Of Three Types of Game Developers, Two Are Going Extinct

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It reads like propaganda, basically. The points are unsubstantiated or outright falsehoods.

Old Guard? The huge studios with all the money and all those successes under their belts? The only studios that are failing are the ones who forget their niche. You don't spend hundreds of millions of dollars on an RPG thinking that it'll make COD money just because COD makes it.

The studios that do that deserve what they get, or what they don't get as the case may be. But other studios know exactly what their target market is and what their budgets should be. The innovators are making a splash because they go into development cycles expecting to fail. They budget conservatively and their game has to survive on it's own quality. If it succeeds, then their ROI is huge. If not, then their losses are minimal. It would also be silly to pretend like for every new successful entrant to market success that there aren't thousands of failures around it.

As for clutching the old dedicated console model. This isn't a mistake. GTA V has two versions of the same game in the top 10 biggest sellers of 2013. In fact, the ps3 version is #1 with almost 15 million copies sold and the 360 version is #2 with over 12 million copies sold. They didn't even release a PC version (yet). That's a combined 27.3 million copies.

The ps4 and XBO are selling faster and better than they EVER have before. So, the notion that consoles are going to disappear or aren't worth selling on is a naive notion at best. It does not take into account that EVERY console generation marks the death of the console and/or the death of the gaming pc. Yet every time, both do well and everyone forgets what they said a decade ago.

So the old guard are dying, not because they aren't adapting quickly enough, but actually because they're forgetting basic business principles:

1. The customer is always right (aka be nice to your customers whenever possible).
2. Budgeting:
    a. Forecast the amount of money you can likely make, not how much you "want" to make.
    b. Budget according to that forecast while leaving room for the desired profit and accounting for unforeseen shortfalls and expenditures.
    c. Stick to the budget as closely as possible.
3. Create a product people want to buy.

Take EA for example. The reason we hate them is their failure to maintain number 1. They take losses on games that sell really well because of a failure in number 2.

Square Enix gets number 1 and number 3 just fine, what they fail on is number 2. That's the only way you can have three titles (Hitman, TombRaider, Sleeping Dogs) that sell MILLIONS of copies each and still lose money. Something happened in budgeting whether the problem was in forecasting or the budget itself. All three of those games were some of the best selling games in their years.

Any business, regardless of product and customer relations, can fail if number 2 is messed up. When you get into hundreds of millions of dollars being put into a failed budget then yeah, you're going to hurt. But these losses aren't the same to these companies that they'd be with others. Failures here are easily comped by past or future AAA hits. Ones that fail to adapt after a few failures are the ones that don't deserve to survive.

This seems more like Rumble Entertainment's mission statement then an actual article.

It also seems very narrow-minded and one-sided in its description of things. It seems like someone is basically advertising here for their market.

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