The AAA games industry is doomed

The video games industry is in big trouble. It’s easy to roll your eyes at a big headline like “the games industry is doomed” – I did, and I wrote the bloody thing. But the business of making and selling games has changed and the publishers – often a handful of decision-making executives – just aren’t getting the message.

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Even at a surface level, the issues are obvious: video games used to be made by a handful of people and sold for about the same price as they do today. Now, games are hideously expensive, take years to make and the audience now spends more money and time on their favourite games – spending less of both on newer releases.

If you worked on, say, Goldeneye 007 for the N64 all the way back in 1997, you were part of a tiny team. When the game shipped, the carts went out, the team (presumably) went out for a beer, and then prepared to start work on the next project. Development cost around $2.5m for the entirety of its two and a half years in development.

The game set you back around £60 at launch, and it ended up selling 8m copies. It was wildly successful, the third best-selling N64 game behind Super Mario 64 and Mario Kart 64. No new content was coming, so chances are you would buy a few other carts too, only jumping back in for the occasional blast on the multiplayer.

Uncharted 4, the third best-selling PlayStation 4 game, sold 16million units. It was worked on by around half of Naughty Dog’s 300 employees, but was produced – allegedly – under a gruelling crunch cycle that involved developers working 12-hour days. Many people who worked on the game left after development, but those who remained stayed on to keep patching the game and cleaning up bugs. 18m sounds like a lot of copies, until you consider that Uncharted 4 also cost £60 to buy. The exact budget has never been revealed, but press estimates suggest an eye-watering figure. Uncharted 4 also had a multiplayer mode, but was a much smaller offering than a lot of traditional multiplayer games.

That’s a huge gulf when compared to the N64 days, and even that’s nothing compared to a title like 2013’s GTA 5 which is still getting regular content updates to its online multiplayer to this day. Scores of developers still work on Grand Theft Auto 5, which has been re-released for three successive console generations and also released for the PC. The only way to fund all of this is for developer Rockstar to sell microtransactions, letting you buy flying bikes, bulletproof armoured personnel careers or even a penthouse above an in-game casino with real money, if you’re so inclined. Rockstar has even decided that keeping people playing GTA Online is their big goal, moving away from other developments to focus on their online crime-’em-up.

As graphical fidelity has improved, the amount of work required to create assets has increased and the only way to feasibly release a game without ten years of dev time is to staff up. The investment required to actually release something into the world now is so much higher; the business of creating games is now nearly unrecognisable from where it was 25 years ago.

As a result, a title now needs to be played by more people and make more money to be profitable, but there are now more games clamouring for people’s attention these days and data seems to suggest that players are spending more time with games than ever before. While before someone on the first PlayStation might have played 20-30 games a year, it’s now feasible for one player to play Fortnite and nothing else, putting a few quid into cosmetics a month, while they clock hundreds of hours.

So, with this many live games fighting for attention, how the hell is any game supposed to truly break through and make its mark? Sadly, this is the only option – with numbers as big as those pumped out by games like Fortnite, a larger company is going to need to sell several times as many copies if they were to have a hope of being viewed as successful, and if they want to avoid angry Steam reviews claiming that a title is a “dead game” they’ll need to keep updating it regularly too.

Games just aren’t allowed to be moderately successful anymore, either. Faced with a middling game that will probably sell just okay, most companies are now choosing to cut their losses early or lock themselves into a perpetual delay loop to try and get a game that delivers on its promise. See Ubisoft’s perpetually delayed Skull and Bones or even the “we promise they’re coming” Splinter Cell and Prince of Persia remakes. Yesterday, news broke of EA reportedly cancelling a game in the Titanfall/Apex Legends universe, soon after news it was closing down an Apex Legends mobile adaptation and canning the forthcoming attempt at a Battlefield mobile game.

Ubisoft is looking particularly shaky at this point after not releasing a big game for a little while, but factor in the below tweet that shows their stock plummeting to be worth less than 20 per cent of their January 2021 values, and it’s not easy to see a clear path forward.

Ubisoft stock on January 29, 2021: 82.40€
vs
Ubisoft stock on January 31, 2023 (today): 18.59€

— Dr. Serkan Toto / Kantan Games Inc. (@serkantoto) January 31, 2023

Fans are part of the problem too: calling out games for both real and imagined technical faults and weaponising their collective ire to harass developers hat again, are mired in crunch and working longer and longer on titles people are unlikely to play. This creates a hostile environment that encourages developers to make safer choices lest the internet fall on them. Back in 2015, a Call of Duty developer received death threats after tweaking the reload times on a few guns in the game during a balance patch.

If you’re harassing anyone online you’re a dick, but it’s perhaps not really the fans’ fault that their expectations are sky-high. Years and years of pre-release marketing for AAA titles has focused on how much bigger and better we can make games and how much more fidelity you can squeeze in, after all.

While on a recent trip to a studio, I talked to a developer about how impressive the carpet physics in Naughty Dog’s recent The Last of Us Part 1 were. He looked at me soberly and said “But now the team has to hit that quality level with every single release, or fans will accuse them of being lazy. Was this worth the extra development hours?” It’s something I’ve been thinking about since: how do you de-escalate this technology war without leaving fans feeling like they’ve been short-changed?

So, AAA development is heading for imminent disaster and it doesn’t seem like an easy thing to avoid. It’s not sure what comes next, but it will have to be a radical departure from the current status quo, because clearly the way the biggest and flashiest games are being made at present clearly isn’t working.

Jake Tucker is the commissioning editor for video games at NME.

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