The Videogame Equilibrium

It’s not that often that you find an article in a mainstream publication that discusses the videogame industry intelligently and thoughtfully. That’s why I found it a very pleasant surprise to read this article on Slate by N. Evan Van Zelfden discussing the reasons why the videogame industry is contracting. By and large, it’s nothing that nobody knew before, but it’s still good to see a non-niche publication point out to the greater world that the cost of development is just way too high.

I did learn a couple things from the article, though. One is that although GTA IV was a smash hit, Rockstar apparently thought it was going to be an even bigger hit and is actually in financial trouble because of that. Score one for Nintendo’s brand of conservative development. Van Zelfden also points out something I hadn’t thought of before which is that videogames aren’t really developed on the Hollywood system. Videogames are often developed by an in-house company wholly owned by the publisher distributing and marketing the game. Hollywood is different in that a studio will essentially hire a production company to produce one film and then the two parties have no further obligation to each other (until they decide to work together again for another project). There are lots of problems with Hollywood (did we really need another Underworld movie?), but there is a certain efficiency in this. If the movie business is contracting, studios simply don’t buy as much work or they buy cheaper work. Big publishers do not have that luxury. They have to keep their development teams working or else fire them. The vagaries of the business cycle thus become extremely cruel to individual game developers.

There’s another difference between videogames and movies: spending more money on videogames does create a better game, even if it’s only on technical terms. You can create a perfectly good, even blockbuster or award winning movie relatively cheaply. Your budget may be one-fifth of the typical blockbuster movie, but you will still have competent lighting, good cameras to work with and high quality music. These days, most small movie productions can even afford to buy some CGI. The rest of the movie production is up to the creative team, and the quality of their work cannot be increased just by throwing more money at them. Contrast this with the world of videogames where a minimum standard of graphical and sound quality has to be met before most videogame hobbyists will even give a game a second look. Right now, that minimum standard is very expensive. Costs will go down eventually, but by then, who know what other ways we’ll find to boost graphical quality?

The other problem facing the videogame industry is that there is now way too much product out there. Even if you were a dedicated gamer and you limited yourself only to playing games that received a 90% or higher score on GameRankings, you would have a very hard time getting through everything that’s released in a year on all platforms (if you did do that, your social life would have very significant problems). Any given game’s chances of catching on are growing steadily slimmer as the core audience continues to get older and gain more and more life obligations. Which means the successful game is going to be the one that generates the most buzz, and that game is most likely to be one of the most expensive ones. The industry is trapped.

What we need is to reach a new balance. An equilibrium in the industry, if you will, in which gamers have come to accept and understand that a certain level of graphical quality is “good enough” and they can get on with enjoying the non-technical aspects of the game. And this equilibrium needs to be at such a point that developers can give it to us at a price that doesn’t break their backs. I don’t think we have reached that point, and we may not reach it for time. I also do not think the Wii provides us with that equilibrium. I like the Wii a lot, and I like the philosophy behind it. However, few will argue that it can’t stand to use a little more juice. My personal prediction is that when the graphical quality of higher end Xbox 360 or PS3 games can be produced cheaply and quickly, we will have reached that equilibrium where most people won’t try to nitpick the visuals and demand for things to look even better. The question is how long it will take for us to get there and what people in the industry will be doing until then.

I’m afraid that by this standard, though, we’re in for a very long and dark period in videogame development.