The Industry is ill. Let’s try and cure, not kill…

Change is necessary, across the board, for a healthier future for all…

 

You can’t have missed Nintendo’s financial issues over the weekend.

It’s a massive talking point; and despite it only being a second year of losses in decades, and with $11 billion sitting comfortably in the bank in cash, a loss of £205/$335 million isn’t the end of the company no matter how many people try to spin it as such. That said, Nintendo does have a problem; it’s slow to change and adapt to a world which is changing irreversibly, and quicker than ever before. As genres rise and fall, as sales drop, Nintendo has played it safe; safer than most, who it must be said, are suffering greater than Nintendo right now.

Scratch beneath the hyperbole and Nintendo’s main losses come from reinvestment; which has happened in the space of a year. This is money, and investment, that no doubt should have been happening when the Wii was riding high on sales charts, and when the 3DS needed such radical policy change. Nintendo’s issue is that it changes only when it needs to; it’s not flexible enough to adapt without the market slapping it across the face.

But Nintendo is not alone in this; we have an industry that relies on tradition, and is afraid to take any serious risk.

Microsoft was, like Nintendo, hoping the new Kinect would shift units of the XBox One. Once again, we’ve had broad promises of games, but the reality from the off is that nothing much has changed and, more to the point, consumers have learned. It would be interesting to see out of the three million sales Microsoft did get, how many have Kinect wired up; this is information that we’re not likely to be told, because the reality isn’t appealing enough for Microsoft – or many of those leaving the company, it must be said. Sony, too, have loss-led on the PS4 in the same way they did with the Vita; the results are a potential annual loss for Sony unless software sales pick up. And software sales, it turns out, are a big problem for Sony; the lack of them is a notable issue and with one of the markets biggest next-gen games delayed into another fiscal year, that is software revenue that all companies will be missing out on this year. Sony is still worth less as a company overall than Nintendo, and its credit rating is shot to pieces; any suggestion of financial trouble isn’t likely to be met with enthusiastic responses.

If the hardware companies are playing it safe, then so too are publishers and developers; UbiSoft’s first instinct in the success of Assassin’s Creed 4: Black Flag over Assassin’s Creed III wasn’t to think about another radical reinterpretation of a series that has such boundless scope for change; it was to ask people if they wanted another pirate-themed game. Because hey, why not, eh? We have Activision – lots of sales, but very few eggs in a single basket. And with Call of Duty sales dropping for the first time, there’s no question that will hurt like hell. The same is true of EA; it has come out of its most difficult year, because it tried to control its content in ways that unfortunately backfired on them. Capcom? Well, after the failure of Resident Evil 6, it decided to port the successful 3DS version – Revelations – to HD consoles; spending lots of money in the process, and ultimately wasting that money. What seemed like a sure-fire winner ultimately met with less sales than anticipated. And then there is Sega; doing another Sonic game, another Aliens game, and still turning out its back catalogue in the pursuit of quick money.

The independent scene is no better; with early access such a popular new means of generating money, products are suffering in the process. We have the unfortunate disappointment of Tim Schafer’s Broken Age, which in spite of all the money, all the promise and all the hype from that hugely successful Kickstarter, has shown us that money does not – nay, cannot – buy quality. With even the ‘technical powerhouses’ of Sony and Microsoft relying so heavily on independent games which hardly utilise the power of the machines to patch up gaping holes in their new console release line-up, you get the impression that we’re burning the candle at both ends.

The sad truth is a lot of the independent scene is made up of those already burned out from the mainstream development world; as costs rise, as staff turnover hits record highs and as demands and pressures build, many of the people who really could help the mainstream market have been pushed out of it, or left it of their own free will. But they’re proving, sadly, to be just as rigid as the mainstream market; unable to adapt, to change, content to follow the leaders and build upon former successes.

Why does any of this matter? Well, look at your games now.

Day One DLC. Season Passes. Microtransactions. All of these are now a standard in the majority of new releases; content cut to be sold back to you on the first day. Season passes promising content at some point down the road, content that is often no more than a twinkle in somebodies eye. Microtransactions wanting you to pay more money, ultimately ensuring that many buyers cannot afford to buy other games at the same time. The huge irony is at a time when the industry is trying to generate more money for itself, it’s actually stunting that income.

People are waiting for GOTY or “Complete” editions again. Season passes require money to be spent down the road; contractually, instead of seeing how things go, the season pass requires them to make content at some point, even if they simply can’t afford to do so. Microtransactions, as I said, make sure people do spend more money on one game; but it ensures they can’t simply go out and buy your other game either. They’re already heavily invested in one game. They’re not likely to go out and buy another, often by the same company, because it’s “new”. They can’t afford to. They’ve spent all that money on one game.

