There will be no crash

Matthew Jabour

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A lot of people have been worried about the current state of the games industry. Tons of expensive, poorly made CoD clones flooding the market, development costs skyrocketing, companies like EA and Ubisoft chugging out games as fast as they can, yet still reporting losses - people see parallels with the first big videogame crash, when Atari fell like a mighty oak and games essentially disappeared before Nintendo saved us all. Game prices skyrocketed, and people's interest in said games plummeted, just as today people have been buying less and less consoles. History repeats itself, and who's to say we might not make the same mistakes again?

Well, me, for starters.

First of all, this industry is a lot more advanced nowadays, and we have more legs to stand on. Whereas Atari was basically the top dog in games, we have 3 now. And one of those 3 is Nintendo. They were dragged into the HD age kicking and screaming - if a crash does begin to happen, they'll just put out a cheap, bare-bones console with good games, like they did the last time. And while triple-A game costs may be skyrocketing, we have a new player called 'indie'. Back in the day, if you wanted to make a simple Pacman clone, you had to cut out your soul and serve it to Atari on a silver platter. Now, we have Kickstarter, where a few million dollars can make a game developer's wildest dreams come true, publishers be damned. When the rich guests have left, the beggars have their fill.

This isn't even mentioning mobile games. As console sales fall, their sales skyrocket. What's a videogame crash to a console which offers half its games for free? And just as Nintendo came out from the shadows, a big indie guy like Rovio might emerge and make their own console, one radically different than what we've seen before, but one made for a new market. It's like a jack: no matter how far you throw it, one point always points up.

Second, the industry is aware of this threat and is already hedging their bets. EA may not be on the fast track to console success, but PvZ 2 was an unmitigated success, and they turned out to handle the F2P market incredibly well. They just might be able to salvage the stuff if they try hard enough. Nintendo's newest console is already pandering to the tablet demographic; their next console could be fully portable and allow you to make calls, and they'd call it a logical evolution. As for the other two, Microsoft is well known by now for making drastic changes to adapt to different scenarios, and Sony earned their brownie points for learning for Microsoft's mistakes and adapting thusly. If the games industry came crashing down tomorrow, at least one of them would end up on top.

Finally, games are nowhere near as expensive as way back then. Just before the crash, one Atari game would cost today's equivalent of $100. Console games are firmly trapped under a $60 ceiling, and 3DS games cost even less. Nobody wants to be the asshole who started charging $65; that said, if one succeeded, the rest might follow. But even then, the aforementioned indie games don't have the same relentless drive for profits as triple-A games do. You have no investors to compensate, you just want your game played by as many people as possible. Many indie games are around $15 at launch, and the big 3 are making sure their consoles are full of indie titles. So there will always be a cheaper alternative.

And the same also goes for consoles. As I said before, Atari was the big dog, and most competitors charged even more for their consoles. Nowadays, we have N, S, and M charging $300, $400, and $500 for their consoles, a much wider range. And let's not forget the Ouya, the honorable attempt to make a $99 console. Whether or not the thing is any good is inconsequential; as long as there's an option to buy a $99 console, then the barrier to enter console gaming is precisely that low. If the crash did happen, Microsoft would take the biggest fall for it. The other two could save themselves, and even if they didn't, the dollar-store console everyone counted out could take the crown.

So no, there's no crash coming. Maybe a couple companies would fall, but the industry isn't going anywhere. So instead of worrying your head, you can focus on other things, like having sex or reading books. (Incidentally, those two things would also make a big comeback if there was a crash.)

Discussion Question: When did we start saying Triple-A instead of AAA? And whatever happened to A and AA?
 

Realitycrash

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A and AA aren't gone, they are just dormant. If there IS a crash, then these A and AA developers (Indie) will just step up and fill the gap.
Sure, there might not be the same absolute AAA quality for awhile, but it won't be like "Videogames are gone forever" either. And I'm quite fine with that. I'd rather let the industry crash and burn (if that were to happen) than keep on bending over for them. I can live without new games.
 

Exhuminator

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What happened to the industry during 1983 is not analog to what is going on in 2013. The games industry right now is cumulatively worth billions of dollars, and periodically outperforms the movie industry in profits.

And whatever happened to A and AA?
"AA" have become the handheld games, think DS/PSP/3DS/Vita. Occasionally pricier indie games have an AA budget as well.

"A" have become the ad supported "free" smartphone and browser based games. Also many freeware indie games are of the "A" quality.
 

Maximum Bert

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No there wont be a crash well at least not like what happened in 1983 the market is very different now back then people just lost all confidence in it.

