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Mat Piscatella: Industry spend CAGR has been basically flat since the pandemic, no significant upside room for player/hours growth, costs keep rising
- Thread starter Thick Thighs Save Lives
- Start date
- Business Analysis
Bernardougf
Gold Member
AAA exclusive market as it is .. is unsustainable... time to make a change for more shorter, less blown games, more focus on gameplay and less on super eye candy and movie like achievements... make more profitable AA games to support a few big AAA games.. and change the AAA formula so you dont take 6 years to do one game...
ProtoByte
Member
How many times does this need to be deboonked before people stop regurgitating it?
Punished Miku
Gold Member
Gotta say it is nice to hear people talk about AA games. Its been my #1 request for a decade. Nice to finally see people start to barely get it, but this was obvious literally years and years ago. Shawn Layden even explicitly spelled it out.
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Wildebeest
Member
Because people are really going wild for short, full price games that don't look that great?
Killjoy-NL
Member
And thus Sony is investing in GaaS, to increase revenue so they can maintain AAA output in particular.
Whoever is not seeing the necessity of this, is quite short-sighted.
Whoever is not seeing the necessity of this, is quite short-sighted.
ProtoByte
Member
Needlessly insulting and antagonistic. Learn to discuss like an adult.
Oh please. Spare us. Double A games have been around and present this entire time. It's not a new thing, and you haven't done anyone any favors by paying lip service to them.
Why people try to lionize games simply for not being AAA is beyond me.
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Bernardougf
Gold Member
I Didnt even say what the price of the games should be mate .. so no point in arguing what wasn't said
Bernardougf
Gold Member
You should try to be more vague, dismissive and condescending next time... poor effort
Wildebeest
Member
Then how are they bringing back profits by selling to the same saturated and oversold group of consumers if they don't charge the same for what they see as less?
Bernardougf
Gold Member
Nintendo deals with the same saturated market selling less complex games with good and sustainable prices, so it is up to them to find the balance between AAA AA GAAS development so they can arrange their budgets, something has to change, you cant possibly see the writings on the wall and think it can all stay the same in AAA gaming.
Punished Miku
Gold Member
Fuck off dude. I dont have to spare you anything. The dumb shit I have to read on this board and you feel like I have to spare people hearing about AA games in a topic about out of control budgets.
Wildebeest
Member
Not really. That saturated market has been bitterly complaining about Nintendo for the past 20 years, talking about how they have abandoned them and needed to move with the times and make more "mature" "high end" games, or whatever.
Bernardougf
Gold Member
Nah, Im not a nintendo fan by any means, my switch is collecting dust for 4 years now, but they found their mojo and perfect balance in profits x development... some may complain about their tactics but is undeniable that at the present moment they have the better grasp of what they are and what they need to do.
Xbox is lost and Playstation is deviating to Gaas and Pc to try and keep afloat in the future while probably fucking up first party single player (their strength) development right now since they have jack shit to show for this year.
I trust Sony to eventually sort things out but changes are needed in AAA exclusive development imho
I think for AA to be increased in desireability customers would need to be conditioned over time to take those games seriously as potential sources of entertainment, and what the industry leaders/platform holders and even game media promotes and the way they package and promote thing during shows like the Game Awards, State of Plays, etc. would need to change. Every now and then a State of Play will put a AA looking game near the AAA game but it is clear that it “looks odd” and I have to think it is because Sony’s own first party took the lead in preferring AAA as time went on and took the customers in that direction as time went on.
Aside from that, AAA publishers could stand to look at qualities that Grand Theft Auto or Baldur’s Gate 3 has and be daring enough to allow their creators the latitude to produce games with those qualities instead of now having to depend on Grand Theft Auto to do the job for them.
Aside from that, AAA publishers could stand to look at qualities that Grand Theft Auto or Baldur’s Gate 3 has and be daring enough to allow their creators the latitude to produce games with those qualities instead of now having to depend on Grand Theft Auto to do the job for them.