We have games which hardly reinvent the wheel either; risks are frowned upon. In the defence of Nintendo, at least it does take a few risks, but it relies so heavily on entrenched IP that most people can’t see past the Mario or the Link, to the change that happens underneath. We’ve watched as whole genres have been sidelined because they don’t make enough money; but whose fault is that? When Capcom released Resident Evil 6, it was hardly “horror” anymore; more a conspiracy theorists wet dream. Silent Hill: Downpour wasn’t horror either; despite all protestations to the contrary, that series is not what it once was. The mainstream Horror genre has been buoyed by little indie games in recent years; but it is still waiting for fresh new blood to bring it back into the fold.

And of course, this is before we address the serious deluge of slurry that the gaming world saw last year; people content not just to throw piles of crap masquerading as games our way, but smile whilst doing it and tell us that we’re going to love it! There is even a court case for Sega this year; alongside Gearbox, the issue of Aliens: Colonial Marines will be put under a legal microscope to find evidence of any wrongdoing. Not that you need a microscope for that; but it does remind you also that we often have to content with the dishonesty of an industry as well, trying to sell even the most rotten of produce to us.

We have an industry that is very sick. The results are there to be seen; EA, losing money. UbiSoft, losing money. Capcom – has very little money left. Sony and Microsoft as companies have been losing money for years; everything the industry has been doing to make money seems invariably to end up with it losing more of it. Presumably because consumers are turning away; last year saw a rare drop in the games industry overall, meaning billions of dollars less to go around. Even PC sales are down 10%. The average age of a console gamer is rising; it’s now 38. Young people are doing more on tablets and smartphones; but with regulation set to come in, even studios in that arena will quickly find themselves struggling. It’s already the case that only 2% of the apps on the store find any success; and even most of the successes fail after the first year. The sad reality of “anyone can do it”, is anyone IS doing it; but not everyone is a savvy businessperson, or understands their product long-term. Heck, if the likes of EA struggle with this, then you can’t be surprised that the majority of smaller companies and start-ups fail either.

We are changing; an aging, ailing market that is slowly having to come to terms with the realities that there isn’t as much money out there as there used to be; the market has shrunk, companies are self-destructing their own products and with fewer quality assurances than ever before, even the grown-ups are finding themselves unable and indeed, unwilling to buy too many games, or at least far more wary of buying games which are rising in cost. With less new blood on the consumer end, or the age of those buying games going up, it’s no longer appropriate to appeal to a teenage audience; let alone use twelve-year-old children as the focus group for an 18-rated game, pitching itself to thirty-something gamers.

The industry as a whole needs to change; it needs to grow, to lay down new roots and new ideas to expand its appeal, not contract it back to the same old first and third person shooter fests that it has relied on for so many years. It needs to have a modicum of consumer respect; the slow demise of Zynga shows that companies that treat others with contempt will often find karma biting them in the backside sooner or later. It needs to accept that financing needs to change; marketing budgets four times that of a games development budget are not sustainable, especially when titles like Dark Souls can make huge profits on fewer sales, largely relying on good press and word of mouth – two tricks that the industry has largely forgotten about in its quest for more and more cash. It also needs to appeal to younger gamers again; shouty, sweary shooters are contracting and not as ‘cool’ as they once were. A diverse, intelligent market would offer alternatives. We don’t have that kind of market right now.

Nintendo’s problems are indicative of its own safe approach to sales, and yes, it needs to change radically in the face of this rapidly changing scene; but it isn’t alone, and it shouldn’t be singled out as somehow requiring special treatment. For we’re picking at one spot whilst the skin around it turns blue; we’re so innately focused on what Nintendo does, so fascinated by it and so entranced by what it does and how it does it that we’re not applying that same huge critical and cynical eye over what is already being laid down around us. The irony is that for so many, Nintendo is a side-show, a distraction that removes their attention from their own damning position.

This generation requires change; deep, meaningful change. It took a generation to get to this point; it may take two or three generations to get out of it. But get out of it we must; we must grow, nurture and encourage the market to do the right things, and the industry must in turn stop over-milking, and stop the slash-and-burn mentality, if they themselves are to survive. Or we’re more likely to end up with fewer publishers, more closely tied to console makers (if not the console makers themselves!). That will be a horrible situation for so many; and further drive wedges between a gaming community already bitterly at odds with each other.

Change will take time; it will also cost money, money that ultimately will have to be spent. Those who cannot survive the transition will be mourned and missed; but they will have to be casualties for the greater good. The drive during the HD era may simply have exposed an industry that couldn’t survive such tremendous upheaval; and let’s not forget we already had one market crash in the eighties. Many, many other markets have risen and fallen in the time from then to now. The industry we know and love cannot be immune to the tides of time, or the whims of change. The industry cannot grow if it doesn’t grow itself; and that means more risks. Which means failure must be accepted as part of it; not as the death-knell of a product.

Sadly though, rather like the fall of the Roman Empire, far too many are cheering on the death and destruction in the Gladiatorial Arena than pay attention to the very real and pressing issues that surround them. But it will happen – change is inevitable. You can’t stop it.

So let’s see what change brings. You never know… you might actually begin to LIKE a brand new Nintendo!

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