The stagnation/decline in the AAA console marketplace, its implications on the health of the industry, and what can be done to reverse the trend

[Pancracio17]

Yes, but that's my point. The Created were backtracked because they literally made people upset. Halo Infinite's story was much better received than 5's because it mostly did not upset anyone, it was an incredibly safe story for a Halo game.

So what Microsoft should take from that is that they need to upset their audience again with risky narrative choices? I don't get it. That applies to Sony too. TLOU2 was, on the whole, less succesful than TLOU1 (while still being very successful anyway) . But if ND decided to make TLOU3 a safer story why would anyone blame them?

I just don't see how you see where Sony and Microsoft are and come to the conclusion that they need to upset their audience. They... have already done that. Multiple times. And it's mostly not led to particularly high fan satisfaction.

Gears 5 is another example with "the choice" and the treatment of JD. The biggest supporter of Gears 5's narrative choices is probably Noah Caldwell-Gervais, and his video on Gears has thousands of comments criticizing both those choices and him for defending them.

They made people upset, but the backtracking shows they didnt really mean to. 343 didnt insist in the artistic version they thought was good, and instead we got a messy trilogy.

Besides, these are tiny risks in retrospect. The choice in Gears 5 is for fans. Its nowhere near the risk associated with throwing the core gameplay and cast of Gears away to instead do another game that is just loosely tied with its themes and design philosophy like FF or Zelda do with their sequels.

 

[Belthazar]

One aspect of this whole situation is that there's quite bit of dissonance between the discourse and the praxis for people who claim they're worried about the sustainability of the industry and want games to be more reasonably budgeted... they seemingly want that as long as the game still look flawless, are extremely polished and have plenty of content to offer for the asking price.

People don't seem to realize that something has to give when you're reducing production costs and development time and that developers just don't spend $200 million on a game because they decided it's a cute number, that's how much it costs to have that level of perfection.

And the game that sparked that realization was Rebirth. It was obviously not a cheap game, but with a development cycle of ~3 years and it's certainly very reasonably budgeted and the corners that were cut to achieve that are seen throughout the game... And then you see the same people who post that Sonic meme that they want shorter, uglier games made by people who get paid more to do less work complaining about rocks that are outside the critical path looking blurry.

People will have to understand at some point that that's how a game made in 3 years looks in a best-case scenario. And I feel like people will really need to adjust their expectations if the industry is to go down the path of fewer $100mi+ games.

 

[John Omaha]

One aspect of this whole situation is that there's quite bit of dissonance between the discourse and the praxis for people who claim they're worried about the sustainability of the industry and want games to be more reasonably budgeted... they seemingly want that as long as the game still look flawless, are extremely polished and have plenty of content to offer for the asking price.

People don't seem to realize that something has to give when you're reducing production costs and development time and that developers just don't spend $200 million on a game because they decided it's a cute number, that's how much it costs to have that level of perfection.

And the game that sparked that realization was Rebirth. It was obviously not a cheap game, but with a development cycle of ~3 years and it's certainly very reasonably budgeted and the corners that were cut to achieve that are seen throughout the game... And then you see the same people who post that Sonic meme that they want shorter, uglier games made by people who get paid more to do less work complaining about rocks that are outside the critical path looking blurry.

People will have to understand at some point that that's how a game made in 3 years looks in a best-case scenario. And I feel like people will really need to adjust their expectations if the industry is to go down the path of fewer $100mi+ games.

You've touched on one of the main pitfalls of high-fidelity graphics - anything that does not look up to par with the more detailed models and environments sticks out like a sore thumb. Having near-CG quality characters jumping around rocks with PS2-quality textures looks unpleasant and jarring.

People are generally fine with lower-fidelity graphics as long as the overall look of the game is consistent. You don't see as many complaints about BotW or TotK's textures because the whole game is blockier and less detailed.

 

[Tokuiten]

If playing half a Halo-game from the pov of the Arbiter who betrays his folk and joins the Master Chief is considered an "upsetting plot", then I don't think we have the same experience of media consumption. That is as vanilla of a plot as it gets. Next you're gonna mention Vegeta from Dragon Ball ...

One aspect of this whole situation is that there's quite bit of dissonance between the discourse and the praxis for people who claim they're worried about the sustainability of the industry and want games to be more reasonably budgeted... they seemingly want that as long as the game still look flawless, are extremely polished and have plenty of content to offer for the asking price.

People don't seem to realize that something has to give when you're reducing production costs and development time and that developers just don't spend $200 million on a game because they decided it's a cute number, that's how much it costs to have that level of perfection.

And the game that sparked that realization was Rebirth. It was obviously not a cheap game, but with a development cycle of ~3 years and it's certainly very reasonably budgeted and the corners that were cut to achieve that are seen throughout the game... And then you see the same people who post that Sonic meme that they want shorter, uglier games made by people who get paid more to do less work complaining about rocks that are outside the critical path looking blurry.

People will have to understand at some point that that's how a game made in 3 years looks in a best-case scenario. And I feel like people will really need to adjust their expectations if the industry is to go down the path of fewer $100mi+ games.

That's exactly the point of @Aostia82 's long posting on the previous page, though. You can have great looking games and lots of content even on a smaller budget as we have games that prove that, see ToA vs XB3. Or see my long reply to Aostia's posting. "look flawless" is a nebulous, vague term tbh. You see it elaborated in my previous posting, but: Most people don't care about the polycount of Batman's belt and such, but making a great looking Batman is possible without that.

 

[Celine]

They made Wii when they saw GameCube sales.

The investment in Gyration, Inc. to leverage motion control tech was made public before the GC launch (September 2001).

Nintendo's Investment in Gyration

Exclusive details of Nintendo's investment in Gyration

www.gamecubicle.com

Nintendo's advocacy for fun ideas trumping "stronger specs" and the need for gaming to try reach a broader population instead of catering only to core gamers could be traced back to past events.
Yamauchi in his presidential message for the FY ending March 1998 highlighted how a smart idea on the aging Game Boy (Pokemon) was trumping the high specs new gen consoles like N64.
Iwata began to heavily evangelize in public the needs to cater to broader audience instead of relying only on core gamers since 2002.
The prime clue he was giving that he (Nintendo) was right in his reasoning was that the japanese market was declining since the peak in 1997 and the release of the new gen consoles around 2000/2001 didn't fix the issue.
Iwata said that while the same trend haven't show up yet in America, Japan might simply be ahead of the curve so an intervention [by who care about the videogame market] had to happen to prevent the issue.
Nintendo actions with NDS and WII didn't stem from a reflection on competition (PS2 vs GC) but on the state of the industry and how, despite rising costs, the Japanese market was declining thus today [2003] Nintendo might make money (in fact more than SCE) but tomorrow they could go under unless they preemptively acted to counter the trend.