As for A and AA games they are still about just recently I played Puppeteer and before that Dragons Crown hardly AAA games but certainly not Indie, ofc no one plays or buys puppeteer but I think Dragons Crown has done ok (both deserve to do well imo). A bit lower down you have Skullgirls I wouldnt class that as Indie but some might regardless it blurs the line and easily contends with the heavy weights of the genre in providing a solid experience.

So they are still there its just they dont get as much exposure as AAA games or certain Indie games.
 

Matthew Jabour

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Exhuminator said:
What happened to the industry during 1983 is not analog to what is going on in 2013. The games industry right now is cumulatively worth billions of dollars, and periodically outperforms the movie industry in profits.

And whatever happened to A and AA?
"AA" have become the handheld games, think DS/PSP/3DS/Vita. Occasionally pricier indie games have an AA budget as well.

"A" have become the ad supported "free" smartphone and browser based games. Also many freeware indie games are of the "A" quality.
If indie is A, then is there nothing else used in that spectrum? Wouldn't it make more sense to have B games and C games?
 

Aiddon_v1legacy

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a crash is completely possible, it just won't be on the same level as 1983. Nothing is crash proof, as evidenced by many, many, MANY industries and economies having multiple ones.
 

TheIceQueen

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Always with the presentist thinking. *sigh*

Anyways, of course there's not going to be a crash like the one in the 1980's. That much is ever going to be obvious because no two periods of history are ever going to be alike.

That doesn't mean there couldn't be a crash. Just like a recession doesn't truly describe the severity of the situation it's trying to put a descriptor to, a crash doesn't either. Just like there could be a relatively minor recession or a major recession, there could be a relatively minor crash or a major one. The 1980's one was as bad as it gets, obviously, but to take a catastrophic view that it needs to be as bad as that to be considered a crash is just silly. If a few publishers fail, you could reasonably call it a crash. Recovery would be a lot less lengthy than the one Nintendo had to save us from, but it'd still be a crash. Other people would step up, sure, but it'd still take time to heal.
 

Eve Charm

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No every studio will just sell themselves to EA, EA will take the game or two they have making, finish it and then take them out back and put them down till none are left.
 

PoolCleaningRobot

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I don't think it's even possible for a crash. People will always want games and there will always be people willing to make them for money. It isn't the 1990's anymore and games don't need to be sold on disks or cartridges and you don't need a Sega or Nintendo to play a decent quality game. Cheap pc's, phones, and tablets these days have plenty of hardware to render a decent game without too much limitation. While it does cost money to host servers for downloading games, I read that utorrent is coming up with system for buying torrents so they can be distributed by peers. The only problem I could see with such a system would be drm and piracy. It's hard to buy things you know you can get for free but drm just pointlessly shits on consumers and has the potential to ruin games

As for AAA and other terms, I got nothing :/ . Maybe we just started using it when big games became huge million dollar projects and slowly everyone adopted that model so everything that wasn't indi or portable was AAA

Eve Charm said:
No every studio will just sell themselves to EA, EA will take the game or two they have making, finish it and then take them out back and put them down till none are left.
Luckily as far as we know, EA doesn't execute their devs when their studios shut down so there would still be plenty of game makers in the world
 

Exhuminator

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Matthew Jabour said:
If indie is A, then is there nothing else used in that spectrum? Wouldn't it make more sense to have B games and C games?
I was just referring to "A" as being the lowest budget possible for a game that actually had financial development of any sort. "AAA" = huge budget, "AA" = moderate budget, "A" = tiny budget. Completely my own personal interpretations of the meanings of course.
 

Mr.Mattress

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1) Regardless of whether the likes of Nintendo or Valve could pull us out of any Crash, doesn't mean a Crash still wouldn't happen: It would. Tons of smaller companies would shrivel and die, and so would big AAA developers like EA, Ubisoft, and Activision (Although I think Activision could barely survive the ordeal). It would be terrible for the industry as a whole, and desperation from everyone dying or surviving would mean less quality games and probably less consoles (There is no way Sony or Microsoft would stick around to make a new console in a floundering, uncertain market).

Mobile Indies also have their own problems: No one is going to buy a real game on a Phone, they only want F2P or Freemium time wasting games. Neither Nintendo nor Valve nor Activision could survive in a market like that, and companies like Rovio would not step outside those boundaries (Because, corporations are, for the most part, really lazy unless forced to change). In Short: Phone and Tablet Only Gaming would lead to even greater stagnation then we saw in the past generation, or in the Atari ruled age, thus resulting in another crash.

