Pure speculation post incoming.
By the end of this calendar year, all the new consoles will be on the market. The 2013 holidays will see the “hardcore” gamers buy either a PS4 or XBone. True market penetration won’t really occur until the fall of 2014. It’s cyclical, happens with most any product. I would hedge my bet on a particular brand but that doesn’t really matter much for this topic.
What does matter is the cost structure of said consoles and games. Microsoft has stated that their first-party games will be $60. Sony has said the same. I’m disappointed in the former since one of the main draws is the reduction in pirating/used game sales, therefore companies should be making a lot more money. You’d think the prices would be lower. It’s a bit more expensive than today’s games and the dev costs should be lower since the architecture between PC, PS4 and XBone are near identical. Game prices are part 1 of the problem.
Free to Play (buy to play, freemium, cash stops) is a still relatively new financial model that no one really has a good grasp on. A company can get 1-2 years tops out of a cash stop before devolving into lockboxes. There comes a point where there is simply nothing left to buy and the company still needs money to operate. There are more games that fail this particular step than succeed (waiting on Marvel Heroes to discuss this point). Part 2 of the problem.
DLC is bleeding between the line between core play, additional content and value. Gone are the days of horse armor but here are the days of Protheans. While Skyrim DLC can prove to add value to the entire game, the prevelance of in-media-res DLC (like Deus Ex) is disturbing. Entire chunks of the game are missing. Part 3 of the problem.
Micro/macro-transactions have yet to find a floor or ceiling. LOTRO horses, EvE monocles, sparkle-ponies are in a class of their own. Paying for crafting material in Dead Space 3, or simply having a cash stop button on every screen, regardless of the underlying payment model, is garish. Paying for XBox Live and still getting ads is ridiculous. Part 4 of the problem.
Disconnect with the core audience. Back in the day, the core audience was 18 year olds sitting in a basement. They still exist but the core spenders are older, those with more disposable income yet conversely less time. An older person has a better understanding of value for service yet there is a growing divide between AAA developers and consumers. Ni No Kuni, Tomb Raider, BioShock and The Last of Us are supreme examples of quality and sold extremely well. Gears of War and God of War are cash grabs that are bleeding companies. Part 5 of the problem.
Independent developers are the future. It’s not a question anymore, it’s simple reality. They cost structures are lower, they aren’t jaded, they target their games to a specific market and have lowered expectations. The gate to entry is small (especially on PS) but the market itself is becoming saturated. This makes it hard for a new indie game to reach the spotlight, outside of word of mouth. Part 6.
A crash occurs when a bubble bursts. A bubble occurs when reality is artificially inflated up to expectations, in order to turn a profit. Gaming today seems to be heading farther and farther away from reality and more into slide decks for quarterly reports. Looking from the outside, it seems more like a head scratching exercise of “did they really think that would work?” The market is heavily saturated with the same product on every corner, with less features and more cost per iteration. There are only so many SWTORs that can launch and fail before bankrupting a company (see THQ). You can’t spend $100 million to develop a game that sells 100K copies or only provides income for 3 months.
The gaming paradigm that exists today is doomed for failure as it is simply not sustainable. There’s no one single problem to fix, it’s a plethora of systematic failures driven by a core concept – getting more money out of gamer’s pockets. We’re nearing the edge and it’s a hell of a fall on the other side.
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