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Videogame Industry: Is the Sky Really Falling?

Kimawolf

Member
After reading another thread on how many systems will be released this year, on shelves, and looking at the state of the industry today, a lot of the same circumstances are beginning to fall into line with the previous North American Crash of 1983.

System releases

This fall we will have, all on the market, the Wii, The Wii U, The 360, possibly 360mini/whatever its called the next Xbox and its different skus, the PS3, the PS4 with its different skus, the Oyua, the 3DS 3DSXL, and the Vita. Not to mention all the games that will certainly be cross generation, each with their own different sku for each individual system.

Publisher losses/closures
We’ve seen just about every publisher, from Nintendo to EA post losses, some major, some so bad they went bankrupt, others having to lay off hundreds of employees. We see these major publishers still laying off workers like just today, Square Enix.

Major blockbusters underperforming

No one expected Call of Duty to underperform, but it did, Mario Bros U underperformed drastically, Halo 4 underperformed, Tomb Raider underperformed, TOR bombed hard, as did numerous other games billed as “block busters”

Major competition from Tablet/mobile gaming/resurgence of PC gaming

Even if it is not the “Savior” it’s proclaimed to be, it is leading A LOT of developers down it’s path to failure, thus taking away talent and money from the major systems. And these games even underperform most of the time as well. And PC gaming is seeing a major resurgence as well thanks to dropping prices of enthusiasts cards being able to easily outperform a console.

Compare this with the crash of 1983: (*Taken from Wikipedia) http://en.wikipedia.org/wiki/North_American_video_game_crash_of_1983

In 1983 there were 13 systems sitting on shelves, ALL with games, which were sub par

The Atari 2600, the Atari 5200, the Bally Astrocade, the ColecoVision, the Coleco Gemini the Emerson Arcadia 2001, the Fairchild Channel F System II, the Magnavox Odyssey2, the Mattel Intellivision (and its just-released update with several peripherals, the Intellivision II), the Sears Tele-Games systems (which included both 2600 and Intellivision clones), the Tandyvision (an Intellivision clone for Radio Shack) and the Vectrex.

At that time, there was also a growing PC market which had began to push in on the consoles territory of gaming, plus a huge influx of substandard games and then add to that a weak economy much like it is now and the market looks eerily similar to 1983.

I think if not for the Wii/DS phenomenon the crash would have happened a lot sooner, and since there is no “Wii/DS” like sales monster on the horizon, the situation looks bleak.

So looking at all the information and the similarities my personal conclusion is that these next two years will see a major contraction of the home console market and force more studios to close down and cost more jobs, thus costing us more creativity and risk taking. So if you feel the same way what can be done, if anything to stop it, to soften the blow or slow it down? Or do you think it’s just a coincidence and everything will be fine, if so why?

edit: I meant Gears of War: Judgement not Halo 4. My apologies.
 
The sky is falling for big publishers

Indeed.

It seems like the product roadmap for many old-guard publishers (EA, Capcom, Square Enix, Tecmo Koei) has been eroding to a few, core titles as they struggle to retain profitability and suffer large cuts / shifts in management.
 
We need to wait to see how PS4/NextBox perform to make that decision. Personally, I think the console market is declining.

I also think the Big Publisher AAA model is doomed, irregardless of the market.
 
In 2005-2006 we had: PS2, GameCube, XBOX, GBA, DS, PSP, with the Wii and PS3 on the way. Also a total of 8 systems. Granted, the GameCube and XBOX fizzled out during that time period, but now the Wii's basically done, and the Ouya isn't going to amount to anything big.
 
It may just be natural selection.

The games that sell at $60 will survive. More developers will just be forced into the Xbla/PSN market or they go to handhelds.
 
In 2005-2006 we had: PS2, GameCube, XBOX, GBA, DS, PSP, with the Wii and PS3 on the way. Also a total of 8 systems.

True, but there has to be a tipping point somewhere where it becomes simply too much for the market to bear. At the moment we'll have 10 systems on the shelves all vying for attention in 2013.

And Yes I definitely agree, at the LEAST the big publishers will be in for a huge shock.
 
