Research Warns of Possible Game Industry Crash

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Research Warns of Possible Game Industry Crash

Atari 2600

Findings by consultancy group SuperData Research suggests the current market is oversaturated with gaming devices.

The video game industry crash of the 1980s is still something that gets talked about a lot, even if many gamers today were only peripherally aware of it when it happened. The abridged version is that the market overflowed with games and consoles to the point where people lost interest and stopped buying them, which makes it kind of like a larger scale version of the Guitar Hero and Rock Band music game fad a few years back.

Well, SuperData Research, a New York-based research consultancy, warns that such a situation might happen to the entire industry again in the near future. "Industry veterans will remember the crash of 1983, when the games market was saturated with hardware devices," reads an excerpt from the report. "Today, the industry runs a similar risk, as [with] a higher-than-ever console installed base, consumers may be resistant to adding more hardware to their living rooms." According to the report, 79 of gamers already own a console, with 2.6 consoles being the average number owned. While the report noted that there are now more people who identify as gamers than ever before, many of them play on multi-purpose devices such as computers or mobile phones. Because of this, there isn't necessarily a demand for more consoles.

The study provides some interesting numbers to back up this claim. In 2008, 42 percent of gamers played primarily on a console, 37 percent primarily on a PC and 5 percent did most of their gaming on mobile devices. A survey this past March, though, shows that now 51 percent of gamers play primarily on a PC, 30 percent on consoles and 13 percent on mobile devices.

What do you think of SuperData Research's findings? While preorder sales for the Xbox One and PlayStation 4 are through the roof, will there be enough long-term interest in a market where they need to contend more heavily with PCs, mobile gaming and browser-based games?

Source: GamesIndustry.biz via Gamepolitics.com

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So gamers being... Facebook games? What are the parameters of this survey? What's the classification of a gamer? What is their definition of "Casual" and "Hardcore"?

(And one of the sources -- gamepolitics -- isn't working.)

The industry and demand is far too complicated for a crash now. You might see a decline and for some companies to take a hit because of the issue, but crashing is no longer possible at this point.

maybe one thing that might help is for them to stop churning out re-hashed bullshit every year. They have kinda gotten themselves into this mess by getting greedy. Example BF3 2 years later BF4 after all the money ppl put into BF3 over 100 you'd think there would be some more life in your investment but nope....Its time to churn out another one. :(

Adon Cabre:
So gamers being... Facebook? What are the parameters of this survey? What's the classification of a gamer? What is their definition of "Casual" and "Hardcore"?

(And one of the sources -- gamepolitics -- isn't working.)

Exactly what i thought. Alot of that PC percentage include people playing farmville etc. Doesnt specifically state they Steam based gamers or FB based gamers.

As far as a gaming crash. If it happens then it happens. Not much anyone can do about it.

It'll be down to which trend goes faster: the continuous integration of entertainment devices, or the oversaturation of the console market.

Either way, the dedicated gaming box will be going the way of the dodo. Chances are this'll be the last generation of consoles as we know it.

Which is exciting, really, as it means we'll get to see a lot of truly new concepts - some of which might even catch on.

I wan under the impression that the reason games crashed was because there was a monopoly, and all the games being produced were shovelware. Which is the opposite of what's happening now. Increased diversity is good. More hardware means more competition, which mean more innovation and consumer friendly practices (sorry Microsoft).

Miss leading title. It's not a Game Industry Crash, it would be a console crash.

Also, you have to be careful when talking percentages. While it's certainly true consoles are loosing ground, the total number of people playing videogames in both those survey years should be taken into account. It is possible for a console could loose market share, but increase it's total sales if it's not growing as fast as the industry.

They're wrong. As far as hardware goes, it's never been better. Big publishers are the problem, not the hardware. We are finally getting the hardware that developers wanted for so long. Now it's up to the publishers to let their developers get creative. If they don't, the AAA market will be oversaturated with shitty games, and the AAA market may crash, or simply some of the publishers and studios may perish. But other than that, the next generation of consoles should be quite healthy for the industry. Both consoles are cheaper than their predecessors, and that's without accounting for the inflation. Which is really good. There's a lineup of really great games coming out as well. And not to mention, the sheer number of people who play video games today is god knows how much bigger than it was back in 1983. Consoles are the number one Christmas gift, and this year new ones are coming out. Gaming is becoming more and more an everyday thing for most people, like TV. Actually, TV content is the thing that's on it's way out. They're also neglecting the existence of the Internet and how fundamental it is for the gaming industry.

Long story short, this research is 100% wrong.