【TGS】「今のゲーム産業はシューティングゲームと同じ」任天堂岩田社長が基調講演 - 電撃オンライン

最強のゲーム情報サイト！　読み応え抜群のレビューやインタビューなども盛りだくさん！

dengekionline.com

The lessons taught by "GameCube sales" were:
1) If you only improve the conditions for the production of software for third-parties (being easier to develop for etc.) without giving a resolute economic advantage third-party would still tend to gravitate toward a third-party driven platform like PlayStation (even if PS2 was harder to develop for).
2) If you only compete by offering a higher performance and cheaper console you still get trumped by a more expensive and lesser performance console if the latter has all the focus of the third-parties and thus could provide the most variety of software.

While being easier to develop for and the performance/cost ratio are important factors the priority for Nintendo had to be to offer an unmatched proposition value that make its consoles desirable even if third-parties priorities other platforms thus proving that "the Nintendo Difference" is tangible and not just a slogan.

Of course nowadays with multiplaform development tools being so widespread if your console is successful and support the popular toolkit then you it's guaranteed to receive big support from third-parties, unless the console main concept is far apart for the other platforms available on the market (as an example VR platforms have many multiplatform games shared between them but it tends to be VR games which is a small pool compared to 'flat screen' console/PC games).

 

[tentacle-tropes]

'I Stopped Believing in Myself': Game Developers Share the Human Impact of Over a Year of Mass Layoffs - IGN

Mass layoffs happen for all kinds of reasons, be it because of a bad financial bet, a failed game, a deal falling through, poor planning, or any number of other things. But when they do, human beings find their lives upended in response.

www.ign.com

They told me stories of how it had impacted their physical and mental health and how the loss of income, insurance, and security was hurting their families and their plans for the future. Some had moved across the country or even across the world for their jobs. A few reported being laid off simultaneously with a partner who was also in the industry. Some told me they had been laid off twice in one year.

"Both times I felt incredibly gutted," one person said. "The first time, it felt like a reality of capitalism that I was expecting, but the second being so close to the first, it was like, 'We really are just cogs in the machine.'"

There is a lot more in the article.

 

[Tokuiten]

Unfortunately, nothing will change until they fight for themselves. Imo, this industry is in need of a widescale strike similar to last year's writers/actors strike. Sure, would suck for us as consumers, but unless there's a big movement that forces publishers to grant certain rights to their employees, this up-and-down, emplyoing-and-firing cycle will keep repeating itself.

 

[fiendcode]

The investment in Gyration, Inc. to leverage motion control tech was made public before the GC launch (September 2001).

Nintendo's Investment in Gyration

Exclusive details of Nintendo's investment in Gyration

www.gamecubicle.com

This is supported by Factor 5 claiming to have seen a Wiimote prototype while they were being briefed on Gamecube pre-launch for Rogue Squadron II.

Iwata also made comments to investors around 2003 iirc talking about introducing controller peripherals to revitalize their flagging Gamecube business. Back then people figured he was talking about the DK Bongos (lol) but I suspect the original plan was releasing some variation the Wiimote for GC itself probably in 2004.

 

[Mekanos]

Unfortunately, nothing will change until they fight for themselves. Imo, this industry is in need of a widescale strike similar to last year's writers/actors strike. Sure, would suck for us as consumers, but unless there's a big movement that forces publishers to grant certain rights to their employees, this up-and-down, emplyoing-and-firing cycle will keep repeating itself.

Workers would need to unionize first, which was what the writers and actors had. I think the game industry is seen as such a dream job for so many people that they can always find more bodies to throw at it if others go on strike. It's fucked all the way down.

 

[Tokuiten]

Workers would need to unionize first, which was what the writers and actors had. I think the game industry is seen as such a dream job for so many people that they can always find more bodies to throw at it if others go on strike. It's fucked all the way down.

You're totally right. That's why it'd be so important for websites, gaming and not, to properly and frequently report about the reality of video game development. It's probably similar to making it big on youtube/twitch: A few lucky ones get to enjoy their "dream", while for most the dream never materializes, ends up being a pile of repetitive work, and doesn't pay that much. Plus you might start hating your favorite hobby.

Now that I think about, outside of the occasional Schreier-reports, I don't see any such reports on the regular. Almost like the industry tries hard to keep up a positive facade.

 

[K samedi]

One aspect of this whole situation is that there's quite bit of dissonance between the discourse and the praxis for people who claim they're worried about the sustainability of the industry and want games to be more reasonably budgeted... they seemingly want that as long as the game still look flawless, are extremely polished and have plenty of content to offer for the asking price.

People don't seem to realize that something has to give when you're reducing production costs and development time and that developers just don't spend $200 million on a game because they decided it's a cute number, that's how much it costs to have that level of perfection.

And the game that sparked that realization was Rebirth. It was obviously not a cheap game, but with a development cycle of ~3 years and it's certainly very reasonably budgeted and the corners that were cut to achieve that are seen throughout the game... And then you see the same people who post that Sonic meme that they want shorter, uglier games made by people who get paid more to do less work complaining about rocks that are outside the critical path looking blurry.

People will have to understand at some point that that's how a game made in 3 years looks in a best-case scenario. And I feel like people will really need to adjust their expectations if the industry is to go down the path of fewer $100mi+ games.

Thee main bulk of dev budgets go into graphics, story, voice acting. It takes budget away from actual game design. I think when devs prioritize game design first people won’t have much to complain if the graphics lack here and there. A smart art style is also important.

 

[Terrell]

Workers would need to unionize first, which was what the writers and actors had. I think the game industry is seen as such a dream job for so many people that they can always find more bodies to throw at it if others go on strike. It's fucked all the way down.

The stories coming out of the industry since the 2010s may have soured that "dream job" mystique. With equal precarity and managerial mistreatment compared to any other tech job, grads with proper skills will pick whatever gives them the best paycheque in the moment, and working at a publisher ain't it right now. It'll take time for it all to sink in, but the days of endless warm bodies to throw at the industry (especially on the cheap in relation to comparable jobs in the tech sector) are coming to an end with or without unions, but preferably with.

