The Sky is Not Falling: Common Industry Concerns

Feb 28, 2010

Q: I think there are a thousand problems with the business of making videogames, and I want to do whatever I can to fix some of them, and in the process, make life easier for creative people like yourself…

A: Developers would certainly appreciate some more idealists on the publisher’s end. You’re right that there are many things wrong with the business end of game development. A bit like the journey that lawyers find when they earn law degrees to do good though, don’t be surprised to find (a.) challenges of politics and structural/process momentum have made it hard for those already attempting reform to do so successfully (b.) many of the things that are wrong today aren’t due to laziness, ineptitude, or malice, but are instead the best scaleable way that anyone has been imaginative enough to solve a few previous wrongs while staying in business. It’s certainly not my aim to hamper your idealism, only to better prepare it for battle by reminding it of what it’s up against.


> …How we can build new kinds of brands so that we can capitalize on successful games without having to endlessly churn out sequels?…

The best-selling Halo, Sims, Madden, Street Fighter, and Zelda franchises are effectively releasing the same game again and again, with different maps, a few different items, and a couple of feature additions.

People that play these games like what they’re buying. The Mega Man franchise fell off the horse when they started fooling around with different gameplay than what that franchise proved out.

These games have an established audience, an audience that can be studied, polled, and tested in focus groups to help steer the next project to make them happier. That makes it less of a financial risk, which enables a company to take bets elsewhere – as EA first did when the first Sims came out. (Its success looks obvious now, a decade later, but when it first came out it seemed like a really crazy move for the then even-more-male-dominated videogame market.)

Some games don’t find their core value until the second or third iteration. Ask a friend to list their 5 favorite games, and take note of how many of those games are sequels – the last time someone was talking to me about their concern with a sequel-heavy market, it turned out that every one of that guy’s favorite games were sequels.

Right now, the top 10 games on are Heavy Rain (spiritual successor to Indigo Prophecy), Dragon Age: Origins (PC) (spiritual successor to the Baldur’s Gate series), Mass Effect 2, BioShock 2, Napoleon: Total War, Mass Effect 2, Aliens vs Predator (strikes again), Call of Duty: Modern Warfare 2, Assassin’s Creed II and Dragon Age: Origins (360). Every single one of those games is a sequel, a spiritual successor, or a rehash. Tons of original projects are being made – they just aren’t filling up the top 10 sales lists.

It helps to have market-quality design/engineering/fiction foundations to build upon. Then the next game can become a second draft in terms of polish and execution. Additionally, the semi-established audience means a higher expectation of return, which can help justify investing a little more in it than might happen for a totally new project.

Street Fighter 2, MechWarrior 2, Twisted Metal 2, and Grand Theft Auto 3 are all groundbreaking titles that left a significantly greater impact on the industry than their predecessors. The challenge, of course, is that it’s often difficult or impossible to know until a project is nearly completed how well it’s going to come out. Any given release could be the one to wake up the franchise and find its identity. Or, it could be something great in an entirely different way (Half-Life 2), it could be a mediocre release damaging the value of the franchise (Driv3r, Tomb Raider 3), or it could fall behind on technology and thus never see the light of day (SNES Star Fox 2, also arguably the treadmill that killed Duke Nukem Forever and delayed Team Fortress 2 for a decade).

And, for nearly every time a creative director goes with their gut to do what they believe is the right way to follow their inspiration, fans of the previous games cry foul. Metal Gear Solid 2 left a lot of fans confused.

It doesn’t help either that in the past few console generations, game budgets have inflated from $1 million, to $8 million, to $25 million, meanwhile as the industry has grown there are more people competing with more products for space on the same shelves and top sales charts. The consequence of this is that if you can re-use considerable parts of the art direction, animation, sound effects, programming, tools and design patterns that were solved in one large budget project project – especially one that pleasantly exceeded expectations – to absorb a major fraction of those costs for a followup, it’d be crazy not to do it.

And more often than not, consumers are quite happy to buy straightforward followups to games that they liked, for the same reason people buy the same brands when we run out of something – it’s easier to put down our money for something that we know, in advance, we’re going to enjoy. Good sequels work for the same reason that people like TV shows as a series, rather than every show somehow being an original concept and cast. (Note too that latter scenario would cost far more to produce, while not doing as good a job at meeting consumer wants.)

Stuck Developers

> …but I hate to see a team get trapped by their own success. The first Halo game came out in 2001, which means that Bungie’s been working on Halo now for over nine years (probably 11 or 12?), and they’ve still got at least one more to release. Maybe the guys at Bungie are content to work on the same franchise for so long, but as a fan, I’d really like to see what they can do next. However, Halo’s a far bigger brand than Bungie, and outside of the true enthusiasts, it’s probably going to be a little difficult to capitalize on Halo’s brand equity once Bungie finally does move on to something new…

The producer of old Halo left to make Stubbs the Zombie on top of the Halo engine. It’s charming (but short), and the soundtrack rocks.

