Five Reasons Why the Video Game Industry May Soon Crash

K

kingkiller33

CAGiversary!
Five Reasons Why The Video Game Industry May Crash Soon


“And I peered into the great canyon, and saw death, the plug pulled, the lights go dim, the digital world now a barren wasteland. “

Could this really happen? The collapse of a billion dollar industry? It certainly happened before in 1983. History may soon repeat itself. Here are 5 warning signs:



1. Deals, Deals Deals -


Bargains galore, 2009 has been a great year for gaming shopping as retail stores have offered amazing bargains on recent releases.

For example, Sam’s clubs have been slashing PS3 games price by as much as 80-90%. Fallout 3 for $18 bucks. Mirror’s Edge for $8. Heck I even snagged a new copy of Overlord for $4 bucks.

Target ran an awesome clearance offering titles like Tomb Raider and Ratchet and Clank PS3 for $15 bucks. Toys R Us regularly gives out gift cards. Best Buy ran a $10 dollar gaming sale that got cleaned out in hours from hoarders. Gamestop has regularly been offering B2G1F sales. With so many frequent deals, it would just be pure stupidity to buy a game on release day for full price.

But all these great deals signal a troubling reality. Stores ain’t selling. They can’t get rid of the stock at full price. Bad sales at the store level eventually go back to less revenue for the publisher causing the publisher to go out of biz or merge.


2. Delays, Delays, Delays


There is panic in the streets, boys. A lot of 2009 titles pulled out of the holiday rush out of competition fear. Singularity admits it. No one wants to go up against the juggernaut called Call of Duty. This means a lot more concern about profit, less risks. Games are being pushed back to polish them up and meet their maximum potential. While this is a good thing for gamers, if the industry dies soon, we may never get to see those great games.


3. Recession ain’t getting better


Microsoft reported earnings of 66% less than a year ago. Nintendo also 60% less. Less people are buying games. Doesn’t take a rocket scientist to figure out why. There are more signs indicating that the recession is just going to get worse than better next year which could give the industry a virtual heart attack.



4. Me Too E3 Mentality



I didn’t find E3 2009 to be impressive. I found it to be pathetic. M$ and Sony are apparently in desperation mode by copycatting the Wii motion form of gaming. They want you to believe that this is the next evolution in gaming. But gamers by definition are lazy coach planters. Who wants to get up and wave their arms, jump around to play a freaking FPS? Controllers work just fine. Camera based games have been tried before, and they flop. And we get this crap instead of new hardware for the next 5 years? Good grief, the industry does need a rebirth.


5. Fast Shift to DLC


If publishers have their way, all future games will be DLC. Production costs eliminated. Then charge more and more for add ons. You can bet your bottom dollar that EA is planning this with BF 1943. The game is a success with no costs for producing discs or manuals. Now, they will probably release more and more $10 map packs, and by the end, you have paid $100 bucks for a game that had the same number of maps in BF 1942.

They don’t mind screwing the gamer anymore to trim the fat. Profit is all that matters.
 
The industry is not crashing, if anything its getting better. If it takes longer for a game to come out, there is more demand for it. Look at what has happened to Arkham Asylum, people are buzzing all around it, giving it rave reviews.

If publishers are afraid of COD then fine, but Q1 next year is going to be crammed with great AAA titles. Maybe the economy will better then too, there are signs everywhere that the economy is improving and there are still 4 months left of this year or 8 months left in most companies' fiscal years.

As far as copying Wii motion, whatever. Exercise games are going to be the next "Band" series of games and everybody wants to get into the action, will it lead to the demise of controllers. . . of course not. There are too many people that just want to sit there and play their FPS's with the standard controller and not wave their arms around. These peripherals are just new additions, they are not replacing anything but they will certainly keep coming out and making the industry more interesting and appealing to broader spectrum of people.
 
Give him a break guys, he's a CAG in Training.

Seriously though, this "article" takes a lot of assumptions that everything is suddenly going to run out of money. While a lot fo things are true (delayed games, boatloads of sales), the industry is nowhere near collapsing it on itself. Do you even know why it crashed in 1983? Certainly not this. (Hint: It was ET's fault ;)).

