It's no secret that the transition from the PS2/Xbox generation to the current Xbox 360 and PS3 generation hasn't been so easy for the major publishers. Budgets have ballooned out of control for triple-A titles and on top of it all, most publishers struggled to figure out how to effectively support the Wii. Complicating matters, the U.S. and global economy has been suffering through a severe recession. Scott Steinberg just launched a new video game show and online magazine, "Game Theory with Scott Steinberg," and the first episode looks at the "reinvention of the games business."
Lorne Lanning, co-founder of Oddworld Inhabitants, doesn't see the traditional games publishers lasting much longer if they don't change their ways soon. "A lot of the established players (retailers, publishers) are worried. And they have good reason to be worried. People are finding experiences and products elsewhere, and different business are emerging that these large infrastructure companies aren't used to adapting to, and a lot of them won't be able to adapt to," he said.
Lanning added, "Anyone who thinks that they're deeply entrenched in an existing business model and that business model is going to sustain is fooling themselves. When we look at the top publishers, and their performance over the last couple years, I think the writing is on the wall."
Jason Rubin, co-founder of Naughty Dog, agrees. He commented, "The industry will be healthy, is not headed for doom, and we’re entertaining more people in more ways than ever before. But from a profitability standpoint, the console AAA stuff is not quite working… You can say what you will about the industry, you can say what you will about liking the business, but publishers are not profitable, and if publishers do not make a profit, one of two things has to happen. One they have to change, or two, they have to stop making games and go out of business.”
Epic Games designer Cliff Bleszinski added, "Everyone was caught figuratively with their pants down. Everybody in the industry is still trying to figure out how to make AAA, blockbuster, hot games in this day and age.”
And here are some other choice quotes:
"I've never seen a period like this - there's so much disruption. The industry is really being turned inside out." - Trip Hawkins
"We are in a radical shift in the standards of gaming. People who recognize that and choose to adopt it will flourish. People who ignore it or misunderstand it are doomed." - Richard Garriott
"It's like a complete genesis. It will be small and incremental every day, every week, every month. But over the next one, two, three years it will be enormous. Everyone is vulnerable in this change." - Chris Taylor
“We stood around saying for so long that the game industry is immune to the recession. But we’re not.” – Clint Hocking
“Consumers are expecting more engagement… they want to be surprised, they want to be more entertained. And that’s tough for companies to deliver on time and again. When you’ve got those big companies so dependent on very few franchises, if anything goes slightly wrong, it’s a huge tragedy.” – Peter Molyneux
5 Comments
August 3, 2010
This has been clear for a couple of years now... and if anything, the changes are likely to come even faster. Look at the growth in Apple's iPhone/iPad sales, or Android, and then look at Nintendo's DS sales for hardware and software over the last year. Now imagine Apple and Android set-top boxes with the same sort of impact on the console business as a whole. It's roaring downhill like an avalanche, and I fear the big publishers are not moving fast enough to prevent major damage to their businesses. It's tough to shift business models when a development cycle is 2-3 years for AAA titles, but if the major publishers don't make some wrenching changes they will be hit over the head by the wrench.
August 3, 2010
great article james
August 3, 2010
Good article, but a lot of this naysaying is nonsense. Movie studios, for decades, have relied on big franchises as the key pillars to their core financials. Same can be said for TV. And that's not the only obvious comparison.
While I do agree with Clint and Chris, and definitely Richard, Lanning is is an extremely unfortunate choice to lead with for this discussion. The Oddworld franchise ultimately failed (from a once great path) due to lack of innovation and recognizing changes in the what players were demanding from their gameplay. Couple this with the fact that Lanning essentially retired from the industry years ago to play in other areas of entertainment, and you have a person who, though an important factor within this industry, is now completely out of touch.
August 3, 2010
Okay...I have no idea what those guys are talking about. I'm going to go do something else.
August 3, 2010
So should big developers give up making actual good games that take 3-4 years to make and instead pump out small little casual games or portable device games? It's a rough industry and we need a variety of games but without AAA blockbusters games would just suck.