Fans and consumers keep up with company brands and logos, but the people behind those change companies and projects all the time. If they want to take big creative risks, there are valid business reasons (both from risk of downside and possibility of new upside) to not attach those risks to established brands.

Perfect Dark Zero was weak because the creative people that made the original game work left before that project to form Free Radical.

Meanwhile, some people prefer stability over creative or artistic exploration (and the risks that come with it). Certain specialists may be indifferent to what their project is about creatively – some of the business and financial types. A few positions may find extremely engaging work in games that play the same but find new technical challenges in the sequels – such as more robust multiplayer, or overhauls to the graphics code. Others still are perhaps themselves fans of the franchise, and they’re just excited to be a part of helping to bring something that they love to new audiences.

People that like stability get drawn to stable companies and franchises, where they’re likely to stay for as long as they can. Those of us that get restless easily and prefer to stay moving go elsewhere. The world benefits from having both.

On Nintendo

> …Nintendo also doesn’t rush to churn out sequels. They make one Mario Kart per console, and they continue to support it for the rest of the cycle. I’d love to see more publishers doing that, though it would also require them to be less graphics-focused…

Nintendo (1.) has R&D – just like SquareSoft, Sony, Capcom, and many other Japanese game companies do, and just like none that I’m aware of in the US – meaning they try a lot of ideas internally that never make it to the outside world and (2.) is a sequel factory (though as explained above, I hardly consider these “fightin’ words”).

Nintendo has been releasing Mario, Kirby, Zelda, and Metroid games that play pretty much the same for the better part of two decades, except for 1-2 changes to mechanics during that time per franchise. Within the past 10-15 years this has grown to include Mario Kart and Smash Bros as well. If they don’t make 4 sequels of a given game per console (though there are notably several Zelda and Metroid games on any semi-recent platform), it’s because they’re making 1-3 remakes/sequels per console for a half dozen or more games.

Konami has done the same thing with Castlevania, Capcom has done the same thing with Mega Man, to a lesser degree with Resident Evil, and rather shamelessly with (Super Turbo Alpha Hyper New Champion World Warrior Challenger Edition EX) Street Fighter 2 (aka Street Fighter IV).

We translate The Odyssey by Homer into English so that today’s readers can read it, because it’s still very much worth reading. Those companies keep putting out the same games on each new platform because they’re still very much worth playing.

Again though – I’m not criticizing these companies for continuing to re-release their best games. They’d be silly not to, and they’d be doing a disservice to today’s players not to. My goal in highlighting that Nintendo does it too isn’t to say that Nintendo is bad, but rather to emphasize that many of the companies generating sequels belong in a similarly respectable footing.

On Valve

> …What about the way Valve approaches things?…

They release a lot of sequels, too, including episodes / micro-sequels. They also take a very, very long time between games. The riskiest things that they’ve done in recent memory: pulling in a student team to remake their student game as Portal, and making a zombie game plus its sequel (which, to be fair, had neat co-op and online multiplayer).

Meanwhile, relatively few outside companies use the Source engine, compared to, say, the Unreal Engine, and none of those games are anywhere near as high in profile as Valve’s own releases (the same is not true for Unreal-based games, several of which were listed on that top 10 list I included earlier).

As for their building their own digital and indie distribution channel via Steam: absolutely brilliant.

Quality of Life

> …How we can produce quality games without destroying developers’ quality of life?…

A lot of us do that to ourselves. The dynamics of crunch have more to do with the waxing and waning of inspiration and creative rush central to the shaping of a creative product, the interdependence between art/design/engineering/marketing and how as each stretches itself it drags the others even further from their own expectations, and the fact that developers know our reputations and financial futures ride on squeezing every last drop of goodness and love that we can into our projects.

To expand upon that interdependence point from the previous paragraph: if I’m voluntarily staying late as a designer working on a wish list feature or extra level content, before doing the stuff that is on the must-do list (because I know we’ll have to make adjustments for the must-do list, but not vice-versa, so this way I can be sure to pack more in), then it should be no surprise when soon after I’d be staying late even when it isn’t my choosing to do the must-do items that I wasn’t focusing on. But this wouldn’t just throw me off. No, it could affect bottlenecks in the schedule, it could introduce a need for new bug fixing, sounds, or modeling work that otherwise could have been avoided, and so on. Now imagine every person doing this to every other person as the project gains momentum and people get excited. Combine that with a financial imperative to release on a certain ship date, and exactly why this turns into a train wreck nearly every time should be fairly obvious.

