A reader is pessimistic about the future of the video games industry and worries about what will be left if it suffers another market crash.
In 1983 the video games market in the US (but not Europe or Japan) suffered a crash so severe that shops refused to stock new games or consoles and most people wrote the whole concept off as a passing fad. It wasn’t until the release of the NES a couple of years later that it recovered, ushering in a new era in which none of the previous industry giants remained relevant.
Video games are so entrenched in modern culture it seems like something like that could never happen again, especially as the reason for the crash was over production of poor-quality titles. That’s a problem that doesn’t really exist today (not that we don’t have bad games, but nobody ends up burying them in a landfill when they don’t sell).
Market saturation was also a part of the problem, and is certainly an issue now, but the real problem today is the cost of making and buying games. Every generation it gets worse and now, as publishers increase their prices during the middle of a cost of living crisis, it seems like we’re reaching a tipping point where something has got to give.
I actually started writing this article on Monday, after the announcement of job cuts at several different games companies, but I quickly revised it (I hope it doesn’t show) when I read the subsequent reports on Friday about more job cuts, including at the makers of Fortnite, and the apparent explanation of all the upheaval: that video game companies are no longer attracting the investment they used to.
Frankly, I’m not surprised. If I was a venture capitalist with a few billion to spare the last thing I’d invest in is a video game that will take six or more years to make and has no guarantee of being a hit at the end of it.
And that’s the problem now. Games take so long to make you can only get one or two full games out of one developer per generation. That means employing hundreds of people for half a decade or more, with no chance of making your money back unless it’s either a mega hit or you fill it with microtransactions, NFTs, or some other scam.
Even when you do, as Fortnite proves, that’s no guarantee of long-term success. I know it feels like it’s been around forever but it hasn’t, only six years – the average length of time it takes to make a AAA game in the current generation.
This industry is clearly unsustainable with the way it currently works. Traditional games are too expensive and time-consuming to make, the bottom seem to be falling out of the free-to-play market, and subscriptions are already failing. Concepts that seemed like they might be publishers’ next big money maker, like NFTs and live service games, have already been discredited and that really doesn’t leave anything but indie gaming.
To be honest, a world in which indie games are the only video games would probably not be so bad, but we all know that’s not going to happen. But what will? Well, first of all, more and more publishers are going to go under or, more likely, get bought out by Microsoft and others just before they go under.
But I’d also predict that either Sony will leave the games industry, because they get outspent by Microsoft, or Microsoft does because they still can’t manage to convince enough people to buy an Xbox or subscribe to Game Pass. Perhaps they’ll both leave, or become irrelevant – after all that’s what happened last time with Atari and the others.
Nintendo will survive, I’m sure, and indie games and mobile as well. But games that cost hundreds of millions of dollars and six or more years to make? No, they’ll be gone, at least for several years or until technologies change.
Video games just can’t keep on getting more expensive forever. Something is going to snap at some point, and I believe we’re rapidly reaching that point. But I don’t relish it when it happens.
By reader Tamsen
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