We will never see another crash like 1983. The market and industry is too fundamentally different and is not almost entirely reliant on a single company for there to ever be a crash like that again, outside of a wider economic crash.

At worst, the console hardware market will prove impossible to break into and the Steambox will end up floundering.

That said, I am kinda hopeful that someone in a position of a power will read this and then the console manufacturers will stop the stupid proprietary bullshit they've had going for forever and agree on a single format that will make any game work on any console.

If hardware manufacturers find themselves worried about this, all they need to do is start putting proper backwards compatibility back into their consoles. Average Jo may be unwilling to add another device to her living room, but she'd be perfectly willing to replace the old one with a shiny new box that wont render her old games obsolete.

This research is only looking at hardware, and not the real factor behind the crash: the surplus of shovelware games. You know, "games," the entire point of this industry?

This report reads like my mother; "people have enough nintendos now, so they don't have to buy any more."

My interest in games has certainly crashed in the last 2 or 3 years. I also agree that there are way too many different platforms out there now. There are the consoles themselves obviously, but PC is pretty divided these days. You got Steam, GFWL, Origin, GoG, and probably more. Not to mention the various OS they may or may not be compatible with. Even among mobile games there are divides along iOS/Android etc. party lines. Each Kickstarter I see these days for a game I really want to play has at least 4 stretch goals to port it to like 8 different consoles, though this is in part due to the bizarre need for them to make it to current AND next gen consoles. That ought to be eliminated in a year or 2 hopefully.

At this point its at least simple for me. I own a PS3, a 3DS XL, and maybe will get a PS4 in a few years. As my TV is still messed up my interest in that is minimal. I DO plan on getting Dark Souls 2 oddly enough, even if I need to use someone else's TV.

I also own a Wii, but it has been nothing but a total waste of money. I do not plan on getting a Wii U, as so far only 1 game actually interests me. Super Mario 3D Land U or whatever its called. The one with the kitty suit. I wanna play as catgirl Peach, and I always want to play as Toad. He is a fun guy.

A crash would be a welcome flush of this toilet. The market is working to hard to take as much as possible while giving as little as possible, it's become a landscape of fleecing, DRM, mistrust, and a lot of consumer exploitation. I doubt that it would happen because the environment is vastly different than it was during the first crash, and smaller devs as well as a handful of larger developers still listen to their demographic and treat them respectfully.

The bigger companies need to break apart, they're too big, they've got too much control, and are losing sight because they think their monopolies on IPs and brands have made them immune to disaster. The idiots that say a game must sell 8 million copies in order to not be a failure have themselves already failed. They need a reality slap, but may never get one.

Also, too many people out there have proven they will pay anything for something, however stupid or trivial. People that bought a $5 light saber for their Xbox avatars have proven at least that much.

Escapist newsfolks, stop it with the sensationalist titles. I'm not even going to say please. The original stuff from Superdata talked about how people aren't as willing to buy next-gen consoles because they either already have a console or they prefer mobile or PC gaming. This is not a games industry crash; this is the demand vanishing from the console market. Stop your apocalypse mongering and give us some actual goddamn news.

Besides, a total industry crash ain't going to happen. The game industry is not what it was at all back in the 80's. Even then, the crash was only limited to North America; Japan was just fine. Read Wikipedia for God's sake.

That is preposterous. The great crash of 83 happened because the market was saturated with too much software, not too much hardware. They devalued their own products by putting out so many crappy games.

What we have now is choice. Choice to play a game on console, choice to play the same game on the PC. And the games aren't sitting in bins marked down for a nickel per cart.

I'm not saying there's no chance for Doom & Gloom, but I honestly don't see how anyone could assume that an industry that has been in a state of growth over the last decade could be in danger of losing it's relevance. The market may not support every console out there, that's what capitalism IS. The strong survive, and Sony or MS are likely not going to be dropping the more profitable arms of the empires any time in the near future.

If.. IF... there was another big economic crash in another major market, maybe. But that is hardly repeating the past crash of 83, that's a new problem.

I am awaiting for another crash, we need it to get at least one major publisher to be crushed and to change some of the stupid tactics (IE stupid DLC, always on, etc) in the industry.

let them crash and burn.
something good might come out of the ashes...

Fox12:
I wan under the impression that the reason games crashed was because there was a monopoly, and all the games being produced were shovelware. Which is the opposite of what's happening now. Increased diversity is good. More hardware means more competition, which mean more innovation and consumer friendly practices (sorry Microsoft).

There was no monopoly, and in fact little to no control over releases.

