6 mins read

One of the things we learned from E3 is that the games industry has an appetite for hyper violence. It’s also going to collapse the entire industry. In business circles, what is going to happen very soon is something that sounds decent enough – “consolidation” – but that’s merely a nice way to dress up the following truth: The industry is about to hit a wall.

Anyone who reads this website regularly knows I have an affinity for business, and this translates into a support for developers and publishers to turn a profit. This isn’t because I’ve been compromised by publisher PR agents being nice to me, or any of those other accusations I typically get slammed with every time I post an opinion piece (usually by people who can’t even string together a coherent, grammatically correct sentence, and yet apparently know more than a career business journalist about business, but that’s a story for another day). No. I’m not biased against consumers. The reality is that a profitable developer – and by extension a profitable publisher – has a direct benefit to the consumer. Conversely, when I write about how used game sales and games being sold at deep discounts are a bad thing, it’s because you’re literally shooting yourselves in the foot. E3 2012 has made this painfully clear. Here’s why:

The reason that E3 is so filled with hyperviolent games is because hyperviolence is a proven way to sell a game. The numbers are there – people buy Call of Duty. People buy Resident Evil. God of War is, along with Uncharted, Sony’s biggest property. It is therefore safe to take one of those games, copy it down to the finest detail, and then package it off to the shelves. Is it creative to be one of those Call of Duty clones? Of course not! Everyone understands that, but they simply don’t have a choice. The games industry is a low margin one, hampered by an audience resistant to premium pricing, a second hand market pulling down the prices of new games quickly, and high production costs. It’s becoming increasingly difficult to be a medium-sized publisher – see THQ – the only way to survive is to be either a tiny team working on mobile platforms, or making big, expensive blockbusters. And those blockbusters are not games the publishers can afford to have fail.

So, when an industry is low margin, it becomes hard to take risks. Or in layman’s terms – you’re not going to greenlight a project if it’s not going to return a profit. The risks involved in developing new IP are substantial (and hats off to Ubisoft for actually doing that), and when you’ve got a stable of reliable franchises that are proven sellers, they’re what you’re going to rely on to keep you afloat.

The problem is that consumers eventually get tired of this. Call of Duty was massively successful, the clones are successful, everyone’s been wading in gore for years now. Judging the reaction of many on twitter over E3 though, people are now thoroughly sick of hyperviolence. The more tired people get with a product, the closer you come to a crash. All it takes is one really high mega-failure for the entire industry to fall to bits. This is what happened to the games industry once before, and that wall is rapidly approaching again. Then it was E.T. Now it might be the next Call of Duty game, or something of similar scale. If any of the mega franchises genuinely fails, it will pull its owner down with it, and the ripples will affect every single other organisation in turn – investors will lose confidence in the market, share prices tumble, and no one is buying the hyperviolent games that everyone relied on previously.

The only way out of this is for the publishers and developers to become genuinely profitable again. Not breaking even, but being profitable. A profitable publisher is one that can invest in developing new IP, taking creative risks, and finding new popular franchises and services. That’s the only way any healthy creative industry can survive.

And then, finally, we might get a bit of relief from this endless supply of hyperviolence.

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  • I'm not really sure I would call the Call of Duty games "hyperviolent", perhaps the Zombie Mode, but I don't think the general storylines or online multiplayer are anymore "hyperviolent" really than GoldenEye 007, Turok, and other FPS games from nearly 20 years ago (see Doom).

    Using THQ as an example of struggling to survive as a publisher/developer, but not addressing bad business decisions by them doesn't really help explain their situation fully.

    Seems to me that the E.T. point is also off, just because there was a lot behind that. It was a pretty bad game, and millions of orders were canceled from suppliers due to Atari changing policies on them before the game released. Overproduction being one big factor as well.
    If anything, a better example would be the Guitar Hero and Rock Band series basically vanishing overnight. Or the Tony Hawk Pro Skater games going away for a few years. Those were blockbuster franchises, hugely successful for both Activision and EA, but then massive sales vanished from one year to the next. Where did they go? Perhaps the rhythm games moved to the "dance" games, since Ubisoft has seen such success with the Just Dance series? Don't know.

