Video Game Crash?

[Ebonrul]

Short answer, yes.

A crash happens when a product's price returns to normal after having been inflated beyond it's value. It's how a person ends up $300,000 in debt on a home that's only worth $100,000. The industry is telling us everyday that the end is nigh if this or that title doesn't make asstarded amounts of money. If you want to recount history, recount all of it. This is how every crash starts.

A market crash is financial, not a PR snafu. The numbers of customer's complaining about DRM policies or on-disc DLC isn't a real number until those same customers stop paying for it. Sure everyone complained about Diablo III, but I remember it selling fairly well (for being broken out of the box...exceptionally well). Can you hear Blizzard not giving a fuck about the whining while they count the huge stacks of money they made?

However, that was last year. This year, the AAA developers have had to resort to outright bribery to keep eyeballs on them. As consumers we've been told, in no uncertain terms, that heads will roll unless we start handing over our money with both hands up front and receiving the product (or service) piecemeal because of the (self-inflicted) astronomical cost of making it. Kind of like when you're told that the economy will survive so long as everyone gives bankers the rest of their money, or there won't be another Dead Space unless the current one outsells the Bible.

Is there a video game crash coming? It's already happening.

 

[rob_simple]

The 80's crash didn't affect "every facet of the economy" either, it left the PC gaming industry untouched (that's also why EA survived it as a young company), and it happened right at the middle of the so-called "Golden Age of Arcade Gaming", that went on for years after it (and was, in fact, ended by the next successful home consoles).

If only the AAA parts of the industry alone would fail, that would in itself be a larger portion of gaming than in the 80's, and gaming is a larger portion of the world economy than then. That's enough to warrant calling such a scenario a major industry crash.

I didn't say the 80's crash affected every part of the economy, I'm saying that to kill the gaming industry, today, there would need to be some sort of global financial meltdown. Even if AAA gaming did collapse it still wouldn't be a crash in the same sense as the one in the 80's, which is what the OP seems to be implying. Yes, it would be on a much greater scale than the one in the 80's, but only because the market is bigger; the ramifications wouldn't be nearly as severe.

All we've heard about for the last few years is how every AAA release is failing to meet its sales targets, while other markets are flourishing and raking in money hand over fist. The market for handheld, MMO's, app gaming, F2P, flash games, and the indie community is profitable enough that the industry could easily sustain itself and re-structure. Consoles like the OUYA would potentially thrive and stuff like Steam's TV box thing would have a chance to take the place of the super-expensive current consoles we're being lumbered with.

I think the real difference here is that whereas the 80's crash almost killed the console industry, having it happen now could be a good thing, because it would give a chance for a console market rebirth that could potentially return us to a time when games were primarily about having fun, and not showing off how many polygons you can cram onto a screen or how easy it is to share everything you're doing with Facebook.

It's worth remembering that gaming was nowhere near as big in the 80's as it is today: it could have quite easily passed away like a fart in the night back then, following the crash. Now gaming is as ingrained in our society as books, music or film, so there is absolutely zero chance of it ever going away.

 

[Entitled]

Even if AAA gaming did collapse it still wouldn't be a crash in the same sense as the one in the 80's, which is what the OP seems to be implying. Yes, it would be on a much greater scale than the one in the 80's, but only because the market is bigger; the ramifications wouldn't be nearly as severe.

I understand that, and I'm not saying that the next crash will be as severe as the one in '83, I'm saying that you misunderstand how severe the crash of '83 was to begin with.

You brought up how people would't throw away their PCs and their iPhones, so there would still be a gaming market.

But people didn't throw away their PCs in '83 either, and there was an Arcade all along. There *was* a gaming market. The crash of '83 was only about investors suddenly losing faith in the home console software market after a few infamous failures, and that crisis alone was big enough to call it a "crash".

All we've heard about for the last few years is how every AAA release is failing to meet its sales targets, while other markets are flourishing and raking in money hand over fist. The market for handheld, MMO's, app gaming, F2P, flash games, and the indie community is profitable enough that the industry could easily sustain itself and re-structure.