I think the warning bells shouldn't ring too quickly now, but we can always be weary.

I do agree there is a chance that at least part of the industry will collapse under it's own weight. But if it does, the community is a hundred if not thousand times bigger than back in the day, not to mention the influx of indie developers which will ensure that there will always be new talent to replace the old and lost.

FalloutJack:
The industry and demand is far too complicated for a crash now. You might see a decline and for some companies to take a hit because of the issue, but crashing is no longer possible at this point.

Except that's never been true for anything. For example, the stock market changed since the Great Depression BUT that didn't stop other Crashes from happening. They weren't as big as the Big One, but they still happened. Nothing is immune to multiple crashes.

Anyway, we might be in for another crash due to rampant problems in the industry; we have all sorts of companies who are sloppily managed with no regard to quality assurance and instead of looking inward and worrying about long-term stability and growth they seem to be obsessed with instant gratification and profit as well as trying to squeeze every drop they can out of properties. It's a system that can't work forever and the major 3rd parties are unwilling to admit their problems and change things. At this rate a crash WILL happen; it won't be as big as 83, but things are going to get shaken. Either a major publisher like Activision, Ubisoft, EA, or 2K is going to collapse or one of the Big Three is going to get knocked out of the hardware war due to a system flopping (more than likely either Sony or MS). The INDUSTRY wouldn't collapse but things would have to change due to the status quo being disturbed.

Aiddon:
Snip

Good thought, but no. The stock market is not the same as the video game industry. Video game industries have stocks, but this is not a stock-related matter. Or rather, anything going wrong would affect the stocks as a result, but not as a reason. It's not a true parallel.

lol, no

the industry as a whole, won't collapse. We might lose the AAA market for a few years, but no real loss there imo. We still have a thriving indie market, so, these guys are idiots :3

Yeah, and for most of the last decade there's been doom-saying about how there'll be a crash worse than The Great Depression "just around the corner". I'll worry about it if and when it happens, until then, these "consultants" are about as useful as homeless people walking around with "the end is near" signs.

Game Industry collapse like the 80s, no. THere is no way games are going to disappear now. They are on too many devices and being made by too many different people.

Now is it possible that consoles could collapse? Possibly, but I'm not worried about it. Sure there are more options. But really only the big 3 worth counting. No telling what steam will come out with yet, but it doesn't sound like a console, so I doubt its really going to be a game changer.

What I am worried about are AAA games. The huge cost of them makes them vulnerable. And they are why I game. Sure angry birds, ftl, fez, etc... are games but they aren't what excites me, they aren't what gets me to save and buy hardware. If the AAA games disappear I won't keep spending $600+ a year on games.

SonOfVoorhees:

Adon Cabre:
So gamers being... Facebook? What are the parameters of this survey? What's the classification of a gamer? What is their definition of "Casual" and "Hardcore"?

(And one of the sources -- gamepolitics -- isn't working.)

Exactly what i thought. Alot of that PC percentage include people playing farmville etc. Doesnt specifically state they Steam based gamers or FB based gamers.

As far as a gaming crash. If it happens then it happens. Not much anyone can do about it.

Perhaps many of those PC gamers are actually casuals, but I'm sure that many of the console gamers taken into consideration only play their favorite sports game (FIFA/NFL/NHL/NBA) + CoD, or are Wii users who just bought it for Wii sports and similar games. The casuals on both PC and console probably balance each other.

Let it happen, let the huge companies bankrupt, and new independent developers can pop up without being crushed into the dirt by mega-corps.

And NO more mictroctransactions, and devs can develop what they want... it'll be like the 90's all over again. (I hope)

Nurb:
devs can develop what they want... it'll be like the 90's all over again. (I hope)

I don't think you remember the 90s correctly. It was pretty much the same silliness we have now, there was no magical period where developers just made what they want and thus a plethora of amazing games spewed out. Just like now there were a few diamonds among the piles of shit. Heck if the past really was so amazing we probably wouldn't have guys like the AVGN and all his copies running around.

Rednog:

Nurb:
devs can develop what they want... it'll be like the 90's all over again. (I hope)

I don't think you remember the 90s correctly. It was pretty much the same silliness we have now, there was no magical period where developers just made what they want and thus a plethora of amazing games spewed out. Just like now there were a few diamonds among the piles of shit. Heck if the past really was so amazing we probably wouldn't have guys like the AVGN and all his copies running around.

Oh I do... and Oh yes, they did.