    As for, "Is it creative to be one of those Call of Duty clones? Of course not! ". Just because a game uses the FPS formula, doesn't mean that it isn't creative by perhaps adding new weapons, level designs, enemies, and mission structures.

    I guess the question I'm wondering is, what do you consider hyperviolence, and can you provide another example other than Call of Duty and the Resident Evil games…both of which have been around for a long while and with established. Same with God of War since the PS2, Uncharted really only being the new one in the last few years (about to get back into the first Uncharted game actually).Sure, saying the market is becoming flooded with "hyperviolent" games more than any other time is true, but then again, there are more games being produced than any other time that I'm aware of. So, I would think it goes hand-in-hand with that point right now as well.

    I mean, why mention the successful Call of Duty series though, but not games like Elder Scrolls? Is it because you enjoy one over the other? Here are their rating descriptions, "Blood and Gore, Intense Violence, Sexual Themes, Use of Alcohol"  and "Blood and Gore, Drug Reference, Intense Violence, Strong Language".  I'm not really understanding the point.

    Is this just more of a gripe against the FPS/shooting genre?

  • Yeah, I don't think I've thanked Coffee enough for his inputs. He always keeps me on my toes, which makes me a very happy camper 🙂 I love being made to think about stuff, beyond my own (sometimes insane) opinions!

  • "Uncharted, Sony’s biggest property" I would consider Gran Turismo as the biggest property still when considering worldwide appeal and sales. I don't have the latest figures so that might have changed.

    I always thought that bloated budgets and an unsustainable business model (if you have to sell a million copies at the minimum to break even, there's is a problem) would lead to a crash. I mean, already so many devs this gen closed and so many publishers lost so much money. I don't know if neglecting the console with the biggest user base and not building games for that sect mattered or not. All I know is HD-only games for the most part didn't help things financially for most companies.

    Also, I agree the clone mindset of making me-too games doesn't help matters either.

    I never considered hyperviolence and its influence as a reason. Not that I disagree with it; I just never considered it. Nice piece.

    Like I said in my top five article today (I won't link because I don't want to look like some shill), in an industry where gamers only consider more powerful consoles to be next gen and not new features that have never been seen before, I sort of wish for a crash to see the tears of the so-called "gamers." I'm such a heartless boy.

  • I would just like to add something to this article. Of course a company needs to make a profit, without it they will not survive!

    That being said, I think it is very important that the main purpose of a gaming company is not to make a profit, but to make great games. With great games then comes the profits.

    It is exactly this focus on profits that make the gaming industry so empty when it comes to new ideas as it is today. They have forgotten why they do what they do.

    It is a totally different thing to offer, for example, financial services or building a car compared to working in a creative industry, where the people are the assets of the company.

    I see the same thing happening to the big movie studios – just making what sells, instead of making great movies.

    What this leads to is stagnation. However sooner or later it can't hold up anymore to just make mediocre games only looking at the bottom line.

    I agree with the author that the gaming industry is heading for extremely tough times ahead, however for very different reasons. I think the focus on ONLY profits is the culprit here.

    So get your priorities straight game companies! – Great games first – and with that comes the profits.

  • Hi Thomas,

    Thank you for your input! Glad you found our site and took the time to leave a comment 🙂

    You make a good argument, but there is just the one counter I would like to make – the unfortunate reality is that quality doesn't sell. Often it does, but a company can't base a business model on anything but guarantees. There are innumerable examples of really high-quality games, games that do well with the critics on Metacritic, and fan favourites, that have bombed badly.

    The unfortunate reality is that it is the business stuff – the marketing, the focus grouping, and yes, the sterilising of the games that allow a game to sell well.

    This doesn't need to be a bad thing! A company that is profitable is a company that can invest in riskier ideas. And that's when we end up with really awesome games, but those big studios do need the kind of (tragedy) games that we saw at E3 just to stay afloat, let alone take the risk of investing in a truly great game.

  • I read this and I'm like.. what?

    Hyperviolence? League of Legends, one of the most profitable games right now, not "hyperviolent". World of Warcraft, massively profitable over the last almost eight years now, not "hyperviolent".

