Is the AAA Console Games Market Heading for a Crash?

[youji itami]

Video game crash predictions?

Ooh, ooh here's my two cents worth.

I believe that the big Japanese 3rd party publishers are going to crash this generation.

That's Konami, Capcom, Square Enix, Bandai Namco and Sega Sammy.


Japan's largest 3rd party publisher game shipment info.


From 1st April - 30th June 2014


Capcom - 1.4 million ( retail & Digital )

( http://www.capcom.co.jp/ir/english/data/pdf/explanation/2014/1st/explanation_2014_1st_01.pdf ) Page 14

Square Enix - 3.11 million ( retail only )

( http://www.hd.square-enix.com/eng/news/pdf/15q1slides.pdf ) page 7

Bandai Namco - 3,656,000

( http://www.bandainamco.co.jp/files/E8A39CE8B6B3E8B387E69699EFBC88E88BB1E78988EFBC89_2.pdf ) page 3

Sega Sammy - 1.7 million ( retail only )

( http://www.segasammy.co.jp/english/pdf/release/2015_1q_presentation_e_final_v3.pdf ) page 15

Konami - 1.29 million

( http://www.konami.co.jp/en/ir/ir-data/meeting/2014/0805_486481.pdf ) Page 6


When western publishers have games that sell in 1 week, on 1 platform more than what all 5 of them ship in 3 months it can't be good.

 

[youji itami]

ET gets far too much credit. The crash of 83 was more the crash of Atari.

For example, if Valve goes under we will see a PC Gaming Crash. Steam has cannibalized the retail market, and EA is just as toxic as ever. Valve going under would be bad. I could see people abandoning Steam in waves because of how they've collected all the garbage on their front page for all to see.

The Console market isn't nearly as bad because it isn't as centralized. However, MS is currently undergoing massive changes. They could cut their losses and abandon consoles entirely in favor of actually taking their Android Profits, and not subsidizing the Console market any more. A lot of big developers have married themselves to MS. That kind of change could hurt a lot of developers.

Sony isn't exactly in a great position ether as a company, but at least they aren't subsidizing the way MS has. As long as they sell off their gaming division before they implode things will be all right.

Nintendo has to make a lot of mistakes to get where Sony is.

If Valve went under then everyone would lose there entire steam catalogue it wouldn't be a PC games crash it would end it.

 

[MartyGoldberg]

I'm not convinced, simply because of gaming diversity. During the 80s when the gaming industry crashed, there were what 5 companies? 2 gens worth of games?

Not sure where you got that idea, there were around 130 publishers world wide for the Atari 2600 alone. That doesn't include the six or so other consoles on the market and their third party publishers, plus all the video coin companies and the even larger amount of game publishers for computers as well.

 

[Entitled]

Not with a bang but a whimper.

Like Yathzee said, for unemployed developers, starting an indie studio is becoming the standard. The AAA industry is bleeding talent, and relies on old ideas staying popular, while all the NEW big hits are coming from outside of it.

I'm not even talking about Old IPs here, that's a meaningless distraction. Anyone can easily make up a "universe" or a character. Just not a very interesting one. The indusry is trying to revitalize interest with Titanfall and Watch Dogs, even though they are essentially sequels to CoD and Assassin's Creed in the sense that the same people buy them for the exact same reasons.

Meanwhile, indies are inventing not just IPs, but whole new, evolving genres, business models, and what it even means to make a video game.

10 years ago, the AAA industry was the gaming industry. Nowadays, it has narrowed itself down to be one of the niches that one might be interested in, with many core gamers boasting about how rarely they play AAA games. This same trend will continue, AAA games will become more and more irrelevant until their name looses it's meaning.

 

[Amir Kondori]

Of course there will NOT be a crash. The quality of the AAA titles released today is head shoulders above 99% of the games released back in the 80's. Sure, us "core" gamers may not like the design direction of these new titles, but we are a smaller part of the market then we used to be, and we have to get used to that. Yahtzee says these games are bad but really they are just not to his taste.
Be prepared for more articles and posts like this that lament how shit everything has become and how the average gamer is a fool who will buy anything. What that person is really saying is "mainstream video games are leaving me behind".