BlueLyria
Member
I mean, 2020 and 2021 had massive unsustainable growth and now pretty much any growth is crawling, people don't have massive free time anymore and most are not in work from home regimes, so it's natural that we're slowing down, it just looks like most publishers don't want to accept that
StereoVsn
Member
Yeah, the issue is that those games will not sell well for $70. Just not going to happen.
Personally, there is no way in hell I am spending $70 unless it’s a meaty title I can get “lost” in. Aka FFVII Rebirth is the first one this year and probably only one for a while on my side.
Edit: In addition to natural reduction from pandemic heights, overall most people’s real spending power fell since 2019 due to inflation vs salaries difference. Looking at something like 30-40% rise in costs over past 4 years in most Western countries.
So people just have plain less money to spend.
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Xtib81
Member
I'm gonna have to ask what takes so long to make games honestly. Aren't they supposed to develop tools to make development faster? When I see sequels taking 5+ years and bringing very few innovations to the table, I'm really wondering what they've been doing the whole time.
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Cyberpunkd
Member
See those AA games still priced as full retail titles because MUH PROFITS, then tank, we go back to square 1.
cormack12
Gold Member
The real story is maintaining pandemic numbers. That would be growth imo considering such an unprecedented event.
However, this is what GaaS ecosystems lead to. If you force your players to spend more time in your games for seasonal grinds or 160 hour open worlds then they don't have time to play anything else. When I finish them or put them down the other games are on sale so, I dunno. Seems like this is something anyone could have predicted tbh.
However, this is what GaaS ecosystems lead to. If you force your players to spend more time in your games for seasonal grinds or 160 hour open worlds then they don't have time to play anything else. When I finish them or put them down the other games are on sale so, I dunno. Seems like this is something anyone could have predicted tbh.
Little Chicken
Member
Lean on emerging markets... enter Xbox Series S.
UK officially in recession and economies elsewhere going down the pisser, luxury spends i.e. gaming is not on the table for many.
UK officially in recession and economies elsewhere going down the pisser, luxury spends i.e. gaming is not on the table for many.
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Bernardougf
Gold Member
Absolutely... this situation if it is as bad as it seems to be or some are making it to be needs a completely overall in strategy.. from development to sales tactics.
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Cyberpunkd
Member
This is the real reason. If you are playing GAAS you are playing al the time one, at most two games. You don't have time for anything else. I know, I raided in WoW for 10 years, during which I didn't touch another game.
So what the dumb fucking market is doing is consolidating around a dozen of titles (FIFA, CoD, Fortnite, etc.) and pushing out everything else.
Why request or lionize lower budget games though. What does that get you exactly other than possibly a lower quality game/graphics due to lower polish? You can have good AAA games and you can have bad AA. Why champion AA? If AAA costs are going up then so are AA costs. The only way it works is charging more for less proportionally or having other types of monetisation in your game.
MacReady13
Member
I just purchased Banishers on Steam for $79 here in Australia. It’s a great AA game that plays brilliantly, looks great and has an interesting story. It doesn’t need to cost $300 million to keep me playing it and I can tell you now I’ve put far more hours into this game over Spider-Man 2.
Point is, we don’t need AAA games that cost more than a Hollywood blockbuster to satiate our gaming needs. Nintendo doesn’t need to spend that money to get me to play their games. Why does gaming today need to go that ultra budget route? Who in the fuck is asking for that? Again, I don’t see Nintendo spending that much yet they get sales that Microsoft and Sony would be envious of.
Point is, we don’t need AAA games that cost more than a Hollywood blockbuster to satiate our gaming needs. Nintendo doesn’t need to spend that money to get me to play their games. Why does gaming today need to go that ultra budget route? Who in the fuck is asking for that? Again, I don’t see Nintendo spending that much yet they get sales that Microsoft and Sony would be envious of.
StereoVsn
Member
Most emerging markets are going: “What’s an Xbox?”. Series S isn’t selling well there.
In addition, regional pricing for games has been getting worse and worse in local prices due to publishers’ greed, and people from Western countries taking advantage of VPN to save a few $, not caring about impact on the locals.
MS could have made a bigger difference with Series S and GamePass, but their management is incompetent.
