to 5 percent than 10 percent, but that is what he was trying to say).

 

[semiconscious]

trend setter to trend chaser: has any developer lost its mojo to a greater extent than square enix?...

 

[Kenpachii]

Square enix way of making games

1) come up with a random super high sale number based on nothing but dreams.
2) spend money on a game and make sure most of the market has no access towards it
3) make sure to target a niche market.
4) spend stupid amounts of money on making a game
5) up prices on all there products
6) game runs like crap on the market that it does run on

Result: It doesn't work shocking pikachu face.

 

[Astral Dog]

I’m still of the opinion that games (like a lot of things) are pricing themselves out of existence.

They would make more sales and in turn more money if they lowered the cost of buying games.

They would lose money on 1st day sales,videogames already get devalued too quickly.there is no point in lowering the price if its gonna cost $20 in a year(and lower)

 

[hybrid_birth]

Yes. But government simply don't "raise wages." They set the floor, which 34 states go beyond, and employers are struggling to find workers, so "minimum wage jobs" typically pay much, much more.

Almost entirely, the market sets wages, not government.

You know more than I do. I tried many jobs since 2006. I would say 11 different jobs on my resume.

I applied for so many places that it was hard to get a job. I had to take what they had.

Here are some of my jobs

2006 sea world $5.95 an hour
2008 movie theater $6.50
2014 home depot $8
2022 $12
2023 $14

The most I have ever gotten is $14 an hour and that is on the high side in my city.

It was unaffordable when apartment rent was close to $2000 at most places around.

if they set the minimum federal wage to $20 it would help alot of people.


If I worked full time at say $14 . I'd get around 2k a month. Apartment rent is $1700 so I'm supposed to live off of $300?

That is why wages are messed up.

 

[Robb]

I guess that kind of makes sense, but it does sound like a very harsh goal if the stock market just happens to perform extremely well over the period.

 

[Dr. Claus]

I wish that was the case for me. I tried many jobs since 2006. I would say 11 different jobs on my resume.


I applied for so many places that it was hard to get a job. I had to take what they had.

Here are some of my jobs

2006 sea world $5.95 an hour
2008 movie theater $6.50
2014 home depot $8
2022 $12
2023 $14

The most I have ever gotten is $14 an hour and that is on the high side in my city.

It was unaffordable when apartment rent was close to $2000 at most places around.

if they set the minimum federal wage to $20 it would help alot of people.


If I worked full time at say $14 . I'd get around 2k a month. Apartment rent is $1700 so I'm supposed to live off of $300?

That is why wages are messed up.

Move out of major cities. Go to cheaper areas to live, like the Midwest. You can get 2 bed room apartments for 1000 dollars after utilities or a 1 bed apartments for 7-800 after utilities and make minimum 15 dollars an hour at McDonalds.

You can also take out a loan and go to a trade school, become a plumber or electrician and make bank.

 

[Last Hearth]

What a completely stupid and false thing to say:

“Navok noted that if a game costs $100 million to make over five years, it has to beat what the company could have returned investing a similar amount in the stock market over the same period. “For the 5 years prior to Feb 2024, the stock market averaged a rate of return of 14.5%. Investing that $100m in the stock market would net you a return of $201m, so this is our ROI baseline,” he explained.”

Not only is this not a stupid and false thing to say, this is how it works. The money a publicly traded company has to fund a project is raised by selling its stock, and the people who give them money by buying that stock are looking for returns that is comparable or better than they could have done with the money buying some other company’s stock. If the overall market return on capital is 14.5%. Then any return that does not match that means I should have done something else with the money, I will then sell that stock and buy some other stock, and your stock prices will collapse leading to not having money for future projects.

 

[hybrid_birth]

Move out of major cities. Go to cheaper areas to live, like the Midwest. You can get 2 bed room apartments for 1000 dollars after utilities or a 1 bed apartments for 7-800 after utilities and make minimum 15 dollars an hour at McDonalds.

You can also take out a loan and go to a trade school, become a plumber or electrician and make bank.

