The (De)Evolution of Video Games
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The (De)Evolution of Video Games

Consoles are Dead. Long live the game.

It all started with an article from TechCrunch called “The Console Market is in Crisis.” The quick of it is this - comparing this generation of consoles to last in terms of raw sales numbers shows a steep decline in total sales when looking at the North American market. All console sales combined were down almost 60% with the market shrinking from almost two million in sales to a little over 700,000 in a similar time period. But this really is only part of the picture of how the video game market is changing, several other factors are seeing the market evolve into something we haven’t seen in a long time, if ever.

Cost

A very real problem facing video games today is the sheer cost to develop a true, AAA title. Last generation saw some of the most expensive video games ever created. Grand Theft Auto V had an estimated 265 million dollar cost to produce, market and distribute. At $60 a pop, the game needed to sell 4.5 million copies just to break even. While the game generated $875 million dollars in revenue in the first 24 hours alone, you can easily see the risk vs reward scenario at play here is extremely high. Grand Theft Auto isn’t atypical though. It’s a long established franchise that only sees a new game in the series pushed out only every 4 to 5 years. With very few companies able to support that kind of financial investment, there isn’t going to be much content or competition against GTA.

Perhaps the best example of the unsustainability of the current AAA model in the gaming industry comes from 2013’s Tomb Raider. Tomb Raider is a franchise with a long history in the game industry with several successful titles. Square-Enix decided to reboot the game utilizing the original developer, Crystal Dynamics, full talents. The game’s budget was almost an estimated $100 million. Square-Enix called Tomb Raider a failure, despite selling 3.4 million units in just four weeks. It wasn’t until a full year later the game broke even and started to obtain profitability. The problem with this? Crystal Dynamics was already hit with layoffs.

These are just two opposing examples though of the sheer cost involved with creating games. In an article detailing game budgets, the New York Times estimates the average game cost between $18.8 and $28.2 million to develop during the Xbox 360 and PlayStation 3 era. With these costs increasing for every year the game was delayed.

Time

Which brings us to the time it takes to develop video games today and how that time is increasing for AAA developers.  Content is king in today’s game world, and what pushed consoles are the big AAA titles. Games like Madden, Call of Duty, and Grand Theft Auto grab the attention of the mainstream. Console manufacturers push big first party titles like Halo on Xbox and Uncharted on PlayStation. The one thing these games have in common is the fidelity of them are increasing.

The old saying is time equals money and the time to create these games comes from a variety of factors. Assets - that’s the 3D Models, Sounds, Textures and other media used to create the games - are becoming more detailed and therefore, take more time to create. Increased processing power are allowing developers to create more complex algorithms to solve, simulate, and stimulate players by mimicking real world actions and physics.

While EA and Activision have figured out a way to pump out yearly sequels to these franchises; maintaining the same level of sales figures have begun to prove even more difficult than before. While early on in the Xbox 360 and PlayStation 3 lifecycle sales numbers of games like Call of Duty or FIFA game increased year over year; as we tailed towards the end of the consoles life cycle into 2012 and 2013 we saw the same year over year figures decrease. Madden itself took one of the biggest hits dropping almost 30% year over year from its 2012 game.  

But what about games that start from almost nothing? Fresh franchises and new AAA series. Let’s look at one of the best received new franchises from veteran developer Naughty Dog: The Last of Us. Under development from 2010 and released in 2013, the game took almost 3 full years to develop. Naughty Dog also managed to squeeze out three Uncharted games prior to this, with the studio splitting duties. Four games in seven years is a rarity.

The more common scenario looks more like what happened at 2K with the Bioshock franchise. The first game was released in 2007 after it’s own lengthy development. While the game saw a sequel, it was from another developer entirely. Instead the successor, Bioshock Infinite, went under development and didn’t see release until 2013 - almost 6 years later. The game went on to sell around 4.5 million copies, but with a hefty estimated development cost, it most likely lost the publisher and studio a lot of money.


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