Edinburgh Interactive Festival chairman Chris Deering has warned the games industry that it must look for new revenue sources as development costs rise and software sales fall.
In a speech opening this year's EIF, Deering said, "Traditional revenue sources will not be sufficient to fund games development. If you look at the very narrow definition of the gaming market, people are saying the software business will be down 20 per cent by 2011 versus this year.
"Something is going to have to be there to make up the difference and take us beyond that threshold," Deering continued. He observed that major games can now cost more than USD 10 million to develop - and up to USD 100 million in the case of titles such as Grand Theft Auto IV.
Companies, particularly public companies like Microsoft, need to grow.
i mean its pretty simple, they spent close to 30 billion in acquiring activision, they thought they'd make it bk no problem, and that didnt happen.
its just shit that because of MS's miscalculation alot of people lost their jobs.
They are going to use AI for a large portion of the game development process. Upper management need bonuses and the shareholders need more money. So, people will lose their jobs.
They shouldn't have bought any studios. Some is okay...but they went on a shopping spree...stupid
The better question is why did Microsoft buy publishers for a service they were subsidizing they knew couldn't support.
And why are so many websites trying to make people feel sorry for Microsoft instead of truly criticizing the fact they are closing studios and killing jobs that would have been fine if Microsoft themselves hadn't gotten involved.
Quit feeling sorry for Microsoft and start feeling sorry for the industry and the all the gamers who are actually losing out.
THIS IS MICROSOFTS FAULT.
The first thing that happens after any major acquisition or merger is a consolidation of the whole new portfolio, which includes cutting any excess, bloat or portfolios that don't fit the larger MO of the big boy. So far, it's been par for the course with Microsoft and that's why gamers have been so against this acquisition. Tango Gameworks is the beginning. You think Microsoft wants to pay to keep small timers like Ninja Theory in business?
There is absolutely zero evidence to suggest that Microsoft will improve any of these studios, but plenty to suggest that they will get rid of what they don't need and hold onto the IP. The real agenda of the acquisition was always to acquire The Elder Scrolls, Diablo, Fallout, Call of Duty, Candy Crush etc. that will create millions in passive revenue stream for Microsoft regardless of where the games release. Microsoft simply wants their cut.
Because of Games Pass Microsoft has no interest in investing in new IP which is risky and requires creative talent they can neither nurture nor manage. Game Pass has also not grown in the way Microsoft expected it to, even post acquisitions. Therefore the logical thing to do, without serious money makers to release, is to cut as much cost as possible.
"They want you to believe the devs under them are super stoked to work generative AI into their processes," continued Gaider, "but I assure you what they took as excitement was really a veiled wail of despair not unlike the time that team was informed of their new 'really cool' live service mandate.".
I think anyone with some common sense knew this, im glad i don't support their games anymore, what a sh!t company.
I said this yesterday. AI isn't what we want when it comes to crafting artistry. Alas, these soulless corporate morons don't care about their work, only about cutting corners as much as possible.
Has the rapid growth of Xbox made the ship too heavy? Following the closures of Tango Gameworks, Arkane Austin, and Roundhouse, we explore what the future of Xbox could look like.
This ship was never meant to sail, this ship was made from the get go to sink as fast as possible. It almost feels that they want to lower the standards of quality in the industry so that they can fit in
Xbox has no soul and Phil has no confidence, and it's impossible to say either do when they killed Tango and Arkane Austin.
Everything they've said since has only made them look worse to a point that they're actually less competent than Embracer.
Whe you release something like the series S and expect it not to hurt your business model, and developers have to have parity with games. Then you know Microsoft don't care. Series s is the final nail that broke developers,
why Square decided to go multiplat with FF13...
It doesnt surprise me too see 3rd party games like Bioshock go multiplat , Its 3rd party ! They dont HAVE to stay exclusive.With costs rising and stuff they have to go multiplat.
Maybe with in game ads they can make some extra revenue but dont know if its really significant.
Looks like 1st party games are going to be the deciding factor , 360 still doing good with their 3rd party and timed eclusive strategy but it might not last forever.Pretty sure next gen (720 and ps4) will be more than the end for 3rd party exclusives.
3/10 games only seems quite low to me , but its only his guesses and estimates, I bet its more in reality.Even if gta4 cost 100 million to develop Im sure within the first month alone they had already recovered the costs.
most games are quite poor and and don't deserve to make money.
$100 million for gta4?!?!?!?
the game was poor, why did it cost so much?
i think they spent $10 million on the game and spent the rest on booze, drugs and hookers
i have played shareware games on pc that have kept me interested for longer than gta4
Well seeing as 70% of games blow, it sounds about right.
Does ninjabreadman really deserve money?
I remember seeing that this 3 out of 10 ratio is much the same in the movie business too. The 2 or big hits like Dark Knight and Ironman that a studio gets per year pays for themselves and generate enough profit to fund the other 7 movies of which 3 or 4 break even give or take while 3 others lose money.
The problem in the game industry is not that games fail to make money, it is that the publishers fund every game like it is a blockbuster; the market needs high spend games that generate money like MGS4 and Halo but games like Army of two should not be funded similarly. I wonder if with lower budgets on some games like AO2 and Kane&Lynch if the devs would have made better games by focusing on story and characterisation rather than the conformist graphics and blood demographics.
Madden and the sort are essential to gaming because the profit they generate is needed to fund the boom blox of this world.
The 360 is totally screwed!