Little Chicken
Member
Yep, there's only so many GaaS titles that can healthily sustain themselves at the same time.
Trying to get a slice of the pie up against Fortnite, Minecraft, ROBLOX, Overwatch, Apex Legends, Valorant, etc in the long term is no easy task.
Of course Nintendo seems to be immune to this seen as they can just drop a Kirby game and millions of 50 year olds will buy it in a heartbeat.
ReBurn
Gold Member
This Is exactly why they are doing it. Go into any topic on this board about Sony GaaS strategy and you'll see tons of people saying they don't need to waste resources on GaaS and should just focus on big single player productions. But those games are expensive and take forever to make. Despite selling a lot of copies over time they don't make enough money to pay Sony's bills on an ongoing basis. Number of units sold of consoles and games compared to other companies isn't what's most important to Sony right now. How much money they make is.
They need to do something to keep money coming in between big single player releases to keep the lights on because right now their bills are being paid by third party game sales revenue.
Little Chicken
Member
Yeah that's totally on them because the Series S is actually the perfect offering by price/power.
StereoVsn
Member
Well, I don’t know about perfect, lol, but for the price it should have sold better. Well, till MS went mad and RAISED the price with the new model.
It’s MS management’s incompetence and considering that they are not going anywhere, things aren’t going to change.
Little Chicken
Member
There is a higher likelihood of millions of cheap laptops running ROBLOX being sold in emerging markets than there is anyone buying an Xbox at this stage tbh
Bernardougf
Gold Member
I just think that AAA gaming is too much bloated right now ... Im going to peek one example, Im not couting sales, profits or anything, just talking about the game, I just finished my playthrough of Hogwards Legacy, was about 40 hours, by the end I was exhausted about the repetition but enjoyed the game quite a bit, the problem is that after 40 hours that is still a shit ton of unnecessary things to do... some may enjoy completing 100% of the game sure, but I cannot think that my 40 hours were more then enough and all the rest is cost eating filler.
That's just my thoughts and opinion but I think AAA is to unnecessarily bloated ans there is a middle ground to be found
Woopah
Member
Nintendo is very profitable, but they get a lot of benefits from being a platform holder that other companies don't enjoy.
SpecialAgentZ
Member
Ever increasing costs of AAA games in a nutshell:
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efyu_lemonardo
May I have a cookie?
Why is reaching pandemic numbers even a goal? Who in their right mind set that?
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efyu_lemonardo
May I have a cookie?
I think gaming execs and stockholders may be suffering from the same dopamine addiction they've been pushing onto players. They seem to think that a lucky jackpot event such as the gaming surge during the pandemic should be a regular occurrence, rather than treat it as what it truly is and be grateful for the one time shot in the arm.
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Tajaz2426
Psychology PhD from Wikipedia University
Folks just do not have the disposable income they once did. Insurance premiums have risen because medical bills have went up, educational costs, heating and air as natural gas has doubled in price in just a year and a half, groceries have skyrocketed, auto and home insurance has went up, gas prices are climbing and will continue as we start changing our oil to warmer weather which costs more to refine, all goods and services have went up because everyone in the chain has had to raise prices ending with the consumer.
On the gaming side folks are looking closer at the games they purchase, because most of the time the game is looking to take more money from you constantly causing people to buy less as they know that the purchase price of the game isn’t going to be the end of it and it will cost more to get the full game from the item.
It’s just an overall generalization and not digging into the details of every variable of the equation, but folks out there are hurting. My wife and I make a good living and we are spending about 11 grand more a year just on bills and groceries per year. That is unsustainable for folks as credit card debt has hit over a trillion here for the first time. I cannot imagine those less fortunate and how bad it is crushing those folks that are trying to just live and their breathing room has been taken.
Around the world it is even worse on some economies and their citizens. Just my opinion on the situation as even with what I make per year I’m having to look closer at what I purchase. This year the effects will be felt even worse as folks are really digging in.
