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Have Developers/Publishers in general lost money from generation to generation?

#1ateballPosted 2/19/2013 7:36:39 PM
This probably applies only to those with insider knowledge from past to present, along with some common sense but I'm wondering if anyone has a really good answer that isn't just based on speculation:

(What I'm posting is not necessarily fact, but more or less just educated guesses at how I think the video game world runs.)

When video games first began being produced, development teams consisted of at times no more than 10 people with pretty low production values and budgets to create games sometimes in as little as half a year. This really continued all the way until the PS1/N64 years when 3D graphics became standard and bigger teams with more money became a necessity.

What I'm getting at is that video games as a whole have really always had a very big fan base with the ability to sell a lot of units and game prices from the NES/SNES/Genesis/etc. eras all the way until today have generally stayed pretty consistent, if not gotten cheaper in certain instances. This would cause profits to DRASTICALLY fall as teams and budgets get bigger, correct?

For example, the original Midway team that made Mortal Kombat was supposedly made by like 6 or 7 people and sold millions and millions of units, so profits were probably INCREDIBLE since development costs were probably relatively low and the salaries for 7 employees was next to nothing compared to those profits. Now that same team (which is Netherealm Studios) probably has 150+ employees, takes 2 years to finish one game, and their overall sales are less than what they used to be which means a huge cut in profit from how business was done before.

While certain entertainment industries such as movies and music have historically remained the same in terms of production and creation aspects, gaming seems to be the only one that frequently balloons because there's really no way to prevent production costs from rocketing from generation to generation.

Is this why so many game developer's have failed in recent years or are there other factors that I'm not considering? (Besides obvious ones such as low sales, creative conflict, etc.) Do you think gaming as a whole may ONE DAY become a completely unprofitable market?
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#2TheBlueStigPosted 2/19/2013 7:53:07 PM
Industry earnings have kept going UP every year since the NES came out.

Any developers that have failed in that time only have themselves to blame for not doing what they were supposed to.
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#3mtjormitchPosted 2/19/2013 7:58:17 PM
TheBlueStig posted...
Industry earnings have kept going UP every year since the NES came out.

Any developers that have failed in that time only have themselves to blame for not doing what they were supposed to.


Not really when publishers are, at best, money grubbing thieves that latch onto talent like a succubas and suck them dry until their next meal ticket.

In reality, publishers are some of the dumbest people on the planet, bar none.
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People need to realize that games are art. Seriously, it's been proven over and over again. I think it's about time to people to man up and finally say this.
#4TheBlueStigPosted 2/19/2013 8:04:18 PM
mtjormitch posted...
TheBlueStig posted...
Industry earnings have kept going UP every year since the NES came out.

Any developers that have failed in that time only have themselves to blame for not doing what they were supposed to.


Not really when publishers are, at best, money grubbing thieves that latch onto talent like a succubas and suck them dry until their next meal ticket.

In reality, publishers are some of the dumbest people on the planet, bar none.


Again, the blame falls back on the developers, they get to CHOOSE who publishes their games, if they pick the wrong one, it's their own fault.
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"Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety."
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#5DarkSymbiotePosted 2/19/2013 8:12:21 PM
TheBlueStig posted...
mtjormitch posted...
TheBlueStig posted...
Industry earnings have kept going UP every year since the NES came out.

Any developers that have failed in that time only have themselves to blame for not doing what they were supposed to.


Not really when publishers are, at best, money grubbing thieves that latch onto talent like a succubas and suck them dry until their next meal ticket.

In reality, publishers are some of the dumbest people on the planet, bar none.


Again, the blame falls back on the developers, they get to CHOOSE who publishes their games, if they pick the wrong one, it's their own fault.


Unless the EA developers all decide to leave and form a new company and have CDPR fund them... The developers don't always have a choice.

Also,

http://www.polygon.com/2012/10/1/3439738/the-state-of-games-state-of-aaa
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#6ateball(Topic Creator)Posted 2/19/2013 8:43:08 PM
I think that's where a huge issue lies is that a lot of developers end up stuck in a less than desirable situation when it comes time to find someone to finance their games. Publishers also, on the other hand, have to contend with the most important aspect of business: making money. The harsh part for the Publishers is that they have to essentially make that money off of someone else's work which I'm sure can be extremely stressful since the final product is not REALLY in their hands.

Some fantastic developer's with big, huge, epic plans end up having their desires squashed by those Publisher's that funnel the money into making those plans happen. Whoever has the money has the power.

Think of it like big health insurance companies that come in between the doctor and the patient, who may end up having to take an entirely different method of action than originally planned because the health insurance companies may not find that original route the most cost effective way for getting treatment. Sure the final outcome might be something similar but it isn't what was at all best for the patient (Which in this equation, is we, the consumer) and may not at all be what the doctor (the developers) were comfortable doing or wanted to do at all. If something goes wrong along the way or is not 100% desirable, the doctor's integrity and trust is now compromised and will no doubt affect future relations with other patients.

Fact is, we all hate the big insurance companies that run the show behind the scenes, but they have been the most important necessity in the developer-gamer relationship because if no ones going to step up and fund the project to begin with, what are you going to play?
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#7mtjormitchPosted 2/19/2013 9:27:14 PM
ateball posted...
I think that's where a huge issue lies is that a lot of developers end up stuck in a less than desirable situation when it comes time to find someone to finance their games. Publishers also, on the other hand, have to contend with the most important aspect of business: making money. The harsh part for the Publishers is that they have to essentially make that money off of someone else's work which I'm sure can be extremely stressful since the final product is not REALLY in their hands.