Its gonna be pretty tough to achieve that equilibrium, game costs scale up really fast really easy. Even a simple and content dry game like Mario Strikers now has to include online play, new characters, new stages, and future updates. This is because theres a pressure to exceed your previous games in not just graphics, but also in content and features. You dont have to be making Spider-Man or a cinematic game for your budget to balloon, Tekken 8 costs 3x as much as Tekken 7 too per Harada. If mainline Pokemon games start taking that one extra year they so desperately need for example, theres the increase in budget.

Its not impossible for Nintendo to achieve mind you, but it does sound extremely hard to keep up with consumer expectations on stronger hardware without increasing budgets.

So long as you are maximizing labour hours (preferably in ways that don't involve crunch and/or exploitation), your costs are manageable and rises can be mitigated.
BotW (their most ambitious game to date prior to TotK, indisputably so) took 300 people to make across 5 years. Its break-even sales figure? 2mil to break even on development costs. Keeping in mind that this is a 1st-party title and enjoys a larger revenue share per unit sold, that's still an exceptionally small number of units to hit break-even, especially when some publishers don't hit break-even in anything close to that timeframe. More telling is Miyamoto saying "our current efforts will be helpful in the next production".

Ahhh, asset re-use, no one is more adept at this than Nintendo, and it is indeed a major cost savings for them. It undoubtedly saved them some expense with TotK, which they clearly decided to spend on physics logic, given the game they ended up making and how dumbfounded and/or slack-jawed the developer community has been with the game's physics wizardry.

But equally as importantly, if tech advancements mean that the work of getting game physics to the same level can be done in half the time, imagine how much less the budget for TotK would be. On the flip side, when your content is constantly pushing the envelope, you're in effect always over-extending beyond what new technology can reasonably achieve, which always costs more for less appreciable gain.

But if you can sit comfortably in the space of what your available technology can reasonably achieve, anything that eases the need for labour hours is money you're not spending in one area (like with TotK's asset re-use) that can be either withheld or (more likely) put to work elsewhere. That's what I mean when I say there's an equilibrium with rising dev costs and new tech, there's a give and take. The moment you're taking more than hardware can comfortably give, you will endlessly run into rapid budgetary expansion and rarely get to enjoy the labour savings new tech brings, because you're always blowing through that cost savings trying so desperately to wring out that extra 5-10% and throwing people at the problem endlessly to do it.

There is absolutely an opportunity to sit in an ideal spot on the labour efficiency curve to ensure that the budgetary increase (which will inevitably occur) is far more marginal than elsewhere in the industry. And if we were to suspect any company that could manage to do it, my bet will be on Nintendo.

 

[Astrogamer]

You're totally right. That's why it'd be so important for websites, gaming and not, to properly and frequently report about the reality of video game development. It's probably similar to making it big on youtube/twitch: A few lucky ones get to enjoy their "dream", while for most the dream never materializes, ends up being a pile of repetitive work, and doesn't pay that much. Plus you might start hating your favorite hobby.

Now that I think about, outside of the occasional Schreier-reports, I don't see any such reports on the regular. Almost like the industry tries hard to keep up a positive facade.

Investigative journalism takes far more time to do as unreliable reporting opens them up to legal threats. major corporations tend to make them the first cuts as well. Like for general news, the major reporters have been slashed and organizations like Buzzfeed and Vice have collapsed.
Honestly, the issue with game developer unionization (and unionization in general) is that there's so much FUD in the air that makes unionization to be a weak risky thing when it's one of the few tools they have as workers.

 

[salesguy]

the main thing i'm noticing with todays gaming is these timelines are insane. i want a new halo or gears very badly, but i know i'll be waiting who knows how many years. and infinite was 2021? so i've already waited on going on 3 years. and i think i probably have minimum 3 more years to wait.

correct me if i'm wrong but i think not that long halo was said to be on a every other yr cadence. or maybe it was even every yr! cus looking at wiki, it went halo 3 2007, halo wars/odst 2009, reach 2010, ce anniversary 2011, halo 4 2012, spartan assault (granted wouldn't really count this) 2013, master chief collection 2014, spartan strike 2015 (wouldn't count this either) halo 5 2015. that's a blistering pace of a major halo release every 1-2 years even if as me you wouldn't count spartan assault etc. i remember thinking every yr was just too much, they needed a 3-4 yr break at times to keep anticipation high. imagine worrying halo was coming out too fast now lol.

 

[Tokuiten]

Gears of War is one of the best indicator of this industry being "broken". The story in all of Gears is an episodic model, each game telling a little bitte more. This is a franchise that should release no later than every 2 years. Now it's been almost five years since Gears 5. If the franchise doesn't change much, that wait will absolutely not be worth it for next bite-sized story of Gears 6.

Something's broken and it needs to be fixed, quickly. Mass Effect 4 in 2028 is also insane. Simply insane.

 

[MysticGon]

Only Nintendo could release a device that could take a technological step backwards and still have buy-in from every corner of the industry sans AAA developers. Consumers, retailers, indie and AA would be there.

Bring back the days when smaller budgets were actually a positive selling point.

Nintendo also spends less on its games than its competitors do.

Developing a game for the DS costs a few hundred thousand dollars. Thus, Nintendo has to sell 100,000 only copies of a game to make money on it.

Wii games cost a little more. Developing a game for Wii might cost $5 million to $10 million, including all of the marketing costs.

By contrast, developing a game for the PlayStation 3 or Xbox 360 can cost $20 million to $50 million, Fils-Aime asserted. As a result, a developer needs to sell 1.3 million to 1.5 million copies of a game to turn a profit, he argued.

"That's a pretty dramatic difference," Fils-Aime said.

Will the Wii be a set-top box?

Game maker, happy also with demand for the DS, has created a service in Japan that lets consumers get TV listings, TV Guide Network-style, via the Wii.

www.cnet.com

 

[BTB123]

BotW (their most ambitious game to date prior to TotK, indisputably so) took 300 people to make across 5 years. Its break-even sales figure? 2mil to break even on development costs.

Wasn't that a mistranslation? I've heard about it being a mistranslation for years now.

 

[Terrell]

Gears of War is one of the best indicator of this industry being "broken". The story in all of Gears is an episodic model, each game telling a little bitte more. This is a franchise that should release no later than every 2 years. Now it's been almost five years since Gears 5. If the franchise doesn't change much, that wait will absolutely not be worth it for next bite-sized story of Gears 6.

