Oh by the way! My apologies for never having got back with you about the state of the industry. You gave a great response. I hope things are okay for you and your colleagues amid all the layoffs and uncertainties. I did have a follow-up question in regards to the rounds of layoffs. What do you think needs to be done to stabilize things? The costs and timelines of these games are getting astronomical. Is that out of actual necessity? Is there serious bloat? A lot of times, those of us on the outside make assumptions. "Oh they were mismanaged" or "They should stop making certain games if they want better returns". I've been guilty of this. For someone in your position, what is your view on what needs to happen for the industry to avoid these things in the future as much as possible?
We basically aren't going to see an end to the current set of layoffs for quite some time. A lot of external funders and financiers entered the industry in a mass gold rush over the last 7 years or so, and a lot of them are still seeking ways on how to cash out of their position, or to get their investments to continue to show growth. Layoffs are a means to an end in that sense, but really, non-gaming folks entering the industry and over-inflating everything with a hope of chasing growth only to cash out and cause a multi-year slump is basically cyclical at this point. The industry has gone through this at least twice now, and in the wake of the two earlier times (the infamous crash of the 80s and the exiting of Sega in the early 00s), we had a bunch of new studios and even publishers get propped up in the fallout of those times, many of whom are consolidating or being bought now.
You ask an interesting question - are the costs and dev timelines of these games ballooning to the current breaking point something born out of necessity? Honestly, I think the larger conversation on the turmoil the industry is now in is too focused on the Western Layoffs, and not nearly enough focus is being placed on how Asian dev teams and studios basically put very responsible development practices in place with very responsible budgets attached. There are, however, a ton of caveats that can and should be placed on this, but suffice it to say, the issues we're currently seeing are simply not affecting Eastern Game Devs and publishers, and this is despite some of them taking funding from questionable sources (like the Saudis basically taking over SNK or taking on a 10% stake in Capcom).
All you need to do is compare the last decade of releases from Square, Capcom, Sega, and Bamco, to some of the bigger Western devs and publishers to see that something is off. From Software went from being an obscure maker of niche RPGs to a studio that makes 10+m sellers, multiple of them in 6 years or so, in lofty and budget-expensive genres like open-world even, all while one studio like say, Rockstar, hasn't been able to get GTA6 out the door in that same time. Elden Ring, Tears of The Kingdom, Resident Evil 4 Remake, and FF7Rebirth (just as some notable examples), all come in at much lower budgets than some of the big western made games, but the other part of that is that the makers of those games were also producing other things in a short enough window near those games as well. A week after Sony closed down Studio London, Capcom announced they were increasing starting salary pay at Capcom by 25% and giving a pay adjustment to all remaining staff of over 5% + a bonus. Clearly the JP and other Asian devs, whether its MiHoYo with their consistent string of successes, South Korean game devs striking gold with Lies of P and the upcoming Stella Blade, or partnership publishing like how Bamco often helps Nintendo with projects like Smash Bros., or the Xenoblade devs helping on Zelda. Heck, Sega published two massive LAD-RPGs in the span of like, 6 years, whereas most Western game devs can't get 1 game out the door in that time frame. From 2017 - 2025, 8 years, Capcom will have released 5 massive monster hunter titles (World, Iceborn, Rise, Sunbreak, Wilds).
For a long time, Western devs pointed to the pandemic as the reason behind the delays and even increased budget, but the reality is the pandemic affected all studios all over the world, yet it seems to be the Western ones that simply haven't recovered, while JP devs are making large amounts of money producing games by making efficient dev pipelines that smartly reuse assets in order to cut costs. It should go without saying though: Eastern Game devs are far more likely to have work/life balance and are crunching on their projects, whereas crunch is far less common in western game devs nowadays, but even with that in mind, it doesn't make up for the lack of progress Western Game devs have made at fixiing their issues.
Prime culprit number 1 though is still that so much external funding entered gaming and sought to continue seeing unsustainable growth, and are cutting their losses and trying to collect on paydays now, or showcase continued growth in their investment positions to keep it going and attract more investors. This is an issue that affects all of tech though, as the influence of external funding has only increased, and all of tech has basically become a bunch of Jobs-wannabes, memorizing buzzwords and selling their tech pitches to get investors who have no fundamental idea on how tech is made to flock in, hoping that they are funding the next Facebook or Google, when almost all of it is smoke and mirrors.
The prevailing idea of the big VCs who enter tech is simply that, with increased investment, these tech pitches should simply find new audiences by virtue of them having more money than before. So when someone like Sony puts 3x the budget in SM2 over SM1, the expectation is this will bring in this many more users into the game, when the reality is that unless you're doing a wider release, you're gonna have an additional amount of users, instead of the exponential or multiplicative amount you thought over-investing would yield. That said, it does sound like Sony has gotten the message and is correcting course, while folks like 2K and Ubisoft are going to be doubling down. And while 2K can afford to simply due to GTA, i'm not sure Ubisoft has the wiggle room necessary to go on not learning their lesson.
Having day one Xbox games on gamepass is enough for me to keep their console. I just quesiton myself for the next 10 years, if they skew more third-party and inevitably sell less consoles, would it have less third-party support? Who would spend millions porting their games to a platform that doesn't sell that much games.
That's concerning on the long term.
For a number of years now, Game Pass's 3rd party funding was essentially acting as a slush fund to get games from devs who were openly skipping Xbox onto the platform once again. $1b a year in funding will get even the most conservative of publishers to give your platform a shot.
The reality is very different now for MS though. I expect to see a steady drop of 3rd party support in 25 and in 26 in particular. That said, Xbox has enough internal teams making games that can ensure a owner of their console at least has things to play, albeit there are still going to be a number of issues they need to solve, mainly finding new avenues to further monetize their userbase when they have shown significant resistance in purchasing now that GP changed the environment, but that also explains the expanded focus on 3rd party publishing on other platforms, which is a far bigger initiative than Spencer let on back in February.
All that said - if you enjoy gaming on their console now, I really can't envision that changing in the future. You're already bought into the eco, you enjoy GP, you must on some level enjoy their publishing output, and none of that is going to change.
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