Can someone explain to me what people mean when they say the game industry will crash?

Big publishers will stop making games? PS Xbox Wii will stop production?
Will gaming seize to exist?
 
Can someone explain to me what people mean when they say the game industry will crash?

Big publishers will stop making games? PS Xbox Wii will stop production?
Will gaming seize to exist?

For me it means stores begin to have far too much inventory as people stop buying games, stores begin cutting back on shelf space, which causes a chain reaction through the industry.
 
In 2005-2006 we had: PS2, GameCube, XBOX, GBA, DS, PSP, with the Wii and PS3 on the way. Also a total of 8 systems. Granted, the GameCube and XBOX fizzled out during that time period, but now the Wii's basically done, and the Ouya isn't going to amount to anything big.
No tablets and very low smart phone adoption rate at the time.

Also OP, PC sales are on the decline.
 
We will definetely see a contraction in consoles sold but only because there is no wii phenomenon ( atleast not so far)

And before you ask

no. the current state of wii u is not an indicator of the console market at large.
 
Just look at it as companies needing to realize not every game needs to sell like CoD to be successful for them. So many games have changed to try and get more of an audience, diluting their overall product. They then see that not only did they not get in a new audience, they alienated the old one, so the copy sold even worse than anticipated. Smart companies will realize this problem and mend their ways. Others will try going further in the same direction and close up shop.


Game companies aren't closing due to poor sales, just poor direction/management I think. It's why one company is happy with 2 million sales, and another thinks 3 million is a failure. One cost more money to make and I get that's why, but did it NEED to?
 
Can someone explain to me what people mean when they say the game industry will crash?

Big publishers will stop making games? PS Xbox Wii will stop production?
Will gaming seize to exist?
Gaming is too big to stop. It's everywhere.
Consoles, phones, PC's.

To kill gaming at this point is to kill electronics.
 
In 2005-2006 we had: PS2, GameCube, XBOX, GBA, DS, PSP, with the Wii and PS3 on the way. Also a total of 8 systems. Granted, the GameCube and XBOX fizzled out during that time period, but now the Wii's basically done, and the Ouya isn't going to amount to anything big.

The mobile gaming + tablet industry industry didn't exist in 2005-2006.

That, along with the indie game renaissance completely changed the gaming landscape.
 
True, but there has to be a tipping point somewhere where it becomes simply too much for the market to bear. At the moment we'll have 10 systems on the shelves all vying for attention in 2013.

And Yes I definitely agree, at the LEAST the big publishers will be in for a huge shock.

I agree, but I think what'll happen is that some systems will fail and others will succeed, rather than all of them failing. The Vita and WiiU may fail, but I think the 3DS and at least one of the PS4 and 720 will succeed.

It just seems weird now, as this past generation was the first ever to have three successful home consoles, as well as two successful handhelds. Returning to something like the PS2 generation where one system vastly outperforms the rest would take some adjusting.
 
I agree, but I think what'll happen is that some systems will fail and others will succeed, rather than all of them failing. The Vita and WiiU may fail, but I think the 3DS and at least one of the PS4 and 720 will succeed.

The 3DS has already succeeded...it's shipped 31.09 million units worldwide in two years.

That's already 112% the unit sales of what the GameCube could muster in five years of being on the market.
 
You got it all wrong.This is the most successful console generation ever.
More consoles were sold this span than ever before.


The video game crash in 1983 was due to horrible games on the Atari before the Nintendo arrived. The Atari did not have a single good game.
It even botched porting simple arcade favourites like Pac-Man and Pong.

Those games had terrible unresponsive controls on the Atari.
 
Contraction and transition, not a crash like that one which was mainly because Atari was the home console market of the time and when it suffered, all of its console peers did, too, thanks to jittery retailers and bored or wary consumers. Some platforms are not going to do well, partly because retailers will make the call for which will be sold and supported best at their stores based on performance.
 
