The lights are on
Veteran Member - Level 14
This has been a busy week for me.There have been a lot of topics I've read about that have sparked a desire for me to blog about, but I've been struggling to find the time. So, while sitting by myself at work, I have made several notes regarding topics I wanted to discuss and from those notes, I bring you this blog.
The Next Generation of Consoles
Everyone seems to be talking about their desire to see one of the big 3 systems announce a next generation system withing the next year. To be honest, I just don't see it happening this year or even next. The reasons for my opinion are simple. The current average game development cost is $15 million dollars with the current generation. To see a jump to greater technology would likely see the development costs rise.
With a new system adoption of the system tends to be a bit slow and most systems don't see their peak level of adoption until the 3rd or 4th year. This means that games with a higher development cost would be released to smaller audience. In order to be profitable, games would likely need to see a raise in price that I do not believe gamers would be willing to accommodate. Right now there are several that would rather wait for a game to go to a lower price used than buy at initial retail or even wait a few months for a price drop. If games were to go up in price, likely you would see more gamers turning to the used game market, which in turn means less money going to developers. If a developer is unable to make a profit off of a game, then more often than not they are closed down. All of this considered, I believe that if a new generation of consoles were to come out now, you would see a lot of game studios go under, or be unable to compete with the upper echelon development studios.
Personally, I think this would be a horrible thing for gaming as many studios start out with different games before finding a niche that they excel at. If a development is unable to take those early risks, I really feel like the innovative direction the video game industry has been moving toward would die off and could result in a stale experience going forward for consumers. Again, this is my opinion and could be complete off, but it is something to think about prior to wishing for a new game system to release so soon.
Speaking of development studios being closed due to being unable to make a profit leads me to my next topic of discussion.
A lot of people on this site are upset about Activision's recommendation for the closure of this studio. Many people hold onto their memories of the success they found with the Project Gotham Racing and Geometry Wars titles. While they were moderately successful early on (selling over 2 million units of the original Project Gotham Racing), their success went away once they were afforded the opportunity to work on their own new IP with Activision.
As I stated before, the average game's development costs are $15 million dollars. Out of the initial $60 retail cost of a game, only $15-20 actually goes back to the developer, while the rest pays for shipping, packaging, retail workers, etc. So in order to break even with a title a game needs to sell between 750,000 and 1 million copies.
This is where the problems came in for Bizarre Creations, and what eventually lead to this decision to close the doors. Blur, which had a fairly large advertising campaign behind it failed to meet expectations and inevitable failed to sell enough copies to even break even with sales of only .66 million. This might not seem like a huge loss, but when you do the math, they lost between 1.8 and 5.1 million dollars.
Of course those figures assume that the game had the average development budget. However, Blur had an active beta prior to release as well as an extensive advertising campaign prior to release. This means the development costs were likely even higher, resulting in a greater financial loss.
To add to their woes, they also were tasked with a franchise game as well in James Bond 007: Blood Stone. This game turned out to be an even greater disappointment. Where Blur had scored in the low 80's for a metacritic score, Blood Stone was a critical disaster with a metacritic score in the low 60's. Sales were even more disappointing at only .55 million copies, resulting in a loss between 4 and 6.75 million. All told, between the two games their is a potential for them to have lost more than 12 million dollars.
Considering the average of $15 million dollars, a loss of $12 million is nearly the equivalent of of funds for a single game. Thus Activision was left with a choice. Close down the developer, while moving their top talent to other studios, or continue on with the developer as is, and risk even greater losses. In the end, they went with the decision that makes more business sense.
This is something that is difficult for many gamers to accept, but the fact remains that games cost money to produce. The money does not magically appear out of thin air. It is sad to see a development studio like this close, but at the end of the day, it can happen when good games do not gain support from consumers. This is why I can't stand people who claim they will never buy another Activision product again. That mentality on a mass scale can doom developers of good games, like Bizarre Creations.
West And Zampella
I've been saying for a while that I think West and Zampella will not win their case against Activision. Well, cue the fat lady and everyone can start heading for the doors, because after the e-mail surfaced the other day, it is safe to say that they have absolutely no chance of winning their case. If you haven't seen the e-mail from EA DICE senior director of global marketing Lincoln Hershberger, it read:
"A couple months ago, I asked Vince to hold back their map pack until
after we launched. (He owes me one). Given that they've already made a
billion, he was cool with that, obviously Kotick took it as being
Not only does this show that West and Zampella to be in cooperation with EA at least to a degree (which is a breach of contract), but this raises serious questions about whether EA will be able to win their portion of Activision's lawsuit. Before I thought that it might have been a reach to include EA in the countersuit, but given that EA was actively having Activision employees work against Activision to improve EA's chances of success when they came to market paints a grim portrait for their success if the case proceeds to court.
Interestingly enough, EA's defense to this material is "it was a joke." The only thing that is funny about it is that they used it as a defense of something that is clearly very incriminating. From here on, I'm not concerned with the West and Zampella portion of the case anymore, as I see no way they will win. To me, the bigger story revolves around EA and whether it will be proven further that they were tampering with Activision.
That's about it for this blog. Tomorrow I am going to be premiering a new community blog project I mentioned it in a previous blog. I have five contributors lined up. Each day of the week I have asked a different contributor a question regarding a different news story from either Game Informer, or other reputable gaming sites. I got some really good responses from my contributors and am looking forward to sharing their responses tomorrow.
UPDATE: I now have all five of the contributors for next week's blog lined up, so there is no more need for the question. But you can still enjoy Gir.
So again, make certain to check out the community blog project tomorrow.