Something's broken and it needs to be fixed, quickly. Mass Effect 4 in 2028 is also insane. Simply insane.

Fun fact: Tim Sweeney is on record saying the budget requirements for a new Gears title relative to expected sales is the entire reason why Epic walked away from the franchise.

Wasn't that a mistranslation? I've heard about it being a mistranslation for years now.

Looking into it, the alleged mistranslation (thankfully) does not detract from the point being made. That 2mil point apparently came from a tweet from someone at the shareholder meeting, but looking at the quote the tweet may have referred to, was maybe not exclusive to BotW. From the relevant shareholder Q&A official English translation about rising costs:

Kimishima:

The cost of developing game software has certainly grown over the last ten years. This is a big challenge, as there is no simple formula to calculate the size of how popular a game is going to be with consumers. That said, I think that developing with this in mind will be increasingly important.

Genyo Takeda (Senior Managing Director, Technology Fellow):

The thinking for a long time was that computer performance for a game should be dedicated entirely to the consumer’s enjoyment, but now times have changed and the common sense is that computer performance should also be used to improve productivity in making the game software itself. But what is most important is how we achieve balance. I am going to let Mr. Miyamoto speak, as he has spent a lot of time and energy on raising the productivity of software development while doing this balancing act.

Miyamoto:

In striking that balance, while it's important that we do not overextend by putting an excessive amount of content in our games, the only solution is how to make software that sells well. There will be big hits somewhere in our business, and they support the games that fail and allow us to take on other challenges. So our basic premise is to create software that will sell in the range of at least two million units. We simply couldn't recoup our costs if we only released games in Japan that had sales of around 300,000 units, so the global market is our standard.

Takahashi:

I also think the key word here is balance. This has a lot of aspects, such as knowing when we need to dedicate a lot of time and people to something and when we do not. Or ways to leverage game engines that are used for general purposes, and how to create our own game engines that lots of others can also make easy use of. For NX, we are thinking about many different development techniques based on these considerations.

So basically, Nintendo aims to achieve 2mil+ for every game in their current catalog to recoup costs across the entire current catalog. Could you imagine any publisher being satisfied with just 2mil sales or over for each game they release, while also saying that such sales give them room for failure? I couldn’t.

And Genyo Takeda basically said the exact same thing I did, Nintendo likes to implement technology when it reduces development cost and balances that cost savings out in budgets to increase consumer enjoyment of the product (within reason).

 

[salesguy]

Only Nintendo could release a device that could take a technological step backwards and still have buy-in from every corner of the industry sans AAA developers. Consumers, retailers, indie and AA would be there.

Bring back the days when smaller budgets were actually a positive selling point.

Will the Wii be a set-top box?

Game maker, happy also with demand for the DS, has created a service in Japan that lets consumers get TV listings, TV Guide Network-style, via the Wii.

www.cnet.com

could they, though? they seem to be caught in the same paradigm just a few gens behind. none of their systems have been a step back technically from the prior console. And Switch 2 is thought to be PS4 level.

i could only see them stepping back in technology if something drastically changed about the device. say they made a very small 3.5" screen handheld next. but i also couldnt see that be their only system. it would have to be a side project. if they make a switch 2, it basically has to step up the technology. it already feels like switch is groaning and the natives are restless technically. well, maybe not in the wider world since switch still sells well, but sales are naturally declining.

 

[awng782]

Nintendo may not make game systems as powerful as their PS/XB contemporaries but they have never taken steps backwards either. Even their small technical leaps are still leaps: Wii was more powerful than GCN, Switch was more powerful than Wii U. If the rumors are anywhere remotely true, then Switch 2 will be a huge technical jump over the current Switch.

 

[Mekanos]

Being behind other gens means the consoles are cheaper to make even if they eventually reach the point the current HD twins are. That will help offset a lot of the current issues.

 

[duvjones]

So basically, Nintendo aims to achieve 2mil+ across every game in their current catalog to recoup costs across the entire current catalog. Could you imagine any publisher being satisfied with just 2mil sales or over for each game they release, while also saying that such sales give them room for failure? I couldn’t.

The scary thing about that is over the Switch's lifetime, Nintendo has achieved just that (give or take a few titles under the mark). Well, in all honestly, they have overproduced by a bunch depending on the titles in question....
I WISH that publishers could sustain themselves over 2 millions units per title over their library but the market seems utterly convinced that this is not possible.

 

[MysticGon]

could they, though? they seem to be caught in the same paradigm just a few gens behind. none of their systems have been a step back technically from the prior console. And Switch 2 is thought to be PS4 level.

i could only see them stepping back in technology if something drastically changed about the device. say they made a very small 3.5" screen handheld next. but i also couldnt see that be their only system. it would have to be a side project. if they make a switch 2, it basically has to step up the technology. it already feels like switch is groaning and the natives are restless technically. well, maybe not in the wider world since switch still sells well, but sales are naturally declining.

I think so. Digital Foundry might cringe at the blockier models and and sub-4K resolution but they might get a pass if Nintendo joined Steam Deck in potentially standardizinh a 90hz refresh rate. Throw in HDR support and even legacy content can have a new lease on life.

Looking at upscaled emulator footage of even 3DS games makes me wonder are all those polygons necessary.

Sony seems to think so but I'm not so sure.

From Kratos to the fearsome Rathalos, see the polygonal evolution of 5 iconic PlayStation characters

Developers discuss how the PS4 has unlocked new levels of detail for God of War, Monster Hunter, Tekken and MediEvil

blog.playstation.com

Gran Turismo Car Models Now Made in Three Months, Outsourced to India

Back in August 2018, we brought you some rather interesting information on the inner workings of the Gran Turismo series: after two decades of almost exclusive in-house development, Polyphony Digital had decided to bring in some external talent by outsourcing some of its vehicle modeling tasks. W

www.gtplanet.net

A Single Gran Turismo 7 Car Takes 270 Days To Make

Those super detailed car models are expensive to make.

www.thegamer.com

I would be impressed with lighting and physics applied over simpler visuals. Still expensive to make mind you but the rewards are greater than modeling nose hairs on Kratos imo.

 

[Pancracio17]

Everyone else grew their budgets like 2x-3x when they went from the PS360 to the PS4/Xbone generation. With all these steps to limit how much Nintendos budgets balloon, what would you guys think would be a reasonable number for how much Nintendos own budgets will grow with the Switch 2? Two times higher? Maybe just 50%? Or not at all?

