Can the Gaming Industry Afford a Next-Generation of Consoles?

Development costs are rising. Gamers are demanding better graphics, more features, and ultimately, more of the same. This unfortunate trend has resulted in a downward spiral for the gaming industry where developers are too afraid to take risks. If a game isn’t guaranteed to go platinum within mere months of the release window, it’s unlikely that publishers will take a chance on something that has the potential to be great. It’s a shame, considering the vast amount of creativity that likely goes untouched for so many game developers in an industry flooded with generic first-person shooters and titles that fail to innovate on genre conventions. It all begs the question, however: can we, as an industry, even afford a next generation of gaming?

Let’s examine the problems that currently plague the gaming world. As mentioned before, developers are fearful of the hefty amount of risk involved when launching a new, unestablished IP or taking chances on an existing franchise. Very few studios are confident enough to do either, and the ones that do are often the ones with enormous fanbases or loads of cash backing them up. So, where does the little guy come into play here? How do small-time developers with grand ideas get the funding to create a game that is even capable of piquing the curiosity of the upturned gaming snobs we’ve become? Kickstarter has become a popular outlet for these creative ideas, and while crowd funding is an excellent way to test community response to an idea, it can only be sustainable for so long. The money needs to come from within the industry, and asking fans to fund the development of great games with wonderful ideas can only go so far unless the mechanism by which it operates is revamped to make it easier and more streamlined.

Another issue running amok in the gaming industry is sequel overload. Current-gen developers have been cranking out sequels for what feels like eons. Halo was just granted a new trilogy to explore, Assassin’s Creed is now an annual release, and what Call of Duty are we on now, anyway? It’s an unfortunate circumstance to be placed in, as gamers. Are we to blame for our unwarranted snarkiness of originality and immediate disregard for anything that doesn’t bring an astonishing graphical style to bear? Or are we the spark that developers need to pull themselves from the mechanical cogs of mediocrity? Wherever the answer falls in such a spectrum, one thing is clear: the gaming industry is in trouble, and without a dramatic overhaul of the way we come to experience and enjoy video games, it very well may fail to last in a next generation of consoles.

Some might argue that many developers are holding their cards close to their chest for the next generation of games, but if last gen’s launch is any indication, that is not the case. High-res versions of games may not fill the launch lineup for an Xbox 720 or a PS4, but it’s quite likely that the initial push of next-gen titles will be mere tech demos and incremental upgrades from existing franchises. I’d love to see a brand new IP launch with a console when other options are few and far between, but to expect large sales on a brand new console where the demographic is significantly smaller is impossible, considering development costs.

In fact, here’s the current financial forecast for our beloved developers: cloudy with a chance of layoffs and dissolved studios followed by a brief interlude of corporate mergers leading into a low of Bobby Kotick calling the shots. The video game industry isn’t what it used to be. Developers could take chances and invest in an idea without too much fear of the potential financial consequences. Such a mentality no longer exists, as even quality original IPs struggle to find their footing amongst a sea of shooters and half-baked RPGs. Graphics are always needing to be pushed to their fullest, feature sets always required to deliver awe-inspiring new ways to play, and more. All of these things are excellent expectations to have, but only in a healthy and thriving economy which allows for these things to happen naturally.

It is enormously disappointing, then, to think that as graphics technology evolves and games like L.A. Noire cost upwards of $50 million to make, only the big dogs will be able to hang with the ever-increasing cost of development. Circumventing this issue by having a unique and quirky art style can only get you so far, and when other titles make it a point to feature jaw-dropping visuals, it’s rapidly apparent which studio houses will be able to keep up while others will fall behind.

Survival of the fittest? Maybe, but in an industry as young as gaming, it’s not a good sign. Gaming doesn’t have to be an industry consisting of four mega-publishers and a handful of capable developers; it needs variety, and a whole hell of a lot of it. Gamers’ tastes are as diverse as they come, and to expand the demographic of gamers well beyond its still relatively shallow reach, games will need to adhere to an excellent balance of accessibility and depth. Not only will the quantification of fun need to be a subject of intense interest for every serious-minded development team, but the funds, experience, and technical know-how to create truly great games are all very expensive assets.

Indie games may be the safest haven for small-budget developers now, but on updated hardware with upgraded specs, gamers will come to expect more. 8-bit art titles such as Fez may be timeless to some, but it’s difficult to justify spending a good chunk of change on a new console only to have it showcase graphics from several eras of gaming ago. Gamers will come to expect more, and with better graphics comes an increased price tag attached to the development. If we are already in a situation where innovation is dying and creativity has failed to resurge amidst a wash of unoriginality, how can we possibly expect that a new era of hardware will change things? The issue is price, and the potential ROI of investing that price in a project that has no known quantity; that is, it isn’t known to be a hit yet.

While some might argue that developers are waiting for new hardware to bring out the big guns, such an argument fails to point out that the issue isn’t hardware limitations, it’s financial limitations. With games like Gears of War 3, Watch_Dogs, and Tomb Raider looking absolutely phenomenal on current-gen hardware, it’s evident that the technology currently available in a large amount of homes is perfectly sufficient for amazing experiences that raise the bar. Those developers that are waiting for a next-generation to showcase their ideas? Not the best plan, considering the potential losses of trying to market to a diminutive market compared to current-gen install bases.

In the beginning of a console cycle, almost everyone loses money. The hardware manufacturers take a loss on the consoles to make them affordable for a few years before turning a profit, and big wigs like Microsoft and Sony often aim to recoup their losses on services, accessories, and royalties from games for a few years. Game developers also take a hit, as their demographic is considerably smaller than it may have been with the previous generation due to naturally low early adopter rates. Expecting developers to expect consumers to plop down $300 or so on a new console and then on a new IP or updated old IP is not a wise business choice to make when developers are already struggling to stay afloat. We, as an industry, need to focus on the now, and to stop blaming the lack of creativity and innovation on current-gen hardware or the potential of still as-of-yet unannounced future consoles.

As such, I’m not that concerned about the current-generation of consoles lasting a while longer. Many of the games shown at this year’s E3 all prove that there is still life left in the hardware we have now, and with console sales still going strong (on Xbox 360, at least) it seems foolhardy to introduce a new generation prematurely. As an industry, we need to first focus on minimizing development costs and normalizing engine licensing before we can usher in another era of gaming. When developers can feel confident in taking risks once more, then it may be prudent to upgrade our gaming experiences. Until then, however, we have much more work to be done.

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