So the problem isn't too high development costs, it's customers who don't want to pay $60 for every single game. Sure, why not!

This article really touches on some of the most important points I've been thinking about myself.

I like to think of the example of Dust an Elysian Tail. It was an Xbla game I played that lasted a good 10-12 hours on the first playthrough just simply doing the main quest, has much extra content for you to discover after you've done the main part of the game, looks visually stunning (just look it up), has extremely intuitive and fun gameplay. And the most amazing part about it is that it was done by one dude. ONE FRIKIN DUDE!

I don't understand how one guy can make such an amazing game with a very tight budget that manages to look and play so beautifully at a quarter of the price of a AAA game, yet AAA games with apparently 1000s of people are struggling so bad. I really do agree with Jim Stirling that developers and publishers of AAA games need to fix their model, because there is something seriously broken here. Used games are clearly not even the question. It is merely a scapegoat.

We don't know this. The only number we ever saw was what they expected to sell. We still haven't seen actual shipment numbers.

On VGC PS3 has 1030 games listed with some sales data. and total game sales for those 1030 games are recorded as 670 million. This gives us an average of 650K sales per game. But that's an underestimate of course in the very least due to PSN sales of retail games.

So given many games don't have massive budgets shouldn't a 650-700K average actually be reasonable for this industry?

Or is the industry far too heavily skewed towards producing games with high budgets?

Do we blame, a little bit, reviewers who rather than giving a game 1 score they break down score to include giving a game a graphcs / visuals / presentation score? Having a 3 or 4 component score then average of those component scores rating system gives undue weight to graphics as a part of the overall score.

Oh gods, you're swallowing that Kool aid? The number of people who trade back games within a few days is a tiny proportion of total games sold, and if you want people to hold on to games then make them worth holding on to. Also, the people who trade back games within 24 hrs generally buy a lot of games, and they buy them all new. How many games do you think these people would buy if they couldn't trade back the way they do?

It's really the conceit of the industry in general: they assume that we're going to play *something*, and so take the existence of an audience for granted. Few publishers (like Nintendo) are aware that audience apathy is a very real thing, and even a big industry like comic books can fall into permanent irrelevance (kept afloat only by licensing of iconic characters) if the big players get too caught up in the idea that their industry is a center of gravity

What the developers go through? The devs are getting paid plenty of money and they are doing a job, just like any other. They don't deserve some special form of treatment. They create a product, then we buy it. That's where it ends. Just like when I buy a car or a book or a music CD or a DVD/BD movie. None of them get money from second hand sales, so what makes game devs (Or more accurately the publishers) so special? This also goes for your point about not happening in any other industry. That is simply not true. People read a book, then lend it to a friend or throw it up on eBay. People watch a DVD/BD, then the next day lend it to their friends or if they want, sell it. Some even just rent them. Some do neither and just take advantage of libraries for books, movies and games.

Just because The Witcher, Heavy Rain or Metro doesn't sell as well Mario or GTA while being just as good of quality does not automatically mean they deserve as much sales or as much money. They know this, which is why they work to a budget. They do a good job at it too. They know that every game doesn't sell as well as the other, so they start out with a small budget and see where things go and if all goes well they increase the budget next time. Why does The Witcher 2 cost 8.5M to make while similar games with much less graphical fidelity cost 2x as much if not more? It's called not allocating your resources properly and project takings too long to create. Why does Assassins Creed need 1,200 employees to create?

As for your TLoU point again, it circles back to what I said in the first paragraph of this post.

It is already proven that second hand sales are healthy for the industry. They help finance new game and someone who buys a game used on the cheap might become a fan and buy the next release. Anything that gets more of your product into consumers hands holds a better chance for the future of your product/franchise than a short term solution of "let's see how much we can possibly get on the initial new game sales and screw anyone who relies on cheaper alternatives" or a position of "What, can't afford the game new? Too bad and screw you. You can't play my game". I can assure you that no second market and no lending will not cause many franchises to grow.

There is a whole lot more proof out there that it helps than you could ever find to show that it hurts the industry.

Correct. It's always the customers fault.

Haha, only in the gaming industry.

I can go along with that theory. But then that rightfully shifts that blame back to where it belongs, the publishers (whose confirmation bias is driving them to overspend to appeal to a smaller and smaller group) rather than on the customers, most of whom are voting loudly and often with their dollars.

Indeed a very good point.  Perhaps used games are the problem after all? :P

But it never seemed to be a problem in the past - games of all prices managed to sell alright.  

Hell, the Simple 2000 series was a dedicated series of low-budget Japanese stuff that still saw physical releases and was (mostly) localised in Europe - I'm guessing mostly selling minimal copies but clearly enough to keep Midas Interactive afloat.  I suppose they're definitely the lower end of "the middle" but there was a place for these games in the sixth gen that just doesn't exist anymore.

I guess it comes down to the lowered sense of game pricing coming from things like the App Store which has partly contributed to this.  And development costs shooting up with HD development couldn't have helped too (although again, Compile Heart help to prove a point there about how that doesn't necessarily mean that sales-needed-to-break-even should shoot skyward).

I just wonder if this isn't mostly because of the cost of AAA games shooting up.  In the sixth gen, the gap didn't seem so big.  I always felt in the sixth gen that even though you could have two different series which probably had vastly different budgets (say, Halo 2 vs. Timesplitters 2) they could still both be sold at full price and people would buy them (obviously Halo sold far more, but Timesplitters sold "enough").  It doesn't feel like a similar comparison could be made these days, really.  Everything shoots to be the next CoD or Halo, there's no ground for something lesser.  Unless it's an indie release like Nexuiz or something, I suppose.

So effectively, by throwing so much money at AAA releases they've effectively destroyed the middle because you either go big or go home.  Which I just find a massive shame.  Sure, I love AAA titles and equally there's loads of lesser stuff that isn't great.  But there were plenty of gems of middle-sized franchises too that just can't sustain themselves anymore, and it just sucks because many of those were games I loved.  Ah well.