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Are we seeing another collapse of the games industry?

Having lived through the gaming/atari collapse of 1983 where revenue plummetted an incredible 95%+, are we seeing the next collapse first hand....or are the recent numbers just an industry adjustment.

So any of you under about 40 years of age are probably too young to remember this...
But in about 1983 the gaming industry was worth around 3 Billion annually. Then the wheels fell off and industry revenues plummetted to about less than 100 mill.

Primarily this was caused by over-saturation and too many companies producing crap games. Sales plummetted and the industry panicked and everyone lost their job. It took around 3 years for new games to start coming out again. Start-ups were very slow to turn around until Nintendo and Sega started rolling in house games for their new consoles.

PC gaming blew up with the age of the home PC. Pirating was insane and the gaming industry was a tough go for a good decade or so.

Are we right back there again?

Some Game companies are producing crap games, half finished games... etc. There are a lot of companies charging $150-180 for the full gaming experience, however disposable income of most gamers hasn't increased significantly. Triple A titles that are normally cash cows are reporting a drop of 31-34% in projected revenues over the Christmas period.

Some game companies are hoping their expensive games have longer tails or are depending on rereleased, remastered blockbusters to keep the coffers full. But those are band-aids.

I think this is an industry adjustment, and a bigger industry adjustment is coming if companies don't change their business model. With VR and a couple new consoles rolling out in 2017, is this a perfect storm for an industry collapse?

So love to hear some thoughts and view points.....

Comments

  • Law212Law212 Centurion

    I don't know whats happening but I do know that there are far too many games coming out. Most need patching right at release , and lots of other games are going for the season passes day one, and then adding microtransactions on top of all that.

    Gears of war 4 is a perfect example of that. The Gears 4 community is upset that TC thinks their packs actually are worth the 10 dollars they charge per pack.

    I miss the days when a game came out complete and didn't need anything added to it. Expansion packs were great, but those were like a whole new games worth of content.

    EchoGolfSierra
  • RajioRajio Centurion

    I disagree. It doesn't seem like the industry has balooned like it did in the 80s. Most of the big games are published by one of the (FEW!) big pubs, with the rest scattered across indies. Quality also seems fine - there have always been games launching with bugs and stuff, but now companies can fix them. We're seeing longer support for games which is great. Look at Overwatch for example. launched at retail and has had lots of free updates regularly with fixes, and new content. also RE teh $150 price tag for the full game experience. that is about the same price as most games were in the mid 80s after adjusting for inflation. hell, many games like PC and imports were twice that!

    Companies are definitely hoping for longer tails, not so much for games but for franchises. Thats the result of larger budgets. y ou see the same thing in the movie industry.

    EchoGolfSierra
  • Law212Law212 Centurion

    Overwatch isn't getting free updates. Those updates are being paid for by the amount of people spending real money on loot packs. or whatever overwatch calls them.

  • JuxtaposeJuxtapose Centurion

    For me I'm getting into my later 30's, so I was alive during the Atari Crash of the '80's but didn't know what was going on. My gaming knowledge and first hand memory proper started roughly around '85-ish, give or take a few months.

    Having said that, I've been saying for years the industry has gone in a negative overall direction and in my opinion it still continues to do so. I've also stated that a massive crash would be a good thing overall, and I still believe that as well as things need to be "reset" so to speak.

    Do I think that crash is around the corner? No. Gaming today is significantly more integrated into society than it was in the early '80's, and it's not something that will easily just disappear.

    People of all ages want their games, and the frustrating consumer practices (complains about broken game an states they'll never buy anything from a specific publisher again, pre-orders that publisher's next game ASAP) make it apparent that the average consumer is more than willing to give their cash for practices that do not favour the consumer much at all.

    In truth, I'm not even sure a crash like the '80's is possible anymore, but time will perhaps tell.

    @Rajio As you know I've been playing a lot of Blizzard Entertainment games lately, playing four of the six major titles, and I must say they're practices are generally different than many of their competitors. While they're still doing pricing things I'm not keen on (microtransactions and such), where they differ is in the overall support of their products. They're still regularily adding content to games like StarCraft II and Diablo III and those games are several years old, including free content. Heck, they're still supporting Starcraft, Diablo II, and Warcraft III: Reign of Chaos, and those are Legacy games.

    That's very uncommon in the industry today, especially with the cash flow or remastered titles as @EchoGolfSierra mentioned.

    EchoGolfSierra
  • I think we all should agree to take blizzard out of the discussion. Their model isnt reflective of the industry. They caught lightening in a bottle with WoW and made so much money that money basically stopped mattering. That allowed them to take the time and produce and fund some exceptional titles.

    WoW was earning 2.5-3 billion a year for many years. by comparison there are plenty of countries that dont earn that. Because of that...the same rules dont apply to Blizzard.

    Jux, how many people want games are irrelevant frankly. If investors lose confidence in the industry...it can shut down at tight as a drum in a single quarter. A 31% reduction of revenue during their busiest time period can potentially scare the hell out of investors. |

    Too late for people to cry for games when the only dev that still exist is Blizzard.

