Modern Times - Budget Analysis ...

[Sullla]

Wow, those were REALLY interesting reads, especially the second one. As others have said, almost scarily prescient for the current market.

I'm not sure how many of you realize this, but the market that those articles were talking about (the early 1990s computer gaming market) absolutely did crash, and was completely transformed. The computer gaming market today looks absolutely nothing like it did back then. In the late 80s/early 90s, the big genres were flight simulators (Wing Commander), point and click adventure games (King's Quest), complex turn-based strategy games (Civilization), and ridiculously complicated RPGs or wargaming simulations (the early Ultima games). The games were played by a small group of geeky males, who were really the only ones who had personal computers back in the early 1980s when the market was first created. Needless to say, none of these genres really exist now...

So what happened? The games got too complicated and too niche to justify the (rapidly growing) budgets allocated to them. The market was able to stay alive because 1) many more people were buying PCs in the 1990s, and 2) the games changed in nature to appeal to a larger audience. Although there wasn't much of an Internet in those days, the old-school computer gaming geeks were vehemently opposed to these changes; this would be your "hardcore vs. casuals" debate, although no one used those terms back then. So we ended up with games like Starcraft and Diablo - fast paced and easy for anyone to pick up - instead of the ungodly complex flight simulators and adventure games of a decade earlier. The first-person shooter (Doom, Quake, etc.) also rose to prominence in the 90s too, which brought a new ("casual") group of fans to PC gaming, who were much more interested in action and much less interested in intellectual pursuits.

Now the thing is, the old computer gaming industry managed to offset its spiraling costs by consolidating into ever larger publishing houses and taking advantage of rising PC sales as the technology improved. Most people in developed countries now own personal computers, so that area for growth has slowed down enormously, and we're getting close to the end of the road for what consolidation of developers and publishers can achieve too. So what did PC developers do? Stick all their games on consoles as well! Outside of MMOs, how many major PC exclusive games are there? (Someone will take objection to that, but the truth is, very few.) And even this isn't working. Look at the current market: Take-Two (already a large publisher) needed to be directly subsized by Microsoft to complete work on Grand Theft Auto. The business model whereby Microsoft and Sony take huge losses to subsidize third-party development is extremely unstable, and can't last forever. (Sony probably can't afford much moneyhatting for a while, so expect to see few third-party exclusives come their way in the immediate future.)

In short, I agree with NJ5 that we're reaching a breaking point. You can only keep consolidating into larger and larger publishing firms for so long. The next step would be getting national governments to subsidize development costs, and that simply will not happen.