Let’s talk about risk.
I’m sure you’ve heard that there’s a lot of it in AAA game development these days. Games cost a ridiculous amount of money to make, and low sales can lose you a fortune and put you out of business. This industry is in this strange spot where videogames as a whole are constantly growing in popularity, while at the same time becoming less reliably profitable. The industry has been desperately trying different techniques to blunt or manage this escalating risk. Some ideas are good, some are bad, and some are just stupid. But Square Enix has crossed a line with how they’re handling the new Hitman game, due out later this year.
You can’t really point to any specific point in history to where it all started to go wrong. It was a slow, evolutionary process. You could argue it began in the early 2000’s when developers were sucked up by mega-publishers, but you can also make the case that it really got started in the 90’s when the mega-publishers began to take shape.
Regardless of where you want to draw the line, at some point developers realized they couldn’t remain independent if they wanted to stay in business. As games grew more complex, they took more money to produce. These rising budgets made their sales targets higher, which made them harder to hit. In the early days you could maybe get away with making a couple of bad (or just poorly received) games in a row before the company fell. But at some point in the late 90’s (again, the dates are very blurry here and vary from one studio to the next) it got to the point where you simply couldn’t afford to make a non-hit. A single lackluster game might leave you with so little money you wouldn’t be able to complete the next game. At this point you could either shut down or sell your studio to a major publishing house.
And this made sense, at the time. A publisher could leverage their successes and absorb a few failures. While your game might flop this year, presumably some of the other games they published would be a hit. That money could be spread around to keep the losers afloat. Maybe in two years you’ll have the hit that bails out everyone else. As long as the industry as a whole is growing, there should be enough money to keep everyone in business and survive the occasional round of bad luck. With this system, developers could afford to take some chances with their designs.
That was the thinking, anyway. In practice it became some kind of screwed-up Darwinist feudalism. Once the publisher owns your company, they also own your IP. If you release a bad game they might fire you anyway. Instead of letting you take risks, they can just insist you make the same game you made last time, except now with whatever fad features (crafting system, quicktime events, multiplayer, social media integration ) they think performs well with consumers. And if anything goes wrong they can fire the studio talent and give the IP to another team. The publisher can just keep shoving the blame downhill.
And before you jump to the comments and decry this terrible trend of “corporate greed”, let me just remind you that Greed is Not the Problem. Marvel Studios is churning out movies and making billions doing it, and nobody is complaining about it. The problem with the publishers isn’t their greed, but the fact that they’re run by non-gamers who don’t understand the medium and don’t have the vision to do anything besides chase trends.
So game development is still risky. But before we talk about Square Enix and Hitman, let’s look at the other ways the industry is trying to manage risk.
On the indie side, people are dealing with this by going the Kickstarter route, which lets the developer share the risk with the consumer instead of a publisher. If the game is canceled, the gamer loses the money they put in. (Although I’m a big proponent of the idea that failed Kickstarter games could soften the blow by releasing their art and coding assets to the public as an act of good faith to show that yes, they tried. And maybe the fans can rescue the project and see it through. It’s not likely, but there’s no harm in trying.) But if the project is a success then the backers have the advantage of getting the game for cheap, plus any backer rewards. The developers get the safety of having money to live on while the Kickstarter cash lasts. It’s not a perfect system, but it’s clearly making it possible to develop games that publishers aren’t interested in.
In the mid-range market we have episodic games. The developer commits to making a given number of episodes of a game, which can be purchased individually. If development is canceled, the public will still have the episodes they paid for. Sure, you only got half a game, but you only paid for half a game. Sometimes there’s a “season pass” where you can buy all of the episodes up front, but notice how that’s usually cheaper. You might end up paying almost-full price for half a game, but if the project is completed you’ll have gotten all the content at a discount. The developer is effectively rewarding you for taking on the extra risk.
In all of the examples we’ve just discussed there’s a risk vs. reward tradeoff. The developer takes on some of the risk, and the public takes on the rest, and developer rewards the public for taking a chance on them.
Which brings us to the quasi-episodic mess that is the new Hitman game. The plan at Square Enix is to release some portion of the content in December for full retail price, and then gradually complete the game by releasing more content at some later date.
Square Enix isn’t some scrappy little company. They are a major publisher with a market cap in the billions. Publishers rose to power because they were supposed to be a solution to this problem of development risk in the first place. So the idea that a publisher would turn to one of these other funding methods is deeply suspicious to begin with. Remember that managing risk is the publishers job. This is like hiring a private security firm and then you discover that their “security” system is to call the cops if there’s any trouble. Why should we give you all this power and money if you don’t have anything to offer in return?
But it’s actually worse than this, because Square Enix isn’t just copying what the indies and mid-tier games are doing. Square’s plan isn’t to share risk with us. Their plan is to dump all of the risk onto the consumer. In the case of Hitman, you’ll be buying the full game for full price up front. IO Interactive will then produce and release the game in stages over time. If the game tanks and Square doesn’t like the sales numbers, they would be free to shrug their shoulders and cancel any future content. You’ll have paid full price for half a game.
We’re probably only a couple of months from the game going gold. (The first portion of the game is slated for December release.) And yet we still don’t know how much content there will be at launch, how much will be released in the future, or how long the total process will take.
Not only is Square dumping all the risk onto the consumer, they haven’t even given us any indication what the parameters of that risk will be, or what they’re offering. It doesn’t help that the last major entry in the franchise (Hitman Absolution) was an idiotic, overproduced disaster that betrayed the core concepts of the series to turn the game into a shitty Uwe Boll movie that nobody wanted or needed. It wasted a lot of money on voice actors and cutscenes that were at the same time expensive and embarrassingly amateurish. The other two recent Hitman titles were both mobile cash-ins. This deal would be less preposterous if we had some indication that Square still knew how to make these games and could manage their resources responsibly.
Don’t forget that episodic gaming has a way of confounding the review process. What if Square releases a polished first “episode” (it’s not really episodic, but since they haven’t told us how it will work I’m going to just call the content dumps episodes) to get some good reviews and then does a halfway job on the later content? They will get to ride high on the favorable review scores without any way for critics or the public to hold them accountable. The fact that Square is releasing the game in December sort of highlights this danger. They can reap the rewards of having a completed AAA game ready for Christmas, without having to actually complete a game in time for Christmas. And once those initial sales figures are in, what incentive do they have to complete the game?
I’m not saying Square is perpetrating or planning a massive fraud. I’m saying this deal is abominable even if their intentions are noble. The incentives are all pushing them in the wrong direction, they’re dumping their risk (and thus their financial responsibilities) onto the fanbase, and in return they aren’t even willing to make promises about what they’re offering or planning. I’m hoping the public rejects Square’s offensive idea. I hate to see bad the things happen to a series as unique as Hitman, but I’d rather see that than a world where AAA publishers move to a “if enough of you buy the game for full price, we’ll have a reason to finish it” funding model.