We are in a video games crash

Many years ago there was a video games crash in which any developers and publishers went bust almost every week. It was a slump for video gaming and the industry took years to recover. With the current economic crisis it has been speculated that we too would see a crash in the market, and it looks true.

[Genesis5]

Might be a little easier for Sony and Nintedno to weather the storm they both make a lot of 1st party games.

As far as Lair and Haze dragging those studios down. Those games were pretty bad. If you are only putting out a couple of games a year, you better make sure they are good. With so many games coming out these days most people won't by crap.

[GiantEnemyLobster]

They were putting out one game every TWO years. And for the past 9 years, 3 of those games happened to be Timesplitters. Honestly if it weren't for timesplitters Free Radical would have just been utter trash. Not like that matters now anyways.

[acedoh]

People need entertainment when things aren't so good out there. With the economy video games are an affordable get away. The only thing I can see changing is the slew of games that are average to mediocre. Gamers are not going to spend as much money buying game after game.

[AAACE5]

This is the industry's way of filtering out the crap!

No matter who you are, you gotta admit that the majority of the developers who closed made crap games! The good thing is, there are mostly quality developers left, so any new companies will have to come with quality in order to be taken seriously!

Which means... Better games for us!

[TIKUP]

EA BLACKBOX is not shut down, they have just moved location!!!!!!!!!!!!!! And its stated that in this article it is, what rubbish this article is

[barakiu]

http://ps3.ign.com/articles...

[Jazz4108]

I agree, its not even a article, its a web forum.

[Bnet343]

Wow, are they really comparing this to the crash of 83'? What a joke. Nothing like that. Gears 2 sold 3 million in a week last month. Crash my ass. Basically the companies that are crashing are companies that made games not worth a damn. Lair, Haze, Need for Speed Undercover, etc. Companies like Insomniac, Epic, Blizzard, etc. who pump out good game after good game will not crash.

[micro_invader]

Agreed, and bubbles.

[f789790]

Its a crowded market place to be a developer. You have to create a brilliant game if you want to survive.

[Potty Scotty]

Factor 5 and Free Radical put out have baked games. It's tragic but they should have taken their reputations into consideration before putting out the car wrecks that ended up being Haze and Lair.

[PotNoodle]

Don't expect anymore unique titles like Mirrors edge or littlebigplanet for the next few years, developers can't afford to take the gamble.

[WANNA GET HIGH]

Ur Wrong.... :/

[Smacktard]

No, he's right. How many new, original games in the past year have had a ton of hype surrounding them, and then didn't sell that many games?

And how many games this year were sequels/spin-offs? It's more financially sound to continue in a game series people recognize than to create a new IP.

Wii seems to be the home of new IPs, though. Look at their 2009 line-up: http://www.neogaf.com/forum...

I'm thirstin' for some Muramasa, Mad World, and Little King's Story, among about 20 others.

[cheapndirty]

No more easy money from the credit markets to fund big gambles. At least as far as full retail games. I expect to see more of the unique stuff show up on XBL Arcade and PSN. Big gambles on 5.00 to 15.00 downloadable titles will be the trend for a while.

In fact EA said that retailers only want to give floor space for the top selling titles. We are entering sequel hell for a bit. More so than it has been in the past.

[MaximusPaynicus]

Are video games being hit by the worldwide recession? Of course. They're a business -- all businesses (save for maybe Campbell's Soup and Winchester Rifles) are suffering.

But this is no '83. Not by a long shot.

[Foxgod]

Ugh, i smell BS.
I dont like BS.

[mll09]

This article is slightly too early.

I don't there's gonna be a crash, the game economy is just suffering like EVERY OTHER ECONOMY, so there's really no reason to worry unless you publish half assed games *cough*Wii*cough*.

[Smacktard]

It's sad, because, for the most part, it's the uninspired crap shovelware that's getting bought. How much money do you think Ubisoft is making off of Imagine: Ballerina or whatever the hell they make?

[Voiceofreason]

Yeah....I guess that is why that last two companies to go under made games that were once considered AAA PS3 exclusives until they bombed. I have not heard on one Wii developer going under yet. Development costs between the two are not even comparable. Boom Blox only sold around 500k and EA was so happy with the money they made they announced a sequel. Put the blame where it belongs, both companies poured too much of their resources into PS3 development and were not able to recoup their loses.

[ultimolu]

Rough times for everyone, not just the gaming industry. I don't think it will get THAT bad though.