On the gaming side folks are looking closer at the games they purchase, because most of the time the game is looking to take more money from you constantly causing people to buy less as they know that the purchase price of the game isn’t going to be the end of it and it will cost more to get the full game from the item.
It’s just an overall generalization and not digging into the details of every variable of the equation, but folks out there are hurting. My wife and I make a good living and we are spending about 11 grand more a year just on bills and groceries per year. That is unsustainable for folks as credit card debt has hit over a trillion here for the first time. I cannot imagine those less fortunate and how bad it is crushing those folks that are trying to just live and their breathing room has been taken.
Around the world it is even worse on some economies and their citizens. Just my opinion on the situation as even with what I make per year I’m having to look closer at what I purchase. This year the effects will be felt even worse as folks are really digging in.
ReBurn
Gold Member
Utility is definitely the key in emerging markets. People are going to buy smartphones and laptops before they buy video game consoles.There is a higher likelihood of millions of cheap laptops running ROBLOX being sold in emerging markets than there is anyone buying an Xbox at this stage tbh
Angry_Megalodon
Member
This cheap generalization with zero insight is very similar to the "superhero movie fatigue" mantra. GOOD products sell. Bad ones don't.
And many AAA games nowadays are shit, generic turds designed with a template and stories written by amateurs.
Alan Wake 2 has just released official figures and it's a success. Games like Spiderman, Assassin's Creed, GOW, Horizon, etc, are all profitable.
Final Fantasy and Stellar Blade are going to smash it next. Being AAA is not the problem.
And many AAA games nowadays are shit, generic turds designed with a template and stories written by amateurs.
Alan Wake 2 has just released official figures and it's a success. Games like Spiderman, Assassin's Creed, GOW, Horizon, etc, are all profitable.
Final Fantasy and Stellar Blade are going to smash it next. Being AAA is not the problem.
StreetsofBeige
Gold Member
Maybe a lot of game makers would have more revenue if they didn't bargain bin their games fast setting a trend. It's like they all act like who can dump their games at 60% off the fastest.
I dont do a lot of Steam/GOG gaming, but I know the game goes on deal every month. And console e-store deals are pretty good too for years. Why buy regular price? Console e-store prices at the beginning were lousy but they now trend to lots of bargain deals like PC. Not as good as PC pricing, but can still be good.
Maybe if some companies copied Nintendo and held the prices firm, they wouldnt sink the profit margins into the toilet. I dont foresee any Nintendo fans waiting for 50% off deals. Probably because there wont be one in sight for a long time as Nintendo set expectations.
I dont do a lot of Steam/GOG gaming, but I know the game goes on deal every month. And console e-store deals are pretty good too for years. Why buy regular price? Console e-store prices at the beginning were lousy but they now trend to lots of bargain deals like PC. Not as good as PC pricing, but can still be good.
Maybe if some companies copied Nintendo and held the prices firm, they wouldnt sink the profit margins into the toilet. I dont foresee any Nintendo fans waiting for 50% off deals. Probably because there wont be one in sight for a long time as Nintendo set expectations.
StreetsofBeige
Gold Member
You can get good games that are AA.
Problem is the big companies with tons of employees and mo cap studios etc.... have a go big or go home kind of mentality. They'd rather risk making one $100-200M AAA game complete with tons of marketing than two Lies of P games.
Some big sellers are indie kinds of games costing $20 or less. Made by a group of people a fraction of the budget of a big game. Will these games generate $500M sales? No. But the big companies prefer aiming for the stars. But that's business life. When any company gets a taste of big sales, it's hard to dumb it down releasing budget products even if those products can still find their audience and be profitable.
At my company, the biggest selling products generally have the worst profits. Its just too much of a grind battling it out with competitors selling products at 40% off with high COGs for as much units and market share as possible. Top line sales are fantastic. Bottom line profits are junk. Some even lose money. Then some product ranked 60th on our master sales ranking list is the most profitable.
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SlimySnake
Flashless at the Golden Globes
All this doom and gloom lmao. Gaming is stronger than ever. People are not going to stop playing video games just because its 2024. More players are playing games than ever before. Spiderman 2 just became the fastest selling PS game ever. All companies are more profitable than ever before.
