All I can say to this is Amen.

Words from a game developer himself, Chadius breaks it down why Nintendo took the direction they did which is gaining them millions now.

Now everybody knows why Nintendo IS the videogame indsutry. They take the lead and are not so influenced by the actions of other companies in the field. It is because they have deep understanding on what drives this business. Their mistakes are how the other companies gained ground. But in the end it all comes back to them.

Making the games business a VIP affair is fatal for this industry. Lossleading and subsidizing of platforms only leads to ruin in the long term. Performance enhancing drugs (green 'roids = money) have reached the limit of their ability. Time to get back to basics. Time to keep it natural.

John Lucas

Coal is free also, until you pay someone to mine it.

I'm going to simplify many of the above responses.

There are definitely ways to bring costs down: middleware, increasing install base for next-generation platforms, unifying those platforms (not happening soon), learning the hardware better.

All of those are true, and I definitely expect the economic situation to go from "dire" to "acceptable." But the point remains: we've seen about 5-10 percent growth in the industry in terms of new users over the last 7 years, and production costs have increased over 100 percent. No matter how much fat we manage to trim, how many corners we manage to cut, that simply will not be sustainable. Either the market for "hardcore" games has to grow dramatically -- which, again, doesn't seem to be happening -- or game producers need to figure out a way to slow down the skyrocketing cost of game development, beyond what's listed above. 

I think people who expect a magical reduction in development cost later in this generation are in for a disapointment ...

The facts of the matter is that the cost to develop a game is directly related to the number of developers you have working on the game, and you need more (and higher quality) graphical assets to produce an XBox 360/PS3 game which dramatically increases the size of your development team. Back on the PS2/XBox/Gamecube we were (typically) hearing of games which required 40 to 60 developers who were working 12 to 18 months to develop a game, and today we are hearing of 100 to 200 person development teams working 18 months to 3 years to complete an XBox 360 or PS3 game; even though the tools that exist today can be improved dramatically, these developers workload will not suddenly disapear in the near future when we get a new version of XSI or Photoshop.

I'm not going to pretend I completely understand the technology behind games nowadays, but it's starting to look increasingly obvious to me that the Xbox 360 and Playstation 3 adopted HD graphics before they became financially viable.

I don't think anyone is going to deny that games in HD are much more expensive to make than ones in SD, and it's pretty logical to say that development being more expensive means less content, and less risk making/originality. This assumption is backed pretty strongly by how so many otherwise great recent games have been extremely short, and multiplayer oriented. Gears of War, Heavenly Sword, Uncharted, CoD4, and Halo 3 all have single player modes that take less than ten hours to beat. Shortness works for a lot of games like Shadow of the Colossus or Portal, but I really don't want it to become the standard.

Someone threw the following quote at me a few days ago. I don't know how reliable it is, but if the truth is anything close to that, then I'm pretty shocked.

Kazunori Yamauchi (Polyphony Digital) said that it took about 30 days for one person to build the complete model of a single car for a Gran Turismo game on the PS2, compared to 1 day for the PS1 games. On the PS3 it takes 180 days.

I like to look at HD graphics and all, but it's starting to look like adopting them too soon is holding back games way more than the Wii's lower horsepower ever will.

amen broeder

What was the cost of developing Crysis because in my opinion the graphics in it will be what to expect in the first generation of games from the next generation of consoles. I suspect the cost won't be significantly higher than the cost of developing games on current systems in their first two years and that the biggest jump in cost this generation was simply going from SD to HD.

I don't think we're going to see anything that will cause a major jump in development costs going from this generation to the next. For example going from the SNES to PS1 there was 3D, for PS2 to PS3 there was SD to HD, but with the generation of consoles after this one there really doesn't seem anything on that scale that will cause a jump in costs. There are games already that are 1080P, do they require a lot more money to make compared ot games that are 720P?

I think the diminishing returns people are talking about will actually be what keeps development costs in check in the long term.

Multicore processing, and integrated CPU/GPU systems will keep prices high legend, the same sort of stuff that is used on today's systems will need to be redone for next gen

No offence Rol. I just couldn't keep throwing it around to people when I didn't know where it was from. =P

180 days to make one car is ridiculous

assuming an equivalent salary of $30/hr, 8 hours a day you'd spend over 43K on just one car (for that much you could probably put a car together in real life)