Around the Sphere: Economics

So what’s up around the sphere? Well the past week seems to have been the week for talking about money, specifically who has it and who doesn’t. This topic occurred and recurred both in-games and IRL around the industry. So let’s get to it.

Foremost, the Video Game Awards (VGA) 2012 were perplexing for most viewers or downright worrying for others. The diversity was lacking and it seemed that only popular, trendy games won awards. One might say “and what’s wrong with that?” Well the problem is the VGAs are supposed to be rewarding not just popular games, but games which changed gaming; games that innovated, tried something different which turned out to be both good and inspiring; something that sets a new standard in gaming. Most winners were none of those things. In fact, the only game up there which seemed to me to deserve most of it’s nominations was Journey in my opinion. But I’m definitely being slightly unfair: of the top winners I’ve only spent time playing one of them. That’s part of the disappointment for me actually. None of the games I thought were great this year were even nominated except Journey.

But what’s this to do with economics? Well, when winning awards is influenced too much by marketing hype and insider vote-trading, then it becomes a contest of who has the most money and resources. Still, I guess this year is just as bad as last year was. I’m less and less likely to view this show every year. It’s like watching the Academy Awards, which is a well-known circus.

Layoffs at Trion have hit the Rift development team, and not just a couple. As many as 40 are rumored to have lost their job this week. At this rate, some of us are thinking that if the world ends on December 21st it might be a great mercy. It’s always saddening to hear about people losing their jobs and that’s doubly true in this slugglish global economy.

However the devs creating Bioshock Infinite might be able to hire some extra hands once they cash in on their latest marketing ploy:

Bioshock Infinite Cover

The hoopla over this cover has been interesting the past week. The chief complaint is that it doesn’t speak to the game at all. I have to agree with Liore’s take on it. Others think we should be grateful for slightly worse games and some others believe we should be glad that we only have to pay $60 dollars for them — because, ya know, we’d be paying more than that if not for mass market (hint: the games would not cost more, since they don’t for non-mass market titles). It’s a bit too obvious that 2K is trying to cash in on the mass market bandwagon. Honestly I hesitate these days to make a judgement one way or the other on these kinds of manipulative ploys. It’s like I see the world sliding into economic hell in the news everyday and then I see everywhere companies cashing in anyway they can, as if in a desperate last opportunity grab for profit. Who knows what kinds of layoffs this company *might* be trying to fend off with this cover. Whatever their excuses, it’s very obvious they want some of that Halo, Gears of War, and Call of Duty money, who rake in record profits with every release. Maybe it’s because they have a stoic white guy with a gun on every cover with explosions in the back ground. /shrug

Whatever they tell us dedicated gamers, this isn’t a decision they are making so we can have cheaper, better games and that’s for sure.

Glitch has sadly departed as scheduled last week. As reported before, Tiny Speck didn’t have the resources nor the income to continue with it’s development and so the game was shut down. This was a very special game and I hope that someday Tiny Speck or similar developer can pick this back up with a sustainable technology and bring it back to us. If you want to show your support of the company for all the love and goodness they put into the Glitch game experience, they have an Indiegogo campaign going to put together an art album of Glitch.

Last but not least, economic upheaval is the center piece of forum discussion this week. I play EVE but I have a very limited interest gauge when it comes to the often dry aspects of EVE economics. That said, I usually read player and dev published articles that can break it down for players like me who aren’t likely to whip out spreadsheets and charts to understand market trends. The Mittani has you covered this week. At issue? Hi-sec mining, bounties, and ISK sinks.

Lots of winners and losers this week in the world of gaming. Some are miners in EVE Online while others are flesh and blood programmers at Trion studios. It’s never cool to lose anything during the winter and holiday seasons. There’s a lot of economic turmoil and I hope that this article finds all of you in good health and spirits this season. Hopefully next week around the sphere will be filled with more optimism.

Comments

  1. Azuriel says

    Not only is “you should be grateful” a mischaracterization of my post, but you seem to be attributing Psychochild’s money argument in Liore’s comment section to me (at least it reads that way). What I *would* argue is that we wouldn’t likely see AAA-budget games (i.e. motion-capture, full CGI, voiceovers throughout, etc) without AAA-sized audiences. And the only way to get AAA-sized audiences is to appeal to a wide array of people, some of which would find that cover compelling.

    AAA-budgets don’t make for great games by themselves, of course, but they can make for entertaining spectacles when it intersects with good game design. Cover art, especially given it is basically just another PR vehicle, is a small price to pay if it gives Levine’s team a few more bucks, IMO.

    • says

      Your position from your article definitely could be summed as we should be grateful:

      “But sometimes the “dumbing down” is, in fact, necessary. Or at least useful in ensuring that you see more development from that studio/those designers.”

      Now if you didn’t mean to imply that we should be glad that those companies will continue to develop for us and that the only way thats possible is to sacrifice games, I’m all ears for what this was supposed to mean :) I apologize if this was an unfitting summary, but I think you can see how the above statement could be read that way. Especially given the context of your other statements.