    Raj you definitely know more about marketing and specifically marketing in the games industry then I do. I think you point about inflation rates is valid. Unfortunately, disposable income hasnt matched the same inflation rates.

    I dont think the industry is sustainable at the current numbers and I disagree that games were always this buggy or unfinished.

    I think the indie point is very valid. the total number of games on stream increased by 50% in the last year. Most of those are "indie titles" But still....since Stream began 50% of the total Number of titles available were launched in 2016....that seems like a ballooning industry to me!

  • Law212Law212 Centurion

    I like that we get a lot of indie stuff though or low budget games because those ones tend to take more chances than the cookie cutter AAA games.

    EchoGolfSierra
  • JuxtaposeJuxtapose Centurion

    @EchoGolfSierra said:

    Jux, how many people want games are irrelevant frankly. If investors lose confidence in the industry...it can shut down at tight as a drum in a single quarter. A 31% reduction of revenue during their busiest time period can potentially scare the hell out of investors. |

    Too late for people to cry for games when the only dev that still exist is Blizzard.

    What I mean by how I don't think a crash like in the '80's is perfectly possible today is because of the indie scene. Blizzard aside, even if the industry crashes, indie guys will still be making and finding ways to get their games out there.

    With how gaming is ingrained in society today and how people do want games, I do think (despite my belief in a need for it), that we won't see a crash like the '80's, at least not any time soon.

    Time, of course, will tell.

    EchoGolfSierra
  • Law212Law212 Centurion

    Whats happening with Microsoft? They recently cancelled a new IP from platinum star and a lot of people are pretty pissed about it.

    Though I wasn't following the game, you would think a new IP would be good for a console. MS has another Forza, another Gears, Another Halo, but they don't have much in the way of new IPs. ALso, they still don't have Street fighter 5 on the system.

    Lots of people I talk to say that when they buy a new console, they will most likely be going to playstation this time. I would also probably go playstation as well if I were in the market for a console.

    Even the xbox 360 took some chances with games like Bullet Witch, ANarchy Reigns and Death Smiles and other IPs that were more niche. I don't see anything on the Xbox One that is different and new. Seems like they are playing it realy safe this time around.

  • JuxtaposeJuxtapose Centurion

    @Law212 And with that cross-buy or whatever it's called between Xbox One and PC, unless you truly have a preference for the platform, there's no reason at all that I can see to pick up an Xbox One over a PC.

  • Law212Law212 Centurion

    I wont be surprised is XBONE is the last MS console.

  • @Law212 said:
    I wont be surprised is XBONE is the last MS console.

    well that isnt possible...they have already announced the xbox scorpio

    now I can see the scorpio being a fully upgradable console. In am attempt to merge the console and pc markets

  • Law212Law212 Centurion

    Making an improved XBONE is not what I meant. I don't see MS doing a next generation. Scorpio wont be fully upgradeable .

    As far as I can tell , the scorpio is an XBONE that can do 4k gaming and VR. Its not a next gen system. It will have the exact same games, but with a 4K option.

  • JuxtaposeJuxtapose Centurion

    @Law212 said:

    As far as I can tell , the scorpio is an XBONE that can do 4k gaming and VR. Its not a next gen system. It will have the exact same games, but with a 4K option.

    This is correct. "Project Scorpio" is not their next generation console, but rather a hardware upgrade/revision to the Xbox One console. It's meant to compete with the PlayStation 4 Pro.

  • Xbox One is still my preferred gaming platform and i don't see that changing anytime soon

    Juxtapose
  • Law212Law212 Centurion

    If the new PS4 added a 4K blu ray player or better yet a 4K 3D blu ray id be more inclined to get one.

  • I am willing to wager that Scorpio will be at least partially upgradable out of the box....and in that...yes I agree then, there will never be a new xbone...all the games will be compatible
    if you have the hardware to play the game.....just like PCs.

    It seems obvious to me that this is the direction of gaming in the future. The scorpio will become a low cost gaming PC

  • Law212Law212 Centurion

    Except with the restrictions of a Microsoft console.

  • SintacsSintacs Centurion

    MS was doing alright with the Xbone until they started bleeding out their exclusives to the PC and later started the Xbone + PC thing. AFAIK the only exclusives it has left are Sunset Overdrive and Halo 5 (though likely not for long).

  • JuxtaposeJuxtapose Centurion

    @Sintacs said:
    MS was doing alright with the Xbone until they started bleeding out their exclusives to the PC and later started the Xbone + PC thing. AFAIK the only exclusives it has left are Sunset Overdrive and Halo 5 (though likely not for long).

    And as I recall, Halo 5: Guardian's Multiplayer is on PC now.

