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The Almighty Buck Games

EA Says Game Development Budgets Have Peaked 157

Posted by Soulskill from the nowhere-to-go-but-down dept.
Gamasutra reports on comments from Electronic Arts VP David Demartini indicating that the company thinks AAA game development budgets are not going to continue their skyward trend. "If [a developer] happens to make a lot of money based on that budget, great for them. If they come up short and have to cover some of it — y'know, they'll be smarter the next time they do it. That's kind of the approach that we take to it." Certainly this has something to do with a few major economic flops in the games industry lately, such as the cancellation of This Is Vegas after an estimated $50 million had been dumped into the project. Another example is the anemic response to APB, an MMO with a budget rumored to be as high as $100 million. Poor sales and reviews caused developer Realtime Worlds to enter insolvency and lay off a large portion of the development team.
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EA Says Game Development Budgets Have Peaked More

EA Says Game Development Budgets Have Peaked

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  • Bout time... (Score:5, Insightful)

    by Anonymous Coward on Wednesday August 25, 2010 @12:20AM (#33365668)

    Lots of money does not a good game make...

    Bring back innovative fun gameplay and stop pushing graphics!

    Crappy games with awesome graphics... Are still crappy games.
       

    • Re:Bout time... (Score:4, Insightful)

      by crafty.munchkin ( 1220528 ) on Wednesday August 25, 2010 @12:33AM (#33365724)
      So true, gameplay is far more important than graphics.
      • Comment removed based on user account deletion

      • Re: (Score:3, Interesting)

        by Monkeedude1212 ( 1560403 )

        I know people say "Gameplay is more important than graphics" and I agree with them - lets get that straightened out, but lets clarify exactly why it seems to be that so much money gets dumped into graphics.

        Before you can even start much of anything else for your game, you need an engine to run it in. You can either dump a ton of money into licensing one, or you can dump a ton of money into building one from scratch. The latter is of course going to take more time - and the former is taking from people who b

      • I don't consider buying a game unless it can make use of my graphics.

        I want an aesthetic experience in my games as well as configurability and good game play.

        Games aren't that important for me that I'll buy them at all, if they don't interest me. That includes something that will interest my eyes and my mind and my sense of control. It also is a big "MINUS" score, for me, if the primary character can't be an attractive and strong female. Ugly, weak or secondary...major detraction -- makes it hard for me

    • Re:Bout time... (Score:4, Insightful)

      by Anonymous Coward on Wednesday August 25, 2010 @12:37AM (#33365742)

      The Hollywoodization of the games industry has killed it in my opinion. I've seen more quality and had more fun from games coming from companies like Valve and publishers like Paradox in the last 5 years than I have from EA or Activision or any other big name. Hollywood is not the direction that the game industry should be looking for inspiration, it should be a lesson in what NOT to do.

      • Re: (Score:3, Insightful)

        by odies ( 1869886 ) *

        You talk like there's no alternatives. Go search for some of the indie or freeware games, some of them are quite impressive. A lot of times they're also how games would be without big budgets. You don't really need to play big budget AAA games, but you want to, don't you?

        I think it's only good we have a lot of choices, something for everybody.

      • They run commercials at the cinema. Which is a good enough reason for me to not buy their games.

      • Re: (Score:3, Insightful)

        by twoallbeefpatties ( 615632 )
        However, that's the direction that a lot of consumers look in. To many people, budgets = quality. If there's a movie put up by some tiny studio that didn't have any advertisements or famous actors, then you're not going to get many people out to see it. If there's a game put out that doesn't have state-of-the-art graphics and a flashy cover, then only so many gamers are going to end up having their moms pick it up for them at Gamestop.

        This is the direction that movies have gone it, it's the direction

      • Re: (Score:2)

        by nomadic ( 141991 )
        and had more fun from games coming from companies like Valve

        You do realize that Half-Life 2 was perhaps the epitome of the Hollywoodization of games, right?