What if we just had 3 more weeks though? Well, we’d all try to cram an extra 5 weeks of work into that time, and then just have the same train wreck (or maybe a bigger one) 3 weeks later.

We’re going to push ourselves. Our careers, our reputations, our sense of self worth (some of us are more neurotic than others), our certainty going forward that we gave it everything we had – all of this and more are potentially on the line.

Not all crunch is from the publisher (though certainly some of it is). When it is, I expect that it’s in large part because they have enough experience working with developers to have gotten used to the fact that we sometimes work stupid hours, and may even feel like we thrive on it in reasonable doses (which is sometimes true, and sometimes isn’t; adrenaline has an unpredictable impact on the quality of a complex industrial art project).

More on Crunch

> …That comment was more a reaction to the recent Rockstar San Diego news and other horror stories I’ve heard about crunch…

There’s certainly the other side to this, so I’m glad you’re keeping this topic going a bit longer. My previous comments were not intended as a defense, or excuse, or justification – just to provide my own developer-side perspective, since I’ve found myself going into crunch mode for dozens of freeware projects that didn’t even have a publisher, manager, or financial consequences connected to them.

The game industry is no longer comprised entirely of 20-something, unmarried, crazy spark plugs. A lot of these men and women have families to take care of and go home to – real obligations that they’ll be (rightfully!) stressed out over missing for months on end, imposing a very real toll on someone’s emotional health. Spending day after day sitting down inside, sleeping inadequately, and living on ordered food can take a non-trivial toll on someone’s physical health, too.

Pacing of new workers who are full of energy and desperate to prove themselves – those who are sprinting and have not yet taken on a marathon mentality – is an issue with a long history in traditional manufacturing. The long and short of it: managers would love to capitalize on it, given an opportunity to do so, whereas coworkers may be inclined to discourage such behavior, or at least advise against it to help guard against early burnout.

And, certainly, every now and then, someone inevitably comes along and fills a management position that isn’t a good fit for that role. While this can be true for any job, when it’s a manager the damage reaches further, and when the project suffers it may not be as obvious who is to blame.

Those situations are clearly unfortunate, although it’s difficult to really say what more can be done about them. If the person’s behavior is hurting the project, and it’s clear that’s what’s going on, then it’s in the company’s interest to let that person go. Employees are also free to leave, although naturally this can be tricky, and is perhaps an unfair shift in consequence. Sometimes people take things to the blogosphere and courtroom, both of which (especially when combined) seem to have been fairly effective in recent memory.

Changing Release Dates

> …When I asked a few people how it was possible to implement a marketing campaign for a product whose release date is constantly in flux, they would sort of shrug and say, “That’s video games”…

The only way to know, before something is done, exactly how long it will take, is to have done something almost exactly like it before (this is again where sequels are nice) or to set such modest goals that they can be predicted without much concern for miscalculation.

Some projects discover their identity mid-stride, internally rebooting, discovering an emergence and inspiration spike that can’t be planned – passing on it would miss a potential hit. However, making a habit of betting on it ahead of time in terms of budget allocations and schedule would be a waste of money on most projects that will never spot a goldmine during their development process.

Part of what looks like laziness or indifference is that the scheduling of industrial arts needs to be dynamic if there’s any hope at spawning new hits, as opposed to merely re-delivering on past brands or shooting low for the sake of making Excel spreadsheets and calendars look good.

Predictable Release Dates

> …In terms of release dates, I think marketing games would be a lot easier if we didn’t start the PR cycle years before the game is complete. Why not wait until the game is actually finished, or in the final stages of production where the rest of the schedule is relatively predictable and the assets are finished, before we start advertising it? Then, you can set a solid release date, show off actual assets rather than mockups, and organize a stable marketing plan…

There are a few reasons for not doing this – although provided these benefits can be covered some other way, there might be other benefits in changing it. Namely:

  • If marketing starts right before the game is released, then there isn’t sufficient buzz built up pre-release to meet the sales figures necessary on the day of release to hit the top sales charts, which in turn are an important piece of reaching high enough sales to justify major expenditures.
  • If the game is released later, say, by waiting a long time for marketing to build up while the game sits around already finished, then by the time it is released its tech is months behind what the competition has done in that time, and the probability increases that a competitor will be first to market, making you look like an unoriginal follow-up even if your project started (or was finished) first.
  • Even if you release before the competition, if they start their marketing cycle first, it can make you look like you ripped them off, which can threaten a brand’s image as a thought leader or innovator. Unless someone is doing something really out there, like Nintendo did with the Wii, at any given time there’s a pretty decent chance that someone else is working on almost exactly the same thing.