[hfaze]

Yeah... One of the biggest things to bring about the video gaming industry crash back in '83 was craptastic un-licensed games FLOODING the market. It was so hard for your average non-hardcore gamer to wade through the seas of crap to get the few quality titles out there. People lost interest in video games. And the whole E.T. game megaflop put a serious hurting on Atari's bottom line.

The video game industry has come a LONG way since then. It's now a much bigger part of modern society with more people playing now than ever.

If nothing else, we'll probably see a TON of sequels for a couple of years or so... Game developers and publishers sticking with sure shots. But if they are quality sequels, then it's all good.

[Mutley416]

I doubt it as well...
There is big money to be generated by making a "good game"...The Devs are churning them as fast as they can...The business model for poorly marketed and "lame games|" is always gonna be in trouble-

every business is facing a hit right now- it`s a recession...

[JasonPC360PS3Wii]

You maybe in a crash EA, but most others are doing just fine.

[Death]

If you look at the actual data, games and console sales in 2008 are up compared to 2007. Yes, the World is in a recession and this has affected many companies. Video games are not recession proof by any means, but the impact on them is hard to measure since we don't know how much we would have seen sold. What we do know though is the industry is still going strong and growing.

Lair and Haze were not bad games. Neither deserved the negative backlash that they got. This was the result of gamers bashing a product before it was even released. Out of all the people I have talked to that said how bad Lair and Haze were, not one of them actually played either game. They just knew. I own both games and had alot of fun with them When I would show the game to a friend who just knew how bad they sucked, they were shocked to see they were wrong.

I've said this a few times now, the system is broken and we are to blame. The hardcore gamers who used to promote games and spread the word to friends are now killing them instead. This is the result of the internet and unregulated gamer/journalists. The balance between reviewers and developers is gone. The professional reviews are now dismissed in favor of biased reviews that we want to see instead of the truth. These gamer reviews are not being done responsibly and many are done without even playing the game being reviewed.

If you want to blame someone for these studios closing, blame yourselves. Ultimately we are the ones that turned the tide for these developers in our quest to be on the winning team of the console wars. Pat yourselves on the back and buy a Wii. That will be the only profitable console for developers at the rate we are going.

-Death

[JasonPC360PS3Wii]

Yes they did, and so does every crap game that gets made. What, do you want everyone to get gold medels and attaboy ribbons? If the game is poor it gets poor scores, if it's mediocre it gets mediocre, if it's good it's good, and if it's GOTY well... You shout out "Haze and Lair" because your a PS3 fanboy, but I see bad games everywhere, 360, Wii, PS3 and PC. Just because your a fanboy doesn't mean your games are exempt from reviewers and public oppinion. We have a scoring system so people can get a general idea of what to expect. The ultamate dissision is then up to the consumer or fan to buy. You can't expext bad games to get good scores just because they are on your system of choice. If a developer makes a lemon and ends up losing in the end, tough luck... next.

[LebaNoob]

Decided to get Lair and check out what all the fuss was about, and the game does not deserve all the negativeness it got at all. The game can even be pretty spectacular at places.
It might not be a great game, but it's a pretty good one. Definitely not the trash the media made it out to be.

@Jason 360:
I highly doubt you've played either game. Can't see why you're calling Death a PS3 fanboy either.

[Death]

I shouted out Haze and Lair because I actually took the time to read the article that we are responding to. I appreciate that you are here on the front lines fighting the good fight, but it might be a good idea to come to the war armed with atleast a little bit of knowledge. Your response is a perfect example of the point I am trying to make. The studios behind Lair and Haze have made some great games in the past. The negative publicity they encountered before either of these two games released resulted in lower than expected sales. This in turn cuased the companies which both had good track records to go under. As a gamer can you honestly say that these studios deserved to go under because you feel their latest games weren't good enough?

I agree that reviews are what we should use to base our buying decisions. The problem is these reviews are being mixed with fan based reviews which are not held to an unbiased and professional standard. In short, user reviews are not held responsible for what they say. Nothing is in place that can keep me from writing a bad review on a game that I have never played on a system I don't like or even own. When people can do this, the review system is broken. Word of mouth is important for any retailer sales. When that is turned into a console bashing hate machine, this is the result we get. Studios are closing that could not over come the wave of hate they did not deserve.

-Death

[JasonPC360PS3Wii]

Because I have been here long enough to know who is who, and what system they pefere.

[Death]

I have an Xbox 360 Pro from launch, an Xbox 360 Elite, HD-DVD drives to go with both and around 50 or so games. I have an original launch Xbox, a Halo Edition Xbox and over 100 Xbox games. I am also an Xbox MVP and moderate the Xbox forums. Does this really make me a PS3 fanboy?

