Will Code for Food: Funding the Next Generation of Games

So here we are, in the next — scratch that — current generation of console gaming, and I can’t help but ponder the issues that effect the direction of the industry, and ultimately impact gamers. As Microsoft might call it, the HD era of gaming is upon us. The Xbox 360 is now just over a year old, and the PS3 and Wii have entered our lives like the electronic embodiments of a stock market IPO. Gaming is more popular than ever, but because everything is now bigger business, the very audience that nurtured and supported the industry from infancy may end up feeling the harsh sting of its maturation.

The world revolves largely around money, a fact that is painfully evident in the development costs of the new game consoles. With dev kits costing around $10,000 for Xbox 360 and $20,000 for PS3, plus the inflated overall production costs, creating new software is anything but easy on a developer’s wallet. There is great expense in the creation of high-res art, and in working around the difficulty of unusual cpu architectures (like that seen in the PlayStation 3). In an interview with Bloomberg, Namco Bandai Holdings’ president Takeo Takasu stated that the company must sell half-a-million units of each new title on PS3 just to turn a profit. He explained that creating a new game costs roughly $8.6 million, and cites high-end graphics as the culprit. When development houses must grow and grow to meet the demands of new technology, accusations like this are quickly proven correct.

Furthermore, difficulties arise in the early stages of any new console generation, as developers learn to work with brand new development environments. They spend years perfecting their craft on a particular set of consoles, and when the next cycle of hardware rolls around, they become novices yet again, braving unfamiliar territory. As of right now, many developers are holding off on working with the PS3 due to its difficult processor and overall high development costs. They are basically waiting on first party to show them how it should be done to get an understanding before diving into virtually uncharted waters.

If a company needs to sell 500,000 copies of their games in order to make money, with over 2 million PS3s shipped, each company must ensure that at least 25% of all PS3 gamers buy their new title — a giant, almost unfathomable number for most games to meet.. With game creation becoming too expensive to make any money on, then developers will inevitably need to supplement their income.

So how might these companies manage to generate more revenue? Advertising. Consumers are already witnessing a steady rise in in-game advertising, as they drive by Burger King stores or get messages on their Cingular phones, or even simply watch and listen to “sponsors” integrated into a game’s plot. Some gamers, including myself, simply cannot easily swallow ads offered up in their games — especially when they detract from gameplay.

Perhaps game companies will try to save money by only creating formulaic, sub-par drivel (hello, Hollywood!). Will we see the same game reheated and served up time and time again? Resources can be conserved by rehashing games, sequel after sequel after sequel, in this way. Devs never have to invest the same amount in development beyond the first iteration of a franchise. Also, if a game succeeds, gathering plenty of public acceptance, a sequel will surely be a safe, expected bet. Sales are guaranteed–as long as that franchise name remains on the box (see: Tom Clancy, John Madden, Lara Croft). It’s been said before, but originality is in jeopardy during this new generation of gaming.

So money makes the world go round, and video games are not exempt from that law. Developers certainly have their fair share of challenges ahead of them in this new era of gaming, and as game creation becomes increasingly difficult and expensive, gamers can only hope that all the life is not choked out of the industry we have raised.


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Author: Eddie Inzauto View all posts by
Eddie has been writing about games on the interwebz for over ten years. You can find him Editor-in-Chiefing around these parts, or talking nonsense on Twitter @eddieinzauto.

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