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

Take-Two bought Kerbal Space Program.
They gave the project to a new studio who did not work on first game or any other similar project.
They announced a sequel with a massive-scoped plan in terms of new features (multiplayer, high fidelity graphics, more/bigger parts).
The game was delayed multiple times.
The game switched to early access launch.
The launch was HORRID with a state that was a bugged and feature/empty as basically the beta version of the original game.
The pace of the fix and content updates was slower than announced.
They killed the studio before the game is even close to being "1.0 ready".


Well done Take-Two, marvelous planning and management in full display here.
Oh by the way they also confirmed lay-offs at Private Division.
I would not be shocked if they are next, it's fundamentally the parent entity of the 2 studio they shut down.

I take back what I said earlier, I did not know about this background.
 
So I guess so far only Microsoft with T2B and Sega with Relic allowed those studios to leave rather than shutter them down? Also I guess Embracer too (with Saber).
 
Take-Two bought Kerbal Space Program.
They gave the project to a new studio who did not work on first game or any other similar project.
They announced a sequel with a massive-scoped plan in terms of new features (multiplayer, high fidelity graphics, more/bigger parts).
The game was delayed multiple times.
The game switched to early access launch.
The launch was HORRID with a state that was a bugged and feature/empty as basically the beta version of the original game.
The pace of the fix and content updates was slower than announced.
They killed the studio before the game is even close to being "1.0 ready".


Well done Take-Two, marvelous planning and management in full display here.
Oh by the way they also confirmed lay-offs at Private Division.
I would not be shocked if they are next, it's fundamentally the parent entity of the 2 studio they shut down.
Unfortunately you were right

http://GamesIndustry.biz has heard that, in addition to reported closures of Roll7 and Intercept Games, the "vast majority" of Private Division staff in Seattle, New York, Las Vegas and Munich are being laid off
 
Do you think the C suite will take action to remove the prediction managers who continue to ignore Nintendo? We saw it at Sega yet nothing has changed. Square just promoted the guys who presided over the IP’s decline.
I‘d argue they don’t have to. As I have to remind people, the C-suite are the ones who write management’s cheques, so if the C-suite is unhappy, they can force their hand at any given moment and all those managers can do about it is swallow their pride or take a walk. It likely won’t be as dramatic as Nagoshi, but that was a special case because he was part of the C-suite himself and the rest of them lanced him like a boil.

The thing that will most motivate those decisions by the C-suite will be the technology teams. While there is some overlap between devs and the technology teams, they are typically separate units.

Typically, these tech teams work with a hardware team at a platform holder (like Nintendo’s Platform Technology Development team, as one example, usually through a liaison in the business/developer relations team), starting as early as is feasible. Once a technical spec outline is available, the platform holder’s tech team sends that spec (under the strictest NDA, usually along with a hardware emulator, a rudimentary facsimile of the tech using physically modified off-the-shelf parts or both) for them to test their software development tech against it. This for sure happened with Capcom and Switch, as early as late 2014, they went to a Game Creators Conference panel together in 2017 and said as much. Seriously, most news outlets only took the news about the RAM bump Capcom requested from this panel, but the insights into the beginning days of new hardware with 3rd-parties is too instructive to not read it in full. This is the start of what they referred to as the new hardware verification process.

Now obviously, in the case of hardware like PS5 or XBS, new hardware verification is more about how far they can push this new hardware beyond current limits to plan for new development tools, and programming to account for differences in the current development environment. With something like Switch, the latter is still a consideration, but the testing is first and foremost about full compatibility with existing tools. Additionally, RE Engine was just starting to take shape, which is what the origin of the RAM bump was about; Capcom felt that more RAM was required to meet the minimum spec for even standard compatibility with RE Engine (albeit not all of its technical features) and Nintendo obliged. In addition, when making final confirmations on final CPU/GPU clocks, Capcom provided Nintendo in-development game builds to optimize around; this is apparently now standard practice for Nintendo.

This info is provided in pursuit of the reason why this team is so instrumental in getting developers on board, because these new hardware verifications are how the C-suite and developers are informed about what the hardware is capable of, costs associated with straining past its limitations, etc. That means this process is how preliminary budgetary planning is outlined for projects, as well as what in their current pipeline can be released at all. While technical capability is info given to the devs and managers, the cost estimates are usually given to the C-suite to decide their R&D budgeting with management. So platform holders making a solid positive first impression with preliminary hardware spec has a lot of impact on the outcome of software released on a platform in the first few years and, if it was found to be lacking for certain projects in the pipeline, will potentially diminish future support because of estimated exorbitant costs of down-porting that may not be as accurate due to changes in final hardware performance.