Are you talking about the individual corporations, or about the abstract concept of there staying some sort of "games industry" in the future? Because if it's the former, then I could actually see your idea that there won't be a crash, EA and Activision won't go bankrupt, Nintendo won't pull out of business, etc, they will just change their business models.

Though I don't think that will happen. Right now, EA is laying off Popcap, Activision is starting to run out of WoW money, and indies are ridiculously small compared to the big ones. So while I see how these could be the seed of a new industry, the current one is already beyond the point of no return.

Consoles like the OUYA would potentially thrive and stuff like Steam's TV box thing would have a chance to take the place of the super-expensive current consoles we're being lumbered with.

I think the real difference here is that whereas the 80's crash almost killed the console industry, having it happen now could be a good thing, because it would give a chance for a console market rebirth that could potentially return us to a time when games were primarily about having fun, and not showing off how many polygons you can cram onto a screen or how easy it is to share everything you're doing with Facebook.

Just like how the crash of '83 gave the industry a chance for a rebirth through Nintendo's new business model with the seal of quality?

It's worth remembering that gaming was nowhere near as big in the 80's as it is today: it could have quite easily passed away like a fart in the night back then, following the crash. Now gaming is as ingrained in our society as books, music or film, so there is absolutely zero chance of it ever going away.

Like I said, that's probably a hyperbole. Even if we assume that we just got lucky with Nintendo, without them, there still would have been other segments of gaming. That way, maybe the Arcades would have flourished longer, or the PC would have had more dominance, but that's about it.

And even if it's true, it's irrelevant. The OP didn't ask about whether gaming culture is about to disappear, but about whether a crash is coming. And yes, a big, ugly crash is coming.

Pointing hout how the cultural context is not exactly the same, is an irrelevant detail. At best, we can be more hopeful that the industry will be reborn afterwards, than the guys in '83 were.

 

[WoW Killer]

Is gaming becoming more and more like a religion every day?

Much like religion, we've now got our own doomsday prophecy, and much like religion, we've got a small minority actively hoping it will happen.

 

[Entitled]

Is gaming becoming more and more like a religion every day?

Much like religion, we've now got our own doomsday prophecy, and much like religion, we've got a small minority actively hoping it will happen.

I'm pretty sure that it's not just a minority that is hoping for that, at least not in Christianity, after all, the second coming of Christ and the final defeat of sin is kind of the whole point of the whole thing. Maybe there is a minority that is more vocal about portraying that as "apocalyptic" (in a disaster movie sense of the word) than others, but only dualist religions, that believe that Good and Evil are equally strong and in a necessary balance, would say that things should go on forever as they do now.

Gaming is kind of the same way. Pretty much everyone would want bad business practices to go away, and if that requires a crash of the current one, so be it.

The small minority are not those who want such a change, but those who portray this as a terrifying "doomsday", or "the end of gaming". And in my experience, most of those people are not actually hoping for it.

 

[CriticalMiss]

I don't think the industry will crash, there will just be a kind of renaissance/revolution that leads to alot of the shittier companies either folding or at the very least having a drastic change of policy. The internet is going to be instrumental in stopping a complete crash as it is now possible for talented developers to 'go it alone' in terms of publishing their games or finding funding to avoid getting publishers too involved. We've already seen a lot of small and resonably large names in gaming cut out publishers and go straight to gamers for funding, something that wasn't really possible in the 80s. I reckon we will instead see a downturn in the number of massively overbudgeted games being pumped out and a huge increase in small name games, new IPs and basement developded titles in thenext decade. More so than we already have done. And chances are that some publishers will try and embrace it whilst others (read: EA) will try and control it, fail, look like twats and collapse, probably bringing down a few studios in the process.

I'd like to see the console generations get even longer with the next gen, especially if there will be no backwards compatability. Fancier hardware really isn't vital to gaming right now, games already look pretty damn good. Developers need to start using their other skills and out games with decent stories, mechanics and gameplay so we get value for our money and they don't spend millions upon millions every two years for something that everyone stops playing after a month or two.

 

[rob_simple]

I understand that, and I'm not saying that the next crash will be as severe as the one in '83, I'm saying that you misunderstand how severe the crash of '83 was to begin with.

You brought up how people would't throw away their PCs and their iPhones, so there would still be a gaming market.