      You haven’t explained why AAA games are a good thing. Your argument here implies that if we want to have AAA games, we must make these sacrifices. For what reasons do we want them? For what reasons are they a good thing for us? I’d say we don’t need them, even while they might broaden industry appeal. The options aren’t just either broaden appeal or have good games. Good games broaden appeal. A studio “dumbing down” a game (whatever that might entail) could not ordinarily be considered a good thing. So you seem to be implying we must accept some bad to get some good, which is false.

      • Azuriel says

        No, grateful is still a mischaracterization, as it is inextricably linked to the “grateful these games don’t cost more than $60″ claim you associate with me, rather than Psychochild. A claim I find especially odious considering I would be the first to tell you that game companies (like any company) will always charge however much they think they can get away with.

        “The options aren’t just either broaden appeal or have good games.”

        What? I would appreciate if you stopped dropping these crazy Straw Mans. Seriously, reread my original comment.

        If you do not want motion capture, full CGI, or any of the other AAA-budget bells and whistles, that’s fine, whatever. If you DO want them, however, the sort of “sales floor” increases and it becomes more necessary for the designers to cater to a more diverse set of gamers. And sometimes someone’s “dumbing down” is another person’s favorite feature.

        • Brian 'Psychochild' Green says

          Er, I wouldn’t say my stance is “you should be grateful” either. My stance is that the cost for a game of Bioshock: Infinite at it’s current quality level would increase if it didn’t try to appeal to a wider market. Or the company making it would go out of business because they wouldn’t be able to get funding. The argument that it could be made as an indie game is a whole other discussion, one that I don’t agree with but don’t want to turn this comment into a wall of text to explain it.

          I guess I also don’t see how the game is somehow “worse” for having that sort of cover on it. I play the games for the gameplay not for the box art, and I bought the previous games on the strength of the recommendations not because the box is pretty. As I said on Liore’s blog, I’ve bought all the previous games on Steam, so I don’t even see a box, just a fleeting image as I’m clicking through the store.

          Now, if they’ve changed the gameplay to cater to the dudebro Modern Warfare crowd, it’s time to break out the pitchforks and torches. But box art? Meh.

          • says

            I will clarify Brian. I was not attributing “grateful” to you, but to Azuriel’s statement. As for the game costs, I still disagree. We have no proof that a game company these days would ever charge more than $60 for a title with the only exceptions lately being collectors. No one, no matter how much their game costs to make (SWTOR is a fine example) charges more than $60 USD. You’re going to have to provide some proof on that.

            As I mentioned, I’m not sure the box art bothers me *so* much, but I definitely see the point some fans are making and they have a valid one. It’s a sign to them and it’s easy to see how a fan would be concerned that the franchise they helped become successful somehow feels that their support is now not enough. We can judge that however we like, but that’s where the complaints come from.

          • Brian Green says

            Well, Azuriel keeps trying to pawn that label off to me. :)

            As for the cost, let me approach it from another direction: the costs of development continue to rise. That means that a game that was successful 5 years ago, if perhaps not wildly so, essentially needs more people buying it to remain profitable. And, it’s not just a question of being profitable at all, but being profitable enough in the face of other games like Modern Warfare which offer a tremendous return on investment.

            So, their options are:

            1. Sell to the same audience. Not make enough money. Not get a publishing deal for the next game, and likely go out of business. (Or play the Kickstarter lotto, but for a triple-A game like Bioshock I doubt they’d raise enough to make a game to the quality level of what we’ve seen of the new game. But, this is a whole other discussion, again.)

            2. Expand their audience, sell more units. Become profitable enough for a subsequent game. This is what they’re doing.

            3. Raise the price. I agree, this is unlikely, but it’s the only other possible option if the fanbase doesn’t want them to appeal to a larger audience.

            Irrational has to do what it can to make sure it can make further games. This is how they see it being possible. Getting a little bit of that FPS audience would help, even without them selling out the soul of the game.

            There are two other issues that bother me here. First, is how some of the arguments seem to smack of elitism. Or, forgive me for using this word with all it’s negative connotations, “hipsterism”. “Bioshock is too cool for those fratboy assholes. I loved the game back before it sold out to the mainstream!” It’s not like we’ll have to play multiplayer with the new influx of fratboys, so what does it hurt if they pick it up?

            Second is how people are savaging Ken Levine for essentially being honest about how the business of game development works. Yeah, this is how the sausage is made. Honestly, they’re not going to stop trying to figure out a way to get a wider audience, but what’s more likely is that Ken Levine is going to stop explaining the rationale because people are just going to shout him down. And, as a dev who really enjoys sharing my passion for game development with interested players, this also saddens me on a personal level.

            Anyway, sorry for rambling. Just clearing up my perspective a bit more.

          • says

            No I enjoy the rambles most :) They give good dialogue.

            I have to agree with your points. For my part, I never finished Bioshock 1 or 2 …I loved the games as they were and I don’t have complaints. But I guess I’m still on the same stance as I said in the article: I don’t know what kinds of layoffs or downsizing they’re preventing by making this marketing move. Still, I do think some gamers are fearful that as the developers gaze shifts away from them and to “other markets”, that developer will lose sight of what their current fans love. It’s happened before.

