Is shrinking market size all that bad?

[Dr.Henry_Killinger]

sundin13 said:

Dr.Henry_Killinger said:

 

And what I'm saying is a smaller market is more focus, more diversity, and better quality, even if it makes less money. Which it necessarily wont.

Maybe they need to be making less money, they aren't necessarily using all the money they make to make games better.

You still haven't really argued that point very strongly though. There is no reason to assume game quality will increase with a smaller market, or that there will be more diversity. You really need to back up that point better, because all logic refutes that...

No it doesnt, and I've already explained it in the OP.

Lets say game A, wants to appeal to the entire market.

If the size of the entire market grows, the the game will require a larger budget, not only will devs need more money from publishers but Risk on the investment will increase as well. If the budget is larger and Risk is larger, then developer's have less options to explore because they need to ensure their product will sell more, {cip BioShock Infinite}.

Less options means is less diversity, i.e diverse options are not fiscally viable, once the budget increases past a certain point.

Even if the market size is drastically reduced, so will Risk, and less risk means more options, which means more diversity, even if they are making less money, which isn't necessarily always the case because a dedicated market will can meet if not exceed a larger widespread market.

And even if the sales are met, or even lower than on a higher base. Decreased budgets will lead to higher profit overall anyway.

1 million on a game that sells 2 million makes a lot more money than a 15 million dollar game that sells 10 million.