AAA games are far too expensive these days, and that could seriously hurt the industry. I’m not talking about cost to the consumer, mind you, though if things continue the way they are, we might soon see a much higher cost to games. Instead, games are too expensive to make, especially in the AAA industry. We are seeing “blockbuster” titles that absolutely require unrealistic sales in order to achieve profitability, and this had led to some developers closing doors, and each time we risk seeing even more doors shut in the future.
Let’s go back a few years for a textbook example of the problem. In 2006 38 Studios formed with former Red Sox player Curt Schilling at the helm. Their first (and ultimately only completed) project was Kingdoms of Amalur: The Reckoning, a game that had a lot going for it, especially with author R. A. Salvatore and cartoonist Todd McFarlane available to help provide artistic direction for the game. 38 Studios took out a $75 million loan from the state of Rhode Island, and set to work creating a new IP they hoped would sell well. Kingdoms of Amalur: The Reckoning released February 7 2012.
Anyone familiar with the story of 38 Studios knows exactly how that ended. The game sold more than 1.2 million copies within the first three months, which to be honest is actually a perfectly respectable number considering a few strong factors. First of all, this was a new IP, so of course there wasn’t already a dedicated fan base yet. Second, this was a new company and their first game. 38 Studios hardly had any following except for people who would buy the game for the names attached. Despite pretty decent sales, the governor of Rhode Island stated the game was a failure. It needed to sell more than 3 million copies to break even.
Putting that into perspective: Watch_Dogs sold more than 4 million copies across 5 platforms in its first week and was the highest selling new IP in history. In order for Kingdoms of Amalur to be successful, it had to perform much better an a majority of new IPs are ever expected to perform. It was a goal that was difficult for an established company like Ubisoft to break, and would of course prove impossible for 38 Studios who released their game across only three systems. Ultimately that hubris cost more than 300 employees their jobs.
This isn’t an isolated incident, however. It was particularly bad for 38 Studios because they weren’t established and had no capital to fall back on. Most studios can usually eat at least one bad game through their profits off others, but no game developer is too big to fail right now, which makes the current trend of making more and more expensive games with even more unrealistic goals all the more troubling.
For an idea of how ridiculous the expectations are set for modern gaming blockbusters, look no further than the reboot of Tomb Raider published by Square Enix and developed by Crystal Dynamics. The game launched in March of 2013, and according to the Tomb Raider executive producer Scot Amos, the game only became profitable by the end of 2013. How disappointing were the sales of Tomb Raider? The game sold 3.4 million copies during its first month. Again, that’s a perfectly respectable number, but it wasn’t enough for Square Enix to be happy with. The budget for the game was $100 million, and in order to break even it would have had to sell at least 5 million copies.
Not all of the problem is just greedy executives, but it also has a lot to do with the graphics arms race. Mark Rubin, executive producer at Infinity Ward for Call of Duty: Ghosts told Game Informer “Games are becoming harder to make and more expensive to make, and I feel like (I would think) smaller studios are having trouble making big games that hit the big AAA market because they’re harder to do. It is kind of a bummer that games are getting so hard and difficult to make. People want better and better graphics and people want more realistic looking art assets and that comes at a cost. That’s a hard thing to have to deal with.” When even AAA developers are complaining about the graphics race, there’s definitely an issue. Mark may have backed away from the phrase “costs spiraling out of control,” however that’s close to what’s happening. Massive companies can cover those costs, but smaller companies are going to have huge issues leaping onto the next gen and compensating for the apparent “need” for higher-fidelity graphics the PlayStation 4 and Xbox One demand.
Costs are rising, and if expectations on game sales consistently can’t be met, more doors will close, or the price for games as a whole will rise from the current $60. At the end of the day, if the cost of development is going to continue to increase, that cost MUST be transferred somewhere assuming sales can’t outpace rising costs. Naturally, it will come from the pockets of us as consumers. Sony has already increased the price of exclusives like inFAMOUS: Second Son to $70, and I wouldn’t be surprised if we see the general price of games rise to $75. Keep in mind, the last time we saw a price increase like this was back in the PlayStation 2 days!
Beyond that, competition in games development with continue to flounder. AAA studios will become even more dominant as the smaller developers fall around them, creating an even larger disparity between the AAA and indie markets. Non AAA developers can either chase the success of Call of Duty and Grand Theft Auto, risking everything (which will naturally make hiring developers for risky studios even harder), or they can find new and inventive ways to use their limited resources to their advantage (Spec Ops: The Line is a great example of how a smaller studio can make a really successful game without an inflated budget). The less competition there is in the AAA games industry, however, the more we’ll see studios not delivering what was promised, or resorting to anti-consumer business practices because you can’t find an experience like theirs anywhere else, and you will buy the game anyway.
Game developers need to reign in their budgets and ease expectations. Not every game is going to achieve the sales of Grand Theft Auto V ($265 million budget) or Watch_Dogs ($68 million prior to the delay). We as gamers also need to stop forcing the graphics war. Demanding more and more realistic looking games forces companies to continue this arms race. We should instead be demanding better game mechanics and better business practices. In short: Developers need to make cheaper games for all our sakes!
(Featured image courtesy Flickr user Scott Hudson)