The sky is falling for big publishers alone, small devs houses are doing better than ever.
Yup. The big boys have grown too dependent on large scale and big profits. They can't (easily) adapt to the smaller scale necessities of where the media business is now going. They keep entrenching themselves further in their old ways by continuing to dig up desperate profits (DLC, pre-orders, boxed products). And their attempts at adapting (investing in mobile and social gaming) have all but failed to make enough of a profit to be worthwhile for them.

They're simply too big. And the scale has gotten so large that the business is built on massive amounts of risk--even for supposedly "safe" bets.

The immediate future is in the small, versatile, adaptive businesses. This might change down the road, but for now, this is the case.
 
Just look at it as companies needing to realize not every game needs to sell like CoD to be successful for them. So many games have changed to try and get more of an audience, diluting their overall product. They then see that not only did they not get in a new audience, they alienated the old one, so the copy sold even worse than anticipated. Smart companies will realize this problem and mend their ways. Others will try going further in the same direction and close up shop.


Game companies aren't closing due to poor sales, just poor direction/management I think. It's why one company is happy with 2 million sales, and another thinks 3 million is a failure. One cost more money to make and I get that's why, but did it NEED to?

Pretty much. Sales successes (read: Eidos properties) are reguarded as failures due to A) not playing similar to older entries, B) had an electric shitton of marketing money thrown at it, or C) has to sell more to make up for failures elsewhere in the company.

Madness.
 
Any future crash will be caused by the publisher, not the consumer.

Games have been in a constant state of semi-profitability since the beginning. There have been a few titles that have been wildly successful but the vast majority of titles are lucky to break even.

With the HD consoles, the costs of production have increased dramatically and with the new consoles the problem will probably only get worse.

Somehow production costs have to come down and that's the bottom line. It's not sustainable to expect four million copies of a game to sell just to get your money back.
 
Appropriate budgeting or death.

Companies that do not realize the extravagance of current AAA production will bleed to death. Tone down the scope and the focus testing, restrain marketing from interfering with the development process, take shortcuts for textures and animation. Development must also realize that they don't need to make "THE BEST MOST AWESOME THING EVER", because that will only exist in the realm of imagination of the development team.

Basically, stop chasing after dreams in clouds from the get-go and start really focusing on getting a small set of essential things right, then build from there.
 
Not really, a lot of some studios/ indie developers are having a hard time as well.

I think this is being lost in the mix.
It isn't all wine and roses for those outside of the big pubs either.

Hopefully some quick lessons are learned, and dev/pub behaviors adapt.
 
what's that rule where you almost always answer a question mark in a headline with 'no'? Cause I applied it to this thread title.

The sky is never falling. There could be a big reduction in the AAA game market due to ballooning dev costs... but people will realize if that happens just how much stuff there is beyond that and how healthy many corners of the market are.

I don't think mobile phones really appeal to the same market as home consoles. They're not even succeeding at killing off dedicated handhelds (though they've clearly eaten into that market somewhat, there's also clearly a profitable market for them). Tablets, perhaps, but even so, we're only really talking a fraction of the market.

Also, as much as I love gaming on PCs, it's where enthusiasts go. More relaxed gamers will continue to buy consoles. Budgets will get sorted out. Things will keep marching onwards.

And yes, some indies are struggling. Some companies are always struggling even in growing markets. It doesn't really mean much when we're looking at whether or not those markets are healthy or growing. They are.
 
THE SKY?! THATS NOT THE SKY!
images
 
Proper management is ABSOLUTELY, FUNDAMENTALLY CRUCIAL to the survival of big-budget publishers next gen.

Management waste, management bloat, management inefficiency, management incompetency....every little thing at the top-level can very quickly compound and balloon into an unstable, unprofitable ecosystem.

A well-run studio (From Software, Platinum Games) can put out games that impress with an incredibly tight budget. That's what big publishers need to prioritize next-gen if they want to survive.

4 million copies to break even is simply unacceptable, except for the strongest of IPs.
 
The mobile gaming + tablet industry industry didn't exist in 2005-2006.

That, along with the indie game renaissance completely changed the gaming landscape.

The landscape has evolved drastically since the beginning of last gen, true. I think, however, that after we see more companies either shrink or disappear completely the market will more or less correct itself. The publishers and developers that manage to stick around and adapt to these changes will usher in the next wave of gaming.
 
