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Why The Video Game Industry Is In Such A Mess

 November 11, 2010 11:57 AM


I thought that with the way things are going in the video game industry just now it would be good to give one person's view as to what is going so badly wrong.

Just two years ago the game industry seemed to be booming, rapidly growing sales, lots of new titles, exciting leaps in technology, popular new platforms. It looked like the place to be. Then look at it now, moribund, going nowhere and , frankly, pretty boring. So what has gone wrong? Well the fact is that during the boom far too many products made a loss and for the last few years far too many games publishers have run at a loss (we all know who they are) and this is mostly down to the sheer ineptitude of many of the people who run the industry. There are plenty of customers out there with plenty of money who want to spend it on interactive entertainment but our industry has failed to give them compelling reasons to spend it.

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So let's look at what is causing the problems.

Platform proliferation. Not so long ago if you were a game developer you made games for the Playstation/ Playstation 2. That was the market. An occasional PC title added a little bit to the mix, but the real market was with Sony. So business models were easy, put about 20 fairly gifted people together for 18 months and you had a good chance of actually making a profit. Now there are more than a dozen viable, thriving, gaming platforms. So knowing where and when to apply assets has taken a lot of skill and that skill has been conspicuously absent.

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Barriers to entry. In the Playstation/Playstation 2 days the barriers to entry were just perfect. It cost a handful of millions to develop a game. This was sufficient barrier to keep the hordes out but it was low enough to make risks acceptable. Now the barriers to entry are either too high or too low. To make a profitable hit for current generation platforms now takes a £100 million plus punt and there are not that many people with the balls and skill to do this. At the other extreme iPhone and Android games can very easily be made for a few thousand pounds, so anyone can and is putting products on these platforms. There is such a plethora of titles that it is difficult to stand out and attract custom. This dichotomy of high and low development costs has really caught out most of the world's well known game publishers, they have not known how to deal with it.

Poor development tools. The way we make games is still very primitive, between the creative talent and the finished product there is just far too much mindless, repetitive slog. This really needs to be fixed if we are to go forwards with ever more powerful platforms. The number of man hours that the development process consumes can be radically reduced.

Industry pathetically slow at going online.


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