Before you think it, no, I’m not nostalgic for the olden days. Anyone who has ever had the misfortune to see any of the ‘art’ that I’ve made in the past will tell you there’s no way I could make games from my bedroom without someone else providing the visuals.

But my point is, twenty years ago you could make a game with a team of one or two developers (be they programmers or artists). You’d be developing on the NES, Spectrum or Commodore, and your games probably retail for 15-20 pounds sterling. Skip forward to 1991, and you’re developing for the SNES or MegaDrive – your team is around 8-10 people, and your games probably retail for about 40 pounds. Then on to 97 – you have the Playstation and N64, by now your team is around 20 people, and your games are probably retailing for about 40 pounds still. 2002, you’re on the PlayStation 2 or XBox, your team is now 40 or so people, and your game is still retailing for 40 pounds. 2006, you’re starting on a PS3 or XBox360, average team size is now pushing 100 people.

To pluck a cost figure from the air a team of 40 or so people developing on PS2 resulted in a cost of between 1m and 2m pounds per title. Looking over develop‘s top 100 list this year, there are many, many games on the top studio’s books that aren’t making back half a million pounds. Okay, so thats just from the UK market, and the US market is much larger, but you see my point that margins are getting tighter and tighter.

The games industry is being led along a growth path where revenue is rising fairly linearly (10% a year is a generous figure), but costs are rising exponentially! The old system where publishers used the massive revenues from the titles that sold well to underwrite the cost of the games that flop is falling apart, solely down to the diminished profits they can make from successful titles. The increasing fragility of both developers and publishers is, in my opinion, just a worrying symptom of the underlying problem. As we let costs spiral out of control, we start to price ourselves out of business.

Even an established and successful studio can be crippled by more than one bad title or deal in a row, because the costs involved in getting even a poor title close to market are growing rapidly massive. Much as I’d like to blame the publishers for the problem (for attempting to keep their costs down by mistreating developers rather than encouraging efficiency), I think in the end the issue lies with the hardware manufacturers. We are moving onto the next generation of hardware, when we’re not limited by technology, but by the level of complexity the market is willing to pay for. Sure, if the consumers were happy to pay double for twice the complexity, or if twice as many units sold when the technology improved, then it would be sustainable, but its not.

Roughly the same consumers who bought the current generation of console will buy the next generation; when they buy games they expect them to be at the same 40-50 pound price point, because they don’t see enough value to justify paying any more for the games. So in the end, the games industry tries to make more complex, expensive games, for the same revenue as before, just so they don’t get left behind.

So what’s my proposed solution? Well, for console games, I don’t think I have one, apart from maybe to keep producing quality games for PS2 for as long as possible. For PC games I think its clear – make games at the same level of costs as now, and try to make use of better technology and middleware to improve the quality, rather than trying to increase complexity to match what the hardware is capable of.

Console timeline cribbed from here.

This entry was posted on Monday, April 17th, 2006 at 8:07 pm and is filed under Industry Rants. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.