I also have a Wii, a Gamecube, N64, SNE, NES and Gameboy Advance and DS along with a couple games spanning a decade or two. This must be what makes you think I am a PS3 fanboy.

I know, it must be the 60 gig PS3 I own, my Blu-Ray collection and the PS3 exclusives I have for it which include MGS, Pain, Valkyria Chronicles, and of course Haze and Lair to name a few. This must be what makes me a PS3 fanboy. I also have a PS2 and PS1 along with a bunch of games.

Would you like me to keep listing systems I currently own or is that enough to get my point across? I was always partial to Sega systems.

-Death

[TheTwelve]

I suppose if this Nintendo-based writer ONLY had a Wii, and not a 360 or a PS3, it would certainly feel as if good and unique videogames are hard to come by.

As a PS3 owner, I know we're not hurting in terms of great games constantly coming our way.

12

[Raoh]

sony has been known to weather the storm. with so many studios under their belt they can continue to keep the ps3 owners stocked with games.

nintendo has been known to weather the storm. with many franchises they can continue to keep the nintendo owners stocked with games.

Microsoft is a first timer in the video gaming business. i know its their second console and its successful but they dont have the experience. what they do have as a company is spending cash. they usually allocate spending per division. with tough economic times and a new OS in the works, stiff competition outside of gaming. their new budget will be big but not as big as before, they are also spending money on buying back their stock so that's the companies first priority.

how does a gaming crash hurt microsoft? they count on third party support. third parties are seeing their crap games failing. so they are shutting down studios and shelving games. this hurts microsoft more than it does sony and nintendo.

______________

a game crash is great for gamers too. no more crap games released back to back and overhyped.

in the past week i've downloaded about 15 games for the 360. from gears 2 (that i bought), to many many third party games, left 4 dead, etc..

the only two games worth a damn are lost odyssey and left 4 dead. the rest are crap.

a few new ms titles are in the works but like all new titles, we have to wait and see if they will be any good..

_________________________

back to my original comment about pirating. times were hard too around the time the dreamcast was out. while the dreamcast saw a modest clime in sales. ultimately it was piracy that killed it. developers moved not only to the dvd format on the ps2 but saw a sales slump due to piracy on the dreamcast.

_____

here is the final outlook on sales. nintendo makes its biggest software sales in japan. thats good cause the company is in japan. its a huge win.

sony is loosing money because although their sales have more than doubled for the year, its all been overseas sales. the hurting economy has dropped the dollar conversion back to japan. so poor economy in the us, when you transfer the dollar to yen you loose on the dollar.

microsoft see's its highest sales in the U.S. but we are seeing a dropping economy and job loss so the U.S. is tough to predict once Obama is in office and it will be a while before we see if his plans will work for our economy (i feel very positive about obama helping the economy but it will be a while before we see the turnaround).

[omodis420]

"sony is loosing money because although their sales have more than doubled for the year, its all been overseas sales. the hurting economy has dropped the dollar conversion back to japan. so poor economy in the us, when you transfer the dollar to yen you loose on the dollar."

That is bull man. Sony is doing well overseas and well here in the US. Look at the fact that Take-Two list the PlayStation 3 as its biggest revenue generator on the publishing side, with 35% of the quarterly take. Ubisoft has said similar things.

Also a lot of Sony's sales come from europe. You can't deny that fact and just list the conversion of the dollar to yen. There are so many other currency's that you have to put into the equation. Don't spout off dumb stuff dude that you don't even really know about.

[Raoh]

i know they are doing well outside of the US. but the euro is doing better than all other currencies.

even transferring the euro to yen hurts the japanese company.

also these are words by sony themselves. which is why many companies are showing huge sales but low profits. I'll see if i can find the sony statement but its their own words. I'm a sony supporter and stand by them. and their sales are great for a console and televisions that are more expensive than the competition. had it not been for the currency exchange their profit gains would match their sales gains..

its great that they are doing well in europe but sony is a japanese company. which is why they are also talking abotu raising prices in europe because their economy is doing much better. bad move in my opinion.

[omodis420]

Bubbles to you for a decent rebuttal

[omodis420]

This is a forum post. Hardly the insiders news that one would use to say that the VG market has been hit by recession. The theory just doesn't hold up. Look at all the great titles in 09 (for all systems) Look at the fact that we have seen articles on N4G the past few weeks talking about how great game sales were. The only one being hit by all of this is the PS3 and ONLY because of the price. Even with that said they are still selling a good number of consoles. One look at the video game market and software sales will show anyone that videogames are doing just fine. Most people see games as a value during economic hardships. They provide a great return on a $60 investment. Far better than going to a movie, buying movies, etc.