    • Re: (Score:2)

      by rxan ( 1424721 )
      What are some examples of innovative games that are fun to play? When I look for new games I look for games that interest me due to themes, graphics, or gameplay. Innovation isn't on my list of requirements.

    • Re: (Score:2)

      by nomadic ( 141991 )
      Maybe I'm a bit older than most slashdotters, and thus remember more of the olden days of gaming, but you all are imagining a golden age that didn't exist. The average game now is far better than the average game was 20 years ago. The best games now are frequently better than the best games were back then. You can't tell me Fallout 3 or Mass Effect or Starcraft 2 are bad games simply because a lot of money went into making them and the graphics are good. I won't believe you.

  • APB, Fallen Earth... (Score:5, Interesting)

    by Beardydog ( 716221 ) on Wednesday August 25, 2010 @12:26AM (#33365698)
    I never saw APB advertised, or evenmontiioned anywhere but Steam. If the software had been free, with a brief trial before a subscription stage, or if the software had cost, but the game was free to play, I might have given it a shot. Too many companies, and EA in particular, seem to see MMOs as both magical money machines and silver bullets against piracy. In my mind, MMOs in particular have to prove themselves before a sane humanwould join up, even if they have a reasonable price structure.

    I also wanted to give Fallen Earth a chance. Oh, well.
    • If the software had been free, with a brief trial before a subscription stage, or if the software had cost, but the game was free to play, I might have given it a shot.

      Uh, it did have a free 5-hour demo.

    • Re:APB, Fallen Earth... (Score:4, Interesting)

      by elrous0 ( 869638 ) * on Wednesday August 25, 2010 @08:17AM (#33367868)

      I am also continually mystified by the refusal of developers to port even a single MMO to a console. Every developer is spending a fortune to make the PC-only WoW-killer and losing their shirts when it inevitably either fails or flounders. Meanwhile, not a single modern MMO has been developed for a console (and modern consoles have more than adequate hardware to handle it). Considering how many console-only or console-primary gamers that are out there, that seems like a downright bizarre oversight. Everyone is treading the same well-worn path as everyone else and ignoring the one blindingly obvious path that no one has ever went down.

      I know a lot of people say that MMO's are somehow impossible to do on a console. But I remember when people used to say that about FPS's and RTS's too.

      • MMOs are not even remotely 'impossible' to do on a console... But let's talk controls.

        I used to play WoW, quite a bit actually, until I decided there were much better things to do with my life. In WoW each of my high level end-game characters had complex skill rotations and keyboard bindings. Looking back on that and thinking about trying to do that with a console controller makes me wonder how feasible it is. In WoW there were players known as "clickers" who used the mouse to execute all their skills
        • An MMO is not impossible on a console. Dreamcast had Phantasy Star Online after all.

          Though for the most part that was a fighting game that's areas were hard coded on disk. As mentioned in the subject line the PS3 will be getting Final Fantasy XIV which is an MMO. The PS3 can support all types of MMOs where Xbox360 is pretty much limited to a Phantasy Star Online type game that are very static. The Xbox360 limitation comes from Microsoft restrictions on what they allow on their console. One, which I believ

        • I think you overrate complexity. If WoW had hundreds of skills and required four keyboards to operate, it would be much more complicated, but it wouldn't make it more sophisticated or enjoyable. Most of these skills are pretty much the same thing anyway, they only exist to give the player a sense of progression so they keep paying subs. My warlock must have about half a dozen damage over time spells, and I don't think the game would lose anything if I only had one.

          Most classes could be boiled down to three

          • Re: (Score:2)

            by shermo ( 1284310 )

            My warlock must have about half a dozen damage over time spells, and I don't think the game would lose anything if I only had one.

            Most classes could be boiled down to three or four abilities which would be easily played on a controller without losing any element of tactics and skill.

            Keeping decent uptime on five dots is far more involved than keeping one dot up. In much the same way that juggling 5 balls is more difficult than juggling one ball.

