You Get What You Pay For

It seems strange to be here: a week after the biggest gaming launch in history, and still concerned about the future of the big-budget blockbuster. But for me, the biggest story of last week was not the massive sales of a game we knew was going to sell, but the sacking of 1500 developers at Activision’s erstwhile rivals for the top-dog spot, EA. The news snuck out, perhaps deliberately, just in time to be swallowed by the tidal wave of hype surrounding Modern Warfare 2, and is of little interest to those who do not work in the industry. But to me it says a lot more about the state of this business than all the millions that Activision is raking in.

The games business as we know it is not in a healthy state. Taken at a whole – including handhelds, MMORPGs, iPhone games, flash games and that Farmville nonsense that clogs up my Facebook feed – more people are playing more videogames than at any point in history. But most of the users of this site likely have a much narrower definition of games – a definition that focuses on titles like Assassin’s Creed 2, Dragon Age: Origins and Modern Warfare 2, huge experiences that only come around a few times each year (and generally between October and November). These games offer the type of sensory overload experience that gives you a tingle just thinking about it.

Unfortunately, they’re simply not making enough money. Again, I know that sounds ridiculous in the context of the mind-boggling figures already being tossed around for MW2, but it’s the equivalent of a record-breaking lottery jackpot winner – it still doesn’t mean that gambling is a reliable way to make a living. For every MW2 there are a dozen titles that aimed for that top spot only to come crashing back down to earth. Two out of three first-parties have no hope whatsoever of making any money in this console generation, and will likely be paying off their debts for years to come. Out of the major third-party publishers, maybe no more than half a dozen will make a significant profit this year, and there are a number who are one high-profile failure from bankruptcy. And do we have to go over the list of small- and medium-sized developers whose doors have shuttered forever over the past two years alone? (Off the top of my head, Factor 5, Free Radical, Grin – oh, and now Pandemic, I see.)

In the midst of this, it sometimes makes my blood boil to see gamers’ reactions to any perceived slight. The MW2 PC boycott – is it too early to call it an “attempted” boycott? – was always doomed to be a dismal failure. I am not a PC gamer, so the most salient points of the furor are lost on me, and Shamus Young did a fine job of going through them the other day.

Unfortunately for PC gamers, Shamus is far more eloquent than most of their other spokespeople. The thing that struck me hardest amongst these arguments was the idea that Activision was greedy/morally corrupt/the spawn of Satan himself because it dared to change how things had been done up until now by removing key PC-only features, charging for things that used to be free, and/or charge $60 for MW2 PC instead of the “standard” $50.

Be it dedicated servers for MW2 or Rage, day one DLC that “should be on the disc” like Warden’s Keep in Dragon Age: Origins or Activision hinting at creating a subscription-based service for future Call of Duty titles, gamers have been bellowing with rage across the internet at the slightest suggestion that they might have to pay more in order to get the things they are used to.

What I never see in these arguments are all the things gamers have been getting for no additional cost for years. Going all the way back to split-screen play and rumble support up to online co-op and 5.1 surround sound, every developer in the world has had to cram more and more features into their games with every successive generation, in the same amount of time and with no extra budget. Where do you think the money for this is coming from?

Let’s take the example of something dependable, like FIFA or Pro Evolution Soccer. These games come out like clockwork once a year, and sell millions of units with no sign of the audience ever tiring of them as they may one day a Call of Duty or Halo. What could be simpler than to push out one of these a year?

One little problem: Just over 10 years ago, you could have made the latest entry in these franchises for $2 million and still had a lot of change left over. These days, you would be doing very well to get the basic product out for $20 million, while the potential number of customers has stalled or decreased due to the middling popularity of HD consoles. Factor in the costs of multiplatform development and increased competition, and perhaps you can see why publishers are increasingly desperate for any extra revenue stream they can find.

Gamers will surely retort that if the shuttered studios I listed above had only made more good games they would not be in trouble; but sadly, making good products guarantees nothing. Games like Dead Space and Mirror’s Edge might just have made their money back, but that is not what companies like EA are in the market for anymore. They need franchises, games whose assets they can reuse again and again in a much more successful way than Dead Space Extraction. It’s easy to see where that leaves the Okamis, the Beyond Good and Evils and the Zack and Wikis of this industry.

While a CEO like Bobby Kotick may be individually rich, the idea that games developers are laughing all the way to the bank by ripping off poor consumers is a complete myth. Game development is not a particularly well-paying profession, and despite the high visibility of a few big-name developers, it’s nowhere near the madness of Hollywood paying $20 million for a few months of a director’s time. For every Modern Warfare 2 there is a DJ Hero – by all accounts a genuinely good game, and one whose developers no doubt worked just as hard to create. But MW2 has sold nearly 6 million units in a week, and DJ Hero, for the moment at least, has flopped. Those are the risks in this business. The millions Activision spent on DJ Hero will have to be absorbed from their MW2 profits (and, of course, its reliable World of Warcraft revenue stream). Activision has that luxury for the time being – few others do. But if we want other publishers to be able to continue to take risks on new IPs, we are going to have to start dialing back the hate for new payment models.

One final word about the boycott: Ironically, even though the gaming news cycle was consumed for weeks by the story, the fact that the protesters have failed to have even the most negligible impact on the sales of Modern Warfare 2 is all the proof publishers need that the PC gaming market doesn’t matter. Screw you Activision, said the boycotters. You can’t do this. It is now overwhelmingly evident that they can.

Christian Ward works for a major publisher, and was a lot more affected by the terrific snowmobile scene, to be honest.