But there’s also a piece of responsibility that 3rd-parties have to own. At that panel, Capcom talked about asking to include native support for HLSL shaders and the Nintendo rep said Capcom was one of the only devs to ask for that, then asked for a show of hands from developers in the crowd who wanted that to then basically chastise them. To paraphrase, he said "don't be polite and take the hardware as-is, if a simple need like that isn't met, just tell us plainly and we will try to make it happen within an acceptable hardware cost." That outlines that developers were so used to just not asking for more and leads me to believe that Nintendo realized that with devs saying how insufficient their hardware was in public after the fact, they weren't getting good feedback in this new hardware verification process. Perhaps, with the upcoming hardware cycle, devs will get more of what they need to make their games happen on new hardware a lot more smoothly.

(this is the TL; DR part) All of this is to say that, if Nintendo presents hardware that impresses the technology teams at publishers well enough and they take and implement feedback swiftly, that will have a lot more to do with a change in attitude at publishers compared to the last time around, as it will likely deflate expected down-port cost estimations and generally leave a more favourable impression right off the hop that motivates more projects hitting the platform overall. Combine that with an expectation of a repeat in hardware sales success and it will highly motivate the C-suite to over-ride some of the objections to producing marquee software on the platform.
 

  1. The quality of game doesn’t really matter. A studio can have a quality game sell like hotcakes yet still be seen as a risk. While there is risk in live-service games their benefit analysis makes them less so.
  2. Companies are now focused on user’s time with the platform. If a user invests a lot of time on a platform the more likely they’ll get pushed ads, have their info sold, & spend.
  3. The indie space isn’t that much better just less reported on. Indies are increasingly struggling for publishing or funding due to being more risky (at odds with what bigger studios want such as monetization). And there are more stakes involved since they’ll default to studio closure &/or not even release the game.

Big games will be the exception & not the rule. Companies like Nintendo is where you’ll be to get them. Meanwhile everyone else will focus on live-service game hamster wheel; as even if there are multiple flops, it is still viewed as less risky then single player games. If the company folds move onto the next one gambling for success.
This time nothing to do with layoffs or closures. But an interesting video based upon the trends we are seeing today.

The chase for large AAA games has broke the wheel; now the wheel is trying to be scotch taped with things like generative AI trying to reduce costs.
 

Across the board, big game companies are talking about rising development costs--Microsoft, Square, Sega all in the past week--and many signaling they will release fewer but bigger games(Hope they have enough developers left to make them
I get why they put Nintendo in here but don’t necessarily agree about lumping them in with SE & MS. Given this has been something have been talking about over the last couple of years, even with Iwata. Sounds like they have been warning about this. Meanwhile SE, MS, et al are diving headfirst into this situation.
 


I get why they put Nintendo in here but don’t necessarily agree about lumping them in with SE & MS. Given this has been something have been talking about over the last couple of years, even with Iwata. Sounds like they have been warning about this. Meanwhile SE, MS, et al are diving headfirst into this situation.

I agree, especially since Nintendo is planning a major expansion of their development studios to be completed in 2027. This year has been a slow one for Nintendo software so far, but that is likely just due to the Switch successor launching next year. They've been pretty good about their output during the Switch's lifespan.
 
Beyond development times taking longer for everyone across the board, the reduction in Nintendo's output specifically can also be attributed to them only having one active platform (NSW) rather than 2 (3DS + Wii U, NDS + Wii, etc) and the elimination of redundancies that comes with that.
 
I don't really get why every company thinks all of their games have to be huge.

REmake 2 is a big budget game but it's not humongous, while I'm sure it had a very high budget, it probably wasn't on the scale of some other triple A games we've seen, and that was really successful.

One of the mistakes companies are doing is trying to make games with absolutely so much content that you couldn't POSSIBLY stop playing them, right? But if the content is not excellent, then they lose the player to some other content, be it phones, other games, movies, YouTube, etc.

This never stop chase to games that are "infinite" is just not healthy for the industry. There's a lot of space for excellent, more concise experiences that offer a replay loop to players who want to continue the game once they reach the credits.
 
I don't really get why every company thinks all of their games have to be huge.

REmake 2 is a big budget game but it's not humongous, while I'm sure it had a very high budget, it probably wasn't on the scale of some other triple A games we've seen, and that was really successful.

One of the mistakes companies are doing is trying to make games with absolutely so much content that you couldn't POSSIBLY stop playing them, right? But if the content is not excellent, then they lose the player to some other content, be it phones, other games, movies, YouTube, etc.