            I suppose you could argue that it's needless complexity and doesn't add anything the the gameplay. But judging by the second sentence you seem to be implying that it is no more difficult, which is inaccurate.

            • Chess must really be an easy game then if my bishop can only go in four directions.

              • Re: (Score:2)

                by shermo ( 1284310 )

                Your argument was "If we remove 80% of possible abilities this won't reduce the element of skill".

                Do you think that chess would be no less complex if your bishop could only move in one direction?

      • I am also continually mystified by the refusal of developers to port even a single MMO to a console

        Though you added conditions after that line like "MODERN" and it came out on a console a year before going PC, we see your point painfully... let Wikipedia grant you some joy [wikipedia.org]:

        Final Fantasy XI, also known as Final Fantasy XI Online, is a massively multiplayer online role-playing game (MMORPG) developed and published by Square (later Square Enix) as part of the Final Fantasy series. It was released in Japan on Sony's PlayStation 2 on May 16, 2002, and was released for Microsoft's Windows-based personal comput

  • possible, and I hope so (Score:5, Insightful)

    by Trepidity ( 597 ) <[delirium-slashdot] [at] [hackish.org]> on Wednesday August 25, 2010 @12:34AM (#33365730)

    It's possible game budgets have overextended, and I personally would welcome a move towards lower-budget games: these really huge budgets are somewhat stifling for innovation, because there is very little risk you can afford to take with a $50m+ game. If you made ten $5m games out of that money, you could try out some more interesting things, and you'd also have smaller teams that can inherently move a little more nimbly (it's very hard to steer a ship the size of the current AAA dev teams, and changing anything requires heroics).

    Nonetheless, I'm not sure one big-budget failure is enough evidence of a turnaround. The film industry has had a few large-budget films that failed so badly they bankrupted studios [wikipedia.org] also, but pundits' predictions that those films marked a peak in film budgets all proved to be wrong.

    • Re: (Score:3, Insightful)

      by hedwards ( 940851 )
      They probably have, in order to break even a game with a budget of $50m would have to sell 1m copies at $50 a piece and keep every bit of that change to pay off the costs, as in probably not paying the IRS. Which is a risky move to say the least. A better move would probably be to cut the budget to a more reasonable figure and then either lower the asking price or accept a smaller number of purchases initially.

      • Re: (Score:2)

        by gmhowell ( 26755 )

        In the US (since you mentioned the IRS) you are taxed on net income (more or less) not gross receipts. Paying the IRS would be the least of their concerns.

        You are mostly correct though. Given that GameStop and Amazon will get 1/3->1/2 of that $50, EA would have to sell 2m copies, probably more. Continue to pare away at the amount of money coming in and you'll wind up in a place that "SRS gamrz" can't buy the studios out of. There simply aren't enough of them.

        • Re: (Score:2)

          by Dahamma ( 304068 )

          And, since you mentioned retail markup... I think it's going to be *really* interesting to watch how Blizzard does with their model for Starcraft 2, where they are doing significant sales via download, letting them keep 100% of the purchase price.

          Of course there are 2 angles to that: 1) studios make a shitload more money 2) studios can lower their prices on games because there is no longer a need for a now-useless middleman. Who wants to take odds against the studios attempting #1?

          • And, since you mentioned retail markup... I think it's going to be *really* interesting to watch how Blizzard does with their model for Starcraft 2, where they are doing significant sales via download, letting them keep 100% of the purchase price.

            Of course there are 2 angles to that: 1) studios make a shitload more money 2) studios can lower their prices on games because there is no longer a need for a now-useless middleman. Who wants to take odds against the studios attempting #1?

            Given that Starcraft 2 retailed for $60, which is $10-20 more than the average AAA PC game, I think it's quite clear that they are going with #1.

        • Re: (Score:2, Insightful)

          by Jedi Alec ( 258881 )

          Bear in mind there's also money flowing the other way...you don't think the studio's put in those big nvidia logo's and other advertising just because they felt like it, right? ;-)

        • Given that GameStop and Amazon will get 1/3->1/2 of that $50, EA would have to sell 2m copies, probably more.

