Tuesday, February 17, 2009
What's killing the video-game business?
Slate Magazine: "Like pretty much every industry these days, video-game publishing is in some financial trouble. Electronic Arts, the world's largest game publisher, best known for Madden and the Sims, lost $641 million in 2008's fourth quarter. Activision-Blizzard, owners of the cash cows World of Warcraft and Call of Duty, reported losses of $72 million in the fourth quarter of 2008. (They lost $194 million the quarter before that.) THQ, the third-largest publisher in the United States, and known for lucrative licenses ranging from the Ultimate Fighting Championship to Pixar, had $192 million in losses over the holidays and is laying off 24 percent of its work force."
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4 comments:
As a gamer, I had a very different reaction to the idea that game publishers are losing money. Honestly, it's about time in my view. EA and THQ are responsible for some truly terrible games. These games have the same creation costs as others of much more significant standings, and if finical are finally hitting the video game industry, it may finally lessen the stream of games that many publishers put out. EA for years did nothing but make third rate games and has only recently started really putting effort into their work. THQ is basically the company responsible for ever terrible movie based game ever, and should just go under at this point. Companies like Rockstar that and DoubleFine that only put out high quality games that really reflect the money put into them are doing fine, maybe it's time the giants learned that simply making games to make games is not a good idea.
This does not surprise me. When people have little cash in their pocket, they would rather spend it on food than a video game esp. when online games are free. I am not a video gamer so I cannot comment personally, but I agree with Charley maybe this will be a positive thing and press for the creation of higher quality games.
I've played and bought a number of recent games and feel like all too often they jump to flashy graphics and fail to work on a good user interaction. When I do play computer games, I still tend towards 90's games with incredibly simple (2D) graphics but good game play. I would like to see more new games that are well designed, but really don't care if they keep developing such fancy graphics.
There was an article in the Economist a while ago trying to predict if the recession would affect the video game industry. I believe they decided it was too early to tell.
In Europe, video game sales were actually going up as a video game makes for a much cheaper holiday than going abroad. Still, the rising cost of development and the increasing time of production are hindering profit margins as companies need bigger teams to make games that sell for only slightly more than their less complex counterparts.
The video game industry grew too large too quickly, evidenced perfectly by EA. They bought out more companies than they could support and produced only tired titles instead of new IPs. The new generation of consoles places too much emphasis on aesthetics over actual content.
That said, I'm off to play Prince of Persia.
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