Thursday, February 19, 2009

Video game industry losing money? I know, make your product worse!

There's an interesting article over at Slate about the woes of the video game industry... arguing in the typical counterintuitive Slate fashion that despite what you might think, the massive losses being posted by Electronic Arts, Activision-Blizzard, and THQ are not due to the sucky economy. And indeed, the author's evidence is fairly compelling:
In reality, video games are selling better than ever. The retailer GameStop announced sales of nearly $3 billion worth of games, hardware, and accessories during the nine weeks around the 2008 holidays—22 percent more than during Christmas 2007.

According to the research firm Media Control GfK, game software accounted for more than half of global packaged entertainment sales in 2008, beating DVD sales for the first time. The firm pegs game sales at $32 billion worldwide. (The U.S. market accounts for around 45 percent of the world total.) The NPD Group, which tracks sales for the industry, also reports that game software sales were up 26 percent in 2008.

That doesn't really seem like an industry that should be hemorrhaging money... but they're spending something on the order of $40 million a title to develop them, and thus need to sell 2 million copies to break even... which is not all that common.

What's the solution? Make cheaper, crappier, disposable games, in much greater numbers a la the "2 week movie" model from the 30's. Um, yay? In truth he seems to think that farming out development to indie teams would lead to "1000 Portals"... but I just don't see it how that's supposed to work. I'm not sure I'm following how game development is supposed to be cheaper, simply due to the fact that it's not "in house". I can certainly see the wisdom of not being so technology focused, working with existing graphics engines (do we really need anything more powerful than the CryEngine2 engine right now?), and focusing more on the game itself rather than the polygons... but I don't know if I can really get on board with the smaller scope and shorter games ideas. Some of these games already take less than 10 hours to beat... how much shorter can we get? Is somebody going to pay $60 for a 2 hour game? God I hope not.