The Games Industry is due to Crash. Again.

The Games Industry is due to Crash. Again.

We're edging closer to another crash like in 1983.

pocru by pocru on Feb 24, 2018 @ 12:35 AM (Staff Bios)
Those who forget history are doomed to repeat it, as the saying often goes, and it applies to every country, every people, and every industry, including the gaming industry. And if there’s ever been a more important point in the game’s industry’s history, it would be the great crash of 1983.

To go into all the details would make for a small book, but the underlying cause of the crash can be understood by anyone with even a remote understanding of economics. In those days, video games were very much niche, but they were also growing in popularity and were relatively cheap to make, and could typically be done with pretty small teams. While this was true across the board, it was especially true for home consoles. Arcade machines, which had been the most popular and well-known way to get your gaming fix back in those days, were pretty expensive to produce, sell, and ship to your local arcade or pizza place. The introduction of home PC’s and consoles, however, allowed the cost of the hardware to be offset to the player, and selling them software was a significantly easier task.

The first console was technically released in 1972, the Magnavox Odyssey, but the first console that really picked up any traction was the Atari 2600 (1977), the Intellivision (1980), and, of course, the ColecoVision (1982). With these consoles, it had never been easier to produce and endless slurry of games, ranging from classics like Pac Man to significantly less well-loved classics like Custards Revenge – the best known game from developer Mystique, which specialized in old-school “sex games”, but like everything else at the time it was infamous for being very bad quality.


That was the running trend of the years leading up to 1983: while a few games would be remembered (such as M.U.L.E) for their exceptional quality, the vast majority were something akin to shovelware, designed to be produced as cheaply as possible so what few sales it could manage might turn a profit. And since the world was so much larger back in the days before mass communication became the norm, all too often word of mouth moved slower than wallets did. With no one to act as a gatekeeper to quality, it was largely luck that determined if you got a gem or a dud.

While it had been a well-known if badly acknowledged fact that the blooming bubble the industry was “enjoying” was untenable, it didn’t really burst until 1982, when Atari released the now-infamous E.T. The Extra Terrestrial. Atari had earned the right to make a game after Spielberg’s family classic, but due to a number of factors that would also take a full article to go into, it was rushed and the final product was quiet honestly one of the worst games of the era. While that itself might not have been too bad – terrible games were sort of the norm – the fact that such a “big budget” and well-recognized title would turn out to be garbage made fans realize that maybe the industry simply wasn’t going to get better.

The lack of trust lead to an immediate drop in sales over the next year, which left dozens, if not hundreds, of small developers unable to survive. Faith in games as an entertainment medium was at an all-time low, competition from PC’s was getting too intense, a sudden spike in Inflation meant that game prices skyrocketed, and with publishers taking control away from developers, the wafer-thin poles holding up the industry started to cave. The poorly-made games had their prices slashed in order to sell copies, which continued to reduce trust and meant that good games that were fairly priced wouldn’t get a fair shake. Retailors stopped stocking video games, using shelf space to promote other products, and Atari, once the king of the gaming world in the west, would fall from grace hard, and never really recover.


It wasn’t until two years later in 1995 that Nintendo would drag the gaming industry out of the pit it had dug for itself with the release of the Nintendo Entertainment System – the NES. Basically single-handedly, Nintendo was able to salvage the reputation of gaming, and shift the “capital” of the gaming world at the time from the US to Japan for at least fifteen years.

You might be wondering why I’m bringing this up. Or, you might think you’ve already figured it out: after all, the PC gaming world, specifically steam, is suffering the same problems that we faced all the way back in the 1980’s, with a plethora of cheap and worthless games absolutely drowning the indie scene and making it hard for the quality games to escape the mire. But while that’s an excellent observation and guess… it’s actually not why I bring it up.
Because while the slog of cheaply-made asset-swap games on Steam is certainly a problem, games journalists are good at ignoring it, good games still manage to break through and get traction thanks to word-of-mouth, and most importantly, it only impacts a fairly small sector of the games industry, being PC indie games. The triple-A gaming world is basically unphased by it.

Rather, there’s a different symptom currently affecting the Triple-A gaming world, a trend that puts us in danger of bursting yet another bubble: games as a service.

You’re probably aware that “games as a service” is a trending topic these days, with EA, Ubisoft, Warner Brothers, Activision Blizzard, and even Microsoft and Sony toying with the idea. The concept is as brilliant as it is suspicious: rather than releasing a new game every year, release one game and support it with constant updates and improvements, so that players keep coming back to it year after year after year. It’s a design principle that’s informed games such as Overwatch, The Division, Rainbow Six Siege (which is supposed to last 7 more years!), Destiny, Star Wars Battlefront 2, Assassin’s Creed: Origins, For Honor, Shadow of War, and Bioware’s upcoming Anthem.

And while there’s a lot I dislike about the “games as a service” model, namely their reliance on friggen’ loot boxes, there’s a pretty serious flaw in their design. Namely, that it might cause the industry to self-destruct.

Here’s the thing, the Games Industry has always been about imitation. One studio figures something out people love by taking a risk and dozens of other studios shamelessly copy it to try to simulate that success. 3D platformers were basically created by Super Mario 64. World of Warcraft spawned dozens of pretenders that challenged it’s reign for years upon years. Call of Duty: Modern Warfare lead to WW2 being abandoned in favor of modern and sci-fi warzones. And of course, mobile and free-to-play games lead to an explosion of Candy Crush/Cash of Clans clones.

It’s never been a good practice. People who like Call of Duty already have Call of Duty and they aren’t likely to be swayed by a new game on the market. And if you’ve sunk 100 hours into one MMORPG you’ll be hard pressed to hop over to a new one where you have no friends and have to start over from scratch. But it looks to be especially disastrous for games as a service, because yes, while the potential to make lots of money is certainly high, there’s even a bigger chance of crashing and burning.

Because the thing about games as a service is that they rely on both a steady supply of both cash and attention from their audience. Like the MMORPG, they need people to always be checking in, defaulting to it, and supporting it by digging into those sweet, sweet loot boxes. But neither time nor money is infinite: and if you’ve already decided that your go-to game is going to be The Division, and then EA comes along with Anthem… well… you already have your go-to game. You have neither the time nor the energy nor the money to support a SECOND game like that. While you could put a game down for a bit to enjoy a game with a clear beginning, middle, and end (say, a nice RPG or platformer), a open-ended game with no clear start or end? Most people can’t juggle that stuff.


And since games as a service have sprouted as a response to games being “too expensive”, the problem is clear; industry heads will demand more games as a service be created, but there simply won’t be the audience around to support their enormous budgets. They’ll fail, and the industry will start to bleed money – HARD. Especially if so much of their budget had been spent updating the game they thought would be their golden goose, they have less money to make a new game, which will undoubtedly make it turn out worse.

In the 1980’s, the industry thought it knew how to milk its users for as much money as they could, and the model collapsed because they forgot money doesn’t grow on trees. And now, in 2018, we’re gonna be making the exact same mistake.

Maybe Nintendo will have to save us all again, god forbid.


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