Regular franchise updates "a very risky path"
Blockbuster developers risk becoming "execution monkeys" at the whim of accountants, says investment bank IBIS
As more publishers focus on blockbuster games to score big sales and boost the yearly bottom line, IBIS Capital has warned they must be careful not to hand too many crucial decisions over to accountants rather than creative talent.
Speaking in an interview with GamesIndustry.biz published today, IBIS director Tim Merel said investment in triple-A games is high because of the lucrative financial gain of titles like Call of Duty: Modern Warfare 2 – but the lack of innovation in the long-term could damage the games business.
"The major franchises are attracting increasing amounts of investment and generating increasing returns, but this doesn't come without risk," said Merel. "The gaming equivalent of Eddie Murphy's Pluto Nash ($100m cost, $4.4m revenue) is what scares the money men, so the risks of launching new franchises or making a mess of existing franchises becomes enormous.
"The concern is that this end of the industry goes the same way as Hollywood, with accountants and lawyers running the show and the creatives and techs being managed like execution monkeys. Hopefully the majors are smart enough not to let this happen."
Ubisoft said yesterday that it would look to push out updates to its biggest sellers every 12-18 months, and Electronic Arts is going down a similar route, with titles such as Mass Effect 2 and Dante's Inferno – which the publisher hopes will be the first part of a trilogy – supported by multi-million dollar marketing spend.
"To state the obvious, the majors are doing exactly the right thing by investing in and acquiring big franchises," said Merel. "In the short-to-medium term that makes perfect sense, but in the long term I think they're going down a very risky path."
"If the gaming business is all about innovation and new unimagined gaming experiences driving growth, churning out the 25th incarnation of most franchises won't cut it. If the majors effectively become utilities, then they run the risk of becoming like traditional media companies. Cash generative, but declining and cost driven."
The full interview with Tim Merel, where he discusses investment opportunities and the commercialisation of games, can be read here.