So there’s like no thought that perhaps the attempt to monetize and drain as much money out of gamers as humanly possible with stuff like Paradox’s DLC model and all of the pay for play shit in games these days is turning off gamers and hurting sales?
DLC is the result of the cost to develop games rising astronomically but the price of games staying fixed at $60. Given how costly it is build a game, there’s value in continuing to provide content for it as a means to extend revenue off of the initial investment.
The $60 price tag became the norm with the launch of the Xbox 360 in 2005, IIRC. The cost of game development has not remained flat in the 14 years since.
Oh god, that’s funny.
What? Do you think the cost of making a AAA game in 2019 is the same as it was in 2005?
No, I think it’s probably less in real terms. In any event, I also think that there are probably more people buying than in 2005. Among other factors.
Does digital distribution cost more than CDs and boxes?
You’re literally not going to convince me that DLC is some need to make up the staggeringly higher costs of game production. At least not while these companies are making billions each year. It’s not even worth trying.
It’s just clearly a way to drag more money out of consumers, for greater profitability. That’s what people who want to make money do.
But the audience that buys games (units sold) has expanded by many magnitudes. People always leave that part out of the equation.
Sure. But the market in 2005 was pretty damn large, it’s not like it was an unknown hobby and then exploded after that.
If you rely on a large audience to cover the costs of development because you cant’ raise prices then you have to make a game that appeals to that largest audience which is a complaint often seen from gamers. We really can’t have it both ways.
Always a good place to start a discussion from. :p
Well yes, if you scale the project’s budget up to insane AAA levels of animations, textures, voiceovers, scope, etc. Then by definition you will be going after the widest possible audience.
I also see plenty of successful smaller games that operated with a sustainable budget and didn’t require a MTX or DLC dripfeed to succeed or keep the studio open.
Well the lay-offs we’re seeing are coming from the so-called AAA camp. The DLC, Games as a Service, Season pass, small and more frequent expansion stuff is from that camp and some of the smaller ones.
I am not a huge fan of the endless amount of DLC approach at all, so it’s not that I really support that. And sure, indie and small devs/pubs don’t have to go to atmosphere kind of budgets and therefore don’t need to move a staggering amount of units just to hit even, but for these large businesses, if they can raise prices, either directly on the box or other means, then they have to cut costs. The problem is… if they outsource a lot more than they kind of already do, they might wind up with a mishmash or reduction in quality would also affect sales since gamers have a lot of choices and they don’t have to accept subpar results.
Amy seemed to like the DLC, and DLC on a complete game without you know going overboard doesn’t seem bad. it seems like she’s thinking the studio system itself isn’t working. What’s hard though is there is a combination of record profit companies in these lay-offs along with those who seem like they just have their nose above water. Those two don’t have the exact same motivation with their lay-offs.
I’d generally be in favor of a system that helps reduce the constant lay-offs, so if that means artist studios that in-house coders and designers farm out to, well maybe that’s okay. You don’t want the games to look the same and you don’t want every artist to be like freelance, no benefits, no security at all either. That seems like it would be bad.
Yes, the audience is bigger. But not by ‘many magnitudes’, at least not in the last 15 years. PS2 already sold more than 120 million consoles.
And yes, digital distribution and its higher margins has helped to maintain the $60 price and not increase it. Otherwise even with DLC it wouldn’t be enough.
In fact, players are spending more on these “recurring” payments than ever, as Ubisoft’s revenue from it has increased by 83% year on year. Microtransactions and DLC made about $202.6 million during the first six months of Ubisoft’s financial year or 51% of the company’s overall digital revenue. In comparison, digital game sales have increased by 57% year on year to earn Ubisoft about $194 million.
In fact, players are spending more on these “recurring” payments than ever, as Ubisoft’s revenue from it has increased by 83% year on year. Microtransactions and DLC made about $202.6 million during the first six months of Ubisoft’s financial year or 51% of the company’s overall digital revenue. In comparison, digital game sales have increased by 57% year on year to earn Ubisoft about $194 million
It is clear that the industry is well past the framework of having DLC support the higher costs of development of the main title when DLC revenue is eclipsing revenue of the game proper. Companies now see DLC and MTX as a dominant source of revenue and not something necessary to keep a studio open.
Also in most cases layoffs are untethered from fiscal performance as Activision Blizzard just nakedly demonstrated. Mass layoffs have more to do with late stage capitalism and quarterly financial reports to investors.
If you are excluding phone and tablet gaming then perhaps, but I’m willing to bet the gaming audience/consumers exploded in the last 15 years if we factor in all forms and devices.
I admit that part of this is on me. I know I’m on a forum that is frequented by a lot of people with a vested interest on the developer/publisher side. At some point, I know my views are simply not going to be popular with them, anymore than a viewpoint that cars are overpriced is going to be popular on a forum with auto industry executives would be. I understand that. And I like the people here, so I do not want it to become personal.
What I would say, at a higher level, is that I have repeatedly seen, in different industries, that people with hobbies tend to buy into the bullshit that people who are selling them their supplies give them.
