Is AAA game development a sustainable business model?

Tomb Raider

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We're a third of the way through 2013 already – can you believe it? - and already we've seen some huge console and PC game releases. Whether you're talking Bioshock Infinite, Gears of War: Judgement or the Tomb Raider reboot, millions and millions of copies of big, expensive to develop AAA games have been sold. But despite this, targets are being missed and development money isn't quite being scraped back, even with good reviews and good sales.

Tomb Raider is a great example of this, as despite selling 3.4 million copies in its first week of release, garnering a slew of surprisingly – considering previous entries in the series – good reviews and praise from the gaming community as a whole for the new gritty reboot, publisher Square Enix recently announced that the game missed its sales targets.

To put it into context, Bioshock Infinite didn't sell as many copies as Tomb Raider did, but Lara still didn't move enough units. This comes at a bad time for Square as well, as it's just announced big profit drops due to expensive internal restructuring – and no doubt game development.

This begs the question, is AAA game development really that sustainable in 2013?

Well it must be in some senses, because if you look at any top sellers chart for the PC and Xbox, Elder Scrolls V: Skyrim can still be found on it – albeit at the lower end – despite being well over a year old. It also sold over seven million copies in its first week of sales, half of those on launch day.

So it's not a case that big games like Tomb Raider can't sell units, it's just that the ones that are able to get into the crazy figures are perhaps ones with hardcore fans that are ready to jump aboard, as well as all the new buyers. This would certainly explain why games like Fifa and Call of Duty do well, year on year, despite not changing up the formula.

But of course Tomb Raider isn't the only AAA game that's struggled to make its money back recently. God of War sales are down on its previous version, likewise with Gears of War: Judgement, which sold 400% less copies than Gears of War 3.

Perhaps what's happening, is that like summer movie blockbusters, not everyone is seeing everything any more. Everyone saw Avatar when it was released, but you don't see the same kinds of numbers for other big budget movies. Perhaps there's only so many AAA gaming experiences people are interested in having each year?

This is what's being suggested by the head of Ubisoft Toronto, Jade Raymond who believes that the maximum number of AAA games that can be successful in one calendar year is 10.

However, she mentions payment models as part of it, saying that those 10 should be able to survive on the standard, “pay everything up front,” payment model. Others, would need to look elsewhere.

Perhaps she has a point too, when games like League of Legends are the most played in the world and free to play and social games drum up way more numbers than any AAA experience could hope to achieve, perhaps the gaming industry just isn't capable of sustaining blockbuster games like it used to. Or maybe there's just too many companies trying to cash in on the idea of a super game.

With a free to play game, you have a business model that immediately attracts more customers and as long as you keep the micro-transactions aesthetic and not something that will break the game, you have a far better chance of being moderately successful than putting all your eggs in one basket. Just look at Sim City. That launch was a complete mess and it cost EA and Maxis huge numbers of buyers and therefore cash returns on their investment.

Just as the way we consume movies and music through services like Netflix and Spotify are changing, the games industry is also evolving. Through the growth in indie games – just look at the awards list of any recent games show, its all indie – the giant markets of social networking gamers and the way competitive gaming is growing into a true phenomenon video games, the industry is changing and developers need to take note.

Some are however, with 2K games publication of Bioshock Infinite, it not only did a giant marketing campaign for a game that has been in development for many years, but it also hedged its bets by making money elsewhere. 2K has given away hundreds and hundreds of copies of the game with graphics cards from AMD and with website promotions with certain companies. No doubt it made a little kickback from AMD there and it increased exposure for the title. Tomb Raider's publisher did the same, but perhaps with less effect.

Here's a good test to see how sustainable the AAA industry is. How many big budget games have you guys bought in the last year? For me, it's maybe one or two, that's it.

What about the rest of you?

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Comments

Greed and mismanagement

What a load of garbage these guys are spilling. Even though it sold better than Bioshock and Dead Space 3 , it still missed our entirely unrealistic sales targets, and will not be enough....And probably will never be enough, because how could you possibly satisfy a money hungry whore. "big profit drops due to expensive internal restructuring" ? Who's fk'n fault is that? Sounds like the people who manage finances at square enix are going to run it right into the ground. I don't think I would invest in that company any time soon.

Losing North

I installed Master of Orion II a month ago for a twelve year old kid, he loved it and said that the graphics are great having seen a lot of current 3d games. Thats a strategy lover playing what PC is mostly all about, and a boy with good taste when it comes to art. Rework Master of Orion II with updated high resolution 2D, more options and a lot of random stuff going about every turn and make it for PC and mobiles devices with cross platform multiplayer and people will love it untill the end of times and buy it, of course. Its not about the graphics, you dont need to spend millions of dollars on a 40 man team drawing pixels. Look at EA, at least they know their deal being so big and paying so little. Bioshock is not huge, you just got hyped, they pushed you into the wagon. Gears, neither. Nor Tomb Raider, it always made most of its money on consoles, the same as Gears and the same as Bioshock. More so, if you consider all of these games triple A titles, you are out of your mind and have lost your North. Dead serious. Blame marketing and rhetoric. Im sure it will make some feel better. Good reviews mean nothing, more so for PC games. The people that read magazines, or online pages. They want to know what a new game is about, the things you can do in them and stuff like that. They dont care about scores and can deal with bugs, the rest is for children or mindless fools, which most PC players arent. The only thing that matters are a few pictures and facts about the games, not some general opinion of who knows who with a flawed system to measure something. No science there pal. Games with good reviews and without sales, always has been present, games with med-reviews and decent or good or bad sales, always has been. Games with bad reviews and decent sales and etc, happens as well. You do the math. You want to know of a Super Game that didnt cost a 100 million to make that nobody played? Outcast. It had everything, the music, the gameplay, the graphics, even state of the art AI and much more. That was a AAA title, in every sense. Do you really believe a word from them talking about sale targets? For all I know they could be dilusional. There is something called logistics. A story, a man arrives at his house and says to his spouse: Hey, I won 100 dollars with the coin machine. The spouse says: and how much did you spend? He answers: 150! To win with the least amount of resources is a glorious victory. Total carnage is for idiots who will eventually perish. Read Sun Tzu and tell the same to marketing divisions and alike. The test? Its not good and I will tell you why, because in reality, there are very few AAA games with original and fun content, each within their own trades. The rest is just hype with warp9000. I play strategy and the only AAA titles I have bought in the last years is SUPCOM and Shogun II Total War. Why? Because they are awesome strategy games and nothing else. Of course, I also consider Europa The Guild 1 and 2 to be awesome strategy games, and they didnt even cost half of what Shogun did. You can consider them AAA titles as well, or MOO2 for that matter... And please, stop saying indie, they just slapped that word in your face.

The only big-budget games I

The only big-budget games I've bought in the last four years (at full-price, not on sale) were Deus Ex 3, Dishonored and Bioshock Infinite, the former two of which I pre-ordered because I wanted to give the developers the most support I could. I find myself buying more indie or older games I never played now, which has been a nice change of pace. I only bought Bioshock because everyone I know was raving about how good it was - the ending was amazing, but the rest of the game was incredibly bland (especially considering that all of the amazing scenes and concepts shown in the trailers leading up to release were nowhere to be found in the final game).

omg

ARE people REALLY that thick its obvious why things are slowing down its called END OF GENERATION!! people are not impressed with gears of war any more its not like there any better anyway not 50 pounds better thats for sure

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