Some AAA games are massively profitable. If you want to see which ones weren’t, look at the studios that got shut down or went through massive layoffs in the past few years. But if they’re not selling that many copies at $60, the thought that seemingly never crosses their minds is to stop spending $200M on a single project that’s make or break for the studio.
It’s true, there are outliers like that. But if you’re looking at shutdown studios or massive layoffs at random, it’s going to generally be because the game they made lost money. In Hi-Fi Rush’s case, to the best anyone can tell, it’s because Satya Nadella changed the direction of Microsoft at a time when Tango Gameworks was starting a new project, which means there’s the least sunk costs on a project that was going to be several years away from returning a profit.
Back of the napkin math on a number of them says that a number of them probably took a bath on what was put into them. I get the cynicism, and in many cases you’re right, but it’s been a bad time for video games lately. An industry-wide number of how many billions of dollars video games make is almost entirely coming from only a handful of games like Call of Duty and Fortnite. Games like Star Wars Outlaws and Forspoken probably did lose a ton of money. Games like Concord, Avengers, and Suicide Squad lost so much money that it was impossible to not notice it, and they were each to the tune of hundreds of millions of dollars. There are a lot of games out there, and the dollars tend to flow to very few of them, relatively speaking. But I’d still argue the solution is to cut costs, not increase prices.
But I’d still argue the solution is to cut costs, not increase prices.
This is the solution moving forward and is probably what most studios are doing right now (see: publishers shelving low-profit studios, massive layoffs, etc.), but the issue is that the games launching right now with $70-100 price tags have been in development for years. Their budgets were written under contract during the boom a few years ago, they can’t just “unspend” that money, but at the same time, they’re probably seeing that gamers are being a lot tighter with their wallets these days.
I’m obviously never one to praise higher prices for the same thing, but I at least get why major releases are feeling justified to charge a higher door fee for the base game than to gamble on the freemium market (See: Concord).
That boom also just led to a market with way more games in it every year. With more supply and less demand, you can’t spend as much making the game and expect to be a success unless you’ve got a sure thing. So the higher prices will only be afforded by the games that would have been a success charging less than $70.
Some AAA games are massively profitable. If you want to see which ones weren’t, look at the studios that got shut down or went through massive layoffs in the past few years. But if they’re not selling that many copies at $60, the thought that seemingly never crosses their minds is to stop spending $200M on a single project that’s make or break for the studio.
Shit the hi fi rush team got laid off. Success doesn’t guarantee shit.
It’s true, there are outliers like that. But if you’re looking at shutdown studios or massive layoffs at random, it’s going to generally be because the game they made lost money. In Hi-Fi Rush’s case, to the best anyone can tell, it’s because Satya Nadella changed the direction of Microsoft at a time when Tango Gameworks was starting a new project, which means there’s the least sunk costs on a project that was going to be several years away from returning a profit.
They were probably on slightly profitable. Or, Money forbid, only breaking even.
Back of the napkin math on a number of them says that a number of them probably took a bath on what was put into them. I get the cynicism, and in many cases you’re right, but it’s been a bad time for video games lately. An industry-wide number of how many billions of dollars video games make is almost entirely coming from only a handful of games like Call of Duty and Fortnite. Games like Star Wars Outlaws and Forspoken probably did lose a ton of money. Games like Concord, Avengers, and Suicide Squad lost so much money that it was impossible to not notice it, and they were each to the tune of hundreds of millions of dollars. There are a lot of games out there, and the dollars tend to flow to very few of them, relatively speaking. But I’d still argue the solution is to cut costs, not increase prices.
This is the solution moving forward and is probably what most studios are doing right now (see: publishers shelving low-profit studios, massive layoffs, etc.), but the issue is that the games launching right now with $70-100 price tags have been in development for years. Their budgets were written under contract during the boom a few years ago, they can’t just “unspend” that money, but at the same time, they’re probably seeing that gamers are being a lot tighter with their wallets these days.
I’m obviously never one to praise higher prices for the same thing, but I at least get why major releases are feeling justified to charge a higher door fee for the base game than to gamble on the freemium market (See: Concord).
That boom also just led to a market with way more games in it every year. With more supply and less demand, you can’t spend as much making the game and expect to be a success unless you’ve got a sure thing. So the higher prices will only be afforded by the games that would have been a success charging less than $70.