    In fact, PC gaming in particular has become far less violent. I've been PC gaming since I was in elementary school starting with the old point-and-click adventure games. Back then, IPs like Doom, Wolfenstein, and Quake were all the rage. Yeah, people still like games such as Call of Duty or Medal of Honor, but you're painting with broad strokes.

    In general, gamers have become much more diverse. Just look at the popularity of Portal.

  • "a company can't base a business model on anything but guarantees" – I believe this very same sentence, and the word 'guarantees', to be a utopia not only in the videogame industry, but for media companies as a whole. Especially the 'guarantees' part makes me cringe. ¿Where is creativity then? ¿'Guaranteed' somewhere?

    ¿How can anybody guarantee on anything that's never been done? As the author points out, there have been other, big crisis in the videogame industry, and they all come from bad quality products, in the middle of what seems to be economic bonanza and 'big hits' (the author points out the 1983 crisis, but right before Modern Warfare the market was chock-full of WWII games). The market (read: consumers) become uneducated and lust for more and more of the same experiences all over again; companies think this same experience comes from the same game, thus giving rise to a saturation of the market, where companies wishing to 'fulfill' consumers' 'demands' offer remakes upon remakes of products, disguised in gore and bigger weapons.

    I agree that there's many other things on the table that discourage production of risky videogames (piracy, second hand sales, escalating production costs, although digital sales have cut most of the distribution costs down), but in the end the short-term solution (copying) is going to come down on the whole industry, save small mobile developers and very big companies, the first of which will survive for being so small and the latter, for being so big.

  • Emilio,

    Thanks for the comment – and I agree with pretty much everything you've said there.

    The fundamental problem with the games industry is indeed the fact that it's become too expensive to invest in new content creation – Building a new IP is an expensive process – it's essentially R & D work.

    Because profit margins are so thin for publishers, they simply can't afford that R & D, especially when the sales of a new game franchise are not guaranteed. If it's a good game, then by the second or third you'll see a return, but even the biggest publishers can only afford one or two of those projects going at a time.

    I always like to point to Assassin's Creed as a brilliant example of how new IP generation works – the first game was a relatively modest title – expensive to produce and the returns for it would have been small. Now it's a major franchise all-but guaranteed success.

    In this environment, though, even trying something like Assassin's Creed constituted a big risk that could genuinely put the publisher on death's door – look at THQ. Homefront and uDraw were major reasons it ended up in so much trouble, and both were a genuine attempt and new IP generation.

    Is there an answer? Not one I can come up with, but as long as there's such aggressive pressure put on prices and the escalating budgets of AAA-titles, the risks of new IP generation are just going to become more pronounced.

  • Minecraft is butt-fucking everyone. its amazing how ONE PERSON turned a small project into one of the worlds best/fastest and FUN selling game. its SOO simple yet its sold millions and isnt slowing down it seems.

  • Heres a example of Quality game not selling well, i currently have two examples, first Eternal Darkness for the Gamecube, Extremely High Quality sales not so much only sold 440k copies. second is Beyond Good and Evil only sold 500k copies and thats if you add up PS2 GC and xbox sales so no Quality Games doesnt mean sales. In todays game market Quality is no longer what sells games, The game has to be "cool" and have good graphics, those two things seem to trump all else for some reason.

  • I have to agree, the gaming industry is going to fall, but honestly it is exactly what it needs. As an avid gamer , and a blogger myself, I have noticed the low quality of games lately. It looks like most games these days are looking to turn a quick profit instead of taking the time to make a really great game.

    Over the passed five years the video game quality has gone downhill. Video games no longer provide quality or quantity, they only provide the "boss" getting their buck. Games used to have hours and hours of gameplay, now you are lucky to get a solid ten for your sixty dollar investment. The corporation Blizzard just fired over 800 people from their development team because they didn't deliver a product quick enough. I have to say this type of business in the entertainment industry is bad. Think for a moment what else you will sit down for and spend more than one hour, and also think if you were not entertained for the time you were sitting there, you would feel ripped off and eventually you would stop being interested in that industry altogether.

    We need smaller companies to bring back the "new car smell" games had not more then 15 years ago. If we don't start seeing more of these companies pop up we will see a fall in huge corporations, which in my opinion needs to happen to bring the quality back to the industry.

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