 

[BTB123]

The scary thing about that is over the Switch's lifetime, Nintendo has achieved just that (give or take a few titles under the mark). Well, in all honestly, they have overproduced by a bunch depending on the titles in question....
I WISH that publishers could sustain themselves over 2 millions units per title over their library but the market seems utterly convinced that this is not possible.

The average sales number of all of Nintendo's million sellers on Switch is at over 9M copies sold right now.

 

[DarkDetective]

These statements I bolded seem a bit at odds.

The final technical ceiling you mention is also not linear and thus neither are the budgets. Unless Nintendo (as one example) decides to radically change its art direction choices, the ceiling they're going to hit technically will be lower, as well, as less realistic art demands technically less to achieve a very appealing result before wandering into that "5-10% for 2-3x more money" issue that Nintendo rarely does. And they aren't the only developers who benefit this way, they're just the most consistent in making the choice of art direction that benefits from a lower technical ceiling. Once games that opt out of realism start getting into 4K and consistent 60fps, there's not that much further they can go to make their product look so much better than it already does that they don't just earn automatically from hardware advancements that also often result in less demanding workloads (like less time managing draw distances due to pop-in, as one example). In other words, you can wait out technology actually bringing some of the cost increases into a kind of equilibrium due to the labour you don't need in other areas of development anymore.

So long as Nintendo's production costs scale up slower than their revenue does, they're more than fine, and they definitely have been for the past 7 years. Also, they seem more than capable of making adjustments to their production budgets to fit very comfortably within their revenue intake (barring a massive collapse in platform interest like Wii U, anyways, but even then, they were able to cannibalize their work there and try to sell it again in a more favourable platform environment with minimal extra expense, so it more than evened out in the end anyways).

In other words, if they're profitable now, they're likely to still be profitable when they hit the upper limits that their art direction will reasonably permit or what is fiscally responsible to pursue.

But that's the thing. Costs growing overtime isn't unsustainable, costs growing faster than revenue is.

When they saw dev costs skyrocketing for HD dev, they made the Wii and bet on the people who were fine with SD graphics while trying to expand their audience until HD dev was sustainable for them.

And if they needed to do it again, even freezing at Switch level scope/assets but at higher resolution and with RT* should keep them profitable for much longer than the Wii, long enough to try things and find a way.

* RT requires a lot less effort (thus cheaper) than baked lighting at the cost of being way heavier. Perfect for this hypothetical case where you would have plenty of headroom to make it prettier but don't want to increase costs.

Highlighted part of RennanNT's post.

Lagging behind on tech compared to your competitors makes game development cheaper for you than your competitors at that moment in time, but when you look at things really long-term, the question is: was creating Wii games with graphical prowess similar to the PS2/Xbox/NGC cheaper for Nintendo than developing PS2/Xbox/NGC games of similar direction and scope was for those devs? And similarly, was creating Wii U or NSW games with graphical prowess similar to late PS3/360 games actually cheaper for Nintendo than developing PS3/360 titles of similar direction and scope?

Because if the answer is no, i.e. it's not cheaper than developing similar games for those other devices with similar specs, then it's simply a stay of execution before it hits Nintendo at some point too, as long as they keep increasing the specs of their successive console generations.

 

[Aleh]

Stronger hardware COULD mean cheaper development if they used it a certain way. They could use the extra power to render the same games at higher resolution, higher framerates, with higher quality lighting settings, to reduce load times (all of this basically being the remasters approach), or even allow devs to spend less time on optimization and just letting the hw brute force some things.
Raytracing is a big thing that can both make graphics better and reduce workload on devs, the problems come with the hyperfixation on chasing the absolute best it could theoretically offer.
Sometimes using worse hardware isn’t even cheaper, that’s why you’ll never see even Nintendo go backwards on that front.

 

[Drblitzk]

Highlighted part of RennanNT's post.

Lagging behind on tech compared to your competitors makes game development cheaper for you than your competitors at that moment in time, but when you look at things really long-term, the question is: was creating Wii games with graphical prowess similar to the PS2/Xbox/NGC cheaper for Nintendo than developing PS2/Xbox/NGC games of similar direction and scope was for those devs? And similarly, was creating Wii U or NSW games with graphical prowess similar to late PS3/360 games actually cheaper for Nintendo than developing PS3/360 titles of similar direction and scope?

Because if the answer is no, i.e. it's not cheaper than developing similar games for those other devices with similar specs, then it's simply a stay of execution before it hits Nintendo at some point too, as long as they keep increasing the specs of their successive console generations.

We obviously don't know how expensive BotW or TotK or Odyssey are (arguably the most expensive looking games for the Switch, Smash too because of licenses), and how do they compare to the AAA games of the 360/PS3 era (Gears 3, Mass Effect 3, Tlou), however, I think we can safely say that something like Animal Crossing, Mario Party and Ring Fit are definitely cheaper than those AAA games yet, their sales are comparable to Zelda and Mario, and a big portion of Nintendo's catalogue are made up of these type of games, so on average I would say that Nintendo does spend a lot less in creating games that get AAA level of sales than anybody in the industry. Yes the next big wave of Nintendo games are going to be more expensive than current wave of Switch games, but over all Nintendo will spend less than AAA studios did during the PS4.

And we haven't talked about how tools also get cheaper to use too and you have more people with experience in those tools, there are plenty of factors that I believe make developing on not top of the line specs cheaper/better, ray tracing being a big one.

 

[Xbro]

Asset re-use isn't the only thing that can be reused. Coding tools being reused is a massive thing. I imagine that the techniques and tools developed from Xenoblade X helped to streamline BOTW, and whatever Monolith cooked up with Xenoblade 3 will be reused across the board.

 

[Pancracio17]

Warner Bros talked about how they want to do more GaaS today, and I cant help but think the reasoning is a bit shortsighted?

So the plan going forward, he said, was to help reduce volatility by focusing on core franchises and bringing at least some of them to the mobile and free-to-play space, as well as continuing to invest in live-service games that people play--and spend money on--over a long period of time. This will help WBD generate more consistent revenue, he said, going on to tease that WBD had some new mobile free-to-play games coming this year.

"Rather than just launching a one-and-done console game, how do we develop a game around, for example, a Hogwarts Legacy or Harry Potter, that is a live-service where people can live and work and build and play in that world in an ongoing basis?" he said.