The findings of this report could lead you to assume that people are giving up console gaming in favour of PC and mobile devices. However, the key statistic that is missing is how many people in total were catagorised as gamers in 2008 and 2013 respectivley.

Now I can't say for certain but I would imagine that when the research was conducted the question asked was not "do you identify as a gamer?" but "do you play games?" and as such this will cover anyone who plays games of any description, from the commuter playing CandyCrush on their phone on the way to work, to the Facebook user playing their browser games.

I would suggest that many of these people -who would all fit into the PC / mobile device catagories- are not people who have been wooed away from console gaming, but are in fact people who five years ago werent gaming atall.

This would paint a very different picture. Still potentially worrying for console makers, as even this scenario would signal that their is a growing market that they have failed to tap into in any meaningful way, but not the looming disaster the article suggests.

In short I don't think console gaming will see a particular impact from this, people who game on consoles are unlikely, in my opinion, to be drawn into giving them up in favour of playing games on their phone or via Facebook.

FalloutJack:

Good thought, but no. The stock market is not the same as the video game industry. Video game industries have stocks, but this is not a stock-related matter. Or rather, anything going wrong would affect the stocks as a result, but not as a reason. It's not a true parallel.

It doesn't just happen with stocks; everything economic wise has highs and lows. After a large period of growth there is a period of stagnation for instance. Crashes happen all the time and there's no way to immunize something against that. A crash WILL happen, just not on the same level as '83.

Aiddon:

FalloutJack:

Good thought, but no. The stock market is not the same as the video game industry. Video game industries have stocks, but this is not a stock-related matter. Or rather, anything going wrong would affect the stocks as a result, but not as a reason. It's not a true parallel.

It doesn't just happen with stocks; everything economic wise has highs and lows. After a large period of growth there is a period of stagnation for instance. Crashes happen all the time and there's no way to immunize something against that. A crash WILL happen, just not on the same level as '83.

I'm of the opinion that it's not a crash unless it has the impact of one. Highs and lows, of course. That's economics. Crashes are the result of an extreme failing that has nothing to grip for a safety net, no margin for error and a margin just showed itself. To be referred to as a crash, I feel as though it should do the harm one did. The stock market crash (which was only the tip of the iceberg) was "Oh crap, there's little or no money to spread around!". The video game crash, if I recall right, is the saturation of games to the point where few people want them in an age where they were still just a curiosity.

The gaming industry is this strong because it's also wanted. It can't go back. It can take a few hits, and even some companies may die, but I've been seeing a few go under anyway, so that's not new or as impacting. It doesn't speak to me as a crash in the same sense. A crash should panic us, and I don't think it's reaching that level.

Agayek:

That said, I am kinda hopeful that someone in a position of a power will read this and then the console manufacturers will stop the stupid proprietary bullshit they've had going for forever and agree on a single format that will make any game work on any console.

You mean like a standard computer running a Microsoft operating system?

We've had that since the 90s. You could play DOOM on an IBM *and* an HP. ;P

People, you are missing the point.

Over saturation of consoles is a BAD thing. Here's why:

Games are expensive. games are expensive to port. Having 2 big markets is good, less money spent for most money potentially earned.

a highly fractured hardware space means that more porting is needed, or may cause your makret to struggle growing in a hardware space full of competing platforms. Markets get smaller or stagnate and the work needed to get to them are getting bigger.

If game publishers can't get enough money with 2 really big markets. Its a death sentence for trying to make games for many smaller ones.

Basically: Publishers will die off, and consoles will too because they haven't fully adopted digital distribution. Gaming will be just fine but consoles are another story. This will hurt microsoft, and sony and send waves through the tech industry when the huge employers of the industry no longer work anymore. No publishers, no hardware manufacturers. The link between them is huge for console launches. It will make hundreds if not thousands unemployed and put a damper on an already fragile economy. That would be very bad.

It would take a long time for employment levels to get back to what they once were. Any device that steals away people from the bloated console market can potentially cause a crash. Consoles were built with the idea that everyone plays them en masse, and growing exponentially, and if the market has competition and is struggling to grow the market won't be able to handle it.

Modern consoles were built to not have much competition. Its the reason the costs are so high, because its the only game in town. It relies on a vast amount of people for the market to live.

As it is we are losing publishers. At this rate the only ones left will be activision and EA.

MorphingDragon:
You mean like a standard computer running a Microsoft operating system?

We've had that since the 90s. You could play DOOM on an IBM *and* an HP. ;P

Yea, or DVD players.

As it stands right now, it's kinda like you could buy a DVD and have it only work on Toshiba players, for example.

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