2) I've already covered this, a lot of Indie groups would survive on F2P and Freemium models, but I don't think EA makes all their money off of Peggle and Plants vs. Zombies. If EA were forced to only rely on them, they would crash, and crash hard. Another problem is that yes, most Console manufacturers are moving closer and closer to become like the Mobile market, but they still have some dedication to Video Games. Mobile Phones have no such dedication, because that is simply a luxury. A Luxury most people demand be free or extremely cheap or else the luxury won't be bought. Sony and Microsoft's gaming division would never stand for it (You honestly expect Naughty Dog to throw up their hands and say "Yeah, let's pour billions of dollars into the next Last of Us, put it on phones, and charge only 99 pennies for it"? That would be insane!).

And 3) If the Industry crashes, it won't matter how much games cost, because most game makers and consoles would cease to exist. The games that do exist will either be cheap F2P or Freemium games on your phone, or games with very tight budgets that most gamers won't enjoy because "It's not Uber Graphics or Uber AI." We already see this problem with Nintendo: Sure their games sell, but you always hear people complain about how their behind the times. If a crash were to happen, the only ones to survive would be companies that were behind the times (And holding a ton of money in the bank), and thus Gamers would be furious.

All in all, if a Crash really does happen, and I'm starting to think it will soon, no one will be happy and only a few corporations will survive this thing: Most of them not even looking like they use to look like.
 

KeyMaster45

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I don't think we can expect the industry to crash, but I do think we can expect we'll see a "popping" of the industry bubble in the next 5-10 years. If production costs continue to increase, eventually the sales required to simply break even will be so unrealistic we'll start seeing shit get real really fast. When the "bubble" does burst we can expect to see a few major long time players in the industry crumble under their own weight.

The industry won't die, but it will take a pretty solid punch to the gut that forces companies to reorganize the way they make games or go out of business. We'll see less blockbuster games and more medium sized games; an unfortunate side effect may be that we'll see a more "nickle and dime" business model permeate the industry for a few years.
 

Aiddon_v1legacy

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Mr.Mattress said:
1) Regardless of whether the likes of Nintendo or Valve could pull us out of any Crash, doesn't mean a Crash still wouldn't happen: It would. Tons of smaller companies would shrivel and die, and so would big AAA developers like EA, Ubisoft, and Activision (Although I think Activision could barely survive the ordeal). It would be terrible for the industry as a whole, and desperation from everyone dying or surviving would mean less quality games and probably less consoles (There is no way Sony or Microsoft would stick around to make a new console in a floundering, uncertain market).

Mobile Indies also have their own problems: No one is going to buy a real game on a Phone, they only want F2P or Freemium time wasting games. Neither Nintendo nor Valve nor Activision could survive in a market like that, and companies like Rovio would not step outside those boundaries (Because, corporations are, for the most part, really lazy unless forced to change). In Short: Phone and Tablet Only Gaming would lead to even greater stagnation then we saw in the past generation, or in the Atari ruled age, thus resulting in another crash.

2) I've already covered this, a lot of Indie groups would survive on F2P and Freemium models, but I don't think EA makes all their money off of Peggle and Plants vs. Zombies. If EA were forced to only rely on them, they would crash, and crash hard. Another problem is that yes, most Console manufacturers are moving closer and closer to become like the Mobile market, but they still have some dedication to Video Games. Mobile Phones have no such dedication, because that is simply a luxury. A Luxury most people demand be free or extremely cheap or else the luxury won't be bought. Sony and Microsoft's gaming division would never stand for it (You honestly expect Naughty Dog to throw up their hands and say "Yeah, let's pour billions of dollars into the next Last of Us, put it on phones, and charge only 99 pennies for it"? That would be insane!).

And 3) If the Industry crashes, it won't matter how much games cost, because most game makers and consoles would cease to exist. The games that do exist will either be cheap F2P or Freemium games on your phone, or games with very tight budgets that most gamers won't enjoy because "It's not Uber Graphics or Uber AI." We already see this problem with Nintendo: Sure their games sell, but you always hear people complain about how their behind the times. If a crash were to happen, the only ones to survive would be companies that were behind the times (And holding a ton of money in the bank), and thus Gamers would be furious.

All in all, if a Crash really does happen, and I'm starting to think it will soon, no one will be happy and only a few corporations will survive this thing: Most of them not even looking like they use to look like.
That is the thing, the only company in the industry I could say is really "crash-proof" is probably Nintendo. The reasons being that A) They're not dependent on a handful of franchises due to the fact that they are INCREDIBLY diverse and B) Because they're just plain SMARTER than most companies. They took a slow and steady approach with their money and as such have made a steady profit unlike Sony, MS, and a lot of 3rd party publishers and devs who got MASSIVELY drunk off the power of the 360 and PS3. And unlike those companies they did not have to suffer the massive hangover they had afterward when they realized just how unsustainable they've made their business models. Things need to change, but instead of companies changing themselves internally they keep making stupid decisions.
 