But people didn't throw away their PCs in '83 either, and there was an Arcade all along. There *was* a gaming market. The crash of '83 was only about investors suddenly losing faith in the home console software market after a few infamous failures, and that crisis alone was big enough to call it a "crash".

I know that I'm misinterpreting the severity of the '83 crash, but I think the majority of people who bring up it happening again do the same: they assume that the '83 crash completely killed the industry and things like arcades and PC's didn't trundle on.

I know it's stupid to fight ignorance with ignorance, but I'm getting tired of all the doomsayers on these forums acting as if the inevitable collapse of the AAA industry would be the worst thing that could ever happen to us.

All we've heard about for the last few years is how every AAA release is failing to meet its sales targets, while other markets are flourishing and raking in money hand over fist. The market for handheld, MMO's, app gaming, F2P, flash games, and the indie community is profitable enough that the industry could easily sustain itself and re-structure.

Are you talking about the individual corporations, or about the abstract concept of there staying some sort of "games industry" in the future? Because if it's the former, then I could actually see your idea that there won't be a crash, EA and Activision won't go bankrupt, Nintendo won't pull out of business, etc, they will just change their business models.

Though I don't think that will happen. Right now, EA is laying off Popcap, Activision is starting to run out of WoW money, and indies are ridiculously small compared to the big ones. So while I see how these could be the seed of a new industry, the current one is already beyond the point of no return.

I'm just speculating, really; all I'm trying to say is that, even if companies like EA closed tomorrow, while the industry would undeniably suffer a major blow, it would be far from the kind of apocalyptic event people are painting a crash as.

Consoles like the OUYA would potentially thrive and stuff like Steam's TV box thing would have a chance to take the place of the super-expensive current consoles we're being lumbered with.

I think the real difference here is that whereas the 80's crash almost killed the console industry, having it happen now could be a good thing, because it would give a chance for a console market rebirth that could potentially return us to a time when games were primarily about having fun, and not showing off how many polygons you can cram onto a screen or how easy it is to share everything you're doing with Facebook.

Just like how the crash of '83 gave the industry a chance for a rebirth through Nintendo's new business model with the seal of quality?

Yeah, exactly like that. I think there are going to be big changes in the industry over the next ten years and a lot of companies are going to disappear while a lot of others are going to get their shot at the big time. The difference I see between me and the people that keep starting these threads is I'm optimistic about these changes, because just like Nintendo changed the game in the 80's, a shake-up now could get rid of a lot of the more distasteful elements of gaming that have become commonplace in recent years.

All I'm really against here is people being predictably cynical and automatically assuming that any change is bad change.

 

[Joccaren]

We're looking at a different sort of crash than the 1982 one. Whereas that was utter annihilation of videogaming pretty much, caused by a monopoly and lack of control over said monopoly, this is more likely to be a long, drawn out death of many large AAA publishers, caused by their inability to make intelligent business decisions in part because they are too focused on making a game sell a ton of copies and giving it a bloated budget hoping it'll do so, and partially because they try to stop people from playing their games through DRM and season passes made to bleed as much money as possible from the consumer.
Additionally, there may be a console hardware crash. I doubt they'll be gone for good, but unless MS and Sony pull their heads out of their asses real quick I'm not seeing their consoles selling well for the next couple of generations.

PC hardware will still be largely fine, unless Intel actually go ahead with that stupid idea of not selling individual CPUs, but instead locking them to motherboards to be sold too, though that'll just mean AMD gets more sales, as pricing there is dropping and its still moving up fairly well in performance each generation.
Indie games and AA games, or games made by smaller AAA studios, will also be fine. The ones that spend far less money and try to attract a smaller audience will survive, as they are happy with less than a million sales, as opposed to needing 5 million to break even, and still produce a quality of game on par or better than that released by the larger companies.

Of course, this could all be averted and things might not turn out that way, but if the market does crash that's the way I see it going.