If im understanding correctly, theyd rather spread out the revenue a game a like HL gets by instead doing a GaaS game. But isnt this looking for trouble? They just had a big success in their SP efforts and a big failure in their GaaS efforts. If theyre looking to get into GaaS just so they can smooth out the charts and spread out their revenue I would be just plain confused.

 

[Aostia82]

Highlighted part of RennanNT's post.

Lagging behind on tech compared to your competitors makes game development cheaper for you than your competitors at that moment in time, but when you look at things really long-term, the question is: was creating Wii games with graphical prowess similar to the PS2/Xbox/NGC cheaper for Nintendo than developing PS2/Xbox/NGC games of similar direction and scope was for those devs? And similarly, was creating Wii U or NSW games with graphical prowess similar to late PS3/360 games actually cheaper for Nintendo than developing PS3/360 titles of similar direction and scope?

Because if the answer is no, i.e. it's not cheaper than developing similar games for those other devices with similar specs, then it's simply a stay of execution before it hits Nintendo at some point too, as long as they keep increasing the specs of their successive console generations.

But the answer is yes, if tech is well known, developing tools easier (and cheaper), assets reused, developing pipeline more streamlined and used for longer period of time, experience scaled and so on

 

[RennanNT]

Lagging behind on tech compared to your competitors makes game development cheaper for you than your competitors at that moment in time, but when you look at things really long-term, the question is: was creating Wii games with graphical prowess similar to the PS2/Xbox/NGC cheaper for Nintendo than developing PS2/Xbox/NGC games of similar direction and scope was for those devs? And similarly, was creating Wii U or NSW games with graphical prowess similar to late PS3/360 games actually cheaper for Nintendo than developing PS3/360 titles of similar direction and scope?

Creating Wii games was kinda like Majora's Mask situation. MM is comparable in scope with Ocarina of Time, but it took 1 year of dev (salaries) instead of 3+ and had very few assets created for it, in other words it was WAY cheaper than OoT. Why? Aside from assets reuse, the devs had a lot of experience making N64 games, their engine was ready, their updated tools were a lot more efficient/helpful in 1998 than 1995, the hardware documentation was probably much more complete, there was more libraries to be used instead of creating new code for basic things. Whenever they found an issue, chances are much higher that someone had this issue before and already found a solution. Etc. By using the same architecture, making Wii games was a lot like making GC games with some extra headroom (like MM had the memory pak), which Nintendo was extremely more proficient and efficient in 2006 than 2001.

Wii U however required more than just making GC games render in 720p. They needed to change a lot of how they develop games, they need a lot more people working on each game, etc. But unlike people making HD games in 2004~2006, they didn't have to learn it by themselves. In 2009+, there were a lot more people with HD experiences they could hire, more efficient ways to make HD games, tools appropriate for it, 3rd party engines they could learn from or use for themselves, plenty of someone else's mistakes to learn from, more established studios they could use to outsource games or assets, etc.

And then there's new performance headroom and architecture improvements, which allows faster-to-implement-but-heavier solutions to problems. The Wii U didn't had a lot more headroom and used outdated architectures because Nintendo had other priorities (like full BC), but that was their choice.

Because if the answer is no, i.e. it's not cheaper than developing similar games for those other devices with similar specs, then it's simply a stay of execution before it hits Nintendo at some point too, as long as they keep increasing the specs of their successive console generations.

Even if it was no...

The only really expensive games Nintendo has is Zelda and Mario. The reason these 2 didn't have a 200M budget isn't because Switch capabilities (see GTAV on PS360) but because Nintendo is very conservative and efficient with their budgets.

Many current gen AAA games won't match TLOU2's 200M budget (or GTAV) either. Sony went with increasingly higher budgets so far, but not because the new specs forced their hand, but because outspending the competition was a quick and relatively safe way to leapfrog most publishers.

As for Nintendo, I doubt 95% of their series will reach TLOU2's 200M even 3 or 4 generation leaps from now.

 

[duvjones]

As for Nintendo, I doubt 95% of their series will reach TLOU2's 200M even 3 or 4 generation leaps from now.

The question that I have to ask is: Does Nintendo need to be the company that pushed 200M units and makes little to no cash from that kind of expenditure that produced TLOU2?

As much as a segment of the gaming community seems to be of the assumption that they should... Nintendo's finances make it clear that they don't want to or need to be.

 

[Pancracio17]

Even if Nintendo doesnt push for ultra cinematic games, scope creep is incredibly hard to avoid. Literally nobody has managed to avoid it for a reason. Even Nintendo themselves have had rising budgets for generations now. They take a lot of steps to mitigate the problem, but its not exactly a given that that will be enough.

Though if anyone does it, its them. Theres good timing here, with diminishing returns next generation.

 

[Earandilus]

Not really a fan of this “infinite growth otherwise unhealthy” narrative.

The movie theater never really recovered tickets-wise from TV being introduced and yet here we are almost 80 years later and movies continue to be a thing.

Something’s gotta give yeah, but that’s probably not gonna be the industry at large.

 

[duvjones]

scope creep is incredibly hard to avoid

I am not sure about that and Splatoon happens to be a pretty good example of how the development process works within the company. Scope is the first thing that they tackle in the dev process, so they are not completely searching in the dark for an idea. They settle that rather quickly as to begin to hammer out what the mechanical design within that scope. Splatoon was developed in such a manner, so that the core gameplay is already decided upon. EAD only needed to refine and expand on those ideas.

Even Nintendo themselves have had rising budgets for generations now.

Somewhat, but they have manage to keep it from ballooning out of control... Part of that is due to having a very mature process and tooling, Part of that is due to a very strict budget regimen during development. They don't suffer the same issues because of that. And at this point, if the industry could trade situations.... it likely would.

Not really a fan of this “infinite growth otherwise unhealthy” narrative.

Neither, the thing that bugs me with that is that is comes with an assumption that "rainy days" and other unforeseen (and sometimes foreseen) events don't happen. They do, it sucks, and it up to a business to prepare for it.
Growth fluctuates, it's suppose to. Once you start dealing with a hockey stick graphs when it comes to growth, I would cautious. It has to come down at some point.

