This article is the third in a four part series, beginning with Gaming at the Margins.

In the last installment of this series, we talked about what might be called “soft” problems – games and culture… gender, age and ethnicity issues… gaming as a social or solitary activity…

This time, I want to talk about “hard” problems – hardware and business issues. And I want to talk a bit about content.

Hardware

The Situation
Existing hardware allows us to do amazing things. New hardware on the horizon offers staggering possibilities.

In anticipation of the Xbox 360, Revolution and PS3, I’m digging out proposals and design concepts conceived 15 years ago because, finally, the hardware seems capable of realizing a vision that was literally impossible to pull off back then. Everything’s about to change and, in all likelihood, get better – graphics, sound, AI, physics… you name it.

Shortly before I gave the talk that inspired this article, I showed a friend an early, un-retouched screenshot from a game we were prototyping at Junction Point Studios and found myself marveling at it – not out of any sense of ego, but, rather, out of a sense of awe. It looked like something pre-rendered, not something playable in real time.

But power comes at a price. Once the hardware is capable of something, someone’s going to do it. And once someone does it, everyone will be expected to. So, for example, once someone throws 100 artists at a game, and it looks like something from Pixar but real time and interactive, we’re all going to be expected to “ooch” ourselves above that new, higher, way more expensive quality bar.

When that happens, team size goes up for everyone, development time goes up, costs go up. That means marketing costs go up. Next thing you know, independent developers have it even tougher, the rich get richer and finding someone willing to back you in any sort of risky endeavor becomes harder than it’s ever been – and it’s never been easy.

In the last decade, my games have gone from $2.5 million dollars and 30 person teams, to $5 million and 40 people to $12 million and around 90 people. Looking to the future, that seems like the place you start if you want to play in the next-gen, triple-A game development game. And it may be more hype than reality, but I’ve talked to plenty of folks planning on spending $20 million and up on future games.

And I’d bet that 90% of that cost is down to that terrific new hardware coming, with all sorts of incredible capabilities we “have” to exploit!

There is an upside in all this. Games will look better than they ever have. And there’s at least the possibility (remote, I fear) that someone will harness the power of the Xbox 360, PS3 and Revolution (and whatever comes after them) for something other than putting prettier pictures on the screen – non-combat AI, characters you care about, problems that can be solved without resorting to guns, knives and baseball bats, anyone?

But the cost of exploiting all that power, even for Good, is going to be great. And the experiments we get to try will be determined by the folks with money – the same folks who’ve proven risk averse in the past. I’m not optimistic.

Not just next-gen consoles and more powerful PCs…
As if powerful new consoles and PC’s weren’t enough, they’re only part of the near-future picture. We also face another set of hardware challenges.

  • Used to be, there were computer games.
  • Then, there were computer games and videogames.
  • Now there are computer games, videogames, PDA games, handheld games
  • Heck, my cell phone is more powerful than the computers on which we developed the old Ultima and Wing Commander games!

Now, in one sense, more platforms are a good thing – platforms that don’t require crazy graphics or support the depth of gameplay that drives costs up offer small developers new options. That’s all to the good.

The interesting thing is what happens when players start expecting to be able to access their games wherever they are and via whatever hardware they happen to have handy. That day’s coming, sooner than most of us expect. And we better be ready for it.

The Choice
Given the way the game business works these days, I’m not sure there is any choice to be made as we face a frightening future of high-priced hardware. Given our single-funding source model (publishers) and our near total dependence on boxed games sold at retail, you’re either a player in the triple-A videogame arena or you’re not.

You either spend what it takes to be competitive – $8, 10, 12 million and up – or you better not even try to compete. Go where EA and Activision and the big-time MMOG guys aren’t. Make puzzle games or boutique games aimed at a more targeted (and likely smaller) audience. And spend a couple million bucks or less.

The Outcome
Until and unless the business model changes, I see only one possible outcome: A business that’s already heading in a rich-get-richer direction will see the trend accelerated and the situation exacerbated.

Those who can afford to compete at the triple-A, movie-budget level will; those who can’t will either be driven out of business entirely or driven to different parts of the business – boutique online games, cell phone games, casual puzzle games…

Even mid-pack publishers will have trouble competing in the coming years, and marginal ones will cease to exist. There just aren’t many companies that can afford more than a couple of $20 million bets a year. If even one of those bets failed (and given the “four out of five” game failure rate the received wisdom says we suffer now, you know most of those bets will fail), a lot of publishers are going down.