I remember with board games 10 years ago or so, the number of people who would literally talk about how they wanted to give Fantasy Flight Games more money, because they must be barely scraping by, and they loved the game industry so much, and won’t anyone think of the poor game developer/publisher, etc. Like people literally seem to have some type of weird cult creation around their hobby providers. No one ever seems to worry whether their plumber, electrician, auto mechanic, grocer, etc. is making enough money, but if it involves games, golf, or some other hobby industry, all of a sudden we’re all desperate to let them know that they’re not charging us enough for the magnificent work they do.
But the reality is, they are charging enough. They’re a business. They’re trying to take your money. I look back and laugh at the people who were so concerned about the Fantasy Flight Games of the world. Who could not see that they were literally trying to empire build and make as much money as possible. Capitalist businesses don’t need my charity. And I also think it is ridiculous to believe that anyone who wants my money is telling me the truth about why they are charging what they are. They are charging me what they think I will pay. End of story. If Paradox thought they could get away with charging $300 for a game, they would. They can’t, so they’ve figured out a way to charge that over a few years and are profiting quite handsomely for it. I think the notion that they need to do it to cover their costs is ridiculous. Again, that’s something that everyone said many years ago, and it turned out to be the joke that I knew it to be at the time. They are a tremendously profitable public company. They’re doing it because capitalism, not because they’re some starving artist pressing CDs in a basement selling them out of a trunk.
At the end of the day, I don’t think there is anything wrong with that. What I do get tired of is people trying to pretend that the rich are barely getting by, and that they need my charity. For all of the liberals in this forum who go on about the rich soaking the poor in politics, the same crew seems to for some bizarre reason side with game company executives making (each individually) tens of millions of dollars per year, over consumers.
I’ll believe that these companies need to release DLC just to get by (as opposed to drain as much money out of me as they can for the bottom line of shareholders and executives) when I see their complete, publicly released salary information, and it does not look like the following:
As for outsourcing, it seems kind of a no-brainer to me, especially for art.
As things get more complicated, it makes sense to specialize. How many studios do you need making hair/fur look right, or making trees, or brick textures or gun sound effects? It doesn’t even need to be 100% stock, just tweak it a bit for your customer’s needs and presto!
How do you figure this though?
The overall console market isn’t much bigger (if at all) than it was two decades ago.
The PS2 eventually sold around 155 million units. Combined with the Xbox and GameCube, it was just shy of 200 million consoles sold for the entire generation.
The PS4 is currently at around 92 million units sold. Xbox One is around 40 million by the latest estimates. Switch is at around 32 million. Even adding the Wii U’s 13.5 million into the mix, we’re still pretty far from 200 million for the console.
What these numbers tell me is that, two decades later, the console market is still roughly the same 200 million installed base as it was 20 years ago. That’s not “expanded by many magnitudes”, unless you’re also including mobile games and other platforms with completely different / non-“AAA” development economics.
Outsourcing is different than stock. You can get very specific, high quality art outsourcing. Indistinguishable from in-house most of the times, specially if your concept artist is in-house (but there are really good concept outsourcing houses out there).
I was including Mobile and Tablet gaming, but I will happily set that argument aside for now. I was thinking about Fortnite and PUBG among others. I wonder what their revenue split is between console and mobile.
Let me look at the giant elephant in the room.
A little under a week ago Paradox Interactive revealed revenues of SEK 224.98 million, a 25% year on year increase on last years 180.67m. Operating profits for the quarter came in at SEK 68.31m, a 29% YoY increase on 52.85m from last year. For the nine months ending September 30th, revenues stand at SEK 790.80m and operating profits of 308.25m.
For reference, for the whole of the 2017 financial year Paradox Interactive saw revenues of SEK 813.78m with operating profits of 339.81m. Simply put, the company is looking forward to a strong year that will stand far above any other year in their history.
In 2018 Paradox only released Battletech and Surviving Mars (both not from Paradox Interactive) as full title releases. The vast majority of their releases were DLC, expansions, and immersion packs. Those pieces of DLC lead to PI having probably their best year ever in revenue and operating profits. I’m sure there was a time when Paradox Interactive had to release DLC to keep devs employed and titles supported but that was years ago. DLC is their primary business model now and the lion’s share of the company’s revenue and profits. That’s fine, they are a for-profit business that people love. As @SlyFrog noted above I wish we could move past the narrative that DLC pipelines are what keeps these companies afloat and are what contributes to beloved titles moving beyond life support. DLC pipelines are now the principal business model and basis for revenue projections of most AA or larger game companies. Let’s just be honest with ourselves.
For the record, I own most Paradox games and the vast majority of their DLC content. I am right in the middle of this.
If (for one random example) Soldak Entertainment (Din’s Curse, Drox Operative, Zombasite) noted that they needed to release DLC to keep staff employed and titles supported I would believe it. It is those size companies that face that dilemma, not the giants of the gaming industry in 2019 where DLC/MTX is rapidly becoming their primary or largest revenue source.
Isn’t “the thing that brings in most of the income” by definition “what keeps these companies afloat”?