 

[Pancracio17]

I am not sure about that and Splatoon happens to be a pretty good example of how the development process works within the company. Scope is the first thing that they tackle in the dev process, so they are not completely searching in the dark for an idea. They settle that rather quickly as to begin to hammer out what the mechanical design within that scope. Splatoon was developed in such a manner, so that the core gameplay is already decided upon. EAD only needed to refine and expand on those ideas.

Im not sure what you mean by this. The scope of a game implies how "big" it is, roughly. Scope creep would be something like how Pokemon games are open world now, or how the Splatoon campaigns, hub worlds and side modes get increasingly more elaborate every sequel. With these decisions the scope of a game was "powercrept" if you will. Now theres the expectation that a Splatoon 4 will include all of these modes, even if reusing assets becomes harder.

 

[RennanNT]

Scope creep would be something like how Pokemon games are open world now, or how the Splatoon campaigns, hub worlds and side modes get increasingly more elaborate every sequel

"Scope creep" is when you increase the scope beyond what was defined when you started.

It can be small things like: "make a short dialog about being lonely for this NPC" and later "add an extra line about being scary". Or it can be something big like turning a non-open-world game into one mid dev.

If, for example, Sword and Shield was originally meant to be random encounters only but Let's Go response made them change that, it was a scope creep. If SV was open world from the conception stage, than it wasn't one.

Similarly, power creep is when you add power levels which weren't there in the beginning. If you pretty much establish that Freeza is the strongest in the universe, it's fine for Goku to find hundreds of people who can kill Nappa and Vegeta in one attack, but it's a power creep if suddenly there's a handful of enemies who can kill Freeza in one attack coming out of nowhere (and it would also be a scope creep if Freeza was originally the last boss).

 

[Pancracio17]

"Scope creep" is when you increase the scope beyond what was defined when you started.

It can be small things like: "make a short dialog about being lonely for this NPC" and later "add an extra line about being scary". Or it can be something big like turning a non-open-world game into one mid dev.

If, for example, Sword and Shield was originally meant to be random encounters only but Let's Go response made them change that, it was a scope creep. If SV was open world from the conception stage, than it wasn't one.

Similarly, power creep is when you add power levels which weren't there in the beginning. If you pretty much establish that Freeza is the strongest in the universe, it's fine for Goku to find hundreds of people who can kill Nappa and Vegeta in one attack, but it's a power creep if suddenly there's a handful of enemies who can kill Freeza in one attack coming out of nowhere (and it would also be a scope creep if Freeza was originally the last boss).

You are correct, it is just my opinion that scope creep in the Pokemon franchise has manifested in its open world. Scarlet and Violet have tried to one up Sword and Shields wild area by being fully open world, which themselves had the wild area as way to be more open than ever before.

In your example, maybe if you add dialogue for one NPC, players will expect other NPCs to have the same level of care. Maybe that will carry over to the sequel.

 

[tentacle-tropes]

You are correct, it is just my opinion thaf scope creep in the Pokemon franchise has manisfested in its open world. Scarlet and Violet have tried to one up Sword and Shields wild area by being fully open world, which themselves had the wild area as way to be more open than ever before.

In you example, maybe if you add dialogue for one NPC, players will expect other NPCs to have the same level of care. Maybe that will carry over to the sequel.

I don’t think scope creep is the issue here with Pokémon. Given what we have seen from GF they cut things if they can’t get to them. It would be on the bottom list of things needing to be addressed.

 

[Pancracio17]

I don’t think scope creep is the issue here with Pokémon. Given what we have seen from GF they cut things if they can’t get to them. It would be on the bottom list of things needing to be addressed.

I mean yeah. In Scarlet and Violet its very clear they drew a line that they wouldnt spend any more on the game and I respect that. All im saying is Nintendo is not completely avoiding scope creep. You can see it.

 

[Luke88]

You are correct, it is just my opinion thaf scope creep in the Pokemon franchise has manisfested in its open world. Scarlet and Violet have tried to one up Sword and Shields wild area by being fully open world, which themselves had the wild area as way to be more open than ever before.

In you example, maybe if you add dialogue for one NPC, players will expect other NPCs to have the same level of care. Maybe that will carry over to the sequel.

I'd argue the scope creep for Pokémon manifested ever since X/Y. I always say that X/Y get too much flack given how it's the last game to feature proper caves/dungeons with complexity/good level design to them compared to Sun/Moon, but X/Y still shows a sharp turn for simplicity in comparison to B/W, imho because the overwhelming ammount of elements that required 3D modelling forced their hand into simplifying other elements of the game, I'd argue the smaller number of pokémon introduced in Gen 6 is also a testament to that, and we also have proper interviews where they disclosed for the first time how challenging it was to turn all the previously sprite-based Pokémon into 3D models.

 

[Terrell]

Highlighted part of RennanNT's post.

Lagging behind on tech compared to your competitors makes game development cheaper for you than your competitors at that moment in time, but when you look at things really long-term, the question is: was creating Wii games with graphical prowess similar to the PS2/Xbox/NGC cheaper for Nintendo than developing PS2/Xbox/NGC games of similar direction and scope was for those devs? And similarly, was creating Wii U or NSW games with graphical prowess similar to late PS3/360 games actually cheaper for Nintendo than developing PS3/360 titles of similar direction and scope?

Because if the answer is no, i.e. it's not cheaper than developing similar games for those other devices with similar specs, then it's simply a stay of execution before it hits Nintendo at some point too, as long as they keep increasing the specs of their successive console generations.

But it's not even just about technical lag. Forgive the comparison, everyone, but... the work that goes into creating a comic book is not the same work that goes into a series of Renaissance frescos. Nintendo makes really great (sometimes stunning) "comic books" that people enjoy, but it's a different artistic treatment with a different and less intensive skillset, both in terms of time and resources. You're far more likely to hit a cap in that style of expression that's lower than the cost of commissioning a "fresco"; the pinnacle of technical proficiency in a less realism-demanding artistic style or oeuvre will always inherently be cheaper and less time-consuming to produce than the alternative. Sometimes by a lot.

Warner Bros talked about how they want to do more GaaS today, and I cant help but think the reasoning is a bit shortsighted?



If im understanding correctly, theyd rather spread out the revenue a game a like HL gets by instead doing a GaaS game. But isnt this looking for trouble? They just had a big success in their SP efforts and a big failure in their GaaS efforts. If theyre looking to get into GaaS just so they can smooth out the charts and spread out their revenue I would be just plain confused.