JagermanXcell

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Of course there will be no crash, people recently rushed out and bought one of the most expensive games ever made (GTAV). This may be bad for certain devs who now think "More money in game means more money for us" but it'll be their loss when a game doesn't see that money back.

The industry won't crash, but with the way the AAA game market is acting at the moment we'll see a lot of money go down the crapper in the next couple years.
Also prep your anus for more DLC, that'll come next with a vengeance when big budgets fail.

Tip until that dreaded day: Speak with your wallets, not your words.
 

Strelok

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Seems like wishful thinking if you ask me, who the Hell would want things to continue as it is now anyway? Seriously though, I was there playing games still in 1983 and 84 just not on a console of course. It's not a bad thing for the industry to purge itself, brought around the rise of Nintendo and PC gaming last time, to misquote the Joker, this industry needs an enema. Can't wait to see what remains in the wasteland that is the AAA games market.
 

Bellvedere

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Has anyone ever used the terms A or AA?

While I imagine that the term probably came from a comparative system (like the credit rating system) I've never actually heard anything other than AAA used to describe games... I've always used and interpreted it in the sense that AAA in the game industry is analogous to blockbusters in movies. Something with a high marketing budget, high production costs and expected to sell 1million+ copies.

There's plenty of titles released every year (not just indie or handheld/mobile either) that I wouldn't consider Triple A.
 

MammothBlade

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Bellvedere said:
Has anyone ever used the terms A or AA?

While I imagine that the term probably came from a comparative system (like the credit rating system) I've never actually heard anything other than AAA used to describe games... I've always used and interpreted it in the sense that AAA in the game industry is analogous to blockbusters in movies. Something with a high marketing budget, high production costs and expected to sell 1million+ copies.

There's plenty of titles released every year (not just indie or handheld/mobile either) that I wouldn't consider Triple A.
I think of AAA as being the most hyped up games, which have to sell the most units to return a good profit.

A and AA are mid-hitters such as Resistance, Fallout, and XCOM, which don't have quite universal appeal, they aren't going to be the biggest and most hyped launches of the year, but they'll still make waves. Really, I think a lot of games branded as "AAA" are actually A or AA. It's just a buzzword for anything that's a big release.

It isn't about quality either in gameplay or presentation, but their importance and scale in the games market. There are a lot of AAA games which are actually mediocre besides their budget. Most of the CoD series in point. So yes, blockbusters.
 

Abomination

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I actually think we could have had a crash but the companies changed their tune. A lot of companies, even EA, are behaving differently now and have learned from their past mistakes.

The past 2 years have been years where consumer confidence in the industry probably reached an all time low. But companies like CD Project have shown us that when the top dogs stumble there's going to be someone else ready to climb right over their corpse.
 

gamer_parent

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Umm, of course we won't see another 1983 crash. The times are too different for that. But a bubble pop that leads to industry shrinkage? That's almost certain, if you ask me. The question is really where and how. Personally, I'm pretty sure the bubble popping will happen first in the mobile gaming sector. That sector has way too many studios jumping in, way too much investment, and a pitiful ability to actually monetize it's customer base. So if there is a crashing coming anywhere, that's where it will be.

In console gaming, that's less likely to happen, for the simple reason that in the foreseeable future this market is pretty mature and pretty entrenched as is. However, what you WILL see is the constant erosion of profitability and market size as more and more of the new players get siphoned off into the mobile market. What will eventually happen is consolidation, where a lot of the smaller, weaker studios get bought out by the EAs and such. After all, mobile is changing the way people see gaming as a hobby. Before, it's a niche hobby that required a considerable investment, and then moved to luxury item in the house that every kid needs to have, to now, where it just seems like an expensive machinery compared to other forms of gaming. It's why all the console makers are trying to move towards "entertainment center" instead of just being a gaming console. They see that the market is shifting, and they want to make a move before it's too late. To be sure, it won't go away, and it will still be healthy. But growth is going to stall, if it hasn't already.

PC gaming will probably remain as the final frontier where traditional gaming won't shift TOO much. Again, we're seeing a market contraction thanks to the shift between traditional retail model and the current day F2P model, and that reconciliation is causing a whole lot of friction in between. What will probably happen is that like the console market, we'll see a lot of the big players struggle to maintain margins as their products become more and more expensive, and the smaller AA studios will eventually shutter their doors as they get bought out by the big players. (Or if they don't get bought out, a smaller competitor will step in and fill the gap)

In either case, the gaming industry is NOT a good industry to invest in right now. The only exception to this is if you're a small indie studio that is actually picking up a load of traction or if you're gaming business lives off of the explosion of new gaming studios.