 

[HardkorSB]

are we headed towards a repeat of the 1980 video game crash? it seems that way to me and it has me a bit nervous as this is one of my favourite hobbies. But with developers making gamers feel steadily more frustrated and punishing them for buying their games and the new XBOX looking to be the biggest console screw-up in the history of gaming, it's hard for me not to see a second crash on the horizon.

captcha: stand by me

oh...if only. :C

The crash is already happening, we're in the middle of it.
Just look at how many developers went out of business in the last 2-3 years, just because they made 1 game which wasn't a hit. Look at how the mainstream game market is playing it safe all the way, afraid to go out of business as well.
The thing is, it's not going to look like the crash in the 80's because times are differen. In the 80's, video games weren't as big as they are now. These days, they're bigger than movies, music and books combined. In this context, a crash will mean that the smaller companies will disappear, the bigger will lose money and play it safe for a while, which is what is happening right now.
The industry is too big to fall entirely, which is what a lot of people think the crash would be.

 

[J Tyran]

I think a crash in some sectors is inevitable, like mobile gaming. This might sound odd as its been growing and growing as more people get Smartphones and Tablets, the problem is its like the wild west or something at the moment. Business models and payment options are springing up that are simply vampiric, no control or consumer protection and no real quality control over the products. The market is also getting over saturated, there are immense libraries of games and picking the good out from the bad is getting difficult. Even reviews and feedback is unreliable as some of these devs have no compunctions about using shady methods to get games uprated. Eventually people will get fed up, they will be fed up of nine out every ten games being a freemium cash grab that could set you back hundreds of pounds if you allow it. Oh and some of these games are fairly basic but effective psychological traps too, MMOs have got it down to a fine art and mobile devs have learned the lessons. Users will get fed up of nine out of every ten games being trash too, consumer dissatisfaction is a force unto itself and the level of competition and over saturation will do the rest.

In some ways it actually mirrors the crash in the 80s, except the games are also attempting to suck peoples wallets dry.

Mobile games wont die, nor the devices that run them. Think of the dotcom bubble crossed with the 83 crash and it will look like that. Hopefully the market will fix itself and mobile gaming will move on from being shitty skinner box cash grabs and start using the power these devices have to make some really great games.

 

[Rattja]

Consumer unhappiness with EA and other big publishers WILL NOT lead to a crash. The hardcore outrage over Mass Effect, Sim City, etc. is mostly irrelevant to these publisher's bottom line. It does seem that is a crash is coming though. This is because it is too expensive to continue making games as triple-A titles are currently being made. Good, creative talent is incredibly expensive and the teams working on these games are massive. Look at the credits at the end of a triple-A title and realize that these are all people with college degrees getting upper 5 if not 6 digit salaries plus health care plus payroll taxes... These triple A titles are selling millions of units and it is still not enough to keep them above water.

Video game revenues are increasing every year, rivaling that of all other media and these large publishers are still struggling. There is a crash coming but it is only for the big guys. The model has to change to something a lot slimmer, or consumers have to be convinced to spend far more on games.

See, this has had me confused for a long time.
First, what do they need all that money for? You don't need that much money to have a good life, you just don't.
What else is costing so much? I have not been that impressed lately when it comes to quality, as it mostly seems like graphics is the main focus point.
Good games has been made with less money before, so why not now?

 

[NoeL]

captcha: stand by me

When you're not stroo-ooong and I'll be your friend, I'll help you caaaaarryyy on!

That's *Lean On Me. The song you're looking for is:

Darlin', darlin', stand by me, stand by me
Oh stand by me, stand by me, stand by me

OT: Yes, there's a AAA market crash going on at the moment but everyone else will be virtually unphased. Depending on sales of this next gen, "console" gaming may very well be replaced with "mini PC" gaming (things like the Steambox or Ouya), with more generic brand "entertainment players" with common architecture and (likely Linux-based) operating systems (albeit with proprietary front-ends). These would be able to play a variety of PC games, plus act as a central media/web hub. They'd also be composed of modular parts, where upgrading the RAM for example is as simple as ejecting a video cassette and chucking in a new one.

You'll just have to hold onto your Nintendo console, because they'll probably be the last to give up proprietary hardware.

 

[Gearhead mk2]

I don't want it to crash, but if we want to avoid a crash, there's only two options.