Thanks for the advice. I recently moved back to my parents but before I was broke 24/7 living in an apartment with my ex.

I don't think I can return to work due to physical and mental disabilities. I have a bulging disc in my back which hurts alot if I stand or walk too long.

Most of my jobs I had to quit due to excruciating pain. It was just undiagnosed until recently when I got an MRI.

I'm happy at my parents house now. Get disability income and I'm enjoying life. I was mainly speaking of the troubles I used to have.

 

[Dr. Claus]

Thanks for the advice. I recently moved back to my parents but before I was broke 24/7 living in an apartment with my ex.

I don't think I can return to work due to physical and mental disabilities. I have a bulging disc in my back which hurts alot if I stand or walk too long.

Most of my jobs I had to quit due to excruciating pain. It was just undiagnosed until recently when I got an MRI.

I'm happy at my parents house now. Get disability income and I'm enjoying life. I was mainly speaking of the troubles I used to have.

Understandable. My advice was definitely more toward those who are fully physically capable and in good health. Sorry to hear that you are in pain, hopefully that can be remedied over time and you can feel more normal!

 

[Fabieter]

I really want to see one of the big AAA studios do some experiment runs: form small 10-20 person teams, give them AA budget and go make ~8-10hrs $40 games in a 2.5 year dev cycle. Sacrifice production quality enough to achieve that goal, if it has to look like a really polished PS2 game, go for it. Like form a bunch of indie teams between the company. I want to see what kind of game would come out in these conditions from teams like Naughty Dog or Santa Monica Studio.
Then Sony can go and market them, give them a cool tag line or something, "Playstation Sweeties". Then we can fight over who makes the best Sweeties.

Sqaure enix did alot of these smaller games as well and weren't happy either. Smaller games don't help either if the market isn't there.

 

[James Sawyer Ford]

The money a publicly traded company has to fund a project is raised by selling its stock

No, it’s not except under certain conditions. There are plenty of other ways to fund a project (retained earnings, debt, exclusivity arrangements, etc). Issuing stock of a mature company is a lot more rare

 

[ShadyAcshuns]

trend setter to trend chaser: has any developer lost its mojo to a greater extent than square enix?...

Yes, and no. FF and other odd-ball projects haven't done well lately, but DQ and Octopath and Triangle Strategy have all been very good games that didn't break SE's budgets like others.

 

[James Sawyer Ford]

Nope. That’s not how it works.

It’s a bench mark for the time value of money. (Which is what he is saying). He is saying that say if it costs 100 bucks to make a game… it has to make 110 bucks (10 percent, which is the average increase in the market a year, give or take) to break even or they “lost money.”

That said, we aren’t going to be able to guess Square’s financial projections based on one quote.

It’s a stupid benchmark for the time value of money. My whole point.

 

[Zathalus]

Dude who led business development and strategy at Square: This is how it works.

Gaf "Experts": No that's dumb.

 

[Fabieter]

Yes, and no. FF and other odd-ball projects haven't done well lately, but DQ and Octopath and Triangle Strategy have all been very good games that didn't break SE's budgets like others.

Sqaure enix said multiple times that they weren't happy with smaller games either. Stuff like octopath 2 and triangle also didn't get them alot of money. You can expect less of those in the future.

 

[Pelao]

Final Fantasy has been needlessly trying to reinvent the wheel since the PS2 era. It's ridiculous how Square Enix doesn't know what to do with this franchise. In any case, the day they fuck up Dragon Quest will be the day Square Enix dies, which, unfortunately, is almost inevitable now that Yuji Horii is the only one of the three original creators left.

 

[LavitzSlambert]

That was an amazing thread. I don't think a lot of people with short attention spans or low IQ's will get through it, but if you do it's pretty enlightening about how the business of making games is these days

It's good info, but Twitter is the absolute worst platform for this kind of info dump. I can't believe the degenerates that actually endorse these multi-tweet monstrosities. Just write a blog post and link to it, FFS.

The problem isn't that new gamers aren't being born, the problem is the new gamers only play Fortnite, Roblox, Minecraft, Genshin Impact, etc.