And as far as games that operate across PC’s, consoles, handhelds, cellphones and so on? Well, that’s going to require IP ownership and distribution that reaches consumers on all those platforms – that’s a mighty big play, one available only to the existing power players, or new players with sufficient cash and connections to buy their way in. Developers who own their own IP? They’re going to be even more of a rara avis than they are now.

In many fields, more horsepower can provide the little guy with tools to challenge The Man. Call me cynical, but in the world of game development, I see upcoming hardware shifts benefiting the existing power elite more than anyone else, maybe exclusively. Unless the business changes in some radical way, and/or the powers that be support more interesting work than they’ve been willing to support in the past, gamers will be stuck playing prettier GTA clones, sports games, shooters, me-too MMOGs and the 1,001st damaged-DNA knockoff of Tetris

Internationalization

The Situation
The internationalization of the game business is inevitable. It’s no longer worth thinking about as something that might happen someday. It’s already happening.

Sales
For years now, a bit more than half of my sales have come overseas. Last time I checked, a third of those sales came from Germany alone. From a business perspective, anyone who isn’t thinking about foreign sales is leaving a lot of money on the table.

But internationalization means something more than just selling your product overseas. It means competing with developers who are as clever and creative as you are – and typically get paid a lot less. That’s a scary combination.

Foreign Competition
There’s always been healthy competition between North American and Japanese developers. The Final Fantasy series could never have been made in the U.S. and it’s unlikely Doom could have come from a Japanese studio.

But now, we’re seeing games like Serious Sam coming from Eastern European teams a quarter the size of many American teams. We see terrific studios like Io and others creating games with universal appeal, and typically doing it for less money than U.S. developers with no noticeable difference in quality.

And if you haven’t checked out what’s happening in Asia outside of Japan, it looks as if there’s going to be an explosion in creativity – and competition from that quarter as well.

Outsourcing
As costs increase, in any business, everyone starts looking around for way to economize. Clearly, the easiest way to reduce costs is to pay people less. Can’t do that locally, without losing resources to competitors – and other industries – willing and able to pay more.

What happens next is utterly predictable: Jobs are increasingly “off-shored.” It’s happening in games as it’s happening in most industries. Unless you’re a major player with a major cash-cow hit, competing in the triple-A game space requires teams far bigger than you can build internally.

Sure, I know of studios throwing 100-plus people at projects. I tried a bargain basement version of that approach at Ion Storm – with over 90 people working on Thief: Deadly Shadows. And looking at the demands of next-gen hardware, it looks as if teams of 100, 150-plus people will become increasingly common.

At Junction Point Studios, a start-up working on its first project, I simply can’t afford that. And, frankly, I wouldn’t want to deal with the management and team/studio culture issues associated with teams that big, even if we could afford it. To compete, we have to look to Asia and Eastern Europe to supplement our internal asset generation capabilities.

Am I putting American developers – artists, mostly – out of work? I guess so, and I hate it, but I don’t see any other choice, any other way, to compete in the triple-A game space.

The Choice
How do North American developers remain competitive in the global marketplace? That may end up being the most critical question we face, thanks to a perfect storm of business and creative elements.

  • Should we ignore the problems we cause for local talent by off shoring jobs? It’s just business, right?
  • Should we make games that appeal largely, if not exclusively, to local audiences, ignoring the huge potential audience beyond our borders? We’re making plenty of money…
  • Should we ignore the competition from foreign studios whose capabilities more and more frequently match those of bigger, more established studios in the traditional game development powerhouses of the U.S., Japan and Western Europe? “They’ll” never be able to compete with us, creatively.

To be honest, I love the idea that there are game development “garage bands” out there who can beat the pants off us. If they can make games with strong sales appeal at lower cost than we can, more power to ’em.

And if there are folks in Asia and Eastern Europe who can provide art resources at low enough cost to allow independent developers to compete with the internal publisher teams, we should take advantage of that all day long. (Though, to be honest, I’ll be hoping for the day when those folks realize they’re being underpaid and start demanding higher wages, which will level the playing field again.)

The Outcome(s)
It’s hard for me to see a downside to internationalization. Smaller, cheaper, more agile developers competing with bigger, more established players can only make the medium stronger. And, frankly, short of cutting a lot of peoples’ salaries, there doesn’t seem to be much we can do about studios in parts of the world where they can pay people less than we do.

Along those lines, I have a fantasy that involves a game development world that’s a bit more like the movies, where there aren’t a lot of 200 or 300 person film studios waiting around for their next project to start. Instead, there are lots of producers, in tiny six person offices. The people there create and nurture properties until they have one around which they can build a “package” to take to a studio. Only then do they build the team to make the movie.

