Elite Co-Creator Gives Thumbs Down to Big Budget Development

[Logan Westbrook]

Elite Co-Creator Gives Thumbs Down to Big Budget Development

The videogame industry could learn a few tricks from the movie industry when it comes to money, says the veteran developer.

David Braben, co-creator of the classic space simulator Elite and head of Frontier Developments, says that publishers and developers will soon have to change the way they make and release games, because he thinks that the current model just isn't sustainable.

Braben said that a lot of triple A games cost upwards of $50 million to make and promote, and that was before the "large overheads" added on by publishers. He said that that figure was comparable to big Hollywood movies, but added that games had much less time and opportunity to make that money back. Where movies had multiple revenue streams like the box office, rentals, TV revenue and re-releases on new formats, Braben said that games really only had a small window - usually just a few weeks after release - before pre-owned sales started to cannibalize new sales.

He thought that this short window of opportunity, coupled with the high costs involved in development, was the reason that EA had posted yet another loss in the last quarter, and why Activision had shut down so many of its in-house studios recently. He also thought that if it weren't for Blizzard and the Call of Duty series, Activision would also be losing money, too. He said that publishers would have to examine the way they funded triple A games, and make some changes if they wanted to keep making them.

Braben thought that the best way for publishers to reduce the risk in releasing new games was to embrace online distribution models, and to make better use of product placement. By using online distribution as more than just an alternative to retail, Braben thought that publishers could create new revenue streams for games. "For much-anticipated games perhaps an exclusive online-only premium (charged by time) multiplayer play could be made available before the full release of the game? Building a game over time, starting with the minimal playable is perhaps another way of doing this - as already happens online in the 'social' space."

Product placement, he said, would provide much needed additional funding game development, and reduce the amount that publishers had to invest. Unfortunately, it meant that publishers would have to relinquish some control over their games. In the current model, publishers could cancel a game if they thought that they would be unsuccessful, or if they didn't have sufficient funds to release it, but Braben said that that also mean that securing outside funding was very difficult. If publishers wanted this extra investment, they would have to commit to publishing a game, and wouldn't be able to back out if circumstances changed.

Braben isn't the first person in the videogame industry to say that the days of big game development in its current form is on its way out: Both Rovio's Peter Vesterbacka [http://www.escapistmagazine.com/news/view/108428-Angry-Birds-Dev-Foresees-Doom-for-Consoles] and God of War creator David Jaffe [http://www.escapistmagazine.com/news/view/108498-David-Jaffe-Predicts-Next-Console-Generation-Will-Be-the-Last] have made similar comments in recent years. Where Braben differs from Vesterbacka and Jaffe, however, is that rather than just prophesize doom, he's suggesting solutions. Whether his will be the solutions the industry adopts is anyone's guess, but change will eventually come, and having more ideas on how to handle that change floating around doesn't seem like a bad thing.

Source: Develop [http://www.develop-online.net/blog/178/Death-of-the-50m-game]


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[The_root_of_all_evil]

Possibly the greatest game of all time. And fitted into 32k.

Listen to this guy.

 

[Irridium]

Or they could just, you know, not spend so much money on making games.

Films have small, indie films(Kevin Smith films, Paranormal Activity), a bit bigger, low budget films(romantic comedies, buddy-cop movies), mid-budget films(think District 9, Predators), and huge blockbusters(Avatar, Transformers).

The games industry has indie games, and massive, AAA games, with very few mid-budget games.

Here's an idea, make those mid-budget games. Less money put in means it wouldn't have to sell as much to make back its budget, since they're not putting so much money into it, they would allow for more creative freedom, resulting in more interesting games. And they would probably not look as good, but that means if your selling on the PC, it will require less demanding hardware, meaning more people could play it on their machines, which means more sales.

You could also charge less, or have more sales on Steam. And as sales on Steam have shown, gamers will buy the fuck out of things on sale. And if you charge less up-front, more people will be able to buy the thing.

Seriously, the movie industry has all kinds of movies with varying budgets. The games industry essentially has 2 forms of games.

Oh, and treating your customers like actual people instead of pirates with fat stacks of cash would probably help. You can do this by not putting so much bullshit DRM on the games. DRM that pirates never have to deal with. Just saying.

 

[gigastar]

I agree that sometimes obscene levels of cash are spent on games sometimes, but putting it too low will mean we end up with crap like Farmville all the time. Its not all that great, and it tries to suck out as much cash as it can through microtransactions.

 

[Irridium]

AAA games killed the middle game. Unless they die 100%, mid games will be dead. The quality drop will be noticeable, and will send people running away in droves when the graphics are not top notch on the console. Anyone who says graphics don't matter hasn't tried to market games in a console market.

A strong art-style should be able to make up for sub-par looking graphics.

Granted everyone would have to stop focusing so hard on graphics. Change could happen if done slowly, but it'd be tough. And would require gaming publications and reviewers to stop focusing so hard on graphics.