The Good Option: AAA publishers, developers and hardware makers do a complete U-turn from everything they're doing now and go back to making good games. No millions on graphics and voices, no gimmicky controlers, no overblown ads, no DRM or online passes or any other kind of restrictions, just high-quality games.
The Bad Option: The consumer base will grow so stupid that they won't care about the crap the AAA industry pulls anymore and will gladly suck up the latest always-online online-pass pay-now-pay-again-later spunkgargleweewee game repeated ad nasuem until the end of time.

Given that the good option there is extremly unlikely, and even if it did happen right this second it might be too late to work, I think a crash might be the only way to avoid the bad option.

 

[Gearhead mk2]

Good games has been made with less money before, so why not now?

The AAA market is so obsessed with being the best in everything, looking photorealistic, having voice acting worthy of Pixar, making sure the ad campaign is so big that everyone knows about it, etc etc. that they spend all they can afford and more on those parts while neglecting that actual game development. It's lack of understanding on the part of the people who run the publishers. If they want to get into making summer blockbuster action movies, great, but don't run gaming into the ground trying to make them.

 

[RhombusHatesYou]

But people didn't throw away their PCs in '83 either

... and a lot of the Western European (yeah, remember those cold war hijinks) market was already dominated by PCs, specifically the C64, the lifespan of which pretty much defines the 'Golden Age of British game development' (and why doesn't Jeff Minter have a fucking knighthood?).

For those markets (and other PC dominated ones) the Crash of 83 was barely a blip.

 

[jetriot]

Consumer unhappiness with EA and other big publishers WILL NOT lead to a crash. The hardcore outrage over Mass Effect, Sim City, etc. is mostly irrelevant to these publisher's bottom line. It does seem that is a crash is coming though. This is because it is too expensive to continue making games as triple-A titles are currently being made. Good, creative talent is incredibly expensive and the teams working on these games are massive. Look at the credits at the end of a triple-A title and realize that these are all people with college degrees getting upper 5 if not 6 digit salaries plus health care plus payroll taxes... These triple A titles are selling millions of units and it is still not enough to keep them above water.

Video game revenues are increasing every year, rivaling that of all other media and these large publishers are still struggling. There is a crash coming but it is only for the big guys. The model has to change to something a lot slimmer, or consumers have to be convinced to spend far more on games.

See, this has had me confused for a long time.
First, what do they need all that money for? You don't need that much money to have a good life, you just don't.
What else is costing so much? I have not been that impressed lately when it comes to quality, as it mostly seems like graphics is the main focus point.
Good games has been made with less money before, so why not now?

You need how ever much money you are worth. We don't work hard to make the same as some jackass flipping burgers. We make what we are worth and a good developer is worth a lot of money. Not only are they incredibly hard workers but they invested in their own education to the point where their skills have unique value. There is no cap on how much money you can be worth if you are unique and valuable. Incredibly basic economics. The problem though is not how much the employees are paid but how many they are. Games are incredibly elaborate and need to be toned down if they wont be selling 10s of millions of units. Companies need to scale back the graphics or begin outsourcing some of that development in a smarter way.

Also a AAA game doesn't mean good game. You are right that good games can and have been made for less. AAA games simply have higher production values.

 

[Something Amyss]

I don't recall having DLC, blatant fanboyism, 60$ half games, or even much to do with online multiplayer back in 2003 unless you had a LAN cable.

And since those are the only points for the scumbag companies and the disdain alluded to, then I guess you have a point.

 

[Atmos Duality]

AAA Gaming and social gaming are leaning more towards a crash every year it seems.
However, unlike the 1983 crash, the entire market will simply restructure itself naturally, due to the large amount of games already seeding the market in the independent sector.

To use an overly cutesy metaphor:
Think of the crash a great fire wiping out the old, rotten forest, and the opening the seeds for a new one.

 

[CityofTreez]

I think it's sad that people are hoping for the industry to collapse. Just please, get out.

The industry won't collapse, but maybe restructure. EA might fall a little bit and 2K and other good AAA publishers will take their place, with indie's getting a little larger and take up the space of AA publishers.

 

[Rattja]

Snip

Since you are saying "we" I am going to assume you are one.

You still did not answer my question, what do you need all that money for?

Also, if you did not make as much, would you still make games?
If the answer is no, I don't think you should be making em.

But that's just me.