 

[Amir Kondori]

Not with a bang but a whimper.

Like Yathzee said, for unemployed developers, starting an indie studio is becoming the standard. The AAA industry is bleeding talent, and relies on old ideas staying popular, while all the NEW big hits are coming from outside of it.

I'm not even talking about Old IPs here, that's a meaningless distraction. Anyone can easily make up a "universe" or a character. Just not a very interesting one. The indusry is trying to revitalize interest with Titanfall and Watch Dogs, even though they are essentially sequels to CoD and Assassin's Creed in the sense that the same people buy them for the exact same reasons.

Meanwhile, indies are inventing not just IPs, but whole new, evolving genres, business models, and what it even means to make a video game.

10 years ago, the AAA industry was the gaming industry. Nowadays, it has narrowed itself down to be one of the niches that one might be interested in, with many core gamers boasting about how rarely they play AAA games. This same trend will continue, AAA games will become more and more irrelevant until their name looses it's meaning.

AAA bleeds talent as a business model, they work you hard for as long as you'll take it, I believe the average is five years, and then replace you with a cheap kid right out of school. IP is certainly not a meaningless distraction, look at the loyalty that still exists, 30+ years later, for a property like Star Wars. You take juggernauts like GTA, COD, Elder Scrolls, Halo, this IP means something and will mean instant sales for years to come.

Now I will agree with you that so called "indie" developers are doing some great stuff, and I think the most exciting new games are coming out of that space. But the idea that the AAA industry is anything other than ascendent right now is kind of wishful thinking.

 

[raankh]

ET literally had nothing to do with causing a crash, that's continually regurgitated on websites for some reason and it's a myth. The issues that caused Atari Inc.'s (and ultimately the industry they were 80% of) downfall were already hitting before ET was even in development. ET was more of a symptom of what was happening and not the cause. You're talking about a company that was making about $2 billion in sales, one bad selling game they spent less than $8 mill developing and promoting isn't going to break an entire company and cause a crash - even in a small part.

Likewise, the "crash" was specifically a consumer industry crash (Coin and computer are separate industries, each with their own resources and markets) and confined to North America (Europe for instance was mainly personal computer based for their gaming at that time, such as the popular Sinclair Spectrum series).

I'm Swedish and the Spectrum and C64 carried me and my brother through those dark ages until the NES and Amiga came along. Can only confirm that the crash didn't affect either of us much; we hadn't really heard of consoles until the NES appeared. At the time, a dedicated gaming system sounded so awesome! And it was!

 

[Evonisia]

I don't think it will be a full crash either. I think the AAA market will go the way CoD has been going for three years now. It will gradually start selling less and less copies which still dwarf the competition, but don't sate the share holder's desires. Companies get sold, go bankrupt or go into other things like indie games.

 

[gorfias]

This thing doesn't happen. The video game crash was very specific and unique. Was there ever any other such event in history? Where consumers just stop buying stuff with no external reason? I can't recall any.

It is unique but similar enough things have happened, all the way back to people not buying horse and buggy whips because they got cars. Yahoo regularly publishes a top ten industries wiped out by the Internet. I wouldn't want to buy a Tower Records anytime soon. And South Park had a fun episode about Stan's Dad buying a Blockbuster Video.

But if AAA games today have an issue, it is with Glut.

I have nearly 200 Steam Games. About 120 console games including Vita games. I get all sorts of free games with PSN+.

I will never live long enough to play a fraction of what I already have.

And great games are selling for under $5.

But as one poster put it: I can't imagine paying $60 for a new game. Unless I do. With everything I already have, I got GTA V full price anyway. Mario Kart 8 too. Infamous 2nd Son and Black Flag for PS4. But this has been over the course of a year. I don't know if that kind of sparse purchasing is enough to save the AAA industry or not.