Yeah that would never work...
I guess we could hope that people will get bored of all the graphics. Its starting to show, but its got a ways to go still.

 

[TrevHead]

Braben is correct the the price stucture is wrong. Plus the costs of AAA gaming are really high as most gamers demand eye candy as a requisite. Ofc much of this is the industries own fault in the way they market games and hardware to the public. All this low brow marketting like the graphics arms race weve had since the start of the industry which got worse when 3D came out and killed off 2D. The childish way in which the publishers act while always slagging off their competitors and the way they breed this same childish behavior into their customers who become fanboys.

Basically the industry is going to have to grow up in how it behaves both in marketting and like brarben has said the business end of making games.

Concerning lowering costs of production the whole industry could learn a thing or two from the devs of the mech online FPS Hawken it looks really damn good despite been only made by a dev team of NINE people!

 

[Therumancer]

Well, the actual thing that needs to change is the one thing nobody in the industry is willing to give up, and it's the massive corperate culture and monster profits that it has gotten used to.

See, the thing is that development budgets are by and large being spent on human resources, a lot of people want to deny that, but there is no way around it. When your dealing with some of these budgets, and remove the cost of computers and renting office space, everything else comes down to paying the people involved. While a lot of game developers will claim that they are humble, hand to mouth people, who make games "because they love them", and who could "make better money with their skills in other areas", I haven't been buying that. I mean it's either going to these guys one way or another, or they are flushing it down the toilet. Also there has been a glut on computer skills since the 1990s when I was in school and really I very much doubt many of these guys could find other employment for their skill sets in reality. A lot of people in the games media can, and do say, that game developers are poorly paid, but then again it can be said they also have a vested interest in relations, and on top of that it still doesn't really answer where all that money is going.

Over the years I've read a lot of things in magazines and on the internet about how the game industry operates. They keep blinders on a lot of it, but the general process works in either one of two ways:


One way is that a producer approaches a game developer to either make a game they think will sell, or simply to develop a game the developer itself thinks will sell and will get them a return on the development. The developer gives the producer a time frame and cost to produce the game. That cost is pretty much what the developer is going to pay itself to make the game. In the end they don't really own the product, it belonds to the producer who invested the money. Game developers already got paid, all through the time they were making the game, and onces it's done move on to another project with the same producer or another one. In the end the sales have little to do with what game developers make, other than whether anyone else will hire them again. As an academic point this means that argueing that piracy hurts the developers directly is a complete joke, rather it hurts the people paying to have the product developed. By the time the game is able to be pirated the developers have typically gotten everything they are going to get out of it. Of course piracy DOES potentially reduce the profits of the guys bankrolling the games, and make it into a less attractive seeming avenue of investment.

The other major way is when a game developer decides to produce a game itself, they wind up going to an investor with the idea, and taking out a loan. That loan is pretty much what they decide to pay themselves while they develop a game that they think will sell. To succeed they need to make enough money to pay off the loan, and whatever else they have from that point on is profits. HOWEVER, the thing to understand is that the developers have already been paid, they have pretty much given themselves however much money they decided they wanted to live on while producing this game. If the game fails, these guys aren't in any major trouble, the guys who lose the money are the ones who loaned them the cash. In such cases there is really very little they can do, this kind of thing was at the heart of all those missing monies used to develop "Duke Nukem Forever", there was no chance of ever getting it back because the guys spent those tens of millions of dollars living while they were developing (or allegedly developing) the game. The biggest risk here being that the guys extending credit will see video games as a bad investment risk (investments like this are always a risk), or put a developer out of business by seizing whatever assets it might have towards the loan, and ensuring nobody else will lend them money again.

I'm keeping this simple intentionally, the point I'm making is that any way this goes your looking at a bunch of programmers and coders who demand tens or hundreds of millions of dollars for their services over a couple of years. I very much doubt they are setting their prices on a "hand to mouth" level, especially seeing as in most cases where they are working for a producer directly in some form, they have no real vested interest in the product beyond that point except as far as landing another contract goes.

What has to pretty much stop is developers deciding "hey our team wants 50 million dollars over the next two years to make this game". I don't care how they try and justify it, it's pretty ridiculous, and they keep demanding more and more money, and their demands are what
is making the situation almost impossible to sustain. At the end of the day we're really not going to lose any tech or anything by those costs lowering, especially in this economy there aren't exactly any industries dying for computer and IS guys, heck a lot of those people are being laid off like crazy. Seen plenty of people on the news going "oh gee, I was a programmer making 200k a year, now I'm losing my house because my company let me go", people hyped computers as the future back in the 80s and 90s and the market just got too flooded. In the final equasion the same people will continue to work, and the tech will continue to increase at the same rate. It's not a popular view to blame the developers for the costs, but really I think that's where a lot of the problem lies.