          I think you are overestimating the retail markups on games almost by an order of magnitude. Retailers don't make a lot of money on brand new games (which is why Gamestop as a company is doing well -- they have a huge head start on the used game market). I wouldn't be surprised if the markup is around 10% at most. However, the markup on used games is often 100-200% or more. Gamestop, for example, will buy a relatively new game from you for $10-20 and then sell the game right back at about $5 less than re

    • I like big budget games because they can have cool visuals, full spoken dialogue and so on. However once you've hit that point, you have pretty much peaked. There isn't a point in spending money on other things.

      In particular I think some games make the mistake of spending money on big name actors. I really don't care, I'd much prefer a good voice actor, and there are many, to having money wasted on an actor because they are a big name.

      I also think you are right that smaller titles can be a benefit too, so l

      • I like big budget games because they can have cool visuals, full spoken dialogue and so on.

        This rises an interesting question: is voice synthesis nowadays good enough to handle most of the dialogue? Most voice actors are pretty bad, sometimes hilariously so, so I'd imagine that a computer reading a script - perhaps with some markup cues for emotional state and such - would do just as well, if not better.

        This would cut development costs for dialogy-heavy games a lot, and as a bonus also make modding a lot e

        • Re: (Score:2)

          by tlhIngan ( 30335 )

          I like big budget games because they can have cool visuals, full spoken dialogue and so on.

          This rises an interesting question: is voice synthesis nowadays good enough to handle most of the dialogue? Most voice actors are pretty bad, sometimes hilariously so, so I'd imagine that a computer reading a script - perhaps with some markup cues for emotional state and such - would do just as well, if not better.

          This would cut development costs for dialogy-heavy games a lot, and as a bonus also make modding a lot ea

        • The state of the art I've seen is Yamaha's Vocaloid. However it only really can handle singing (for various reasons that's easier than speaking) and it still isn't great. Also it takes a lot of programming (in the MIDI sense, not the C++ sense) to make it sound right. Well that means having a skilled individual spend a lot of time which costs money and so on.

      • Re: (Score:2)

        by vlm ( 69642 )

        I like big budget games because they can have cool visuals, full spoken dialogue and so on. However once you've hit that point, you have pretty much peaked. There isn't a point in spending money on other things.

        Agreed, big budget games generally don't spend any money on gameplay/balance, testing, or creative ideas. Minor disagreement in that they do blow a lot of money on marketing (TV commercials for my mom to watch?)

    • I don't think that a temporary decline in game budgets marks a permanent decline. Rather I think it likely marks a re-aligning of resources within the industry. We'll still see games like Modern Warfare get ridiculous budgets and those budgets will continue to climb. However, I think most developers are starting to come to terms with the fact that there's only room for so many Modern Warfare level games in the industry, and that sometimes it's better to set your sights a bit lower. So I don't think the

    • If you made ten $5m games out of that money, you could try out some more interesting things

      Hint: I worked in the game industry when games cost less than 1/100 of $5m, and I coded games during 20 years, so I saw the progression about games being more and more expensive.

      The problem is that nobody is willing to invest $5m for a "small" game, because they don't earn enough money in the end.
      There is a big delusion about videogames: videogames earn more money than movies.
      It's probably true, but I dare to say that only a few games are earning a lot of money, and these are only big titles, or big compani

  • It couldn't be (Score:3, Insightful)

    by CaptainZapp ( 182233 ) on Wednesday August 25, 2010 @01:00AM (#33365848) Homepage
    the fact that Steam (not their fault, thy're a reseller here) charged 50 Euro for APB, which gives you the privilege to pay a recurring subscription fee on top of that?

    Nosire! Of course not. It's probably due to evil software pirates.

    • Re: (Score:3, Insightful)

      by Lonewolf666 ( 259450 )

      Yes, that appears a bit greedy.
      For games with a recurring subscription fee, it seems smarter to make getting in cheap. Like CCP did with EVE Online:
      IIRC purchasing the game was 20 Euros, including the first month. Not too bad. So I got in, found I liked the game and stayed (and payed) for a few years.

