No, Jim doesn't have a misconception that "games" are cheap to make. Of course, that statement is like saying that "movies aren't cheap to make" when some movies certainly are. What Jim maintains though, is that games should cost what the budget allows for them to cost or they shouldn't be made at all. He appears to believe (correctly, in my opinion) that these companies aren't budgeting properly.Arnoxthe1 said:Jim, you keep having this misconception that these games are cheap to make. Cliff B. mentioned a great video on used games in one of his recent blog posts and I think you should watch it. It may seem disconnected from what I'm saying at first but trust me, it will all connect in the end.
http://www.youtube.com/watch?v=2G_f8YBy39M
Example:
Let's say making a certain kind of game should reasonably bring in $2 million in revenue. You then need to make a game that costs less than $2 million to produce/market/sell.
What producers are currently doing is hiring their inept grandsons who can't find a job elsewhere (on account of their terrible crack habit) to work in their forecasting depatartment. This department, full of inbred inept beings of stupidity, then does "market research" in which they see how much money COD makes and then project COD's revenue as a possible trajectory of their own RPG. The board of the company then make budgetary decisions based on what their ridiculously out-of-touch forecasting department tells them they can make on the game if they spend money that compares with COD investments.
So then, they spend $250 million on a game that can only make, say, $150 million and are suddenly shocked that it fails to make the eleventy billion that their slack-jawed mouth breather of a department thought it would. That's how great properties like Sleeping Dogs or Tomb Raider can be immensely popular and sell VERY well but not cover the costs of production. So now, they are trying to cover their asses by making only safe bets that equates to them relying on IPs that are francizes. Even inbred Johnny can't screw up that forecasting. The last game sold X, so spending Y on marketing should increase X by around Z amount. They can look at actual data from that market segment so it works well.
With Ubisoft's mindset that they can't profit off smaller scoped IPs, they're essentially saying they don't understand budgeting where new titles are concerned. They either have to swing for the fence or not try at all. That's bad business. Small IPs ARE risky and so should be budgeted for conservatively. They should be forecasted for by looking at games that try to do similar things rather than the top of the line seller in the industry/genre. If they could spend a reasonable sum on a few new ideas, they could see a HUGE return on their investment per dollar. They're giving that up because they don't know how not to spend millions of dollars on a game that would make less.
It's ok to make a smaller game that caters to specific market demands rather than the entire market. That can be very profitable and can produce an extremely viable franchise where sequels were not initially considered. You just have to remember to play it safe with new IPs and only budget what you can reasonably cover with sales. That's essentially what big publishers are supposed to do. Play it safe and put money into good/reasonable investments.
EDIT: If anyone here is part of a marketing department that forecasts profitability, I don't mean all such people are dumb. I got my start in marketing. I'm just saying that there are some REALLY bad forecasters in gaming right now.