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Forums - Gaming Discussion - Roughly 11,500 industry layoffs since late 2008

justinian on 12 January 2010
noname2200 said:
justinian said:


Really??

The VG industry was predicted to explode like nuke in the mid noughties.

Even if 2008 was the second highest revenue ever it was also very likely the highest developing cost of games ever.

Revenue don't mean shit if most of it goes towards covering expenses leaving you with next to nothing in profit.

Casual or even some seasoned gamers out of work or worried about keeping their jobs have more important priorities .. or so I am led to believe, than to buy every game on their wish list.

Not a single bit of this contradicts a word I said.

Not. One. Bit.


Good. I am not being sarcastic, I mean that.

 I was worried I wasn't quite clear because my last post was rather hastily done.

Yes you are right, depending on the way you look at.

The fact that 2008 was the second best ever in VG revenue maybe true but can be misleading because so much more was expected.

What stopped the growth that was expected? You said the recession wasn't responsible for any of it.

I agree with you on the management to a certain extent, but developers went along with the forecasted growth predicted for the industry and expanded and invested in projects.

They then found themselves in economic turmoil when this said growth in the gaming industry failed to materialise at the rate as forecasted.

Hence we disagree on the recession being a major issue.

Anyway your post was interesting and I respect that, even if we don't quite agree.

 



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Mummelmann on 12 January 2010
cAPSLOCK said:
Mummelmann said:
Again, everyone seems to base everything entirely on choosing the "wrong" platforms to develop for and completely ignore the fact that we've had a second depression and recession that brought entire nations to their knees and even rendered some bankrupt, killed half the world's largest banks, several big car manufacturers, punctured the real estate market and generally made thousands upon thousands of companies go under and probably cost several million their jobs.
When viewed in context, the gaming industry has done quite well for itself compared to many other industries and many of the affected ones were in dire straits long before this generation started.

The woes of the world cannot solely be blamed on evil, shiny graphics.

Of course the industry isn't recession proof, the 1930s film industry proved no entertainment medium is recession proof. Something to the tune of 1/2 of the movie theaters shut down, and right around the time when sound was a new thing (a big technological jump just before a crash). Granted today is nothing near the level of the Great Depression, but like you said, the entertainment industry seems to do better than most.

At least part of the blame does rest on "evil, shiny graphics." Most of the video game industry (including Nintendo) isn't Microsoft and Sony--they can't sink billions of dollars into debt while other arms of their company pick up the slack. The industry as a whole wasn't financially ready for the leap to HD. There was something like 10-15% HD penetration (and what % of that % are gamers?) by 2006, and to make matters worse the cost to produce a game has gone through the roof.

http://www.vgchartz.com/forum/thread.php?id=37077

This thread is a pretty good one on the financial problems HD causes. That's the problem, though, it's already an economic strain in difficult economic times. Things weren't exactly peachy here in the US for quite a few years prior to the crash, the financial system just publicly caught up with the rest of the problems. 2001-2002 "9/11 Recession" was fairly substantial, 2005 saw a massive downturn in the housing market. Not to mention a slow and steady collapse of the middle class here since the early 1980s that accelerated in the last decade. 

The death of the computer gaming industry around the end of 2001 was something like a canary in a coal mine.

So I agree with a lot of what you're saying in spirit, I'm just putting a higher % of blame on HD than you.  In my opinion it was the 2 biggest bullies on the block pushing the whole industry in a direction it wasn't ready for.

Good post! Oh, I know that HD needs to take some of the blame, there's just no denying it but often times people leave the economy's overall crash out of the ecuation entirely, not to mention the the fact that this generation has a difficult hardware chasm separating the competitors and that a manufacturer who has previously been soundly beaten is suddenly on top for the first time in nearly two decades. Besides, having seen lists of bankrupt developers in 2009 there's a rather large semblance of either developers who made mobile games (Iphone type phones are selling like hotcakes so all is not well despite having hardware sales, you simply can't count on having blistering software sales), casual games that weren't successful or let everything ride on a big budget title that drowned in either better competition or wallowed in its own mediocrity (think Lair and Haze). I for one perfectly well understand many developers' timidness in restructuring and changing entire processes where making games are concerned, they aren't exactly guaranteed to make heaps of money outside of HD gaming either, as the startingly low sales of many game have shown us (a small profit is to be had for many of them but most big companies don't seek small profits, they rather fancy big ones).

So its either; release big budget games on three platforms that historically have moved that kind of software but aren't assured to or release smaller budget, similar games on a platform (or platforms) that historically hasn't moved much of it at all and risk less of a loss if and when it goes bad. To me, there's really no mystery in why quite a few choose option A, doubly so when they don't know the first thing about what the crowd that will be the recipients in option B really want and whether they can actually make it. Either way, there's bound to be obstacles for everyone and I really am stunned at how well the industry is faring in the face of this plethora of troubles.



