Why should a company be running on such razor thin margins that one game that missed expectations (not bombed, just sold less than projected) should cause a panic that pulls resources away from smaller titles? Think about it. That's like if a new Star Wars movie grosses less than expected, Disney cancels the next kid's animated movie. You don't see that because Disney is a healthy company with a healthy customer base. That is the kind of behavior you see when a company is starting to see a cash crunch. That's turnaround management territory behavior.
The issue here is you're acting like this is new, Activision has been doing the rug pull on studios and other games for COD for years. Since at least MW3, and started being more aggressive about layoffs and shutting teams down and stalling projects that were already in development around Ghosts almost 20 years ago. Yet in both those instances they were a "healthy" company by most metrics, and were gaining on EA to replace them as biggest third party publisher, and did, while they were killing DJ/Band/Guitar hero and Skylanders into the ground.
I think the issue with COD, is that it is incredibly huge in the console space and pretty good on the PC too, which combined makes it one of the best selling franchise of all time, and the most successful yearly franchise of ANY entertainment media outside of games, and is likely to be (if it doesn't stop selling) in another 5 or 10 years on track to be the best selling game franchise of all time, that's how big it is, that's excluding the spin-offs and other releases just main entries. Activision since MW2 has never had any comparable success even if you cut the yearly releases since MW2 in half.
COD sold under expectations but still sold more than most other games and made a lot of money moving millions and millions of units with an incompetent team behind several entries, something Halo could never do and has suffered greatly for it, or Battlefield, or any other large FPS franchise.
Doesn't the fact that the publishers are afraid to let go of the PS4/XBone user base and go all-in on the PS5/XSeries user base 2 years in imply that something is wrong? Like the publishers are Wile E. Coyote looking down and seeing that the costs of developing for PS5/XSeries exclusively make them one bomb away from failure. Todd Howard said exactly that when talking about Bethesda selling to Microsoft.
As i said previously in the thread the costs are not sustainable. however the biggest issue isn't so much cross-gen is still going on, as that happened before with DC/ps2 and 360/ps3, but more so there is a great LACK of new hardware specific games being made for the new consoles (or even being made first on next gen and then scaled down, instead old gen games are being scaled up) and one big factor for why this is is because devs are hesitant.
They are waiting for the new engines, or are making next gen games in already existing new engines that arrived later than usual.
Because consoles are not really being made to lower dev costs or to provide much beyond a basic environment for development, only a few companies, many of which are on financing, are producing engines for devs to use or making proprietary engines to take advantage of the new hardware. You will also notice even on PC, there has been a lack of truly improved gaming experiences despite the wider availability of better specs. Development has become this much of a burden that devs have no choice but to
wait unless they want to upscale their games for next gen knowing that it won't show off a clear difference in hardware leading to gamer complaints and bad review scores.
We are no longer in a situation where you can have many games like Gears of War, Project Gotham, Motorstorm, or Uncharted 1 within 2 years from launch showing early on that the new consoles are a necessity, there's not 20 soul caliburs, Tekken tag teams, Halo 1's, or Splinter cells to buy for the Series and PS5, there are maybe combined, a handful this gen so far.
What's worse that that handful unlike in gens past, isn't showing you something that's undeniably impressive to what came before, while making it obvious things will improve overtime, giving you a reason to invest short and long term on these consoles, especially for developers. But instead, we are seeing games that indicate to the average console owner that we are already reaching a ceiling on these new consoles and compromises
already have to be made (performance mode on new consoles in the FIRST year of the new gen? Really?).
Most of the old engines can't be refined or improved upon to fix this, and most devs won't make an engine themselves, and even the ones that do will have to refine their engines for years to push the hardware enough to get around what clearly seem so far to be graphical and performance ceilings that usually aren't shown for early games in new generations (NES aside). Usually many of the new games show us an example of what's to come as the new generation continues, these days the new generation shows us that they may already be spend this early, that's how bad the transition has been.
If it wasn't for some devs (not many) taking the PS4 Pro and One X seriously, Series and PS5 games may be in even worse shape than they are now.
The PSeries X audience has also been conditioned to think that anything that is not a grim-dark "realistic" title with lots of cutscenes and voice acting isn't worth the $70 price of admission. That is not sustainable because the costs and time needed to develop those titles have ballooned with the PSeries X. That's why you're seeing consolidation and genres being left to whither, just like during the PS3 business disaster that ballooned development costs back in the late 2000's!
The Xbox side has been better on the variety issue a bit because of gamepass, being a bit less of an ass to third parties (Xbox is suddenly getting games no one though they would get form japan) and not buying into, for now, the $70 price tag.
