It seem developing majorly on HD consoles and developing the games high cost was starting to get on them. Most third parties do rely on how many games they can release in a year(quantity) rather than how their games have great reviews on mags and sites like IGN(quality)...

Most of third parties are making games based on quantity rather than quality, thats why there are many shovelwares and yearly spin offs of franchises on the PS2 on its heyday. It should be also on the Wii, but instead, the only games that comes out most on the Wii are shovelwares that comes form unknown companies like Data design Interactive and UFO or Majesco. Even most yearly franchises like COD and Madden their main consoles are on HD consoles rather than the wii, opposed to the last generation were even with inferior hardware, the PS2 was the main platform.

I did say before the games will be fewer and fewer in this generation if 3rd parties keep doing this and consoles would be turned out like PCs, were the most popular games that sells. Till now Valve still milking the frqanchise of Counter Strike this will be similar to consoles in fact its happening now, COD and Guitar Hero keeps selling SO... thats whats Activision will develop from now on.

The listed companies all had a lot of flops. I said in in the Midway thread, but I have to imagine that by far Midways most profitable game (by % return) has been Ultimate MK3 for XBLA. If you go big and don't have good sales it's over.

There have been so many good games released in the last year and a half. The competition is brutal.

Like TV, Music & Movies....all the major studios eat up the small ones.

A mere 20% of games that make it to market actually make a profit.  I think that the break even point is much higher than you think it is.

Source

This is an excellent discussion. Which we had ones of this quality more often.

In reading the replies I can't help but think of Miyamoto who says that you have to keep giving the consumer some new experience or they will get bored. Wii and DS were totally designed around this premise as were there main games: Wii Sports, Wii Fit, Wii Music, Nintendogs, Brain Age. All are mega (10m+) sellers (except Wii Music but it's still a hit). Now Nintendo also releases new versions of classic franchises too (Mario, Zelda)

With western developers they have simply lost all innovation. And for good reason. The problem is the western's world pursuit of graphics and realism. This has driven costs sky high. With costs so high developers/publishers are scared to try new innovative game play ideas. They'd rather do sequel 10 or yet another FPS or realistic action game instead. That's okay except... everyone is now doing it. First off, the preception is the sequel needs to be bigger, badder and more graphically powerful than it's predecessor. But then it also has to out muscle your competition's game too. So there's little to no innovation and lots of rising costs.

THIS ISN'T A NEW PROBLEM. We had this same problem last generation for the exact same reason. Same games over and over with ever rising costs and ever dropping profits. These same companies were all losing money then too. Just not as much. The HD consoles are merely bring this to a head. Bringing PC games to consoles also made this problem worse.

I think Nintendo forsee this coming, a semi video game crash were graphics isnt important anymore, and yet video game companies still pursuing it, NAAh... I just want to share this article

http://www.cracked.com/article_15732_life-after-video-game-crash.html

Now, I don't want to be the type to say "I told you so." Let me instead just say that a couple of years back I made a prediction about the gaming industry and that my prediction is on the verge of coming true and that I now wish to emphasize the fact that I told you about it beforehand.

Who am I? I am the creator of a certain video game console. I don't want to toot my own horn, but let's just say that profits from this machine were four billion dollars higher than the Microsoft XBox.

Think about that, and think about how Sony plans to take a $400 to $500 loss on every single damned PS3 they sell for the first few years. Oh, I know they can make that money back on the games... if the consoles sell like hotcakes in a colony for hotcake addicts during a hotcake shortage. But only if.

I hereby predict that this will not happen. Luckily for me, it doesn't take a genius.

I'll now answer some of the most common objections about the Video Game Crash:

1. Why does the industry have to crash at all? The movie industry is still around over a century later, dumbass.

Let's say Sony and Nintendo and Microsoft came out tomorrow and announced they were cancelling their next-gen systems. I don't know why, maybe there's a plague or something. How long would you keep playing your current game machine? Forever? As long as good games were coming out for it?

History says otherwise. History says that you'd eventually get bored with the machine even if there wasn't a better one to replace it.

It sounds crazy, and it took everybody quite by surprise the first time the game industry crashed in the early 80's. Back then the Atari 2600 was king, it being the first really popular game console. They sold 25 million machines when suddenly, inexplicably, most people stopped playing games.

Nobody was more surprised than Atari, who in 1983 spent millions bringing their biggest title to market, a game based on the movie ET (at the time it the highest-grossing film in history). So they had the most popular film, in a game for the most popular system. What could go wrong? They stamped out seven million copies of the game, and then were shocked to find that about six million of them sat untouched on store shelves. Legend has it that the unsold games wound up buried in a landfill and that to this day, no plants will grow over that spot

What Atari didn't realize was that by 1983 the vast majority of 2600's were sitting in closets, and in basements and in moldy cardboard boxes in the back of the garage. No other console became popular in its place, not for years.

Why? After all, we still watch TV sitcoms, and they've looked the same since color TV was invented. Kids still play basketball, more than a century after that sport was accidentally invented by a rural turkey farmer looking for a quick way to get dead birds into the round hole of the carcass chute. So what's different about video games?

The difference, is that most people are only playing games for the novelty of it.

Remember the first Roy-Orbison-wrapped-in-shrinkwrap erotic fiction story you read? Of course. Do you remember the 207th one? Only vaguely. Well, it's the same reason. Those stories really aren't that great. It was only interesting for the novelty, and the novelty wears off.

With the 2600, players realized that Hot Dog Maze was just Pac-Man with different colors. Soon the cool thing among video game fans was to sit around not playing video games. The industry collapsed

(... you can read the rest)

Yeah, that's true.

I would like to add that even though the Wii doesn't have 70% of the market, it's outselling the PS2 at the same point in its lifetime. This is because the market is growing. That means that you could develop exclusively for the Wii and it would be the equivalent of developing exclusively for the PS2 last gen. The only difference is that the Wii has a different userbase than last generation. However, it is possible for a third-party to get as much success as Nintendo. They just need to find how.

 Now that I think about it, how many years before developers make a profit and HD console development becomes cheap? Its been 3 years already, so 3rd parties still cant handle the development cost of the 360?

 same.  Credit Union instead of bank though.

I'm also unsure of hou Japanese companies deal with their workforce in troubled times.  I would imagine given their reputation for intricate and numerous contigency plans, and the extreme lack therof in America, that would highlight this contrast in virtually all business ... uhm.. figures.... Damnit PSrock your avatar is distracting!!!

The problem is most of those current gen games have absolutly nothing to offer other than pretty graphics.

Do we really need something like 20-30 shooter games made each year ?

There are genres where you don't need uber graphics like RPG, Strategy, Adventure but those are avoided by most big developers.