BrandonM on 12 January 2010
Mummelmann said:
cAPSLOCK said:
Mummelmann said:
Again, everyone seems to base everything entirely on choosing the "wrong" platforms to develop for and completely ignore the fact that we've had a second depression and recession that brought entire nations to their knees and even rendered some bankrupt, killed half the world's largest banks, several big car manufacturers, punctured the real estate market and generally made thousands upon thousands of companies go under and probably cost several million their jobs.
When viewed in context, the gaming industry has done quite well for itself compared to many other industries and many of the affected ones were in dire straits long before this generation started.

The woes of the world cannot solely be blamed on evil, shiny graphics.

Of course the industry isn't recession proof, the 1930s film industry proved no entertainment medium is recession proof. Something to the tune of 1/2 of the movie theaters shut down, and right around the time when sound was a new thing (a big technological jump just before a crash). Granted today is nothing near the level of the Great Depression, but like you said, the entertainment industry seems to do better than most.

At least part of the blame does rest on "evil, shiny graphics." Most of the video game industry (including Nintendo) isn't Microsoft and Sony--they can't sink billions of dollars into debt while other arms of their company pick up the slack. The industry as a whole wasn't financially ready for the leap to HD. There was something like 10-15% HD penetration (and what % of that % are gamers?) by 2006, and to make matters worse the cost to produce a game has gone through the roof.

http://www.vgchartz.com/forum/thread.php?id=37077

This thread is a pretty good one on the financial problems HD causes. That's the problem, though, it's already an economic strain in difficult economic times. Things weren't exactly peachy here in the US for quite a few years prior to the crash, the financial system just publicly caught up with the rest of the problems. 2001-2002 "9/11 Recession" was fairly substantial, 2005 saw a massive downturn in the housing market. Not to mention a slow and steady collapse of the middle class here since the early 1980s that accelerated in the last decade. 

The death of the computer gaming industry around the end of 2001 was something like a canary in a coal mine.

So I agree with a lot of what you're saying in spirit, I'm just putting a higher % of blame on HD than you.  In my opinion it was the 2 biggest bullies on the block pushing the whole industry in a direction it wasn't ready for.

Good post! Oh, I know that HD needs to take some of the blame, there's just no denying it but often times people leave the economy's overall crash out of the ecuation entirely, not to mention the the fact that this generation has a difficult hardware chasm separating the competitors and that a manufacturer who has previously been soundly beaten is suddenly on top for the first time in nearly two decades. Besides, having seen lists of bankrupt developers in 2009 there's a rather large semblance of either developers who made mobile games (Iphone type phones are selling like hotcakes so all is not well despite having hardware sales, you simply can't count on having blistering software sales), casual games that weren't successful or let everything ride on a big budget title that drowned in either better competition or wallowed in its own mediocrity (think Lair and Haze). I for one perfectly well understand many developers' timidness in restructuring and changing entire processes where making games are concerned, they aren't exactly guaranteed to make heaps of money outside of HD gaming either, as the startingly low sales of many game have shown us (a small profit is to be had for many of them but most big companies don't seek small profits, they rather fancy big ones).

So its either; release big budget games on three platforms that historically have moved that kind of software but aren't assured to or release smaller budget, similar games on a platform (or platforms) that historically hasn't moved much of it at all and risk less of a loss if and when it goes bad. To me, there's really no mystery in why quite a few choose option A, doubly so when they don't know the first thing about what the crowd that will be the recipients in option B really want and whether they can actually make it. Either way, there's bound to be obstacles for everyone and I really am stunned at how well the industry is faring in the face of this plethora of troubles.

But HD needs to take all the blame:)

I mean if selling one to +two million copies still puts you in the red than it's time to stop blaming the times and start blaming the systems...



Gaming make me feel GOOD!

Dno on 12 January 2010

i dont get how HD is to blame when most 3rd parties have made games on the wii and like capcom and sega said they fail bad and are making less games on he Wii in 2010. not to metion target and was it walmart? said they are gonna stop taking in some games for the wii....

its not the "ONLY" the HD systems fault as a lot of devs are making a killing and its not soley the wiis fault as um.. nintendo is making a killing there. The reson is simple. its EVERYTHING, HD costs, wii 3rd party games not selling, depression. its not one thing and it foolish to think other wise. Sony spoiled the 3rd parties the last 2 gens because Sonys 1st party sucked (compared to now) so it gave 3rd parties time to shine... now with nintendo on top selling monster great games lazy 3rd parties need to step up and make great games or customers are not even gonna look at you. i say it leaves only the best of the best.