However even so, it's only moderately better, and there are many people who have been indoctrinated into pushing the $70 price tag, to the point where it's used against gamepass because people claim with no evidence gamepass impacts game quality (ignoring games like GT7 and others because it's inconvenient) and that charging more is better for "game quality" yet we went through almost 10 years of many AAA games from any region all barely giving us finished games at $60, with missing content, content locked on the disc until you paid, all the gambling slots loot crates surpise drops trading card nonsense, releasing games that had little to no QA, and forcing the players to beta test so they can release 4 version of the same game at full price, and even missing modes that were advertised.
So I will not touch a game that is $70 because it's an insult to my intelligence and anyone defending it can go jump in a lake of BS.
As for your other point, as i said about AAA unsustainability before, AAA isn't only taking others with them as they start to collapse forcing dev costs across all types of games to go up, but also genre consolidation. the margins are getting insanely thin even with the upper budget level indies with adequate budgets, productions, tools, and graphical prowess.
An arcade racer like Ridge Racer or Rush has very little standing these days unless they can attract a sizable niche or group of loyal fans of these series to buy a game, and that would require these games to not put too much into them. But, if you want to make real profits you do have to risk small margins or a loss, and have to have marketing at a B-movie level at best, but it's too risky.
Could a new rush, outrun, blur, or Ridge racer sell at a goal of 3 million units today? What about 5? the answer is very likely no. Because of this, it would make more sense to make a game that would fall into the same popular categories as what AAA is doing, or you head into games as a service and hope your budget project catches on, but if it gets too popular you will have to sink AAA money into it to maintain it anyway. Those are the choices most devs have to deal with, either hope you can sell a certain amount for a regular release, or hope your GAAS takes off but doesn't become TOO popular so you don't have to increase your investment back into it ti maintain it's popularity, cutting your margins.
Microsoft canned Project Gotham for a reason, it wasn't because it wasn't selling, it was because a couple million units for an arcade racing game without many ways to incentivize the player to spend more money in-game wasn't enough to make the profits needed. The PGR games had a big budget and were getting grander, that had to stop. Forza was releasing every 2 years selling 2-3 million copies and getting people to buy accessories, it was more valuable, and it was part of a niche market (at that point) of racing sims, so it had long term viability without fear of competition interfering with revenue especially as a 360 exclusive. Once the Forza brand was established, they made a spin-off Forza to take the place that used to be held by PGR. Sega stopped Outrun after the two modern games (both exclusive to Xbox/360 I believe, maybe one was also on the PS2) because they weren't even selling 1 million units. It's why you saw entries for several franchises across genres take 4-5 years to come out because there were issues greenlighting sequels. You have the Yakuza team at Sega making a
Gears of War clone for a reason. The idea was that Sega hoped that game would click (it didn't) even adding headset support for voice commands because they were following where the money was.
This was two gens ago when these events were happening, we are now at the tipping point.
It already is correcting itself harshly:
Sony Plans to Launch 10 PS5, PS4 Live Service Games by March 2026 | Push Square
If you like GAAS's, you're getting GAAS's! If you don't, well, you need to find a PC or Switch to get access to other non-GAAS video game software. AAA isn't going to give you much of anything else anymore. It's the premise of this entire thread: make more and more money from a slowly decreasing customer pool.
Edit - Here is yet another example of SIE going all-in on looter shooter GAAS's:
Bungie Set to Revive the Marathon Series In A New Way - Insider Gaming (insider-gaming.com)
They're reviving an classic FPS IP from the 1990's as yet another GAAS looter shooter. This is despite the fact that the three Marathon games on the Macintosh were linear old-school FPS's with story elements told through text at in-game computer terminals. Marathon's feel was inherently about being isolated, whether due to not knowing who to trust (AI's gone crazy, aliens manufacturing hostile fake human robots) or exploring an abandoned place. It was never about teams getting loot. But, SIE wants GAAS's so you'll get GAAS's and like it! (while also defacing a beloved IP from my teenage years)
Wouldn't say that yet, there are still devs who aren't moving on the GAAS model or are limiting it. Even Microsoft isn't going all in on it like Sony is despite "gaming journalists" acting as if they are. It just failed with their biggest franchise, and Microsoft has found success with some medium and large non-GASS games with either partnerships or through gamepass.
I would argue gamepass may actually keep Microsoft from going all in on GAAS and is a blessing (for them) in disguise, it may be an outlet where more non AAA games, even from sizable devs, will flourish. Many devs that aren't just small studios or lower have given credit to gamepass for engagement and revenue percentages elevating, and that ironically may help reduce the impact when this unsustainability hits its head.
Sony however is in a panic about what's going to happen in the long term, to the point in less than 3 years they turned back on several of their positions, have new strategies of releasing games on PC and mobile, and going all in on GAAS, $70 games, and have no plans to drop the price of the PS5. In fact, they just recently raised the price in several countries. Even Switch isn't dropping the price. Xbox however currently seems to be testing for an official drop, at least in select countries, for the Series consoles.