WB Games has been allegedly trotted out for sale a few times already, the issue is that WB is trying to sell without the gaming IP and the majority of their success is tied up in WB's film IPs (the wizard IP, DC, etc.) So in lieu of that, they don't want to keep taking 5 years in between projects to get money, they want something that they can get recurrent money from so long as they keep re-investing in it.

That honestly might explain this big GaaS push. Not just the huge money made, but the consistent money made iterating on a project where a lot of the major work is already done and you can just graft onto it to keep it rolling.

 

[tentacle-tropes]

I mean yeah. In Scarlet and Violet its very clear they drew a line that they wouldnt spend any more on the game and I respect that. All im saying is Nintendo is not completely avoiding scope creep. You can see it.

Don’t think anyone was arguing they weren’t being affected just the degree. Of which I don’t think Pokémon is a particularly good example since they have other pressing issues that need addressing.

 

[Spork4000]

I think we greatly underestimate the used console’s market effect. Lower income/budget conscious households buy consoles second hand when the gen rolls over. I’ve know plenty of people who were always a gen behind because they just got consoles when they were super cheap used or a friend gave them one due to that friend upgrading.

 

[duvjones]

I think we greatly underestimate the used console’s market effect. Lower income/budget conscious households buy consoles second hand when the gen rolls over. I’ve know plenty of people who were always a gen behind because they just got consoles when they were super cheap used or a friend gave them one due to that friend upgrading.

Maybe, but I always looked at the used market as a pretty big sign that consumers are very cost sensitive. The fact that it was so big is more of a sign of where the consumers were and still are.

"599 USD" is still something of a meme in these circles for a reason.

 

[tentacle-tropes]

How former PlayStation boss views gaming’s tumultuous time | Shawn Layden interview

Are you looking to showcase your brand in front of the gaming industry’s top leaders? Learn more about GamesBeat Summit sponsorship opportunities here. Shawn Layden used to run Sony Interactive Entertainment’s Worldwide Studios, a position that gave him unique insight into the whole industry...

venturebeat.com

Absolutely. When your costs for a game exceed $200 million, exclusivity is your Achilles' heel. It reduces your addressable market. Particularly when you're in the world of live service gaming or free-to-play. Another platform is just another way of opening the funnel, getting more people in. In a free-to-play world, as we know, 95% percent of those people will never spend a nickel. The business is all about conversion. You have to improve your odds by cracking the funnel open. Helldivers 2 has shown that for PlayStation, coming out on PC at the same time. Again, you get that funnel wider. You get more people in.
For single-player games it's not the same exigency. But if you're spending $250 million, you want to be able to sell it to as many people as possible, even if it's just 10% more. The global installed base for consoles–if you go back to the PS1 and everything else stacked up there, wherever in time you look at it, the cumulative consoles out there never gets over 250 million. It just doesn't.

Chunky interview so lots to sift through

 

[Terrell]

How former PlayStation boss views gaming’s tumultuous time | Shawn Layden interview

Are you looking to showcase your brand in front of the gaming industry’s top leaders? Learn more about GamesBeat Summit sponsorship opportunities here. Shawn Layden used to run Sony Interactive Entertainment’s Worldwide Studios, a position that gave him unique insight into the whole industry...

venturebeat.com

Chunky interview so lots to sift through

A lot of “blockchain this blockchain that”, but you can tease out the good bits in the latter section:

The demise of the industry has been predicted so many times in the last 20 years that it’s almost a joke. We’re fine. I don’t want to sound like a broken record, because I’ve been saying this for five years, but it’s the rising cost of development. That’s the existential threat. It’s not “live service gaming is tricky” or anything else. When we’re in the $250-300 million to make a game world…

I’m giving a talk about this tomorrow at Stanford. Gaming is reaching its cathedral moment. There was a world hundreds of years ago where they built cathedrals, massive edifices to God, throughout Europe and around the world. Eventually, indentured labor only takes you so far. Then it stopped. It became prohibitively time-consuming and expensive. They were wonderful and beautiful. You can look at any of them across Europe and think, “That’s a marvel.” But we don’t make them anymore. We don’t make them because the math doesn’t work. If you have four walls and a roof, you can call it a church, and God will come visit. You don’t need the cathedral anymore.

I’m afraid that we’ve bought into the triple-A, 80 hours of gameplay, 50 gigabytes of game, and if we can’t reach that then we can’t do anything. I’m hoping for a return of double-A gaming. I’m all for that.

Granted, I’m an old man. We have our own nostalgia. But I look back at the PS2 era, and there was so much variety. You had God of War and Assassin’s Creed. But you also had Loco Roco and SingStar and Dance Dance Revolution. You had this entire spectrum of entertainment opportunities. At $7-12 million a throw, why not make a bet and see what happens? Katamari Damacy, for Christ’s sake, you couldn’t get that built today because you can’t even explain what it is. But now, when every bet is triple-digit millions, risk tolerance is super low. You end up with copycats and sequels and not much more.

He suggests a change in mindset. And the “cathedral moment” imagery is great, and similar to other imagery previously used by Yahtzee Croshaw, where he likened the current moment in gaming to the era of the expensive spectacle of Hollywood epics like Cleopatra and Ben-Hur. And then there’s my “comic book vs. Renaissance fresco” comparison above that I use to detail how artistic direction plays a role in this.

 

[Quinton]

A lot of “blockchain this blockchain that”, but you can tease out the good bits in the latter section:



He suggests a change in mindset. And the “cathedral moment” imagery is great, and similar to other imagery previously used by Yahtzee Croshaw, where he likened the current moment in gaming to the era of the expensive spectacle of Hollywood epics like Cleopatra and Ben-Hur. And then there’s my “comic book vs. Renaissance fresco” comparison above that I use to detail how artistic direction plays a role in this.

Yeah, I didn’t love the framing for much of this interview - which only made me all the more impressed, then, when Layden put out some real damn hard-hitting answers. Terrific stuff, that “cathedral moment” quote.

 

[Nokia]

How former PlayStation boss views gaming’s tumultuous time | Shawn Layden interview

Are you looking to showcase your brand in front of the gaming industry’s top leaders? Learn more about GamesBeat Summit sponsorship opportunities here. Shawn Layden used to run Sony Interactive Entertainment’s Worldwide Studios, a position that gave him unique insight into the whole industry...

venturebeat.com

Chunky interview so lots to sift through

That Palworld section at the end from the interviewer is pretty funny considering how it's died down massively compared to it's launch month.