Given that development costs for games have been rising rapidly with each generation, this surely cannot be sustainable for the industry in the long run. How do you see the industry reacting to this? Less AAA titles? More indie titles? DLC? How can we as developers reduce the costs? Better middleware and tools? Procedural generation of assets? I recently had the opportunity to ask a lead game developer this question, and whilst he agreed that it was a good question, he unfortunately didn't offer many thoughts on the potential solutions. So I wanted to try and probe the knowledge of more experts and see if I could spark a discussion on the subject. Sorry if this is too broad of a subject for discussion!

Quote: Original post by Twigletguy
Given that development costs for games have been rising rapidly with each generation, this surely cannot be sustainable for the industry in the long run.

How do you see the industry reacting to this? Less AAA titles? More indie titles? DLC?

That's already happening. The problem is, if you want a AAA title on par with the latest blockbuster movies, you gonna need a lot of assets.

And why couldn't it be sustainable? As long as there is a demand for it, and you sell enough to recoup a profit.

Quote:
How can we as developers reduce the costs? Better middleware and tools? Procedural generation of assets?

That's already happening as well. Better tools for better productivity, noneless, you still need a lot of people generating the content, the tools, and procedurally generated content is not always a solution.

The thing is, you can only go so far with cost cutting measures, before it starts to fall apart. It's like making movies really. Blockbuster movies ain't getting exactly cheaper, they just get more high-tech.

my 2 cents.

Quote: Given that development costs for games have been rising rapidly with each generation, this surely cannot be sustainable for the industry in the long run.

How do you see the industry reacting to this? Less AAA titles? More indie titles? DLC?

More Indie titles. The mainstream market simply costs too much in advertising and publishing costs when it comes to AAA titles. The amount of money the developers receive is tiny compared to the actual makings of the game, simply because of of the developer/publisher relationship.

The biggest change needed is to reduce the publisher control by altering 'how' games get to market. Steam and XBLA are excellent methods in that they empower smaller development studios to get their games to market with proper quality filters in place. I think this model will continue to grow and make up a larger portion of the overall gaming landscape.

Quote: How can we as developers reduce the costs? Better middleware and tools? Procedural generation of assets?

I don't think the developers really have much room to mitigate this since the raw development costs are actually not that bad. Game developers are paid lower than most - if not all - other development jobs of equal skill requirements, and general development tool costs are semi-negligible compared to the other costs. Using cheaper middleware (Ogre instead of Unreal, etc) is possible, but that's usually fixed depending on target audience or platform.

Developers could cut license costs to near or at zero by turning to cheaper/free operating systems or development tools (Blender instead of Maya or 3DMax, Codeblocks or Eclipse instead of Visual Studio), but it'll be moderately hard to find coders or artists who can work well outside their 'bubble' so you'll pay for it in the end. Even if you had a full team of skilled workers, there will be a ramp up time. This is only realistic for non churn-and-burn studios.

Quote: Given that development costs for games have been rising rapidly with each generation, this surely cannot be sustainable for the industry in the long run.

Well from what I hear the cost bubble has already burst over the past 12-24 months.

Only 1% of "boxed product" (i.e. regular retail games) have been selling over 1M copies as of late, so it's definitely not sustainable to be spending so much money on development, unless you're making MW2, etc and you know you're going to be in that 1%. On top of that, only 10% of titles sell over 100K copies, which at AAA budgets is still a borderline financial failure -- a big-budget game wouldn't even make half its money back from this many sales.

The big publishers have responded to this. They've halved the number of games they're funding, and they've halved the budgets for the ones they are funding (except for those projected to be in the 1%).

Quote: How can we as developers reduce the costs? Better middleware and tools? Procedural generation of assets?

The number 1 player that these cut-backs will "attack" is time. You can halve the development costs of any project simply by moving the deadline. When you're the publisher, you can do that -- It doesn't matter if the developer says the deadline is unrealistic, you can just say "I don't care, you'll do it or you won't get paid". So staff are stretched thin, features are cut, assets are reused, work is outsourced to China, iterations are reduced and another piece of shovelware ready to go into the 99% basket is born, for half price... which means you just might have a chance of making that money back in the meagre sales it's going to get.

Another trick is for a publisher to get 3 or more developers working on a new game at the same time, without them knowing about each other. Three months in, you cancel them all except the most promising looking one - that company gets paid to finish the game, the other's get screwed. A few months later they end up in The Daily GameDev.net attributing their failing to their super secret unannounced title which didn't pay off. Projects have a ramp-up time so it's relatively cheap for the publisher to pull these kinds of tricks, while having "insurance" of getting a half-decent game on the deadline they want.

Quote: How do you see the industry reacting to this? Less AAA titles? More indie titles? DLC?

As necreia said above, lots of companies are reacting to this by getting as far away from traditional "boxed product" as they can... however, many companies are still going to be tied to publisher-money to do these smaller games.

So all 3 of your suggestions are correct. There'll still be AAA titles, but these will only be the Hollywood blockbuster sort. Everyone else is scrambling for B-grade contracts, downloadable-whatever, smaller games, add-ons, pay-me-to-customise-your-avatar, etc.