 

[CaitSeith]

"Electronics are changing so rapidly. And each change of electronics brings something new. So this (videogames) is not a passing fad. What is a fad is the kind of games that people like to play."

Does somebody know when was this said?

 

[CaitSeith]

Video game crash predictions?

Ooh, ooh here's my two cents worth.

I believe that the big Japanese 3rd party publishers are going to crash this generation.

That's Konami, Capcom, Square Enix, Bandai Namco and Sega Sammy.


Japan's largest 3rd party publisher game shipment info.


From 1st April - 30th June 2014


Capcom - 1.4 million ( retail & Digital )

( http://www.capcom.co.jp/ir/english/data/pdf/explanation/2014/1st/explanation_2014_1st_01.pdf ) Page 14

Square Enix - 3.11 million ( retail only )

( http://www.hd.square-enix.com/eng/news/pdf/15q1slides.pdf ) page 7

Bandai Namco - 3,656,000

( http://www.bandainamco.co.jp/files/E8A39CE8B6B3E8B387E69699EFBC88E88BB1E78988EFBC89_2.pdf ) page 3

Sega Sammy - 1.7 million ( retail only )

( http://www.segasammy.co.jp/english/pdf/release/2015_1q_presentation_e_final_v3.pdf ) page 15

Konami - 1.29 million

( http://www.konami.co.jp/en/ir/ir-data/meeting/2014/0805_486481.pdf ) Page 6


When western publishers have games that sell in 1 week, on 1 platform more than what all 5 of them ship in 3 months it can't be good.

And yet, the western publishers' sales barely cover the cost of publishing AAA titles. Publishers like Ubisoft keep canceling their side projects in order to keep their AAA games in production. That can't be good either.

 

[Callate]

So the message is, "The video games industry (or at least parts thereof) will only crash if you pitch in and do your part?"

That's a little cold. Funny. Probably true. Maybe even desirable. But cold.

It is kind of funny, though. Atari was run, on a certain level, by people who were kind of crap at their business. Hindsight is always 20-20, and all, but if you think of the cost of letting your most talented creators put a signature on their games versus the cost of having them walk out and form a competitor... Or the basic sense of not creating more copies of a game than you can possibly sell, even if you're wildly optimistic...

...And yet, it sounds like the explosion at Infinity Ward wasn't that far removed in the "take the people who make your games seriously" department, and there were games in the PS3 era that it was noted would have to allegedly sell two-and-a-half copies for every system in a home to make back their costs, so, Yahtzee's right about at least one thing: we don't seem to learn.

We're paying for a staff roll that runs for a solid ten minutes with day-one DLC, in-game purchases, and a pre-order system designed to make highly advertised games immune to reviews. It doesn't seem like it should take much for people to get fed up at this point.

 

[veloper]

The marketing bit deserves more emphasis.

Mediocrity + loud marketing is good enough to sell the same derived AAA games to the next generation.

When you haven't played many good games yet, even a mediocre title can be very entertaining and originality won't even come into it at all.
The real shit doesn't get the marketing treatment and won't burn many unwitting customers on gaming.

 

[medv4380]

snip

If Valve went under then everyone would lose there entire steam catalogue it wouldn't be a PC games crash it would end it.

Not completely. Minecraft would still work.

Though I'm sure as an anti lawsuit policy Valve has a big red button they can push to disable all the DRM so the libraries would still work. It would probably be mandated if they had to file bankruptcy since technically they are indebted to every single gamer that uses steam, and not the other way around. The licencing shenanigans hasn't played well in bankruptcy hearings.

 

[balladbird]

TBH, I think the AAA model will not crash, but it will degenerate over time until it collapses into itself before they notice it.

captcha: "be my friend?"

that's a dangerous proposal

This gentleman already voiced my feelings on the matter...

