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Brace yourselves because the game Industry is headed for another full crash


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I posted a social media message at the start of November 2018 which was a comment on the state of the Video Game Industry. It was a start for what I'd like to discuss in this article. As a disclaimer, I will say that this is only my opinion, but I do base this theory off historic trends that we have seen from the game development companies, the market itself and the consumers that help drive the market. I mentioned in my post that the industry will experience another crash similar to the famous crash of 1983, and here I will explain why I believe this.

Brace yourselves because the game Industry is headed for another full crash

If you don’t learn from history, you will repeat it

Perhaps the biggest reason I have to support my theory is the history of video game development itself. The industry saw a surge in popularity from 1978 to 1983 as new consoles were made very frequently. The second generation of consoles was dominated by the Atari 2600. However, one of the most commonly cited factors in the industry’s crash in 1983 was the combination of rapid growth of options in which game consoles to buy and how quickly games were being produced. Atari had banked on E.T. being a hit during the holiday season of 1982, but millions of cartridge copies went unsold and were eventually dumped in a New Mexico landfill.

Competition for the attention of gamers comes from many different angles these days. There is the mobile gaming market which utilizes smartphone devices like Android to promote gaming content. A prime example of this was the phenomenon of Pokemon Go when it was released in 2016. There are other past examples to consider like Angry Birds. You also have pc gaming options like Steam, which offers a considerably affordable experience depending on the games that are bought.

What caused the Video Game Industry to stumble in the mid-1980’s was the inflation of options that were presented to gamers. There were simply too many consoles and too many rushed games being made for gamers to keep track of, and there was only so much money for gamers to spend back then. Today games are more expensive than they were in the 1980’s, so gamers have to be more selective with the games they want to buy.

The Ugly Side of Business Decisions

The industry at the end of 2018 is in a different place than where it was in 1983, but trends come and go very quickly at any time. Nintendo, one of the main companies to save the industry from possible doom in 1985 with the release of their NES console, finds itself in a position similar to Atari’s. Convinced that it can’t be stopped, which was Atari’s mindset in the 1980’s, Nintendo today has made some questionable business decisions that have come across to gamers as antagonizing.

The Ugly Side of Business Decisions

The 2010’s have seen Nintendo attack multiple pieces of content created on platforms like YouTube, filing copyright claims which led to videos either being demonetized or taken down. Nintendo also threatened to take various game emulation websites to court if they did not take down their ROM links. Emulation of games is widely accepted as a form of preserving games of yesteryear, and in an ironic twist, it is rumored that Nintendo downloads emulated games, and then turns around to sell these “pirated” copies on their platforms like the NES and SNES Classic mini-consoles.

Downloadable Content (DLC) and microtransactions represent ugly business decisions in the industry as well. Electronic Arts makes around $1.3 billion per year selling extra content to gamers, though not every part of that content is ultimately worth buying unless you are a hardcore fan of sports titles like Madden or FIFA. Activision’s Call of Duty franchise also fell into this trap a long time ago and has since released games almost yearly with little to no considerable changes.

How about the remasters of older games? Repackaging games that were great for their time and putting them back on the market for sale is more troublesome than it is pleasant. 2015 was a big year for remastered games but looking through the list of games that received a fresh coat of paint that year there were plenty that didn’t need a remastered version. Legend of Zelda: Majora’s Mask 3D, Saints Row IV: Re-Elected and Final Fantasy X/X-2 HD come to mind.

Advancing Technology: When Does It Stop?

Another part of this equation could simply be that the current competitors for the hard earned money of gamers are getting bored and that all they need to do these days is advance the technology of their gaming platforms. Nintendo is currently riding the waves of the Switch, a hybrid console that is both portable and stationery. Meanwhile, Microsoft and Sony recently upgraded their consoles to what we know as the Xbox One X and the PlayStation 4 Pro. It is probably no coincidence that the time frames of console generations have shrunk, and this trend doesn’t look reversible.

Advancing Technology: When Does It Stop?

There appears to be this need for companies to jump ahead and continue advancing gaming technology to the point where all gamers will rely on in the future will be computers and Virtual Reality headsets. Once again, companies are not learning from history, especially with Virtual Reality.

Once upon a time in the 1990’s Nintendo tried to promote the Virtual Boy, but failed miserably. Microsoft certainly has the funds to enter the Virtual Reality gaming market if they wanted to, but haven’t as of this writing. Sony is currently giving Virtual Reality gaming a shot as they released the PlayStation VR in October 2016. This effort has seen mixed reviews so far.

Back in 2014 Facebook bought the Oculus Rift VR platform for $3 billion, and promises were made that VR would be the future of gaming. It has been years since the Rift was officially made available to the public and its promised impact still hasn’t been felt.

Realistically speaking the idea of putting all of a company’s eggs in the basket of VR is foolish. One reason is that there are many gamers that are not in good enough health to take on the VR experience. If gamers play VR games for too long there is the chance they could develop side effects such as dizziness and disorientation, seizures, nausea, eye soreness, and a loss of spatial awareness.