The problem is that they dont want to take a loss on their console like they did in the past to hit the $300 let alone $199 mark. Thats when you get the casuals. But right now, everyone just wants to make profits and arent willing to grow. Then they bitch about not growing.
This guy below is right. Games are too big, too long, and too expensive. Spiderman was a 15 hour game with maybe 5-10 hours of optional content. Sold better than any of this other bloated shit from Sony. GOW sold 5 million in a week or something crazy like that. Did it sell that much because it was twice as long as the first game? because it was 40-50 hours long? Nah. it was always going to sell well. They shouldve made a 15 hour game with maybe 10 hours of side content and shipped it in 2-3 years. instead the 4.5 years it took them to make a last gen game.
HFW is even longer with almost 100 hours of content. Why the fuck did it need to be that big? Mass Effect 2 was made in 2 years. Had 20 hours of main content with 10 hours of side quests. One of the greatest games ever made.
Corporations like Sony, MS and EA need to intervene and say, here you have 2.5-3 years max. Deliver what you can in that time period. Cut what you cant. You are not going above 3 years, period.
People are going to buy these games. No one is saying release a 6 hour campaign. But 15 hours like Uncharted 4, Spiderman 1, and 2 and TLOU1? Why would people skip those games?
The problem is that they dont want to take a loss on their console like they did in the past to hit the $300 let alone $199 mark. Thats when you get the casuals. But right now, everyone just wants to make profits and arent willing to grow. Then they bitch about not growing.
This guy below is right. Games are too big, too long, and too expensive. Spiderman was a 15 hour game with maybe 5-10 hours of optional content. Sold better than any of this other bloated shit from Sony. GOW sold 5 million in a week or something crazy like that. Did it sell that much because it was twice as long as the first game? because it was 40-50 hours long? Nah. it was always going to sell well. They shouldve made a 15 hour game with maybe 10 hours of side content and shipped it in 2-3 years. instead the 4.5 years it took them to make a last gen game.
HFW is even longer with almost 100 hours of content. Why the fuck did it need to be that big? Mass Effect 2 was made in 2 years. Had 20 hours of main content with 10 hours of side quests. One of the greatest games ever made.
Corporations like Sony, MS and EA need to intervene and say, here you have 2.5-3 years max. Deliver what you can in that time period. Cut what you cant. You are not going above 3 years, period.
People are going to buy these games. No one is saying release a 6 hour campaign. But 15 hours like Uncharted 4, Spiderman 1, and 2 and TLOU1? Why would people skip those games?
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Loomy
Thinks Microaggressions are Real
6 year turnaround on AAA games is fine. The only way to make that shorter is to hire more people and that gets unmanageable very quickly, and it's impossible to retain from project to project.
6 years to create a new game/new IP is not unreasonable though. 6 years to make a sequel though - that's a problem.
The bigger problem is when you have 6 AAA games all coming out in a 2 year span, leaving you with 4 years of nothing. The solution is to stagger those out more, which is harder than it sounds. Or find a way to generate more revenue in those 4 years until the cadence is fixed(GaaS). Also harder than it sounds.
Next 3 years are going to suck
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Trogdor1123
Member
I suspect the biggest issue isn’t that the market growth is slowing, it’s that it is getting more and more concentrated in a few areas. This is bad in the long run.
ShadyAcshuns
Member
This industry
Bernardougf
Gold Member
Having your studios working for 6 years on a project is not ok mate... thats one of the problems right now...you can and should reorganize things so they can output games in 2 to 3 years ... that means shorter less bloated maybe less ultra production values ... but something has to be done .... they are all complaining about big costs and at the same time maintaining the same mentality
Klosshufvud
Member
It's funny how the fat guy Matt is clamoring to GTA6 to save them. As if GTA6 selling 40 million will benefit anyone but one publisher and select number of shareholders and investors. In fact, its release will most likely cannibalize sales of smaller games. Piscatella talks about a problem and then hopes the cause of said problem (consolidation of market buying habits) will save it. Completely clueless like he's always been.