As far as copying Wii motion, whatever. Exercise games are going to be the next "Band" series of games and everybody wants to get into the action, will it lead to the demise of controllers. . . of course not. There are too many people that just want to sit there and play their FPS's with the standard controller and not wave their arms around. These peripherals are just new additions, they are not replacing anything but they will certainly keep coming out and making the industry more interesting and appealing to broader spectrum of people.
Click to expand...

This is true too. Although i may not like that all of these casual gamers may arise since they take away from the niche-genre of gaming (soon it'll be cool to own Persona 4, i don't want that xD), this is the direction gaming is taking. It's certainly not going to disappear.
 
[quote name='kingkiller33']But gamers by definition are lazy coach planters.[/QUOTE]

Exactly what kind of coaches are gamers trying to grow? Football coaches before Madden comes out? Perhaps lifestyle coaches to help them with Wii Fit? I'd like to see these in the garden...
 
Personally, I don't think the gaming industry is going to crash. But a lot of the points brought up by the OP are entirely valid. It did suprise me that he didn't mention one of the biggest dangers to the game industry.

6. Over-Saturation

This is what killed the home console market back in 1983. Now, circumstances are considerably different from back then. The home console market is much better understood by the general consumer than it was back then. There are also fewer console contenders, and generally less confusion than in 1983. So even a substantial amount of over saturation isn't going to sink the industry.

But I think it quite possible that hard times could be ahead. The Wii is actually the console most at risk for this. Nintendo has seriously slacked off on its licensing standards, and now a glut of low-quality Wii titles are being released. Moreover, these dross titles are being distributed in outlets where the Wii's primary demographic regulalry shops. (big-box stores like WalMart and Best Buy) This particular demographic is one of the most fickle, and is the most at risk of losing faith in home consoles due to an inundation of crap games.
 
I hope that at least a bunch of crappy publishers and developers go belly up and the rest realize we want quality games only not trash to make them a quick buck.
 
Not to turn this into a "one console future" thread, but it would take another industry crash for Microsoft, Sony & Nintendo to work together on the same piece of hardware.
 
Its a much bigger industry now than in 1983 and the companies involved now, Microsoft, Sony and Nintendo are much bigger companies than Atari, Mattel, Coleco were back then. One thing that is similar is that the amount of shovelware produced both then for the 2600 and now for the Wii is quite prevalent.
 
where sony and microsoft have seen losses in their gaming depts they both have other ways they make money and can pull from those resources when needed. i dont see how deals would hurt them same for used games most people dont care too much for how expensive games are so they wait for those deals they get the games they like the games maybe when the sequel comes out they will buy it new for full price ( i plan on doing that for uncharted 2). the gaming industry isnt going anywhere anytime soon its one of the few industries that is still making decent amounts of money which is why the govt is doing all it can to find ways to get some of that.

hell considering you can get games cheaper nowdays than the price of going to a movie and most gamers know that id believe the movie industry would be in more danger of failing than the videogame industry but before those 2 its the music industry.
 
Don't quit your day job, OP. I don't think you have much of a future in financial journalism.

Pretty much everything you wrote makes no sense. Sorry.

[quote name='militantatheistaphob']I hope it crashes, so PC gaming gets stronger[/QUOTE]
Super-facepalm.
 
If #1 is a sign, then the industry's been due to crash since CAG began in 2003. :lol:

The recession has hurt the industry, judging from the number of studios we've seen close this year, but I think that's the only thing on the list that actually makes sense at all. Even then, it's something that (hopefully) shouldn't last for more than another year or so.

As for #5...until we've got affordable broadband access everywhere in the country, we won't see all-DLC systems. Period. The PSPgo is the first test of this, and I suspect we're going to see regions of the country where the system bombs because broadband is either nonexistent, provides inadequate speeds, or prohibitively expensive.
 
This kind of thread was getting old when I was using a Windows 3.1 system to access Usenet. Without fail the OP fails to understand that the console game business is structured very differently from that which crashed in the early 80s.

