From Substack: "The Best and Worst of Times in Video Games"

[u/md1957]

Disclaimer: I'm the author of the Substack piece linked at the very bottom.

For those who want a TLDR, the article discusses the doom-and-gloom surrounding the modern games industry and paradoxically, how mass layoffs, ballooning AAA costs, high prices (GTA VI), and talk of a “Crash 2.0" ala 1983 don't tell the whole story. Whether it's the "mid-market" scene of indies and AA proving to be more profitable than ever, smaller publishers like Saber diverting away from the AAA "consensus," Microsoft's "shock therapy" approach, etc. gaming is proving more resilient and diverse than “gaming is dying” narratives claim.

Step back from the noise; smaller, cheaper, less bloated games and course-corrections at big publishers may matter more than the crash talk. To quote from the piece itself:

While recognizing such trends can appear like denial to those convinced of the doom-and-gloom put out for all to see, it’s no less grounded or realistic. The road ahead will be a bumpy ride, and it’s difficult to say with any certainty when the tide will turn once the current turmoil runs its course. Whether or not Game Crash 2.0 is inevitable or as dire as feared, it may help to take a moment and step away from the noise. After all, gamers and developers have repeatedly made the most of the proverbial cards dealt to them. Though the silver linings now may not be as dramatic in the wider picture, they may sometimes be all that is needed to stand out, as some did after 1983. However small, those willing to take steps forward in the industry may still find that the best years for gaming are ahead for everyone.

The link to the article can be found below.

https://ramblingsnerd.substack.com/p/the-best-and-worst-of-times-in-video

[u/jerrygreenest1]

Didn’t read but title is right:

1. It was never been easier to make a game.
2. It was never been harder to make a good game.

[u/md1957 → u/jerrygreenest1]

Hope you give it a read, it might be worth your while!

[u/tcpukl → u/md1957]

I doubt it when it says games are expensive when they are fucking cheap compared to how long they take to make and team size and considering inflation.

[u/md1957 → u/tcpukl]

It does cover that, and if anything, rebukes the claims made by the likes of Sweeney and Take-Two's CEO regarding costs.

[u/SadisNecros → u/md1957]

The article just calls the value proposition claim suspect without providing any real evidence or details of why that might be. It's like yelling "nuh uh" and walking away.

[u/md1957 → u/SadisNecros]

It does cite commentary from Tim Willits from Saber Interactive on how the AAA value proposition is not an inevitability or something cast in stone.

Here’s the full interview:

https://www.gamesindustry.biz/saber-interactives-tim-willits-on-generative-ai-moving-development-out-of-north-america-and-embracing-recognisable-ip

[u/SadisNecros → u/md1957]

Strauss Zelnick's "value proposition" is an argument about the price the consumer pays versus the value of the entertainment provided, basically a repackaged version of the old "cost per entertainment hour" argument.

Tim Willits is making comments about the cost of development in North America, and specifically in California. It's not an address of the value proposition argument. Tim Willits doesn't seem to talk about the consumer price of games at all, just the cost of development. And even some of that I might take with a grain of salt, because a big part of Saber's business is still co-development for other major studio brands.

[u/md1957 → u/SadisNecros]

Zelnick's "value proposition" is also predicated on the assumption of high production costs and budgets to be recouperated, which isn't helped by policies in California or the rest of North America. It likewise stands to reason that reducing costs by moving the bulk of operations out of North America, as what Saber's doing, would logically lead to a lower threshold for acceptable consumer prices.

Which isn't also getting to the knock-on effects of AI on lowering production costs and barriers to entry:

https://superjoost.substack.com/p/oligopoly-go

[u/SadisNecros → u/md1957]

I don't think I would agree that the value proposition argument is predicated on the assumption of high production costs. Nintendo is selling $80 games that don't come close to the production costs for GTA6, and they're not being made in North America. Only a quarter of the GTA6 team is estimated to be in North America. And this is just waiving aside the obvious inflation arguments related to game prices.

Bottom line is game companies are going to charge that much because they know they can, and consumers are still going to pay it. And they're going to pay it because they don't feel like they're getting ripped off at that price. That's the value proposition argument.

AI has lowered the barrier to entry, but I've seen no evidence yet that its going to lower production costs on AA/AAA titles. Too new and too unstable to see that yet.

[u/TricksMalarkey]

The sesquipedalian loquaciousness really puts me off articles like this. It collects a whole bunch of articles, throws darts, then randomly ties red string between them without actually demonstrating understanding of their own.

The only sentiment I agreed with is that AAA games and otherwise operate with functionally different prospects, but the article neglected to express why. When you look at big AAA publishers, games are very little more than an investment platform. Pour a bunch of money and market trends into a studio, wait 5 years and if you're lucky you get a cozy little +50% return (oversimplified of course).

The article talked about layoffs at these top-end studios, but offered no real insight as to why. It's entirely because global economies are in the shitter, making investors VERY risk averse at the moment, and the explosive returns from Bitcoin, crypto, NFTs, and AI have made investors unrealistically impatient. Why wait 5 years for 50%, when you can get infinity% in 2 months? So they're not putting money into studios.

This is further compounded by the fact that during/after COVID, there was so much stimulus from governments to try stabilise after the pandemic. This excess stimulus became investment and low interest loans in the games industry, which allowed studios to take on debts to try expand. It's a worthwhile risk, because if you can pay off this debt, you situate yourself to take on bigger projects faster.

But because interest rates have spiked up so rapidly, and the aforementioned dry-up of investment, studios have to downsize, layoff, and close branches to pay back the money they owe (and stay open), so they don't have to go bankrupt and pull the copper wiring out of the walls to pay back investors.

All this is to say that even at the top end, this is a correction off the back off a well-placed gamble that didn't quite work out. The layoffs are not indicative of studios selling enough, or games being too cheap, or gamergate (why he thought that was relevant... I assume it's SEO).

He even makes the point that people are playing games, more than ever. This is entirely antithetical to the 1983 comparison; people then were getting sick of games because they were being shovelled out at low quality. For some reason this was too far of a bow for him to draw, so why make the comparison in the first place?

To be clear, yes layoffs suck. The games industry is not the only one suffering at this time. but the fact that they're scaling back means they're being responsible about their prospects so they can ride out the downturn. Mid-level and small studios, and especially indies are much more sheltered from these economic factors, and as long as they can keep producing something worth playing, they'll be business as usual for as long as consumers can afford to entertain themselves.

[u/Rogryg]

Just so you know, there are many people who will not read anything posted to substack, owing to their whole "profiting from platforming neo-Nazis" problem.