Undeadpool said:
Oh and listen to Jeff Gerstmann's views on why the videogame crash, as it happened before, basically will never happen again. There could be a "Second Crash," but because of how gaming's infrastructure is structured now.
Oh, there is going to be another crash. It will happen in a year or two. Only a handful of triple-A studios will be left standing. Bioware, Blizzard, Valve, Bethesda will survive. Parts of Ubisoft will live on (AC and Farcry teams, for example). EA will basically be Bioware + EASports. But I imagine an overall reduction of about 75% of existing game studios.
Here's the issue.
A game studio is structured like this: You have a pile of grunts in the trenches. They do the actual work, and make most of the day-to-day decisions within their limited sphere. Then you have team-leads, and sub-leads and these guys are also important because they either facilitate communication and coordination between teams (games have a lot of moving parts) or make high level architecture and/or technical/design decisions. Then Producer, which is ultimately responsible for resources and budget and you need someone who does this. Above the Producer you have a block of Executive Producers, Design Directors, Creative Directors, Studio Managers, Division Managers, VPs, C-level executives. These guys don't add any direct value to a given game, but in theory they add value to the company. In theory. Because it's at this level, in some private conversation, someone makes the decision "all games moving forward will have online DRM." These are also guys that basically never get layed off, unless the entire studio goes under and even then everyone VP-level and above is safe. I'm also kind of glossing over the split between a studio/publisher (aka Maxis management and EA management), but you get the idea.
So when you buy a game, I would guess something like 60% of your dollar covers the cost of what it actually took to make the game, and the rest pays the salaries of upper management. This doesn't even take into account cases where upper management actively hinders the game development by constantly changing the requirements/high-level goals.
What's not sustainable is the way the industry is currently structured. There are way too many people involved in making a game that shouldn't be, either due to their competency or position in the org chart (generally both). This wastes time and money. And then there is an overlapping category of people the game has to pay the salaries of, who didn't directly contribute in any meaningful way.
The games industry is filled with gamers who are also highly skilled professionals. They're just not the ones making the high-level decisions generally speaking (some companies are better about this than others). What's happening is the industry is run basically like how you would run a software company cranking out COTS. Except for a small handful of places, game studios are run like a Dilbert cartoon. Thing is, if you are making COTS there are a lot of ways you can survive making mediocre products and abusing employees as long as the product (mostly) functions in the advertised manner. But video games are a luxury entertainment -- nobody needs to play a video game.
The crash is coming because digital distribution is leveling the playing field. The large publishers survived for years cranking out games with gross inefficiency because selling a game was a function of how much shelf space you could get at the Best Buy, and THAT was a function of how much money you could throw at your marketing department. Companies are making less money because I can go on steam and get a list of games I've never heard of that have a metacritic score > 85. So the big publishers are losing money there... the response has been 1) bribing the gaming press to give inflated metacritic scores and 2) laying off employees in the "useful" category while keeping the overpaid execs, who stand around cracking the whips on the remaining workers and invent reasons to justify their positions. These reasons generally take the shape of company-wide initiatives, such as always-on DRM.
So now the industry is in a death spiral. Gamers will be fine -- every company that consistently puts out quality games that people like to play will survive. The remaining market will be AA indie studios that arise from the ashes, where people who've worked together want to try and make a game without an oppressive layer of management. My only fear is that kickstarter will be tainted -- every "rockstar" blah blah game developer who took credit for some awesome game in the late 90s I guarantee you wasn't the guy doing the actual work. The people who actually know how to make good games are the guys/girls you never hear about.
Anyway, just an observation from someone works in the industry.