They aren't playing FF and Square Enix and also other traditional AAA console/PC game makers have a serious problem because of this

That's part of it, I'd argue the other piece is how long it takes for games to be made now. How are you going to generate buzz with the younger crowd when your studio has released 1, maybe 2 entries in a franchise during their entire lifetime? And in Square's case, they have made some really shitty FF games during that run. So it's an uphill battle for them.

And as we've seen every industry understands the race to the bottom that happens when you lower the price of a premium product.

Game theory coming into play yet again, when one moonshot F2P cash cow (Fortnite) strikes gold and everyone else wants a piece. This is high risk behavior that leads to an industry crash. Then again, suits don't give a shit. They're in it for the money and that's it. Look at the movie and music industry. There is still quality content being produced, but the vast majority is derivative bullshit and the value is certainly not there.

Some think raising the base price is the answer, but imo it would lead to significantly lower sales. The answer, to me, is clear: make more aa games with lower budgets, graphics and development times and stop catering to the higher end of things for consoles. Let the people who want that stuff just choose gaming PCs. Then they wouldn't have to sell 10 million copies or be forced to gut dev teams and studios.

Diminishing returns on power and everything that comes with it, even at $500, just doesn't seem all that attractive to a majority of gamers out there. To me the sweet spot of nice enough graphics and development times was around the PS4 generation, or perhaps somewhere between PS4 and PS5 tech with SSD drives would be a better choice for the masses of console users.

Or we can just stay on the current path and continue down the road of one or less major franchise per gen and GaaS titles and indies...

Preach on dude. Budgets are out of control, expectations for visuals are unrealistic, and game dev studios need to take a step back in production costs and refocus on the content itself, and more frequent releases of smaller games. We don't need open world FF games with the graphics of Hellblade 2, the cost is certainly not worth it.

Nintendo learned this a loooong time ago, and they haven't forgotten what it means to remain profitable and not to go chasing the latest fad. F2P GAAS is not a sustainable business model, except for when it is. All that means is a few companies will be able to do it successfully, while the rest fail and have a chance of taking down the studio.

 

[Fabieter]

Final Fantasy has been needlessly trying to reinvent the wheel since the PS2 era. It's ridiculous how Square Enix doesn't know what to do with this franchise. In any case, the day they fuck up Dragon Quest will be the day Square Enix dies, which, unfortunately, is almost inevitable now that Yuji Horii is the only one of the three original creators left.

Its the best part of the franchise identity and a strong contrast du 95% of the other aaa games which rarely tries anything new.

If they wouldn't do this most remaining fans would be out in no time and you would criticize them for always doing the same.

 

[Xyphie]

It’s a stupid benchmark for the time value of money. My whole point.

It's a perfectly reasonable way of explaining it to a layman because most people contribute to e.g. a 401k or equivalent tracking some stock index and can relate to that. The point is very simple, a risky game investment has to have greater NPV than a lower-risk investments like S&P500 to be worthwhile, otherwise you'd just invest in the lower risk option.

 

[Little Chicken]

He says a lot of things some people on this forum refuse to hear.

 

[Fabieter]

It's a perfectly reasonable way of explaining it to a layman because most people contribute to e.g. a 401k or equivalent tracking some stock index and can relate to that. The point is very simple, a risky game investment has to have greater NPV than a lower-risk investments like S&P500 to be worthwhile, otherwise you'd just invest in the lower risk option.

But etfs tend to average on 7% not 14% like it did the last five years.

 

[Raven117]

It’s a stupid benchmark for the time value of money. My whole point.

Oh! Then yeah. Fair. (I took it as a metaphor)

 

[Xyphie]

But etfs tend to average on 7% not 14% like it did the last five years.

Yes? How does that change the point he's making? Any given investment you make can over/underperform your prediction. It's not about outcome but the perceived risk.

 

[ChorizoPicozo]

The only relevent slide.


