Is the AAA Industry Sustainable?

The 1980s were an odd time in which creatures roamed the land with hair as high as buildings and nostrils as white as snow but more importantly, the '80s were home to the collapse of the entire North American games industry. This resulted in video games shifting from being a sure-fire cash cow to becoming a dirty word for businesses. The only reason Nintendo is a part of so many people’s childhoods is because they used the term “Entertainment System” to convince store owners (who still consider video games to have been a fad) to stock it.

The crash itself was caused by the birth of third-party development. Atari lost staff due to its refusal to credit them and developers felt they deserved the same recognition other artists in entertainment recieve, this lead to a group of developers leaving Atari to form Activision. The ensuing lawsuits legitimised Activision’s business model. Now any brand was free to create a tie-in game, although none used the same skill as found in Atari or Activision, their business model was to copy a successful idea and milk it for all it was worth using advertising to ensure sales.

Consumers lost faith in the industry in part due to monumental failures such as a port of Pac-Man; heavily advertised and hugely popular in the arcades it seemed like a sure fire success. Atari decided to rush the game’s development cycle to get it on shelves for the christmas season resulting in an inferior product that angered both gamers and critics. Atari having overestimated the selling power of the game only shifted roughly half of the cartridges made. Another example of this and far more infamous is E.T. the Extra-Terrestrial, only given six weeks of development time before being rushed out for the christmas season, it was universally panned and is regarded one of the worst games of all time. It sold so poorly copies were buried in the New Mexico desert which was long regarded as a schoolyard rumor until the site was recently excavated and verified. In the end the manufacturing and licensing costs left the company and industry ruined. Industry revenue dropped 97% in two years due to this and the over saturated console and software market.

So in retrospect we can see the key factors that caused the crash but how does it compare against today’s market?

Publishing control is a lot stricter on the console side of things these days. Steam however lets unfiltered slurry slide through on the PC side, although they have been generous in allowing us the opportunity to go picking through the slurry, to find interesting things to show our friends with the curator system. Nintendo is still doing what they’ve been doing for the last 20 years and it continues to work somehow. Except for Nintendo the console manufacturers are a lot more diverse than their predecessors. Sony is probably the most diverse media company there is and most of their profit doesn’t even come from media, it comes from their banking and insurance sector and Microsoft is one of the world’s most valuable companies and the world’s largest software manufacturer. Atari had all their eggs in the gaming basket and being responsible for 80% of the market share in North America meant that when Atari went, the industry went as well.

We have the same treatment of advertising abuse with things that are more media circuses than games Titanfall, Watch_Dogs and Destiny all released to a world rumbling “Meh!” and that’s just in the last six months. It’s the attitude these projects are approached with that causes these issues, Ubisoft has said they don’t want to make something that won’t be a franchise. This means they only want to make something they can milk every year for less work and more profit. While the developers of Destiny refute the claimthat the game had a budget of 500 million, it’s clear to see that more money spent advertising the product than it deserved.

How many times recently have you heard about a cool new game being made by a bunch of people who decided to leave “big studio x” and start a new smaller company. It’s because the AAA environment simply isn’t worth it in most cases because publishers have to predict what will be a hit up to three years in advance. Developers have to be ready to bend to the publishers whim on what will be successful, as most AAA games are built with the budget that they will sell 2 million copies and that’s what they need to break even on the project. This results in companies like Square Enix calling a game a failure when it sells 3.4 million in the first four weeks.

The industry has also grown and spread so much that there are now thousands of different ideas on offer and most of the time you won’t even notice when someone takes one and decides to rip it off or iterate upon it but still when one reaches massive success it will be beaten to death. I mean look at Minecraft, I know it wasn’t original in and of itself but it was definitely successful and now if I threw something out the window it would hit 10 different indie devs working on games with crafting.

So is it sustainable? Well the cost to develop a AAA game continues to rise and advertising is turning into a publisher arms race to see who can create the greatest spectacle all the while the critical and consumer reception isn’t increasing. It isn’t sustainable but this doesn’t mean there’s going to be another '80s style crash the manufacturers are too financially secure and there’s too many development alternatives even if everyone stopped buying EA, Activision and Ubisoft there would still be hundreds of games on offer, mainly on PC though… maybe the unfiltered slurry isn’t bad after all.