Some fantastic developer's with big, huge, epic plans end up having their desires squashed by those Publisher's that funnel the money into making those plans happen. Whoever has the money has the power.

Think of it like big health insurance companies that come in between the doctor and the patient, who may end up having to take an entirely different method of action than originally planned because the health insurance companies may not find that original route the most cost effective way for getting treatment. Sure the final outcome might be something similar but it isn't what was at all best for the patient (Which in this equation, is we, the consumer) and may not at all be what the doctor (the developers) were comfortable doing or wanted to do at all. If something goes wrong along the way or is not 100% desirable, the doctor's integrity and trust is now compromised and will no doubt affect future relations with other patients.

Fact is, we all hate the big insurance companies that run the show behind the scenes, but they have been the most important necessity in the developer-gamer relationship because if no ones going to step up and fund the project to begin with, what are you going to play?


Yet developers are figuring one simple fact out, why bother with a publisher when you can go strait online to produce your own game and also release it and get full profits while not paying a single cent to a publisher who just eats money like a wood chipper feeding on... wood.
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People need to realize that games are art. Seriously, it's been proven over and over again. I think it's about time to people to man up and finally say this.
#8ateball(Topic Creator)Posted 2/19/2013 9:35:45 PM
mtjormitch posted...

Yet developers are figuring one simple fact out, why bother with a publisher when you can go strait online to produce your own game and also release it and get full profits while not paying a single cent to a publisher who just eats money like a wood chipper feeding on... wood.


Exactly why places like Kickstarter are doing so well, if you eliminate the most unwanted link from any equation and somehow still find a successful way of making that equation work, then you've struck gold.

Hopefully Publisher's will start getting the hint and allow a little more developer freedom before the whole industry goes stale and/or goes to the mobile market. I love console games because they offer an experience that an iPhone or Android that isn't primarily a gaming device never really can: immersion.
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#9shawnmckPosted 2/19/2013 11:02:04 PM
It should be important to note that there are more Developers and games being developed, as well as a much bigger variety of genres now than ever before.
To say that there is money to be had in this market is an understatement.
To some, this is a curse, because they erroneously view this as too much competition, and they have a narrow-minded view of Devs having to split the pieces of the pie.
That is wrong because likewise there are more gamers now than ever before, so the industry can easily grow to support the huge numbers, as it has been doing.

However, that doesn't mean everything is rosy.
Every time some Developer closes down, or a game flops, again the pessimists out there view it as an indication that there is something wrong with the market...they will blame places like gamestop that sell used games, or they will blame the high cost of making games, and various other BS reasons that are used for scape-goats.
The real reason why the industry is hurting and sales are down are simply because of a very bad worldwide economic recession.
People just don't have as much disposable income in mass as they used to, which means fewer games being bought....often times used as opposed to new.

So the answer your question is a bit tricky.....
Yes, there is much more money to be had (made), and lots more opportunities, however the window to do so is more narrow because of the piss-poor economy.
This means that they have to do things just right to maximize their profits and ensure as much exposure as possible to their games.
But there are a lot of factors involved here too, such as marketing....time of game release (will it have a lot of competition)....is the game any good....how it is perceived by the consumers in mass...and etc.
And like I mentioned, there is a lot more competition now, so Developers really have to step up to the plate and make some good games, otherwise their games will easily flop (which is why so many protest used games...because it doesn't let them get away with making crap games).

There have been numerous Developers that were around in previous generations, but have since closed down (or are on the verge)...but likewise there are even more relatively newer Developers that have been started and are fairly successful. Plus there are some that have been around for a very long time (EA, Activision, Capcom, Konami, Blizzard, etc).

Overall, the market is still very much a success.
Anyone who says otherwise doesn't know what they are talking about.
If there wasn't any success then there would be no point in making games...and look at how many games are being made, and look at how many console makers there are now.
Traditionally there has been only one company that dominated, and all others failed (Dreamcast, N64, 3DO, Jaguar, X-Box 1, Saturn, etc)...but now look at how all three console manufacturers have been very successful and profitable (for the most part).

Plus, there are more gamers now than ever before, which help support all these games and brings even more money to the tables of the Developers.
That's not to say that the industry is healthy or couldn't be better, because its not, and it can be...but the economy being what it is is hurting everyone.
Improve the economy, and you will improve the industry as well.

BTW
I'm NOT an analyst or anything, but I have been playing video-games for roughly 35+ years, and I have owned every home console ever released....so take my comments with a grain of salt.
And I am just calling things the way I see it.
#10SheepinatorPosted 2/19/2013 11:12:24 PM
TheBlueStig posted...
Industry earnings have kept going UP every year since the NES came out.

Any developers that have failed in that time only have themselves to blame for not doing what they were supposed to.

Who needs facts when they get in the way of the fiction you repeatedly post? Publishers earnings are public knowledge. I know you've been in topics where you have been given these facts.

Companies like EA, Take Two, THQ, have made a fraction of the profits this cycle compared to what they made on PS2/Xbox, and this is reflected in their stock prices which have massively under-performed the market. Activision has done well thanks to CoD and WoW.
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