  • EchoGolfSierraEchoGolfSierra Centurion
    edited January 13

    @Sintacs said:
    MS was doing alright with the Xbone until they started bleeding out their exclusives to the PC and later started the Xbone + PC thing. AFAIK the only exclusives it has left are Sunset Overdrive and Halo 5 (though likely not for long).

    they have a few more than that...they have 5 exclusives coming out this year....and this isnt a forza year

  • SintacsSintacs Centurion

    @EchoGolfSierra said:
    they have a few more than that...they have 5 exclusives coming out this year....and this isnt a forza year

    What games? If they're on PC too, they're not exclusive. You mention Forza but it's looking like it won't be exclusive for long, with Horizon 3 being available on the PC. I'm definitely not happy with the direction MS has been taking the Xbox brand, I used to be a huge Xbox fanboy, it's the reason I bought my Xbone first this gen, but I'm starting to have less and less reason to keep it around. I have 20 retail games for my Xbone, of those, 3 are exclusive (though I'm including Halo: MCC in this count), 1 was a timed exclusive (don't even really want to include it as this really doesn't mean anything), 2 were exclusive but had PC ports made. It really seems their attempt at exclusivity is with Halo, Gears (though not anymore), and Forza, of those I play two, of those, none are enough alone for me to stick with the system.

    At this point you may as well spend the extra little bit and build an entry level gaming PC over buying an Xbone, as there's really very little point in the console existing currently. Even if the Scorpio is upgradable, I'm sure the upgrade costs will be more than the cost of upgrading a PC, and will only serve to splinter the Xbone community, as some will be able to play games because they have upgraded, and others have not. This will also likely create some issues with the average consumers (you can't deny the fact that the average person is very dumb/ignorant), as folks will be buying games they want to play that require upgrades, only to find out it won't run on their system, creating some negative word of mouth. I definitely feel MS is killing off the Xbox brand in the console space, I really doubt we will see anything after the Xbox One, and upgradable or not, I can't see the Scorpio lasting too long.

    As stupid as the concept of locking games to one platform only is, it's what gives people a reason to own that platform. The 360 had some great exclusives and hidden gems outside the big AAA stuff, a few I really enjoyed:

    Bullet Witch
    Conan
    Crackdown (could argue it was AAA, but it was only really a big thing since it came with the Halo beta)
    Full Auto
    Ninety-Nine Nights
    Ninety-Nine Nights II (list them both since they felt fairly different from each other)
    Onechanbara

    The Xbone isn't getting anything like those in terms of exclusives, and we're just over 3 years into it's lifespan now. You know what platforms are getting games like those? The PS4 (I bought my PS4 for just this reason) and Wii U. At this point, if the Xbox brand ends up vanishing, I won't be all that upset, as the few franchises they have left will likely keep going on the PC anyway.

    @Juxtapose is it the full MP or just the Forge stuff + custom games still? Either way, that's why I said "not for long" in brackets.

    Juxtapose
  • JuxtaposeJuxtapose Centurion

    @Sintacs re: Halo 5: Forge on PC, I'm not sure as my system is at the minimum requirements so I haven't bothered to try it. I think @Law212 did though.

  • SintacsSintacs Centurion

    @Juxtapose I downloaded back when it launched it but I don't think I've launched it yet, I'll have to try it out sometime soon.

  • Law212Law212 Centurion

    Halo 5 MP for PC now has matchmaking.

    Also, I just watched a bunch of stuff on the Nintendo Switch and it looks pretty cool. I think id pick that up over an Xbone or evne a ps4. Since PC gets lots of games from those two systems but PC doesn't get Mario and stuff like that.

  • OzziOzzi Centurion
    I could see some major changes to the industry, i cant see a full collapse. Even though a lot of the games coming out are riddled with bugs, and gwtting old with the same shit. I think peole will still buy them games.

    Look at the new CoD. Its complete shit. Got terrible reviews and lots of hate on it. Still they sold a shit ton of copies.

    I can see more publishers adding 'classics' in with the games like cod 4 bundled with it, but the $110 price tag for that is absoutley ridiculous. If they got away with charging an extra $40 for 10 year old game other will too.
  • SintacsSintacs Centurion

    @Ozzi said:
    Look at the new CoD. Its complete shit. Got terrible reviews and lots of hate on it. Still they sold a shit ton of copies.

    I thought the campaign in it was great. Sure, the MP was a little more of the same, but I've been really enjoying the future stuff they've had in the games since AW. Honestly, I think I've been enjoying the new COD more than the new Gears. My point is I definitely would not call it complete shit, just another victim of bandwagon hate, people love hopping on the hate bandwagon these days. Just look at No Mans Sky, yeah, I'm sure it wasn't great, but there was a lot of people that enjoyed it or even loved it. I can guarantee a lot of people that had it sour on them were influenced by all the folks hopping on the hate bandwagon it had going.

    There's definitely some bad trends going that need fixing, but I haven't really played much lately that I would deem that bad, though I also have been fairly selective with a lot of what I play, and have avoided most of the games everybody flipped out over, not because of what I heard, but simply because they didn't look interesting to me.

  • Law212Law212 Centurion

    I haven't finished a cod campaign since cod 2 because of boredom.

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