Deteriorating Economy Spells Trouble for Game Developers - RaychelSnr's Blog

Arena Blog Dynasty Scores Sign Up ☰

RaychelSnr's Blog

Deteriorating Economy Spells Trouble for Game Developers Stuck

Posted on August 17, 2010 at 01:43 PM.

(4)

In case you missed it, Recovery Summer has turned into Realization Summer with stimulus waning and economic indicators all pointing rather solidly downwards. People in every corner of the economy are shuddering at the thought of another downtick (or was that a continuation of the current one?)| but that might just be the new normal for awhile.

Video game publishers, developers, journalists, players, and semi-interested patrons should shudder at that.

Video game sales have effectively collapsed for anything but AAA titles in the past 24 months, and with the prospect of another meaningful contraction in the economy very real -- it could have dire impacts upon the gaming industry as a whole. Here are three things to look for in the next 12 months from video game publishers and specific impacts on sports gaming:

Belt tightening -- We already saw an early example of this with Visual Concepts cutting 30 jobs to "increase efficiency". Don't fool yourselves, this is a direct result of a weakening economic picture and trying to get ready for tougher times and not a result of yearly layoffs. It's also most likely another in a series staff cuts in the gaming realm. I'm pretty glad I'm not an employee at any gaming firm at the present time, because I can only imagine what a fresh 10%+ drop in overall industry sales will do to it.
More focus on money makers -- Look for gaming companies to move towards more profitable projects. The big sellers such as Madden and NBA 2K might get a boost, but the real profits are to be made on the small screen. App Store apps and internet based games are the real winners here. These projects are so efficient to produce and profitable, there's little doubt gaming companies are going to chase after these types of projects to maximize profits. AAA Titles will be a main focus of gaming companies as well, which might leave those titles which made some but not much money in a position where they are no longer making money. That's not a good place to be, for the record.
Give me quality...or a cancellation -- NCAA Basketball was a early death in this philosophy. But look out for any game which isn't extremely profitable, because those games will be the first to go in a fresh round of title cuts by companies such as EA and Take Two. Weakening sales industrywide would place several bigger named titles in a place where they might not be making much money anymore, if any. NBA Elite, NHL 2K, MLB 2K -- you've all been warned.

The outlook isn't all doom and gloom for sports games though, the one good thing a tightening economy will do is force titles which do make it to the shelf to increase in quality since consumers aren't spending their money in a constrained economy. Let's face it, $60 is a lot to spend on something in an uneasy economy, so games will either have to prove themselves to be worthy of the price of entry or the price of entry has to drop. Indeed, it's very possible new games could see a price drop in the coming years if the economic situation continues to be anemic to spur sales. Don't forget that Madden was $40 at a lot of retailers at launch -- if that's not a sign that publishers are trying to spur on sales, I don't know what is.

Chris is the Executive Editor of Operation Sports and maintains this blog on the site. He is also a native Oklahoman and avid storm chaser. You can follow him on Twitter @ChrisSnr.

Comments

# 1 markprior22 @ Aug 17

People have said to speak with your wallet if we want better quality games. My response has always been that 1) we may get a better game in some instances or 2) if it isn't worth it, the game will just go away.

We still have our hands tied to a large extent...we either buy the game or, in many instances, it will be discontinued. I know we will all find other ways to spend our time/money but it is frustrating to know that sports games existed 5+ years ago that were on par with what we are seeing with many current titles. It is a frustrating time for those of us who love sports gaming.

# 2 Beastly Wayz @ Aug 17

"I know we will all find other ways to spend our time/money but it is frustrating to know that sports games existed 5+ years ago that were on par with what we are seeing with many current titles"

Well Said markprior22

# 3 eyeknowzz @ Aug 17

Good article. In a few years I think there may only be a handful of sports title left standing. You may want to add the Fight Night series to your list of endangered games. I don't want to see it go but if Fight Night Champions doesn't sell well I think EA will drop it from their roster of games.

# 4 Valdarez @ Aug 17

Used game prices have gone up as well due to the recession. I had to pay $35 last year via eBay for both NCAA 10 (bought week after Madden's release), and Madden (bought in mid-October), when I had only been paying $25 before. Then again, maybe sellers were pyschic and were already factoring in the value of the 'Online Pass'. heh