Are we heading towards another Video Game Crash?
(too old to reply)
2012-04-02 22:23:48 UTC

by Shawn Long, Contributor

Things are changing in the video game industry, whether we like it or
not. However, not since the North American video game crash of 1983
has the industry changed so much in a short bit of time. History is
important, but only if you learn from your mistakes. Unfathomably, it
doesn’t seem that the industry has learned from that.

SEGA has recently announced its restructure plan and massive losses,
and now SEGA of America has been for the most part wiped out. This
isn’t a small indie company, this is freaking SEGA. You know, the
developers of Virtua Fighter, Sonic the Hedgehog, House of the Dead,
along with countless other franchises. SEGA used to be one of the
biggest console companies in the industry, and now its being reduced
to rubble. It’s sickening to me, because SEGA has always stood out to
me as a developer, publisher and console maker. The company has taken
risks, and now it seems like its catching up to them. SEGA dying is
just going to lead to less companies taking risks and trying new
things, which is a shame.

SEGA isn’t the only company hanging on by a thread. THQ has been
rumored lately as having the same fate of SEGA, reporting massive
losses and cancelled projects. This isn’t another small company, this
is THQ. The publishers of the UFC and WWE game franchises, games that
constantly sell over $1 million each year. Ever heard of a game called
SOCOM? Of course you have. Did you know that the studio that makes the
SOCOM series just got shut down? Yeah, I’m shocked too. SOCOM was one
of the biggest franchises on the PS2, and now Zipper Interactive, the
company that was making them, is no more. Why is all this happening?

There is a number of reasons that could be leading to all the these
recent happenings. Some are more possible then others in my opinion,
but I think they should be mentioned anyways. A lot of people like to
point to tablets and smart phones taking up a portion of the gaming
market. I can understand that, but in no way do I think that a tablet
will ever replace a handheld or a console for two simple reasons:
Reason one is that a tablet and a phone lacks a clear and concise
control scheme and doesn’t offer a traditional controller. Reason two
is no matter what games come out for the devices, they will never have
the AAA first-party titles that a gaming device needs to stand out
from the crowd.

Developmental costs is another reason that is thrown out a lot, and I
think is a valid point. Current consoles cost a good bit to develop
for, because of the technology involved. Piracy is running rampant and
companies are losing money. While I understand that point, I can’t
help but feel that developers should have a base idea of what their
game is going to sell, and should use their assets more wisely. If you
are making a niche game, don’t throw $70 million into it to have an
awesome graphics engine, then complain when you don’t sell a ton of

The main reason I think all of this is happening is simple: Greed. The
gaming industry has adopted a cut-throat business model, with your
cookie cutter games being the ones of choice. Companies that make a
profit aren’t satisfied; they want more profit. I understand the basic
business model, but there has to be a point where you say enough is
enough. Look at the rumors for the next Xbox and PlayStation consoles.
The most popular thing being talked about is not being able to play
used games on the system. Are you kidding me? That is the stupidest
thing I have heard in my 20 plus years of gaming. So, I won’t be able
to buy games from eBay or GameStop, I will have to buy a new copy to
play it on my system? Well, what if I want a game that is four years
old and isn’t being sold in most stores anymore, what do I do then?
Exactly. It’s not a well thought out business model, and will fail
miserably if implemented.

Final Truth:

The combination of greed, piracy, rising developmental costs, and
companies being afraid of breaking from the norm is leading us down a
very scary path. We may be heading towards another video game crash,
but we may not. It may just end up changing the way games are
developed, and who is making the said games. Regaurdless, something is
changing in the gaming industry, and I think the next three years are
going to be very interesting, in all the wrong ways. Expect to see
your favorite companies going out of business, or changing their
business model. It’s a sad state of affairs, but I don’t see the light
at the end of the tunnel…yet.



Dan Lingman
2012-04-03 01:04:43 UTC
Post by TMC
by Shawn Long, Contributor
Things are changing in the video game industry, whether we like it or
not. However, not since the North American video game crash of 1983
has the industry changed so much in a short bit of time. History is
important, but only if you learn from your mistakes. Unfathomably, it
doesn’t seem that the industry has learned from that.
Well, lets take a look at a number of factors:

Mobile gaming
- Previous gen: Nintendo DS, PSP, misc elcheapo handhelds.
- Current Gen: 3DS, PS Vita, android and iOS

3DS game - $30-40
PS Vita game - $30-40
Android/iOS game - Free, or 0.99->4.99. Some ad supported, some in game
purchase supported.

So, I can spend $30 on a game that I may not be able to resell (looking
at you Vita), and maybe get 10-20 hours of play out of it. Or, I can get
10-20 games, and maybe get 2-3 hours out of each, and if I get
tired/bored of it, who cares - it was $.99

Console gaming
- Current Gen: PS3, 360, Wii
- Next Gen - who knows.

The current game consoles have all dropped radically in price, but you're
still paying large amounts ($30+ per game) for content. Addons like the
Move and Kinect help a bit, but really, you're competing for TV time with
the rest of the family.

PC Gaming
- Steam sales seem to be the rule, rather than the exception here.
Nearly nobody pays full price for anything any more, except for the rabid
fans who need to be there on day one. (yes, I've preordered DIII, and
will likely do same for GW2, so I'm in that pile as well), but much of
what I have, I've paid between $2.00 and $10.00 instead of the $40 or so
that they were when released. I've got stacks of games in my to be
played queue - so many, that I can afford to wait for something
interesting to drop in price. Note that these are in the same ballpark
as the iOS/Android games.

I see the industry crashing, as you've noted, but due to us, the
consumers, having gone all cheap ass when it comes to what we're willing
to pay for. Anything that doesn't have a massive following, is going to
get wiped out unless they move to the bargin approach to game production.

Another factor to consider is attention span. Seems to be getting
shorter and shorter these days. People aren't willing to invest an hour
inbetween waypoints - they want a 5 minute gaming fix, while waiting in
line somewhere. And what do they have with them? Smartphones. At home,
I can get a turn or two of Catan on my iPad while the commercials play.

So what can we do about it? Probably very little at this point. We need
to accept that Roxio has won, and wait for the little studios to grow up.
The old guard is quite likely to be unable to adapt, and will get swept

RIP Sega. You'll be missed.


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