[jack who]

am sorry this is bs EA spent almost if not over a mili buying ppl up what they think was gona happen

[ReBurn]

If there's a crash do you know how many games we're gonna be able to pick up on the cheap?

[Zinc]

They need to figure out how to make these so called 'AAA' titles without spending 30 million dollars. It's really that simple and it's something they should have figured out a few years back. I'm sorry if that's too blunt for some people, but that's the way it is.

[Vizion26]

The days of developers catering to "hardcore" gamers which make up a small percentage of the gaming population is over. Well, there are still going to cater to hardcore gamers but much less so in the future.

Companies that have concentrated on big bugdet games to target a very narrow graphic of 14 - 25 males has put them in financial trouble. For instance, Midway (Midway closes Austin studio, reduces total workforce by 25%.) , Atari/Infogrames (Atari ousts board of directors, lays of 20% of workforce.), SCi/Eidos (Eidos cuts workforce by 25%, cans 14 projects.), THQ ((THQ closes 5 studios, reduces workforce in 2 others.), Electronic Arts (Electronic Arts warns of further losses, likely more job cuts) and likely LucasArts (Lucasarts lays off 100 workers). Free Radical just went bust, and (though it is not confirmed) Factor just went bust as well. The latest financial reports of Take 2 shows that even though their revenues are up they made less profit despite the success of GTA IV.

I see companies have NO CHOICE but to support the Wii (even more so) and stop or reduce making high budget games which carries a lot of financial risks. The fact is the "core" gaming market has contracted or stayed the same, while cost of games have increased greatly which means lower profit margins or no profits at all.

[Gr81]

Exactly.

[poeo]

games like Call Of Duty sell A LOT more on xbox 360 and ps3... why would the developers of such games switch to the wii? only nintendo's own games sell bucketloads on it.

[outlawlife]

just as i said in the factor 5 thread, you need to make hits to succeed

when i company like factor 5 puts all of its resources into a game like lair and it doesn't do well then you will ahve a ahrd time convincing people to invest in future product

in the case of fact 5 they did not have a real hit in over 5 years, their last hit came on gamecube which was not an outrageously successful platform to begin with

in this industry you have to be able to compete and do it on a consistant basis and when you don't you fold

studios fold everyday, but you never hear about it because they can't even get a game out the door

if a studio gets games out and is actually lucky enough to have a successful game or franchise then they are extremely lucky

no matter how many indie studios fold, there will be one that pops up to take their place, the video game industry is not really working any different than it ever has people are just magnifying it and trying to link it to the current economic state

no matter the state of the economy the industry works the same, you put out a commercially viable and technologically acceptable product and you have a chance to succeed and continue onto something else

if your game tanks and you have no cushion to fall back on, you have to close

that is just how it is

[ReBurn]

http://www.cnn.com/2008/TEC...

[Mahr]

"We are in a video games crash."

Could this title be more melodramatic? Why not 'We. Are Going. To Die. :('?

And then you could include this gif.

http://i111.photobucket.com...

Look, anyone who thinks that this current situation bears any more than a passing similarity to the crash of 83 doesn't know what the term "Videogame crash" entails in the first place, which is why 'articles' like these are relegated to forum posts and stuff.

Are we seeing millions of units worth of merchandise being returned to stores? No.

Are game prices taking a massive dive to the point where stores are selling them for practically nothing? No.

Are toy/electronic stores massively downsizing their videogame sections? No.

Are any of them doing away with their videogame sections entirely for years to come? No.

Are 99% of our games now coming from Japan? No.

Have any of the major console manufacturers gone bust? No.

A sum total of three (actually only two) studios closing their doors does not a Crash make.

[Gr81]

Exactly.

[fmjpower]

sounds like BS to me......EA is just making excuses for the investors. video game developers are one of the few publicly traded stocks that are doubling and quadrupling each year......EA just cant keep up because they keep rushing out half assed games.

[bigjclassic]

alot of the companies that are failing are the companies that choose
only to make games on the expensive HD consoles and then neglect the
less powerful consoles. Every game developer cannot afford to make
HD era games (hince why they are all so similar). Suda 51 and other
devs had hinted on this months ago.

If devs want a quick cash in, make games for the Wii,PS2,DS, and PSP,
because thats is what most people have and the devs have a better chance to make a profit.

[indysurfn]

people that make exclusives for the PS3 or that make crap for both have money problems. I remember Namco and Konami both saying they would need to sell half a million JUST TO BREAK EVEN. That was do to exclusives on the PS3.