Honestly, the way gamers talk about a crash, especially the PC and indie gamers, reminds me of the way a bitter old racist talks about a race war. They go through the motions of acting like they agree it'd be a terrible thing, but it's clear that they're eagerly, EAGERLY wishing for it. XD

the worse aspects of the current triple-A model are unsustainable, or in some cases just fads. Eventually things'll change. I have hope!

 

[Atmos Duality]

Am I the only one that's kinda depressed in that, at least from Yahtzee's point of view, the only two avenues we have right now are:

1) Stop buying the Triple A garbage, and risk a crash and burn in said part of the industry.
2) Continue buying them, and nothing changes.

That's exactly the situation, concisely.

The heart of the problem: AAA's is struggling with rising costs; most of which is of their own doing.
Yet, the market is very stubborn about accepting price hikes up front. In short, AAA is on a death clock.

We've seen the first results of that already (Interplay's demise, THQ's demise, Capcom's near death state along with virtually all of Japan's presence in the game market).

For the remaining AAA to avert further disaster, one of two things must happen:

1) AAA must reduce its costs.
(While AAA has attempted this, how they have gone about it thus far has only made the problem worse.)

2) AAA must convince the greater market to accept a significant price hike across the board. Either in direct monetary costs, or in other concessions (such as always online and all the bullshit that brings).
Because of their backwards handling of option 1, this is their most logical goal.

I could elaborate at great length with examples, but the skinny of it is this:
AAA itself appears to be aware of a looming crash and is working towards averting it, but will only do so if it's purely at the consumer's expense. (if they're desperate, no wonder they keep slinging misuses of "entitled" at us)

TLDR: AAA is playing a game of chicken with gamers.

If we break first, we pay more and AAA gets another life extension.
If they break first, we walk and they Crash.

...but the fact remains that there are still people in those studios making those games, and that the only likelihood of seeing a break in this trend might jeopardize their livelihoods is... you know... not that satisfying.

And yet that hasn't stopped AAA-owned developers from closing every other month, or being gutted for their IP and left for dead.

I absolutely -hate- seeing developers I respect being wrung out for quick cash or forced to degrade their work with marketing-mandated generic slop. All of which tends to lead to their departure from the industry in one way or another.
(which isn't to say developers aren't also sometimes prone to self-destruction, but this is about the AAA-owned developers)

To date, there is one, maybe two developers left in AAA that I still respect who haven't been butchered, closed-down or left of their own volition yet. One or two out of at least two DOZEN in the last 20 years.

At this point, I have barely anyone left in AAA to root for.

If we are to ever see AAA provide both quality and diversity in gaming again, we need new people at the top.
People who know gaming as something other than dollars and cents, but with enough responsibility to handle the dollars and cents side of things.

And the only realistic way those people will even have a chance of getting there is to raze the bloated AAA system to the ground and start anew. Because I assure you, the mercenary CEOs that run AAA today will not budge until they either retire or fail miserably.

 

[Triality]

Good food for thought, Yahtzee.

I think your pondering over an imminent possible crash is akin to your need for juxtaposition in games. The breathers. The highs needing their lows. Hoping for creative destruction. I sorta hope for this too. EA, Ubisoft, Square Enix, and Activision all need a reality check, but for as long as they are publicly trading companies, the respective boards of directors that make these calls aren't going to ever develop their shriveled cancerous empathy glands to see what kinds of problems they are homogenizing and trend-setting into our favorite media.

 

[Ipsen]

Concerning the next games crash, I don't think we're so bugged by just the pit of mediocre, but that coupled with the shit business practices that have been on the rise since last generation. The big publishers reek of desperation, to the point that I don't even think they could spell 'shame' anymore.

We do a fair bit of industry speculation here too (Nintendoomed, anyone?), but there's always something we don't know about in the recesses towards the top of the industry; all the focus on short term gain could perhaps hint at a more catastrophic scenario coming.............[footnote]Or maybe that just applies for their (higher ups) positions. Line your pockets while you can, eh?[/footnote]