Of course I'm not going to say the producers aren't a problem themselves. I mean when guys like Bobby Kotick have private jets, and can buy themselves out of sex scandals with private stewardesses, I think that shows the kinds of lifestyles these guys are trying to live too.

See, the problem is that the video gaming industry is big, multi-billion dollar big, but it's NOT the movie or music industry, it doesn't have that level of penetration yet, though it could get to that point. People in the industry, as both developers and producers seem to want to try and act like it's that big an industry, and want to pass the increasing costs on to a consumer in a bad economy. The industry rising up during a fairly strong economy did a lot to encourage unreasonable standards.

What I'm saying is not that these guys need to go back to basement development, but that I think they need to stop playing "Megacorperation" and trying to act like a big dawg industry that they aren't quite on the level of yet. Gaming *IS* a big industry, and it has a lot of potential, but you can't live off of what it's going to become, only what the reality is now. Wait for the market to expand, the product to come closer to it's full potential, and then start worrying about the private jets, and developers wanting hundred million dollar budgets for a couple years work.

I very much see a future where games can be as big as movies, and even where competitive gaming can become as big as pro-sports. I mean we've seen what happened in Korea with things like "Starcraft" so we know it can get there for the rest of the world with time. The amount of money to be made there is staggering, but it's a goal to work towards, not one that is here now. Gaming could become like Hollywood and Major League Sports rolled up into one, but not if these kinds of payoff demands are put on it before it's ready, and it winds up having to dig deeper and deeper into various kinds of DLC gimmicks and the like to make ends meet.

Also "used game sales" have been there for a long period of time, far longer than the industry has been making a big deal about it. Honestly, cutting down on them is not nessicarly going to increase profits. I think the pipe dream that going after used games will help the industry make more money is simply born of desperation in finding a way to maintain an unworkable status quo when nobody wants to tighten their belt and stop pretending they are a group of major "players".

If anything I think used game sales help. The reason why games like "Mass Effect 2" outsell the original on pre-orders and such alone, is because so many people wind up playing the earlier games used to try them out. Used games presenting an inexpensive jump on point before the games become too old (not to mention trade ins letting people buy more new games) allow franchises to grow exponentially.


Such are my thoughts, I've said all of this before, and I know a LOT of people disagree with me on these points though.

 

[TrevHead]

@Therumancer I totally agree, the industry is going have have lower costs and cut away a lot of their fat.

If devs could lower their costs it would mean that more studios could loosen or pull off the shackles of their corporate publishers.

 

[draythefingerless]

Then theres the concept of someone being a 'game developer'. That is a concept for something that does not exist. Sure there are PEOPLE out there that fit the description, but you dont go and say im gonna be a game developer and make games like some solo commando. Notch did it, but thats the exception to the rule. You go out and you program them, maybe structure them, or you create the art for it, or the story, or help the mathematics and physics of an engine, or handle the marketing, or run the money. There isnt many a guy in a game developing company that can do more than 2 of those things properly. You may like working on games and such, but you really need to know what you can do besides them. Do you like logistics? painting? creating art? creating stories and narratives? do you like being a spokesperson? thats what defines what you are.
In any other industry, this would be averagely paid. I think game developing teams are a tad overpaid, but to call them the main issue when there is no 'main issue' is wrong. The issue goes equally distributed. Teams being a little overpaid, publishers being run by people who shouldnt run them(aka, hound dogs who have no foresight of the future), the marketing, the way people treat video games, the way we sell them, and half the time, a wrong development tactic, one that streamlines, weakens and wastes resources.

 

[octafish]

I'm all for product placement, but it needs to be subtle. Think Sam Fisher chewing Airwaves, rather than the spam of Axe billboards in R6: Vegas 2, the rest of Vegas 2 was pretty good incorporating film posters but there was too much Axe.

 

[Rigs83]

Or maybe they can stop reinventing the wheel. Lot's of games are using the Unreal engine instead of creating their own from scratch. I think the episode formula could work if they don't take as long as Valve or up and die like Ritual Entertainment.

 

[TrevHead]

Episodic gaming is cool for the most successful games / IPs that are safe bets, maybe not so if the first episode flops and no more are released leaving gamers with half a game.

 

[infohippie]

Hey Braben! Release something if you wanna be relevant! Elite & Frontier were awesome but I've been waiting for Elite IV for nearly two decades now. Otherwise, get off the case of devs who are at least writing games for me to play.

 

[samsonguy920]

Nice to see there is someone who comes out to say something and it makes sense to boot. Additionally having suggestions instead of nothing but critique and egotism.

Unless something gets changed soon, the only thing to get the big publishers out of their delirium will be the next game recession.
I would make sure you have an extra console on hand, friends, and make backups!

 

[adamtm]

At least half the money for any game goes to HR, Marketing, Distribution and Management, not the developers themselves (AAA titles).

Its time to scale things down a bit.