How will console game development survive in 2015?

With AAA game profitability making publishers nervous, are Sony and Microsoft really going to release next-generation consoles in 2013 that are 4X as powerful and 10X more expensive to develop for as happens every successive generation? While I’d love to see what such hardware looks like, the numbers just don’t add up.

I remember the good old days of the mid-to-late ‘90s when a sub $2 million budget was considered mighty healthy. With those numbers, you could sell 250k copies of a PlayStation title and live to fight another day. Today, the AAA market is so broken that if you sell 2 million copies, the game is considered a failure and your studio will likely be shut down. With games costing as much as $50 million to develop and over $100 million to market (on the extreme end), the stakes are high.

The thing is, as a gadget nerd I shed a tear to think we’re stuck with what we’ve got. I want cool new technology. Yeah the XBOX 360 is great, but it’s 5 years old now. I want the new hotness. But there’s no real magic bullet to solving production costs. Middleware, slave labor camps, and pretending everyone has a job and laying them off every time a game ships have all been tried to no avail.

Perhaps the newer consoles need to iterate on the business model to make developing for new hardware more attractive by discovering new revenue sources. As we’ve already discussed, console manufacturers’ doomed gatekeeping efforts keep innovation at bay. Publishers are not allowed to find new sources of revenue unless explicitly told to do so by the platform mother ship. You are ordered to spend 10s of millions of dollars to put a game in a box and watch it die.

A lot of what keeps new business models from breaking out on consoles is the reliance on retail. Digital distribution is great–we’ve seen it revolutionize the game industry on Facebook and mobile phones. But it hasn’t really taken hold on consoles yet for AAA releases. I believe part of the reason is because retailers will not support a machine where they don’t make any money off of game sales. Why sell a PS4 when your customers are never going to return to your store to buy physical discs? It’s going to get ugly–Just look at some of the tantrums thrown over the PSP Go.

Maybe the next generation of consoles should be sold like cell phones. You buy a XBOX 720 at a subsidized discount. This puts in you into a 2 year service contract for a premium XBOX Live subscription where you can digitally rent AAA titles with an option to buy and play f2p microtransaction games as well. To keep the retailer happy, every store that sells a console gets a cut of the customer’s subscription fee.

Huge swaths of the US have spotty bandwidth, so a streaming digital media console isn’t going to work for everyone. Whatever machines Sony and Microsoft are cooking up will probably still have to have traditional disc based media as another option. Especially Sony–considering minor patches to PS3 games take hours to download for no apparent reason.

Perhaps next generation technology will focus more on streaming content than cutting edge techniques in 3D graphics. You can already see examples of what I mean in Blizzard’s streaming World of Warcraft client. You can start playing before it’s finished downloading. And yeah–I’ve played both OnLive and Gaikai, but I’m not a fan. They are both too laggy and have too many streaming video artifacts.

Ultimately, this post is useless. There’s probably developers right now already working on this next-generation hardware in some way–so they already know what the upcoming solution looks like. Still, I needed to keep the blog updated in a futile attempt to unseat that stock car racing guy from my egosurfing search results.

5 thoughts on “How will console game development survive in 2015?

  1. I really enjoyed reading this. I hope that all games go digital. I would love the option of not reserving a game or going to a store where it’s out of stock. Plus, I hate GameStop, so I would like to see them out of business. Good analysis man.

  2. Great post!

    I think your point about the next generation of consoles not being 100% digital is absolutely true. The bottom line is (for now, anyway), not everyone can stream or download an AAA title. However, anyone can get their hands on a disc.

    Either way, I think the notion of a hardware box in the traditional sense is on its way out. Consoles will probably all eventually just become subscription services that you can access from anything connected to the internet.

    Maybe the way they get you to keep piling into the stores is to work our some sort of scheme where you buy specialize controllers or some sort of virtual currency cards…

    That, or they treat it like Hollywood treats the box office. if you want a triple-A game on day one, you go and buy it at GameStop. If you want to download it, you have to wait 2-3 months until boxed goods sales die down. That would keep both retailers and internet recluses happy.

    BTW: Did you know that the other you is rocking a Plymouth Superbird? Awesome stuff!

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