            Also I hadn’t quite given the first point you made enough thought. With that in mind, you’re correct that costs are increasing–just not for the fans, for now.

          • Brian Green says

            The THQ bankruptcy shed a bit of light on the costs of developing games. Take a look at the chart at the bottom here.

            http://www.gamesindustry.biz/articles/2012-12-20-rubin-thq-sale-a-new-start-for-our-company

            Even a wrestling game made to cater to an already established audience cost them practically $70 million. A game like Saints Row 4 is estimated to cost $120 million. I’d say overall a game like Bioshock: Infinite is probably going to cost in the $70-100 million range. Keep in mind this is all costs, including marketing (which is sizable for new games).

            A quick search shows that Ken Levine said that the original
            Bioshock was about $15 million to publish; I’m not
            sure if that includes all costs, but even doubling that gives you an idea of how much the cost of making games is increasing, and how they can’t cater to the exact same crowd with the exact same price point while maintaining the quality of the games the existing fans expect.

            Again, I see this as Ken Levine actually looking out for the true fans by making sure the games keep getting made. He opened up about the steps he had to take, the deals he had to make with the devil, to keep things going. Lashing out at him for going after a bigger market is absolutely counter-productive.

          • says

            I don’t see deals with devils as a good thing. They rarely produce positive results in the long run. I don’t know why we are prone to believing that a little bit of bad is necessary for some greater good, but it’s a really annoying theory. It makes no sense and has no historical precedent as A Good Thing.

            To be clear, I’m not saying that the box art is a bad thing, but Levine has already admitted it’s not the cover they would have wanted; it was done to increase profits.

            Games are invariably changed when developers sacrifice some part of their product. This doing it “for the fans” is a fallacy. It’s NOT for us, whatever residual benefits we gain from it.You’re arguing that what’s good for devs is good for players and I’m saying that’s not necessarily true, even if sometimes their desires align. The new box cover is something good for the devs and it’s not being done for the sake of their fans. They simply need the money. And there’s nothing wrong with that, as long as we’re clear on motives here.

          • Brian Green says

            Here’s the dirty secret: all of game development is a deal with the devil. As a programmer, my first job at a game company was paying me half of what I could get at any other company in Silicon Valley. This isn’t theory; when I left my job after a few years, I went and made double my wages at the second company that was a lot less games-focused.

            When you run a company, you make more deals. You take money from publishers, from investors, from credit cards. You pour it into a company, make a product, and hope that in the end you have a hit that pays off that initial influx of cash. Or, that you gain enough experience you can spin into contracting agreements that will pay you enough to get you out of debt.

            When you’re developing the game you make deals with the team. You make deals with the artist who says he can’t create female characters with the limited budget. You make deals with the programmers who want to implement some cutting-edge effect. You make deals with designers who wish they were creating movies rather than slumming it with games.

            Even releasing a game. You make deals with sites to cover your game. You make deals with marketers to advertise your game. You make deals with publishers to distribute and promote your game. You make deals with the check-writers to put a sadly generic cover on your game.

            This is the reason why I helped write a book about business. Not because I’m passionate about business, but because it’s inseparable from development.

            As for what’s good for devs vs. players, I see it this way as a player: I’d rather have another game in a great series rather than excluding some “undesirable” class from being advertised to. If the only compromise needed was a change of box art? Whatever. Until I hear they had to compromise on the gameplay, I just can’t get worked up. Given how many other compromises game development requires, if they managed not to compromise on gameplay then that’s a tremendous feat. But, the alternative is that another game from a series I like might not be made; it’s entirely possible that Ken Levine might be making a CoD clone next if the new game isn’t profitable enough. Then, the fratboys get a new game and I get nothing; doesn’t seem like a great tradeoff.

        • says

          You will have to be more careful in what you say then. I think I humbly and graciously explained what I meant and my intent. You don’t need to get excited (“crazy straw mans”). My point is extremely clear there: you’re arguing that, to quote YOU: “And the only way to get AAA-sized audiences is to appeal to a wide array
          of people, some of which would find that cover compelling” to which I replied the options aren’t to broaden appeal or have good games. Very simple.

          The CGI or motion capture are valid points on what we call AAA games and that’s great that we use that to make games. None of that addresses my argument that they are unnecessary for a good game so I think we are allowed to both believe these statements; they aren’t in conflict.

        • says

          I have clarified that sentence, but to Az: the first part is not “inextricably” connected to the second. Even if it were, it would not change the point I made because the two are mutually exclusive.

          You will have to be more careful in what you say then. I think I humbly and graciously explained how I came to my understanding, what I meant and my intent. I also clarified. You can afford to do the same.

          You don’t need to get excited (“crazy straw mans”). My point is extremely clear there: you’re arguing that, to quote YOU: “And the only way to get AAA-sized audiences is to appeal to a wide array of people, some of which would find that cover compelling” to which I replied the options aren’t to broaden appeal or have good games. Very simple.

          The CGI or motion capture are valid points on what we call AAA games and that’s great that we use that to make games. None of that addresses my argument that they are unnecessary for a good game so I think we are allowed to both believe these statements; they aren’t in conflict.