Thanks Gaas

Men_in_Boxes . all of this is your fault. hope you are happy

 

[Fabieter]

Yes? How does that change the point he's making? Any given investment you make can over/underperform your prediction. It's not about outcome but the perceived risk.

Yes and if they invested 100m in nvidia 5 years ago than no game in the world could have compare the that profit margins. The thing is no one knew nvidia would explode this mich five years ago.

If they want this kind of margins than they should make other games or get more reasonable with budgets.

 

[SantaC]

Didnt sony pay for exclusivity? Isnt that money included in cost etc

 

[Seyken]

Lowering the release price point wouldn't help, just hinder and put them under even more pressure to sell gangbusters.

I'm of the thought that pretty much all of Square's woes with FF right now are self inflicted. The PS5 is my platform of choice and I think it was stupid of them to release both FF16 and Rebirth as exclusive games.

To get really big nowadays, you need to have EVERYONE buzzing about your game, like the guy said on that thread. That means PS players, PC players and eventually Switch 2 players.

The FF fanbase is split among all these platforms and one of their most important regions (Japan) is Nintendoland right now.

If everyone is talking about your game, it starts getting into FOTM and FOMO territory for a lot of people, SPECIALLY with a game like FF where the story is really important and can get everyone talking and theorizing.

A lot of people who don't have a PS5 probably already watched and spoiled themselves on these games and probably won't purchase them when they finally come out on their platform of choice because all the hype and discussions will be over by then.

 

[Darsxx82]

The problem isn't that new gamers aren't being born, the problem is the new gamers only play Fortnite, Roblox, Minecraft, Genshin Impact, etc.

They aren't playing FF and Square Enix and also other traditional AAA console/PC game makers have a serious problem because of this

The only relevent slide.


Thanks Gaas.

This, there is no more. The new generations no longer prefer SP games, they no longer even know what FF is. Today the money that they previously spent on a new game is now used on microtransactions, battle passes, etc. for games that have even been on the market for almost a decade. Is very difficult compete with this.

Therefore, the only solution (if there is one) is to launch the game on as many platforms as you can do it first to increase sales as much as possible. In addition, this saves costs in marketing and advertising because the platform holders will be in charge of doing it so that people know that this game It's on your platform. And third, although people hate to hear it, it requires an online connection to play it to avoid piracy on PC.

 

[Shubh_C63]

The right answer is probably diversification, like what Sony is trying to do.

A successful publisher needs have atleast 2 successful GaaS, multiple AA projects and few AAA breakout heavy marketed games through the Gen they don't expect to recoup shorty, just for the sake of relevancy.

Edit - I definitely do not think Price is any issue over Gaming. If the game is good with right hooks & marketing behind it, people will buy absolutely anything.

 

[Hudo]

can someone ask him about Dragon Quest XII and Final Fantasy Tactics Reborn?

 

[Fabieter]

The right answer is probably diversification, like what Sony is trying to do.

A successful publisher needs have atleast 2 successful GaaS, multiple AA projects and few AAA breakout heavy marketed games through the Gen they don't expect to recoup shorty, just for the sake of relevancy.

Edit - I definitely do not think Price is any issue over Gaming. If the game is good with right hooks & marketing behind it, people will buy absolutely anything.

I would argue that sqaure enix already met what you asked. They have one super successful gaas with multiple tries to get another. Loads and loads of smaller games some weren't that great recived but people loved quite a few. And they had their aaa games with kingdom hearts final fantasy and forspoken.

But besides ff 14 most of the stuff including their AA games are underperforming. So make more mmos I guess.

 

[Panajev2001a]

What a completely stupid and false thing to say:

“Navok noted that if a game costs $100 million to make over five years, it has to beat what the company could have returned investing a similar amount in the stock market over the same period. “For the 5 years prior to Feb 2024, the stock market averaged a rate of return of 14.5%. Investing that $100m in the stock market would net you a return of $201m, so this is our ROI baseline,” he explained.”

“Here I will show you how it is totally not true we set unrealistically high RoI expectations and let me proceed to show you we totally did”. Thanks Adam, quality threads .