And note that phrase: console game business. The video game business in general did not crash, just the console sector. EA was built on home computers like the Apple II, Atari 800, and Commodore 64. These open platforms were EA's bread and butter for several years before Nintendo made console worth supporting again. Even then, it took a while for EA to understand the wisdom of Nintendo's closed platform publishing model. They avoided Nintendo's licensing procedure and royalty fees, leading to much back and forth litigation. After a while, though, the third party publishers came to understand why it was to their advantage comply with Nintendo and Sega's requirements. Among other things, it kept garage band type game developers from being a source of competition that diluted the market on open computer platofrms. (A similar effect can be seen when established players in an industry seek government regulation to prevent problems that are theoretical at best. The real reason is incumbents seeking to deny access to new competitors.)

The names of the players may change but there is nothing to suggest that there the market dedicated interactive entertainment devices is going away any year soon.
 
[quote name='CoffeeEdge']Don't quit your day job, OP. I don't think you have much of a future in financial journalism.

Pretty much everything you wrote makes no sense. Sorry.


Super-facepalm.[/QUOTE]


I bet you can't provide one single fact that invalidates any of my points.
 
[quote name='kingkiller33']I bet you can't provide one single fact that invalidates any of my points.[/QUOTE]

OK from a close industry stand point I totally agree with all these factors including the latter added sixth about saturation of crap! I've been managing a local videogame retailer for over 10 years and there will be nothing like the boom of the PS one or the shift from N64 into this giant raging demon called Sony which Nintendo passed on btw, and later into the PS2 King. It's sad really, but the industry has certainly reached or closely approaching a plateau, hopefully this will all weed out the weak companies and we should see better content and more control over what gets made or ported or re-made, or downloaded..

Not to say there isn't great games right now or in the future, or that the industry doesn't have the potential to make Billions more, I just want the focus to shift back from inbedding ad content in games and every game with a modified unreal engine and a cover system, to.. i dunno, good games, and you know what they are, not titles like ninja breadman or pimp my ride, or even march of the penguins.

sorry I'll stop now, +1 to Kingkiller33 though keep on keepin on!
 
I don't think it's crashing, but, I agree with some of that crap in the list. Everyone shits on the Wii, and yet, tries to be like it. It's cool when Sony/MS has motion controls, but, when Nintendo does it, it's stupid.

:shrugs:
 
I'd also like to propose a 7th reason:

Piracy: It's so taboo I know but it's true, more and more people are spending money on pandora batteries, R4 chips, and console chip/soft mods. I think as we gamers get smarter we get thriftier? Is that it? More and more places in print, or the internet have a game review from more biased sources telling us this game isn't worth it, rental forms like blockbuster or gamefly, and bit torrent, these with all the aforementioned reasons are snowballing together sucking money out of the industry.
 
[quote name='kingkiller33']I bet you can't provide one single fact that invalidates any of my points.[/QUOTE]

Okay, explain how the popularity of DLC is a "reason the game industry may soon crash."

You don't know what the hell you're talking about, and you have absolutely no worthwhile insight into anything.
 
Hi, this is my premiere post, so no hating, please.

The games industry does tread a tightrope of risk, but with no risk, there's no reward. New things will be tried out, like NATAL etc, because they want us to buy into their vision. The consumer ultimately decide on what will be though, so all their schemes might end in nought.

Take a look at Nintendo. They lead the industry, but they have stumbled with some of their products, like Virtual Boy. Back when everyone thought VR was the future of gaming, it was us consumers that decided, 'Sorry , Nintendo this is bullshit and I'm not buying it', and anything VR died out.

The most dangerous and valid, of your point IMO, is the fast paced shift to DLC content. DLC is a positive move for the industry, no doubt about it, but I feel many in the industry are misplacing their trust too deeply in it, and the fact consumers do not want a total DLC future. Come on, we love to own shit, period.

Going total DLC, will be exploited to the max, like how iPhone is only sold through some service providers (it is in the U.K anyway), and you can't just walk into an electrical goods shop and buy one openly, then choose your service. I certainly don't want piracy to kill this industry, but I also don't want the powers that be, to have total control over games and how they are priced and sold. I think, in the end, there will be a middle ground forged, where DLC and physical media coexist, as this is the best and only way to be fair, to the consumer and the developer/publisher, for increased sales, while cutting down on piracy.

So don't worry, unless the world ends soon, this industry isn't going to die, and even if it did, it would be reborn again, because our passion would revive it, and PCs are what games are made on. It would take PCs dying to really have an impact, which is highly unlikely.
 