Used Games

> …When I asked someone in Sales for their opinion on GameStop and the used market, they said that publishers have basically come to terms with it. A huge amount of the industry’s business is still done through GameStop, and the used issue is just a cost of working with them…

GameStop hardly has us in a corner on this one. Between Steam, Direct2Drive, the App Store, WiiWare, PSN, XBox Live Arcade, DSiWare, and a growing mountain of other means of digital distribution, it’s unclear what the future of brick and mortar sales of digital products (including film and music) looks like. Between Netflix, Redbox, iTunes, Hulu, and torrents, it’s pretty clear that Blockbuster is dying off, and looking at the similar list of automated middlemen for the game industry, GameStop has plenty of reason to be worried.

Their scramble isn’t them being greedy, it’s them scrambling to still exist and maintain their significance, which a business is obliged to do. A business owes it to their employees, customers, and shareholders alike to not just roll over and die any time the market changes. Meanwhile, to consumers, the resale value is part of how they can still justify that $50 retail price tag.

For what it’s worth, currently their added value for customers is making games easier to browse than one can do online (in some sense), making used games available at very low prices, buying games back (even if they don’t pay much), and “warranties” (which don’t have much real value, but do have perceived value). They make an effort to have “friendly and knowledgeable employees” but that inevitably varies one store/region to the next. Lastly, they offer a retail experience, which many consumers are still more comfortable with – serendipitously peek in while passing at the mall, make an impulse purchase, and go home with a tangible case and manual in hand.

If the publisher dislikes the value and visibility that GameStop has to offer, there are plenty of alternative distribution channels, including building your own (as Valve has successfully done). So long as our industry still needs GameStop as much as they need us, we have little right to be indignant that the tides threatening their existence have not yet swept them away altogether.

Engine Development

> …How difficult is it to build an engine like Source and continue adding to it and modifying it for many different IPs?…

It’s extremely difficult, requiring a great deal of talent and experience for the engineering, design, and management aspects. Even with all the money in the world thrown at it though, there’s still be no guarantee that it would come out better than the competitor’s engines which have been tested and refined through multiple other titles already. Speaking of which, it’s not just difficult: it can be absurdly expensive.

This is what I was referring to when I indicated that multiple sequels need to be hits for a franchise to recoup the costs of developing its own engine. Typically a studio has to have a few runaway hits under its belt before it can come close to taking a chance on building its own 3D engine that’s suitable to compete with other established technologies, and it takes a long-term strategy and a luck to recoup the costs that go into it.

All-in-all, trying to make an engine in-house is a lot more of an expensive and risky course of action than simply licensing an existing technology platform, particularly if nothing about the game requires a specialized engine to work. The engines that are already out there are stable, proven, have strong tool pipelines, and are competitively priced when the alternative is to try to roll your own.

High Price

> …The $50/60 price point seems self-defeating, especially for an industry that supposedly wants to be mainstream some day. And if that’s the only way to sell games that take three to five years to build and tens of millions to finance, then maybe we shouldn’t be spending that much time and money on those games. It often forces teams to fill their games with fluff, even though no one actually finishes those 30+ hour epics, or tack on useless multiplayer modes in order to justify the price…

It’s worth pointing out that sometimes the 30+ hour epics and useless multiplayer modes are a product of developers falling in love with their game (either the producer always dreamed of making a flight simulator, the programmer wants to prove to himself he can do it, the designer wants to feel current by working on the latest game trends…), and sometimes it’s an unfortunate byproduct of marketing/publishing pushing the development team to add bulletpoints for the box as part of a marketing strategy, even if no one on the team is crazy about those features. And, as mentioned earlier, it’s often impossible to know ahead of time how well (or poorly) something will come out until it’s (nearly) completed. If we knew the results in advance, there would be no risk to distribute through publishers, meaning that most videogames wouldn’t exist, and publishing might not be a business.

All that said, a few years ago the 2K sports franchise was experimenting with price differentiation, and a number of Wii titles show up in the impulse buy shelves of superstores at prices well below $50/$60…

Huge Games

> …In any case, I’d probably argue that, if the only way for you to profit on a $25-million game is for it to become a smash success and spawn a trilogy, then maybe you shouldn’t be spending that much money in the first place…

Of course! That’s why there’s an increase in the number of games being made for iPhone, web, Android, DSiWare, PSN, XBLA, PC download, WiiWare (or, to a lesser degree, plain Wii), and other substantially lower-cost (compared to X360 or PS3) development channels. Then the challenge is that instead of being able to charge $60/copy, like we do for a $25 million project, we’re fighting in the $2-$15 space to recoup our costs, which means we wind up fighting many of the same fights just on a different scale, and with more direct competition.

Originally posted as part of Vol. 11

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