      There is also a growing trend of "free to play" MMOs, where you only pay for in-game advantages like faster leveling or special items. That is an even more consequent version of making the entry threshold low.

      • Re: (Score:2)

        by Ihmhi ( 1206036 )

        You only pay USD$5 to "activate" an account. (I guess they do 5 Euros as well?). You also pay for the first month's subscription.

        After that initial activation, it's only the monthly fee from there. All future expansions are free.

        That's how MMOs should be done.

  • Good old EA "If it's not Madden, it's a waste of money and we'll shut it down eventually" Games.

    I stopped listening to anything they said years ago.

  • ... MMO's are definitely an area I doubt will ever have a "peak budget" as huge markets like asia and india have serious economies of scale.

  • My rules for buying games (Score:4, Insightful)

    by ledow ( 319597 ) on Wednesday August 25, 2010 @03:59AM (#33366564) Homepage

    Since the advent of games-for-show instead of games-for-fun, I have certain rules for buying games. These will probably explain why huge development budgets are a waste of money and why indie games are increasingly occupying more of my hard drive. It'll also explain specifically why APB died a death, because it was one of the games I looked at in the last few months.

    1) No subscription. If I buy a game, I buy it. I don't rent games - never have, never will. I may borrow them from friends. I may have to (at some point) pay in installments to "own" the game, but when I do that's more a financial arrangement than an ongoing subscription. I've never played WoW, or any other MMO, because of this.

    2) Demo. I do not play a game that I don't know *exactly* how it plays. I do not pre-order games, either. Some FPS's are vomit-inducing to me because of the motion (for some reason, Duke Nukem 3D was like that, but almost no other game). Some games *don't* let me change the controls to something I can actually get on with, or that works comfortably on my laptop. Some games do not play well despite looking nice (I *cannot* get on with DogFighter because the control system is just so horrendously out-of-tune with how I want the aircraft to move - thus the game is unplayable to me). If you don't offer me a demo, the only other options open to me are: playing a friend's version, playing a pirate version, or not buying the game until it's incredibly cheap and therefore worth the risk.

    3) Value. I don't pay for any game that I won't get value back for. Asking £50 for a game is ludicrous unless I get hundreds of hours out of it. They are £6.99 games on my hard drive that have hundreds of hours of gameplay from me - you have to compete with that. For some reason, this seems to operate on a bell-curve... very cheap games are usually shit value, very expensive games are usually shit value, with the peak being at about £10 or so. If your game is too expensive, I *will* wait until it's cheaper - I don't mind playing games that are several years old so long as they work. If it never gets cheaper, it never gets bought.

    4) System requirements. If I need a PC greater than the one I have, I won't look at the game. I don't buy PC's to fit the games, I buy games to fit my PC. There is no excuse any more for slow-running games on modern dual-core processors with Gb's of RAM available to them. Dogfighter CRAWLED on my PC and to get it to run smoothly required me to put it into 800x600 with no texture detail - it looked like a version of F29 Retaliator from my DOS days, without the fun, and with broken textures everywhere - and still my PC struggled (in fact, I loaded up F29 Retaliator in DOSBox soon after and had much more enjoyment out of it). If Tom Clancy's HAWX can work fine on my PC without me changing any options, Dogfighter should as well. If you require Windows Vista or 7, that's me done too. There's no reason for that. If you require a particular Service Pack, I will be suspicious and want to play the demo to be sure that you're just fibbing - most games run fine on SP2 even if they demand SP3 for example. If you require gobs of disk space, that's probably the biggest killer because my hard drive space and bandwidth is my most precious commodity.