By eliminating every other way to play like console gaming and PC gaming, the industry would also eliminate a great chunk of gamers from the market. While VR gaming can serve a purpose in the future, it is not the solution to every gaming problem out there.

Lack of Competition and Inspiration

Since the early 2000’s the famously named “Console Wars” have only featured 3 familiar big name companies in Nintendo, Microsoft, and Sony. No other company has dared thinking about entering the arena of making a game console in the 21st Century. Though the main problem in the 1980’s was there were too many options in gaming consoles, the Video Game Industry today may be suffering from a problem of the complete opposite nature. Only a select few companies hold the keys to AAA game titles and with that emerges the possibility of these companies having a monopoly on the market.

Lack of Competition and Inspiration

One could make the argument that the industry as a whole has become lazy in many aspects with the aforementioned upgrades in technology and the questionable business decisions, and calling it progress. Nintendo, Microsoft and Sony know where they stand in the industry, so where would the motivation or inspiration be to make significant moves? These companies haven’t been challenged by any other company for a few console generations now, and when companies have a lack of competition they will take their foot on the gas.

Any talks of “Console Wars” between fans of these 3 big companies should be made obsolete because these “Console Wars” have long been made obsolete through the actions of the industry. Considering how quickly companies are upgrading gaming technology, within a decade or two we may no longer have gaming consoles.

Hopefully Nintendo, Microsoft and Sony all realize that if they flirt with the idea of upgrading themselves out of making consoles they will unwittingly put themselves back on an even playing field with many other companies, particularly in the PC gaming market. Do they really want that?

Unrealistic Qualifications

Perhaps I mention this out of my own experiences contacting with game development companies and publishers, and I mean those of the AAA caliber, but this is worth mentioning. I think another contributing factor to another possible crash of the industry would be the unrealistic qualifications people need to even be considered for job positions.

Unrealistic Qualifications

With the creation of social media platforms and the advancement of how people connect on the internet, one would think that it is now easier to get in contact with game developers and hear back from them after submitting resumes. However, this hasn’t been the case for many aspiring game devs.

It is possible that nepotism truly exists in the Video Game Industry and that some people get positions only because of who they know, either family members or close friends. If you live in cities like New York or Los Angeles, for example, you will most likely bump into game developers. If you live way out in states like Nebraska, Iowa or Idaho, unless you find remote jobs you won’t have much of a chance., or you will be waiting 10 years before you can even get noticed.

The unrealistic qualifications I talk about include having advanced college degrees and multiple years of experience handling specific roles. These qualifications are almost always mandatory depending on the company. Internships still exist but there are similar unrealistic qualifications for these positions as well.

Conclusion

There is no way of setting a date as to when the Video Game Industry will crash. While no one knows when it will happen again, it wouldn’t be wise to believe that the industry will never be capable of crashing again. There are different dynamics in play this time around, but the possibility remains strong that a storm is coming in the future.

While the industry has gotten so busy advancing technology and chasing extra money that gamers may not have enough of in their pockets, an argument can be made that game development companies are starting to not do their homework and are not learning from past mistakes. This is not to say that with a crash gamers won’t still be playing games, but it may help the industry to take a step back and realize what it really wants out of this form of media.

 

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game design gamedev indie indiedev #gaming Atari game development game industry Activision AAA

Steven Vitte

Steven Vitte has written articles and blog posts since 2014 with some content being related to game development and general gaming topics. Vitte has written for his local Ohio newspaper and has also written for his local baseball team as an official blog correspondent.

One Comment

  1. “Nintendo, one of the main companies to save the industry from possible doom in 1985 with the release of their NES console, finds itself in a position similar to Atari’s. Convinced that it can’t be stopped, which was Atari’s mindset in the 1980’s, Nintendo today has made some questionable business decisions that have come across to gamers as antagonizing.”

    No, no, no, no, no. I believe the industry will crash too, but this is BS. If you really think that Nintendo is going to go the way of either Atari or Sega you clearly fail to understand the circumstances that caused the downfall of both those companies.

    Sega and Atari went under due to poor business choices and management. Sega had MULTIPLE failed hardware releases – the Game Gear, Sega CD, 32X, Nomad, Pico, Saturn and Dreamcast. There was constant infighting between Sega of America and Sega of Japan during the Saturn era. They failed to build franchises as big as Nintendo’s. They rushed out new hardware every couple years. Same with Atari. They also had multiple failed hardware releases too, and they had no quality control for their consoles.

    Nintendo is the poster child on how to run a company well – they have no debt, they don’t overspend on games development, and they have a culture. Emulators and YouTube have done nothing to help the industry financially. Nintendo is nowhere near Sega’s level of desperation with the Dreamcast.

    If there’s any company that mirrors Atari in any way, it’s Sony. Sony is the most dangerous company in gaming. They have pushed high end graphics and have contributed to the high development costs that companies are struggling to cope with. They have a near monopoly on 3rd party support. But, they are in massive debt and have been selling off assets left and right.

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