This never stop chase to games that are "infinite" is just not healthy for the industry. There's a lot of space for excellent, more concise experiences that offer a replay loop to players who want to continue the game once they reach the credits.
For senior leadership, the attraction of a business model where you maintain a single live service team for a single game, and then just plug contracted artists in to create battle pass content, which just indefinitely prints money for years, is too attractive to ignore. Even moreso if there is investor pressure to do so.

Conversely, the type of games e.g. Capcom and Nintendo put out are highly contingent on quality work by staff with decades of experience in the same company where they honed their craft. Obviously these are gigantic sellers but you simply can't replicate this model while practicing the typical model of western AAA publishers, where retention is lower and mobility is higher either by necessity (i.e. you're a contractor and thus not even a permanent employee to be retained) or burnout.

It's funny you mention Resident Evil, since that's a series that has also suffered failed attempts at live service multiplayer titles - and the exact same issues arise there: either outsourced or developed by underresourced B-teams and thus quality suffers and a target audience with expectations of higher quality desert the game (or never even engage). More importantly as far as I'm concerned - they are so limited in their imagination that they hyperfocus on a multiplayer PvP model (probably because of executive/investor demands that they chase trends and make exactly that kind of game) when the obvious solution sits right in their face - a standalone PvE Mercenaries game.
 
For senior leadership, the attraction of a business model where you maintain a single live service team for a single game, and then just plug contracted artists in to create battle pass content, which just indefinitely prints money for years, is too attractive to ignore. Even moreso if there is investor pressure to do so.

Conversely, the type of games e.g. Capcom and Nintendo put out are highly contingent on quality work by staff with decades of experience in the same company where they honed their craft. Obviously these are gigantic sellers but you simply can't replicate this model while practicing the typical model of western AAA publishers, where retention is lower and mobility is higher either by necessity (i.e. you're a contractor and thus not even a permanent employee to be retained) or burnout.

It's funny you mention Resident Evil, since that's a series that has also suffered failed attempts at live service multiplayer titles - and the exact same issues arise there: either outsourced or developed by underresourced B-teams and thus quality suffers and a target audience with expectations of higher quality desert the game (or never even engage). More importantly as far as I'm concerned - they are so limited in their imagination that they hyperfocus on a multiplayer PvP model (probably because of executive/investor demands that they chase trends and make exactly that kind of game) when the obvious solution sits right in their face - a standalone PvE Mercenaries game.

You're definitely right about chasing trends and the recurring theme of execs trying to push for live service games. It's just funny how people who are running a gaming company sometimes just don't see the shortcomings of their views in gaming.

Capcom is a great example of how sometimes deciding to just make great games is the best decision for a company. During the 360 era they were kind of the butt of the joke by trying to chase trends and failing miserably to do so. Are any of their western studios even open still?

Then they decided to do a 180 and just made great Resident Evil games, great Monster Hunter games, sure they inserted elements of live service games but I wouldn't really categorize them as live service. The few times they tried to go back to chasing trends they failed miserably at it, like with that RE live game that came packed with RE3make.

Their strategy has worked and they've been as successful as ever.
 
In February, Sony announced a significant round of layoffsaffecting around 900 staff, or about 8% of its global PlayStation workforce. The layoffs impact a number of PlayStation studios, including Insomniac, Naughty Dog, Guerrilla, and Firesprite, but PlayStation's London studio was hit hardest with a notice of closure.

For over twenty years London Studio has been home to some exceptionally talented and wonderful people in the games industry. As we close the doors, and all go forward to new adventures, we wanted to say a heartfelt thank you, to all our past and present, players and colleagues who have supported us over the years. We’ve had one wild and wonderful journey!
👋
💙
It’s official now. Some suspected they were getting closed from earlier layoffs.
 
Capcom is a great example of how sometimes deciding to just make great games is the best decision for a company. During the 360 era they were kind of the butt of the joke by trying to chase trends and failing miserably to do so. Are any of their western studios even open still?
The lasting scar of Keiji Inafune. While being head of development at the time, Keiji was rather obsessed with the western development process and sought to emulate it. Which he did. Which caught the attention of the C-suite because of the massive burn rate on funds and the depleted resources with every project.
He always had something of a bone to pick with the company, so when it was clear that they were not going to abide by that. He left.

Honestly, given how he tarnished himself latter... this was the best thing to happen to Capcom.
 
Huh I must be misremembering since I swear they were just about of the layoffs. Thanks for the reminder.
There was a big shitstorm on Jim Ryan for visiting the studio and posting photos of him with the people there all smiling and happy and then closing the studio down a couple months later.
 
Back
Top Bottom