The impending video game crash.

[bugrimmar]

1337 Gamer said:

bugrimmar said:

1337 Gamer said:
I doubt it. After the media stops making this recession seem alot worse than it is then we will see more poeples wallets open up and it will all be fine. This "recession" has played a HUGE role in this (especially the companies closing).

 

I know, the recession is doing a big part in destroying the business.

But the biggest factors of studio closure are huge dev costs and overwhelming competition. This is the first generation wherein dev costs of a lot of games can be even more than a Hollywood AAA movie. This is also the first generation wherein all three players in the business are with respectable market shares.

Even when the recession is over, if dev costs aren't put down and competition is still as fierce, we're still going to see a lot of studio closures.

 

 yes but these companies are learning not to invest quite that much money in now. When people start buying more games again we will see that it will all be fine.

 

look at my example a few posts back.

5 years ago, GTA3 sold 13 million copies and made a huge profit.

now, GTA4 sold 13 million copies but 2k posted a loss.

people are still buying even in recession. it's just that the dev cost is too high to cover even with the same or higher sales.