    5) DRM. If I can't play my friend's copy on my computer to see how it runs on my machine, that breaks Rule Number 2 above. If I can't play a legit version or demo on another PC, then I won't pirate it - I just won't buy it. However, if I do decide your game is good enough to make it onto my machine, a good way to kill Rule Number 3 is to reduce its value by making it a hassle to install / uninstall, making it require Internet access even just for "activation", making it unremoveable, limiting my installs artificially, making it impossible to backup to media, etc. Pirate versions and cracks will solve this for games I do buy but if I have to do that, you have a serious customer service problem. It's like me buying a car a

    • Some FPS's are vomit-inducing to me because of the motion (for some reason, Duke Nukem 3D was like that, but almost no other game).

      turn down/off the view-bob, if you can. Duke3D had some seriously rolling view-bob.

    • 4) System requirements. If I need a PC greater than the one I have, I won't look at the game. I don't buy PC's to fit the games, I buy games to fit my PC. There is no excuse any more for slow-running games on modern dual-core processors with Gb's of RAM available to them. Dogfighter CRAWLED on my PC and to get it to run smoothly required me to put it into 800x600 with no texture detail - it looked like a version of F29 Retaliator from my DOS days, without the fun, and with broken textures everywhere - and still my PC struggled (in fact, I loaded up F29 Retaliator in DOSBox soon after and had much more enjoyment out of it). If Tom Clancy's HAWX can work fine on my PC without me changing any options, Dogfighter should as well. If you require Windows Vista or 7, that's me done too. There's no reason for that. If you require a particular Service Pack, I will be suspicious and want to play the demo to be sure that you're just fibbing - most games run fine on SP2 even if they demand SP3 for example. If you require gobs of disk space, that's probably the biggest killer because my hard drive space and bandwidth is my most precious commodity.

      I agree with most of that. Except the service pack level (I presume you mean SPs for Windows XP?).

      Unless you have some really important application that refuses to run on SP3, it is a good idea to run the latest service pack. SP2 recently went out of support and does not get security patches anymore. And surfing the net with unpatched Windows is not so good, as I found out myself some years ago.
      I even had the latest SP for Win2000, but forgot to install the post-SP patches =>Hello MSBlast...

  • It doesn't matter if the graphics are good enough that you can read the (made up) names on the dog tags of the enemy soldiers through the scope of your sniper rifle. If the gameplay is crap, people wont buy it (at least once genuine reviews start appearing showing how crap the gameplay is rather than paid "fluff pieces")

    The fact that demos no longer exist for many titles (on PC anyway) is also hurting things as people cant try games before they buy (and so they pirate the game to see if its any good and onc

  • 100 millions where invested in the company.
    the company has produced 1 mmo and about 60% of another one.
    so you can say about 60M where invested in it.

    now you can buy RTW for 4M, and get 1 MMO and half. *hint*hint*hint*

  • Of course it's peaked.. they've learned they can saturate TV and Radio, and other media, with a slew of ads for their products... They can't very well push thier stuff MORE then they are, so they've reached the top.

    Maybe if they took some of that Prime Time ad-slot money and put it back into making a decent game, they'd get a better return?.. ok.. probably not..

  • - APB cost over $100m in investment capital. That's a warning sign right there.
    - APB has been in development for five years. No-one I know had heard of it until it popped up on Steam pre-orders.
    - APB gets bad reviews on user sites.
    - APB *didn't* get bad reviews in magazines, etc. because of a review embargo (until a week AFTER release) that stopped people publishing reviews - this arguably killed the game's publicity.
    - APB changed over 5 years from being originally planned for the XBox and ending up being

  • Game Development (Score:4, Insightful)

    by stewbacca ( 1033764 ) on Wednesday August 25, 2010 @09:41AM (#33368886)

    So the game companies are beginning to realize that, although they are a game company and hire a lot of young guys who get into programming because they took some video game design courses, they still have be a functioning business to survive...interesting!

    I tell my kids that video game development is a good entry into software development because the two should be indistinguishable. Writing code for WoW shouldn't really be much different than writing code for Microsoft Office. The problem I've noticed is people that choose video game development don't think they are in the business of making software and thus don't follow the established business rules that work for any type of software.

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