[Edited by - Hodgman on May 10, 2010 9:12:00 AM]

Quote: Original post by Hodgman

Quote: Given that development costs for games have been rising rapidly with each generation, this surely cannot be sustainable for the industry in the long run.

Well from what I hear the cost bubble has already burst over the past 12-24 months.

Only 1% of "boxed product" (i.e. regular retail games) have been selling over 1M copies as of late, so it's definitely not sustainable to be spending so much money on development, unless you're making MW2, etc and you know you're going to be in that 1%. On top of that, only 10% of titles sell over 100K copies, which at AAA budgets is a financial failure -- a lot of games wouldn't even make half their money back from this many sales -- so we can guess that over 90% of traditional games have been financial failures over the past 2 years.

The big publishers have responded to this. They've halved the number of games they're funding, and they've halved the budgets for the ones they are funding.

Quote: How can we as developers reduce the costs? Better middleware and tools? Procedural generation of assets?

The number 1 player that these cut-backs will "attack" is time. You can halve the development costs of any project simply by moving the deadline. When you're the publisher, you can do that -- It doesn't matter if the developer says the deadline is unrealistic, you can just say "I don't care, you'll do it or you won't get paid". So staff are stretched thin, features are cut, assets are reused, work is outsourced to China, iterations are reduced and another piece of shovelware ready to go into the 99% basket is born, for half price... which means you just might have a chance of making that money back in the meagre sales it's going to get.

I wonder where you get those numbers from. Thats not what I see at all, neither on the sales nor on the budgets. A million unit sales is actually becoming pretty average for a boxed release, and I havent seen budgets being cut. You dont see people with a sales pitch and no experience getting millions to make a game anymore. Well, not so often, and thats a good thing. But the average development budget of well-established teams & studios still seems to rise. Over here anyway.

Im talking about the console market, which is where most of the industry releases are...

Quote: Original post by Steadtler
I wonder where you get those numbers from.

GDC2010.
I haven't done my own surveying, but vgchartz has a lot of data (example graph). It's a shame you can't restrict their lists to certain release dates though.

Maybe your company is lucky enough to still be in the 10%, or even the 1%? =D

Quote: Original post by Hodgman

Quote: Original post by Steadtler
I wonder where you get those numbers from.

GDC2010.
I haven't done my own surveying, but vgchartz has a lot of data (example graph). It's a shame you can't restrict their lists to certain release dates though.

Maybe your company is lucky enough to still be in the 10%, or even the 1%? =D

We're doing pretty well I think, thanks for asking :P

I dont think Fracture is representative of the industry in general, but since we're using VGChartz...

If you look at this instead, there is close to a hundred million-sellers titles on the Xbox360 *alone*. Now theres around 600 released titles on the 360, which give us about 17% of released titles have already reached a million copy on the 360.

And thats not even counting total next-gen sales (360+PS3), and recently-released titles that I included in the total and will reach a million copies. If you counted total next-gen sales and only titles released more than 2 months ago, I wouldnt be surprised to see between 25-30 % of boxed titles reached a million sales. Maybe more.

It seems to be that the general feeling is that this is not an issue that can be "solved" by better use of tools or any kind of technological solution, but rather requires a rethinking of the types of games that are being made.

Obviously costs are closely linked to time, and when developing these blockbuster, huge titles, creating that sheer volume of assets is going to take massive man-hours, and hence a lot of money. If it is the case that making this process more efficient isn't enough, then surely the only other option is to reduce the number of assets? ie; changing the design and types of games being made.

Obviously there will always be developers fighting for the lucrative, mainstream, multi-million selling topspot(MW2, Halo, etc), and indie developers can get away with catering to more niche markets given their game's drastically smaller scope and costs. What I'm wondering is what would happen to the "middle-ground" developers and games? Will developing new IP become even riskier? It seems that you have to have a franchise in mind already when developing a new IP, will that only get worse?

Sorry if this is a bit fragmented. Still can't really get my head around what I was actually trying to say.

Quote: Original post by Twigletguy
Obviously costs are closely linked to time, and when developing these blockbuster, huge titles, creating that sheer volume of assets is going to take massive man-hours, and hence a lot of money. If it is the case that making this process more efficient isn't enough, then surely the only other option is to reduce the number of assets?

According to EA, 80% of money is spent on marketing. Entire development, idea to gold only accounts for 20% of total cost.

It is not technical part that is the problem.

Quote: What I'm wondering is what would happen to the "middle-ground" developers and games?

Middle-class, in every meaning of the word, is all but dead.

Its been my experience that most projects who fails to make their cost do so because of simple mis-management. I find that in the game industry, the level of applied knowledge in simple software project management to be very, very low. You cannot manage software development like you manage a cardboard factory and expect to be successful, but unfortunatly too many teams are still managed that way. Every experienced developper has his horror stories...

Managers love to talk about "rising costs", but more often than not they are just covering their own failures.

Theres the same problem among game designers. There are methods to properly design games, but most game designers Ive met just make it up as they go. I cherish the few that know what they are doing.

IMO, the first and foremost way to reduce costs in this industry is a healthy dose of professionalism.

[Edited by - Steadtler on May 10, 2010 2:33:14 PM]