The gaming industry wont crash, its doing so well that prices of games in Canada are $10 more because publishers know that gamers will continue to buy games even with a price increase. Obviously there is a limit to how much gamers will spend but even with its $70 price tag its hard to look away.

As for DLC I think it will benefit the industry because if a game is good, gamers will continue to support it.
 
Regarding point #1, I've actually found the 2009 gaming deals to be significantly worse than some of the gaming deals found in prior years.

I don't think we'll see a crash like the post Atari 2600 one ever again. There was just one main system at that time. Now, too much crap on the Wii? Find something good on PS3 or 360. Nothing to buy on PSP? There's plenty on the DS.
 
[quote name='RedarTemaG']OK from a close industry stand point I totally agree with all these factors including the latter added sixth about saturation of crap! I've been managing a local videogame retailer for over 10 years and there will be nothing like the boom of the PS one or the shift from N64 into this giant raging demon called Sony which Nintendo passed on btw, and later into the PS2 King. It's sad really, but the industry has certainly reached or closely approaching a plateau, hopefully this will all weed out the weak companies and we should see better content and more control over what gets made or ported or re-made, or downloaded..

Not to say there isn't great games right now or in the future, or that the industry doesn't have the potential to make Billions more, I just want the focus to shift back from inbedding ad content in games and every game with a modified unreal engine and a cover system, to.. i dunno, good games, and you know what they are, not titles like ninja breadman or pimp my ride, or even march of the penguins.

sorry I'll stop now, +1 to Kingkiller33 though keep on keepin on![/QUOTE]

Yea, it's sad that the PS3 is approaching its 3rd holiday season with only 3 exclusives.
 
The game industry is changing, and there will be some major casualties, but it won't die. There is too much money and inertia for it to die. I am wandering how GameStop and other retailers will make due as DLC becomes more and more prevalent.

I like the one poster's comment that if it happened, it would allow him to catch up on a backlog of games - that's me. I think the industry could be out of commission for five years before I would need a new game. :)
 
I'm bored so I feel like refuting all your points.
[quote name='kingkiller33'] 1. Deals, Deals Deals[/quote]
Deals have always been around.
Unlike back then there are even more games being produced and it's always been growing.
2. Delays, Delays, Delays
Click to expand...
Game companies making more profit means they have more money to invest in projects like... making more games. If business timing dictates that the release of a game will be delayed, then so be it.
BTW
The release date of a game does not always coincide with when it's finished.
3. Recession ain’t getting better
Click to expand...
IIRC the gaming industry (and the entertainment industry) have not been hit as hard. Some even grew.
Sales dropping is no surprise to me. They might be saturated in the market right now.

4. Me Too E3 Mentality
Click to expand...
Although Motion Detection is hype right now, let's face it, controls need innovation too. What's the last big controller change, vibration? Analog sticks? Approaching game development with a new control concept is just as revolutionary as lifelike graphics.
I mean, look what happened to DDR...

5. Fast Shift to DLCs.
Click to expand...
If they're making profit, how is the market gonna crash?!
 
I think there will be a mini crash if Nintendo doesn't kick it up a notch. They seem to be going all in on the casual folks, letting publishers run amuck with shovel-ware.

It's the same kind of shovelware that doomed Atari, and the same type if consumer.

I bought a PS3--the last non-Nintendo console I've ever owned was a Sega Gensis. Haven't touched the Nintendo Wii in months. Three of my friends, two of which are Wii-only owners, just got PS3s.

There are 3 titles that I'm interested in for Wii on the foreseeable horizon: Mario Galaxy 2, New SMB Wii, and metroid other M. I'm skipping Wii Sports 2, so what's left?

After playing the next-gen consoles, It is hard to find a compelling reason to buy any more Wii games.

Anyway, I hope Pacter is right--I hope there will be a Wii Plus HD with a HDD, but still, you need some horsepower and memory to play next-gen games.
 
[quote name='jh6269']
There are 3 titles that I'm interested in for Wii on the foreseeable horizon: Mario Galaxy 2, New SMB Wii, and metroid other M. I'm skipping Wii Sports 2, so what's left?