Maybe Wideload Games is onto something, and there’s a game development future that includes many independent shops of anywhere from a dozen people to, say, 50 – production people, designers, programmers, artists. Those people would create concepts, shop them to funding and/or publishing partners and then form the core that shepherds the concepts to completion. These shops would have a consistent, on- staff, creative core, and a leads group to prototype and prove concepts, pipelines and so on. Those same folks could then coordinate and lead the efforts of outside resources who would generate the assets necessary to complete the game.

Maybe that really is a fantasy, but I’d rather see five independent studios of 50 people than one, monolithic, development studio any day. And it would take advantage of outsourcing in a way that could benefit everyone.

It’s the Content, Stupid!
The last crossroads we face is a content crossroad. Let me get this out of way: I’m sick to death of the constraints we impose on ourselves when it comes to gameplay, game genres, visual and thematic approaches – the whole content shebang.

The Situation
The range of content we explore is so narrow, it’s kind of scary. But there’s more to content woes than that. The amount of content we generate in any given year is just overwhelming. Look at E3. It’s getting bigger, louder, more crowded and, unless you’re blind, deaf and dumb, way more depressing every year.

Most of the product (and I use the word “product” purposefully here) consists of sequels and licenses. That in itself isn’t a bad thing at all, as I said in my design keynote at GDC a few years back. Personally, I still hope to work on a licensed game before I hang up my development shingle and move on to whatever comes next. What is a bad thing is the quality of those sequels and licensed products. The processes that lead to a proposal being greenlit by a publisher seem driven less by any kind of creative spark than by mandated release dates, insufficient budgets and licensors/IP-owners whose demands reveal little knowledge of what makes our medium special.

And, worse, to my mind, even the “original” product is pathetically “me too.” It’s hard for me to get worked up even about new IP projects (with apologies to Will Wright, Nintendo’s first-party developers and a handful of others).

Creatively, I see some real challenges ahead. For us to say we’ve fully plumbed the depths of game design would be insane. We’ve barely scratched the surface of what games can and should be.

The Choice
Once again, we can just continue on our merry way, hoping no one notices that, past the glitzy graphics, past the pounding soundtrack, past the supposed opportunity to “live the movie,” there’s just not much going on that’s new, different or uniquely “game-like.”

I’ve been told by people in positions of authority at more than one publisher – people who ought to know better – that “GTA clones are making money hand over fist. All we have to do is keep making them until players tell us to stop.”

With attitudes like that driving decisions at the top our only realistic funding and distribution options, is it any wonder that, from a content standpoint, games just haven’t made much progress in the last decade? With rare exceptions, it’s still all-combat (or all-sports), all the time.

Alternatively, we can acknowledge that (though I’m saddened that I still have to say this, literally, 10 years after I first spoke those words at a conference at MIT), games remain an infant medium. We can resolve to grow up, at least a little. When I first started thinking about games as developmentally challenged, back in the ’90s, I thought we’d be so much further along by now than we are – I figured we’d at least grow up to be whiny adolescents.

The plus side of the realization that we’re stuck in a content and gameplay rut is that there’s plenty of room for innovation! I mean, where are our love stories and soap operas? Where are our comedies and musicals? Where are our suspense dramas and political satires? And where are the Carmack equivalents willing to tackle problems like non-combat AI, virtual actors, conversation systems, collaborative storytelling questions? The technical challenges associated with these necessary elements of more mature content are at least as challenging and fun to tackle as the graphics, sound and physics stuff we usually go after. Surely, there are people out there champing at the bit to tackle them.

The Outcome
Sticking with the tried and true might result in financial success, for a time. But stagnation was never the friend of any medium and filling the retail channel with tons of me-too games all aimed at the same audience is obviously short sighted.

At a time when seemingly every other medium is moving into narrow-casting mode – finding ways to reach specialized audiences with an insane variety of content – gaming is stuck in mass media theory of the 20th century.

So, the easy answer is to say: Let’s start varying things up, people. Let’s tackle the design and technical risks associated with trying to solve really hard problems… let’s try making games that are funny and sad, try to find ways for players to interact in non-competitive but interesting ways.

I wish it were that easy. But there’s real risk here – far more than in, say, reaching out to women developers or giving players more interesting choices than pulling this trigger or that. I’m not proposing we jettison the old content but, rather, that we find ways to make experimentation possible, that we find ways to do some R&D that doesn’t involve renderers or the purely technical aspects of game development.

Next Time
With all of these problems ahead of us, all these big choices we have to make, is there any hope? That’s what we’ll talk about in the fourth, and final, installment of this series.

Warren Spector is the founder of Junction Point Studios. He worked previously with Origin Systems, Looking Glass Studios, TSR and Steve Jackson Games.

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