heruamon said:
HappySqurriel said:
Every time I see a company announce their financials we get threads like this and someone has to explain that increased revenue is only good if it translates into proportionate increases in profit. The HD model is broken because a company can release several games in a year which produce massive amounts of revenue, but a handful of games which sold to traditionally profitable levels lose so much money that they erase all profit from successful games.
For 4 years companies have struggled with this increasing revenue and increasing losses problem, and the management seems too inept to even realize that games with limited sales potential that will primarily be targeting undiscriminating audiences (Monsters vs. Aliens) really don’t need the advanced graphical effects from the HD console. At the same time, they really need to understand that there is a "Snobby" element to the Wii's userbase (as there is on the HD consoles) and they can't continue to crank out crap expecting these videogame "snobs" to pick it up just because they have limited options.
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So all gaming houses are doom?
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If game companies don't start to develop games with appropriate graphics to match the budget of a game based on realistic expectations of sales few companies will survive the next generation. Consider that within a couple of years the handheld games will require several million dollar budgets to take full advantage of the hardware, and even Nintendo's next home system will (probably) see $40+ Million budgets on its better looking games. If Sony/Microsoft push the envelope again, causing development budgets increase by 2 to 4 times, games will start to need 5 to 10 Million sales just to break even.
