All game development is unsustainable | 10 Years Ago This Month

The games industry moves pretty fast, and there's a tendency for all involved to look constantly to what's next without so much worrying about what came before. That said, even an industry so entrenched in the now can learn from its past. So to refresh our collective memory and perhaps offer some perspective on our field's history, GamesIndustry.biz runs this monthly feature highlighting happenings in gaming from exactly a decade ago.

Good News for Developers Who Love Bad News

February of 2011 was a rough month for game developers who put stock in the opinions of their well-known peers.

In a round-up article with some big-name developers sharing their thoughts on the shift to digital distribution, Gaikai co-founder David Perry warned of harder times for developers making small games.

"I see a lot of little teams trying to make simple games, and I'm a little worried... that's not sustainable," he said. "People who make Kleenex games -- ones that you can blow your nose on and throw away -- that's not necessarily a safe place to be betting your money. If your game design is two pages, unless you've found the next Tetris, I would start to worry."

Okay, that's maybe not great for people working on very small games, but it's not the end of the world. There are a lot of different types of games and it's only natural that some of them would be unusually poor investments at any given time. I guess developers just have to focus on medium games or bigger games, then? Maybe not, according to Naughty Dog co-founder Jason Rubin.

"There are some traps in the industry now for developers -- one is to grow into the size that makes middle games on console, bigger than $15 million, but smaller than $30 million," Rubin said. "That middle gap seems to right now be a financial weak point, and a lot of games in that budget aren't big enough to compete with the Call of Duties out there, but there's also not small enough to recoup with lower sales."

Oh, well I guess that makes sense. Obviously now, small games and medium games are non-starters. I guess AAA blockbusters are the only safe bet left then. Or at least they would seem that way, if you didn't attend Mark Cerny's DICE Summit presentation, where he warned the economics of AAA make no sense.

"Last year there were only about 50 or 60 games that sold over a million units -- that's multiplatform and international," Cerny said. "And only half only sold two million. Of course, if you spend over $20 million you want to sell a million units. And if you spend over $50 million you want something well north of two million unit sales... Frankly, the economics of the $50 million game are looking a little shaky."

So to recap, small games are a bad idea, medium games are very risky, and large games are economically irresponsible.

Of course, there are exceptions. Three years after Perry's warning about small games Flappy Bird became an overnight phenomenon, and these days the hypercasual genre is an attractive investment for many firms and publishers.

And sometimes opinions change as the market evolves. Rubin was barely a year away from joining THQ, a publisher synonymous with making games with budgets too big to ignore but too small to compete with Call of Duty.

And then there's Cerny, who was so down on the economics of AAA games that he executive produced Marvel's Spider-Man for PS4, which sold more than 13.2 million copies. And that's to say nothing for his role as the lead system architect for the PS4 and PS5, two systems dependent on the success of tent-pole high-budget blockbusters of the sort he was warning developers about.

The point here is not that Perry, Rubin, and Cerny were hypocrites, or wrong, or anything like that. After all, the industry moves fast, circumstances change, and so do minds.

The point is that no matter how much success someone has enjoyed, no matter how astute they may seem to be, or how much their argument makes sense on the surface, their advice or opinions on where the industry is or what developers should do are only ever thoughts to be considered, and not dictates to be followed.

Besides, they were all right in a way. Small games aren't a safe bet, clones can be more successful than their inspirations, and it can be hard to stand out from the crowd. Mid-size games are risky just like Rubin said; THQ had an established name and a stable of franchises that remain relevant to this day but they weren't enough to keep it from going bankrupt months after Rubin signed on. And as for large games, I don't see a lot of people lining up to argue that the financials are infinitely sustainable, that we can keep throwing more money and more people at a dwindling number of top-tier AAA blockbusters and sales will just keep growing to keep pace.

Making games is hard, success is not entirely within one's control, and the disappointments outnumber the successes in every corner of the industry you want to look at, at every size, and in every era. It's not difficult to come up with an argument as to why this or that type of game is a bad idea. That's not to say developers should ignore it when people point out the problems so much as to say this is video games, and there is no such thing as an entirely safe project.

Good Call, Bad Call

GOOD CALL: The Xbox 360/PS3 generation stuck around longer than most console generations to that point, and more than five years after the Xbox 360 hit stores, Irrational Games' Ken Levine still wasn't looking for a replacement, saying, "At this point I have no desire as a developer and zero desire as a gamer to see the next generation come out where I'm sitting right now."

We may not have understood just how little desire Levine had for a new generation. He never made a single new game for either the Xbox One or PS4.

BAD CALL: GamersGate CEO Theo Bergquist says the digital storefront is not afraid of Steam, adding, "We think they are peaking now while the market is still very hardcore." It's safe to say that wasn't the case.

BAD CALL: Id Software technical director John Carmack told The Dallas Morning News that Nintendo and Sony might stop making dedicated handhelds because consumers will prefer smartphones, saying, "You don't always get to build pyramids just because you want to."

Depending on how you feel about the Switch Lite, Carmack may have been right about the portable space. Still, he's about the last person in a position to lecture others about the unfeasibility of pursuing financially dubious interests.

He founded Armadillo Aerospace while still at id in the hopes of establishing space tourism. He left Id in 2013 because the studio wouldn't let him chase his VR dreams but Oculus would. And he left Oculus in 2019 because he wanted to pursue technology even more "unconventional or unproven" in artificial general intelligence.

GOOD CALL: Speaking at the DICE Summit, EA Worldwide Studios VP Travis Boatman said that core gamers are underserved on mobile, and that there's a hungry audience ready to play traditional-style games with a mobile-style business model.

"The freemium space really caters to gamers who are conditioned to pay," Boatman said. "But the result of that is they really like the freemium model, and they will spend a lot on these games."

That mindset might explain EA's regrettable mobile reboot of Dungeon Keeper a couple years later. But even though EA's free-to-play core gamer offerings didn't become massive hits, games like PUBG, Fortnite, and others have shown Boatman was right about the broad strokes.

GOOD CALL: London Venture Partners unveiled its first investment, an undisclosed sum in a company making a browser-based MMO called Gunshine. Gunshine didn't last, but the developer pivoted to mobile and made games like Clash of Clans, Boom Beach, Clash Royale, and Brawl Stars. Supercell did okay for itself, all things considered. LVP followed that up with investments in NaturalMotion, Playfish, Unity, and a slew of other big gaming start-ups.

A Call So Bad It Deserves Its Own Section

Sony Computer Entertainment president Kaz Hirai said the plan was for the PlayStation Vita (then known as the NGP) to surpass the PSP's worldwide installed base. That probably would have landed him in the "Bad Call" section to start with, but he kept talking anyway.

"Over and above that try to go beyond that," Hirai told the PlayStation Blog at the time. "The fact that we're working hand in hand with the worldwide studios internally but also with a lot of the third-party publishing partners already. That, combined with some of the exciting features, is a really strong combination to really match the install base we have for PSP and certainly go beyond that as well."

He continued, "Whether it's a home-based console like the PS2 or PS3 or a handheld like the NGP, it's very important that we have a stable platform that is in it for the long haul... Once [the consumers] invest in our products, it doesn't go by the wayside in two years or three years, but they are able to really enjoy that particular console for a very long time.

"It's my expectation that NGP is going to have a similar sort of lifespan in the portable space as well."

I know I'm kicking a dead horse here, but the Vita sold considerably less than the PSP over its lifetime, quickly ran into problems with third-party publisher support, and was thrown to the wayside in two or three years.