This is not 1983, nor will any potential crash look like what happened in 1983.

Even if the number of systems reached what happened then, the game publishing side of it looks nothing like it did.

Chick little threads getting old.
 
Appropriate budgeting or death.

Companies that do not realize the extravagance of current AAA production will bleed to death. Tone down the scope and the focus testing, restrain marketing from interfering with the development process, take shortcuts for textures and animation. Development must also realize that they don't need to make "THE BEST MOST AWESOME THING EVER", because that will only exist in the realm of imagination of the development team.

Basically, stop chasing after dreams in clouds from the get-go and start really focusing on getting a small set of essential things right, then build from there.

But that is exactly what gaf wants devs to do .

the world is too small make it bigger
the animation sucks hire better mo caps
the voice actors sucks . get better ones like Patrick steward .
Etc...

and when they do finally address the issues no one buys it because they changed it .now it sucks gets thrown in their faces.
 
With the HD consoles, the costs of production have increased dramatically and with the new consoles the problem will probably only get worse..

So true.
And also, the consumers just don't accept dull texture copy and paste anymore. Those details...
 
The refusal of western devs to get into serious handheld development is what I sort of consider the turning point of this last 6-7 years. A strong idea and non-throwaway production value was all that was needed to sell a couple million units, and yet companies marched to their deaths towards the HD slope. They obviously jumped on to the phone/tablet market, but it takes an incredible number of units to get the same level of $ sales that something on a DS/3DS/Vita might. IMO the only thing the "touch" market's done for gaming is reaffirm many people's views that "games are too expensive," exacerbating the hollowing-out process of mid-tier, non-AAA titles that are strong but don't have the presentation of a $50million title. People's perception now is that those should be given to them in bite-size chunks for $2-$10 a pop.
 
I think a better parallel to what's happening right now is the mid-90s, not 1983. The transition to 3D also brought with it waves of publishers and developers closing shop and companies just in general not knowing what to do.

We're basically just suffering growing pains right now, I think once the dust settles things will be fine, even if that dust settling might take a while.
 
The sky is falling for big publishers alone, small devs houses are doing better than ever.

This. Hopefully this shows big devs that they don't have to kill their budgets to turn a good profit. Seems like most of the current issues are from greed alone.
 
This is not 1983, nor will any potential crash look like what happened in 1983.

Even if the number of systems reached what happened then, the game publishing side of it looks nothing like it did.

Chick little threads getting old.
Just because the publishing end looks different doesn't make the situation better, you know that, right?

Different publisher trends, different pitfalls.

And if anything, we need to look at why indies are thriving and big publishers aren't. There's some comic book industry parallels to make here that are... frightening.
 
Just because the publishing end looks different doesn't make the situation better, right?

The only reason the 1983 crash was as big a deal as it's made out to be was because at the time, people weren't sure if video game consoles were just a fad or not. People thought that consoles would eventually just be replaced by home computers, and that drove the crash.
 
My only thought:

Can we stop this?
TOR bombed hard

I'm racking my brain trying to figure out what TOR is. Just spell it out like you did the other games! That is all.

But seriously, I don't think we're headed for a crash. We may see things drastically cut back, as we've already seen happening, but I don't think the industry is just going to implode.
 
My only thought:

Can we stop this?

I'm racking my brain trying to figure out what TOR is. Just spell it out like you did the other games! That is all.

But seriously, I don't think we're headed for a crash. We may see things drastically cut back, as we've already seen happening, but I don't think the industry is just going to implode.

sorry lol TOR is The Old Republic lol
 
isn't the industry as a whole growing?

In the USA, the retail game industry (software sales + hardware sales) is contracting year-over-year thanks to the diminishing momentum of PS3 + 360, consoles that have overstayed their welcome in terms of industry health.
 
In the USA, the game industry (software sales + hardware sales) is contracting year-over-year thanks to the diminishing momentum of PS3 + 360, consoles that have overstayed their welcome in terms of industry health.

Is that including phonegaming, ditigal, social ect. or just retail?
 
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