Article: What's Killing the Video Game Industry?

[Aiemond]

jammy2211 said:

Aiemond said:

jammy2211 said:
I'm thinking that publishers are just sort of going to have to bite the bullet now, and accept this is how it is and get on with it. Keep investing money into the HD systems, keep building engines, middleware, get their franchises selling, get more studio's equipped to make HD games and more employees trained to it. Once it's all set up and ready to go costs will fall, eventually, just got to hope Sony and Microsoft don't keep pushing graphics even further with their next consoles. Can't see that happening.

Of course doing that costs money, which to me is why the model of using DS and Wii games to fund HD projects sort of makes sense. They don't bring in huge streams of revenue but when you're releasing stupid amounts of PetZ and MySims spin offs it soon adds up.

In the short-term it'd make more sense just to invest everything into the Wii and DS where profits are easier, but I guess the inevitability is that HD gaming will be a standard accross all consoles next gen and handhelds are getting more expensive too. IT's better getting yourself prepared for HD developement, and getting it as cheap as possible, while you've still got profit streams from other systems.

I can't really see the industry going else where until Digital Distribution becomes the standard, if that happens, and that's a long way off. I do think this article does push hyperbole at points, but the sentiment is accurate.

 

But they are laying off and closing down studios due to the HD projects. How can they afford to keep investing in it if they are being killed by it?

 They make money off of HD games, not all of them lose money. They make money from Wii games, DS games, DLC etc.

The 'problem' in the original article is dramatised, albeit it shouldn't be ignored. The inevitability is that HD developement is going to become compulsory sooner or later, better be preparing for it now while you still have other streams of revenue.

 It's hard to say where we'd be if it wasn't for the recession, credit crunch etc. I'd imagine alot of the lay-offs and closures are more due to that, as that's just the corporate mentality in the west.

 

The reason for it is because most of these projects are losing money. That does not fly in an economy where credit is tight. you are right it would not be AS bad if not for the economy, but the credit line is not infinate for these losses even in average times.

 

And yes, they make some money off HD games, the ones that sell like the MGS and the Grand Theft Auto. But, as a whole, HD is not profitable. Why are the companies posting losses if it is, especially with the increased revenue. There is literally no other way to explain this.

By the time it is compulsary the costs may be lower, they may not be. Just because you make an engine, etc does not mean you have everything for your new game. The assets are much more expensive and unless they are reusing every asset the cost is still very high. The industry cannot afford this.