[/QUOTE]

Wii games I'm looking forward to (besides the 3 you listed, all of which are day 1 purchases for me):

Zelda
Metroid Prime Trilogy
Trace Memory 2 (might have to import this one)
Monado: Beginning of the World
Kirby Wii (still showing up on the Nintendo yearly financial reports, who knows what will happen with this game though)
Span Smasher
Sin and Punishment 2
Muramasa: The Demon Blade
The Grinder
Tales of Graces
No More Heroes 2
Red Steel 2
Final Fantasy Crystal Chronicles The Crystal Bearers
Epic Mickey (looks like we wont get it for a few years but it looks awesome)
 
One point before it's locked. OP should've said "Peripherals, Peripherals, Peripherals" or "Blame Activision".

/thread
 
if those are the five reasons then it deserves a good laugh.
those are not the reasons why video games may die.

if you believe in those five reasons then you should also believe in santa clause.
 
Last edited by a moderator:
Video games are only the most money making form of media.....

a video game only holds the record for largest media launch sales in the world...

the video game industry makes more money than books, movies, music, porn, etc..it is the BIGGEST selling type of media on the PLANET..

why in the fucking world would the video game industry crash ANY time soon???
 
[quote name='Malik112099']Video games are only the most money making form of media.....

a video game only holds the record for largest media launch sales in the world...

the video game industry makes more money than books, movies, music, porn, etc..it is the BIGGEST selling type of media on the PLANET..

why in the fucking world would the video game industry crash ANY time soon???[/QUOTE]

you're thinking too narrow! you're thinking about money only, it's more then money.
 
[quote name='Complex Games']The game industry is changing, and there will be some major casualties, but it won't die. There is too much money and inertia for it to die. I am wondering how GameStop and other retailers will make due as DLC becomes more and more prevalent.[/QUOTE]

This is a very good point. The industry for games has shifted considerably since the last major upheavel. It is no longer reliant on a single distribution system. And marketing for games has become considerably more savvy over time. (solid marketing is a large reason for the Wii's success) Even if the industry goes through some rocky times, there are a number of new opportunities that companys are going to be eager to exploit.

If the retail market for games crashes, a lot of publishers and developers will just transition into digitial distribution. Services like On-Live could easily have us paying for games the same way you pay for cable TV. The infrastructre is already in place for all three console holders to distribute games digitally. Even in a worst-case scenario, there will be opportunities that will keep capable developers from tanking.
 
When you have console's like the Nintendo Wii, literally grabbing users who weren't even gamers before, selling so many consoles, and attracting a new audience, I don't think the video game industry will be going anywhere anytime soon. The only thing that might affect the gaming industry is pricey consoles, such as the PS3. I mean, like, consoles becoming so advanced that they breach that price
 
I'm not certain that the PS3's price barrier is something that will hold up the game industry. I think it's primary consequence will just be the speed at which Sony is able to spread it's install base. In terms of sales, the PS3 hasn't been tanking. It just hasn't been doing nearly as well as either of its predecessors. It's important to keep relative perspective in mind. The danger for the PS3 isn't slow sales. The issue is the breadth of the install base, and how this will affect developers already struggling with inflated expenses.

Although its a great time to be a game consumer, it is a pretty harsh time to be a game developer. The real danger of collapse is in that area, on the development side of things.
 
Lol, that specifically sucks for me because I actually plan on eing a video game programmer.
 
[quote name='Phunin']Lol, that specifically sucks for me because I actually plan on eing a video game programmer.[/QUOTE]

It's not so bad for the programmers. There are always jobs availabe for programmers.

And as I mentioned earlier, a lot of comapnies are adjusting their sales expectations and the scope of their design docs to produce more profitable projects. Grandiose visions for open-world games are being scaled back to scripted sequences through smaller-scale levels. A lot of developers are considering producing games for download services like Steam and the iTunes store. Shorter games are becoming more common place and accepted.

We are in a bit of a transition phase. There will be changes, and some of them might be quite dramatic. But there is simply too much opportunity, and too many people standing ready to exploit it, for the gaming industry to crash entirely.

Keep working on that programming. You will get a chance. If you have a Mac, I'd strongly suggest looking into iPhone development. It's a good way to develop some small programs, while providing an opportunity to score some cash.
 
You must log in or register to reply here.
bread's done
Back
Top