Dno on 12 January 2010

ALso if it were as simple as going to the wii why has'nt everyone done so. i mean you can not tell me that hundreds of 3rd parties have NOT figured it out but WE have? every single year for the past 5 years all the best and most well crafted 3rd party games go to the ps360. there has to be a reason. i can understnad the 1st 2 years but in the 5th year of this gen there is just no excuse to keep on making games on systems that do not net profit. point is its not JUST the HD consoles that worry the devs as much as people think... its the Wii also. IMHO



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cAPSLOCK on 13 January 2010
Mummelmann said:

Good post! Oh, I know that HD needs to take some of the blame, there's just no denying it but often times people leave the economy's overall crash out of the ecuation entirely, not to mention the the fact that this generation has a difficult hardware chasm separating the competitors and that a manufacturer who has previously been soundly beaten is suddenly on top for the first time in nearly two decades. Besides, having seen lists of bankrupt developers in 2009 there's a rather large semblance of either developers who made mobile games (Iphone type phones are selling like hotcakes so all is not well despite having hardware sales, you simply can't count on having blistering software sales), casual games that weren't successful or let everything ride on a big budget title that drowned in either better competition or wallowed in its own mediocrity (think Lair and Haze). I for one perfectly well understand many developers' timidness in restructuring and changing entire processes where making games are concerned, they aren't exactly guaranteed to make heaps of money outside of HD gaming either, as the startingly low sales of many game have shown us (a small profit is to be had for many of them but most big companies don't seek small profits, they rather fancy big ones).

So its either; release big budget games on three platforms that historically have moved that kind of software but aren't assured to or release smaller budget, similar games on a platform (or platforms) that historically hasn't moved much of it at all and risk less of a loss if and when it goes bad. To me, there's really no mystery in why quite a few choose option A, doubly so when they don't know the first thing about what the crowd that will be the recipients in option B really want and whether they can actually make it. Either way, there's bound to be obstacles for everyone and I really am stunned at how well the industry is faring in the face of this plethora of troubles.

Oh yeah, Nintendo's audience isn't an easy one to read and that's been quite a problem. I think an equally large problem on that side of the equation is the lack of willingness to at least crack the book.  To be perfectly fair to column A there really hasn't been any effort outside of Nintendo to see what they want. It's all been ports of PS2 and year+ old games, or just shoddy performing horrible game that would do have the same fate on an HD console. There hasn't been a non-Nintendo stand-out title that equals something like a BioShock, Batman AA, or any of the other many many good third party games. I can understand say 80/20 split or something, but 100/0 is insane at this point.

So in some key ways, absolutely it's a safer bet to go PS360 because the audience is established and predictable. A good example of this is Army of Two, which I found to be thoroughly average and maybe a little too homoerotic and it sold something like 2.5 million copies total between the 2 platforms (I think it scored mid to low 70s). 40th Day, which looks better but still painfully average will probably sell more. Certain genres and themes seem to have a lot more leeway.

The Wii, on the other hand, is brutally merciless. An average game will get you waaay below average sales, an okay game will get you below average sales. However, a really great game will sell like crazy on the system, as Nintendo has proven.

I guess a good thought expirement is this:

42% of HD console owners also own a Wii (we'll go ahead and call it 15 million (or 25%), to make it extra conservative)

Now, given that statistic, not even counting people who are PC centric (like me)

How well do you think a completely original third party game, with as much effort put in as BioShock or MW2 or Oblivion or SF4 or Uncharted 2 or Gears, would do? I have a feeling we're going to find out this year, but I imagine a truly great game that can stand on its own merits on the Wii has the potential to sell over 5 million easily.

Problem is so far we don't know. Column A is a guarentee, column B has a lot of questions.



3rd Party Wall of Shame

http://www.nintendoworldreport.com/forums/index.php?topic=30478.msg581036#msg581036

Mummelmann on 13 January 2010

I'd also love to see how much such a game could move on the Wii. It'd be make or break, and there's really no reason why it wouldn't be make!

Edit; 6000!



jarrod on 13 January 2010
Dno said:
i dont get how HD is to blame when most 3rd parties have made games on the wii and like capcom and sega said they fail bad and are making less games on he Wii in 2010. not to metion target and was it walmart? said they are gonna stop taking in some games for the wii....

its not the "ONLY" the HD systems fault as a lot of devs are making a killing and its not soley the wiis fault as um.. nintendo is making a killing there. The reson is simple. its EVERYTHING, HD costs, wii 3rd party games not selling, depression. its not one thing and it foolish to think other wise. Sony spoiled the 3rd parties the last 2 gens because Sonys 1st party sucked (compared to now) so it gave 3rd parties time to shine... now with nintendo on top selling monster great games lazy 3rd parties need to step up and make great games or customers are not even gonna look at you. i say it leaves only the best of the best.

Sega's only major console hit this gen (Mario & Sonic) has been on the Wii, they've had a far, far more disastrious perfromance on the HD twins (VF5, Sega Rally, Golden Axe, etc, etc).  Capcom just had MH3 become the first console game to ship a million units in Japan this gen, and they clarified that they'd be doing fewer, but higher profile Wii games.  Neither is scaling back Wii support, neither is losing money due to Wii support, they're both retargeting Wii support and (seemingly) doing well enough due to it.  

Target and Best Buy didn't say they were taking fewer Wii games, they told publishers which sorts of games they didn't want (minigame collections) due to oversaturation.  That doesn't mean they'll stock less Wii games, it means they want a greater diversity of Wii games to stock.

 

Now look at the list of company closures I posted earlier.  How many of those companies focused on Wii (or DS/PSP) releases?  How many even developed a product for anything but 360/PS3/PC this gen?