WAKE UP PEOPLE. This is more than the typical "trim the fat" scenario. Not only are there a lot more layoffs and studio closings - probably the most since the video game crash in the '80's - but the AAA boxed game model is a dinosaur in its death throes.
I think every one of you who works for a third-party studio or a big publisher needs to take a look at your future. Is your livelihood based on a boxed product for 360/PS3/PC? Is your product a genre king? If not, your days may be numbered.
There is a fundamental shift going in our industry's way of making money. Only a very few games can justify $30 Million plus budgets with their box sales. There is an incredible amount of money being lost on games in this generation. There is no way in hell we are going to get a PS4 or a Xbox 720 that is an extrapolation from the NES to where we stand now. Sony is dying. Nintendo already bailed on that direction with the Wii - they've moved on to different markets where money can still be made.
What we are seeing now is partly due to the global economy, and partly due to that the fact that most of these companies being shut down have been losing tons of money for this entire generation of consoles. Big PC games have been on the decline for a while as well. Boxed games have become a money loser.
The gaming industry as a whole is not going away, and the big AAA games aren't either. Genre kings like Gears of War will stay around, but they will have less competition. What will happen is a major shift to different types of games, and different types of game players. Casual games, Social games, Flash games, in-browser engines, MMOs, Mobile games, XBLA, PSN, etc. That is where the future is. If your company is only making money through Gamestop and Wal-Mart, they better be one of the best.
All, the superstar 3rd party studios have other ways of doing business. Epic has engine sales. Valve has Steam. id has Quake Live. Everybody is moving on from the old ways. Places like Free Radical, Ensemble, et al. . . they did not evolve fast enough. Likewise, Midway based its business on that old way, and I'd bet that at least one more big publisher will die in the next year.
I think we are going to see a big contraction in the number of jobs out there until we can all figure out how to make fun games and make money in these new areas.
As long as big games keep selling and they are, studios will try to make big games, win or lose.
The problem is one of efficiency. There are already a number of smaller studios out there that have the right idea. Keep a small highly experienced core team and buy the services you need. It just doesn't make sense to keep a huge team any more, it never did.
I'll echo what others have said too, if you have talent and drive you'll land on your feet. If you're sitting in a closet at a big studio somewhere and getting by with minimum effort be very afraid.
And I do outsourcing so take this for what it's worth, some people would argue I'm wrong.
doc rob: so you think that the future of games of the casual market will be going up if that be the case?
I'm not saying there's going to be an explosion in downloadable versions of Bejeweled and Diner Dash. I think we'll continue to see a broadening of the kinds of games that are available, but when most games can be tried for free, accessible games will be the ones that prosper. Accessible does not equal "Casual." WoW is accessible. For a lot of players, WoW is casual.
I think you'll see lots and lots of "small" successes in the nature of Braid, World of Goo, Maple Story, Runescape, Whirled, Desktop Tower Defense, on and on and on.
I think there will be a few, rare mega-hits that take all of the traditional market. Big console shooters, sports games. But, there will be less of those than we are used to. The PC-only title that is not multiplayer is dead as a mega-hit. The same will go for consoles in the next-gen. Even sports games will be mainly about online content.
Okkun is right about a few things. People will still try and make those big games. There are ton of companines dumping absurd amounts of cash chasing WoW right now. Most of them will fail miserably. There are lots of companies trying to make the next great AAA shooter. That's the genius of Epic. They make a ton of money from their competitors off engine sales and still stay way ahead.
The problem with chasing those hits, "win or lose," is that when they lose, they lose so big their business fails. The studio dies or the publisher dies. Efficiency is a band aid when the entire business model is poison for 95% of them.
I don't have all the answers, but I think social gaming is going to be the biggest piece of it. What "social gaming" means is up to interpretation.
As long as big games keep selling and they are . . .
The problem is that they are selling the same amount as they did the last generation but they cost 10 times as much to make. See the problem? Outsourcing is not going to cure that. Only the biggest of the big hits can actually make that business work for them.
Haze is a perfect example. Free Radical basically had to bet their future that they could compete with Gears, Halo, MGS4, Resistance, COD4, etc. They couldn't. They died. In the last generation, they did fine with Timesplitters. In this generation they lost because not because their game stopped selling, but because it cost too much to make.
3d Browsergames!! this could realy be the future.. like the flash-video boom these days
ive been hearing of alot of flash based games /downloadble games flash based doing really well, but I thought that tied into the casual market of things?
WAKE UP PEOPLE. This is more than the typical "trim the fat" scenario.
I don't think there is anyone here saying its normal and no one has a right to worry. What I see people saying is that, because of a FEW FACTORS one of them being typical post crunch layoffs, bad management, economy in the toilet, things are a little bleaker then normal, but don't worry because as a whole the industry is pretty strong and unlike other industries our products are in demand especially when things aren't so rosy and people look to stretch entertainment $.
Honestly I think its the big expensive AAA titles that might be slipping to AA or A that are in danger. If they can't continue to wow like they did in the past or start to loose their luster it could be disastrous, big budget, shrinking profit, not good. Little budget, big profit, very very good. It might not be about the quality of the game, but more about what makes profit as to who sticks around.
There is an incredible amount of money being lost on games in this generation
More like an incredible amount of stock loss, and the companies that based their business on money they never had are the ones hurting. The ones that actually set their budgets by the profits they take in, are the ones who are just trimming the fat and will probably be able to ride it out.
Q: What will hurt us?
A: Freaking out like its Y2K. Why bother getting all spun up about something that hasn't happened yet? Why not be cautious and make wise plans for the future but don't choke yourself with stress over things you have very little control over...
doc: I disagree with your notion and the general thrust of this thread about evolution.
I think theres a tendency to want to label things when theres blood in the water but the problems right now really are just being exagerated by the financial climate.
The idiocy of the 'AAA mentality' and the 'at all costs ship for xmas' mantra have been around a lot longer than this generation of technology as have steadily rising team numbers.
Whats different now is that without loans being easy to gain in order to continue robbing peter to pay paul , what was always a short sighted system is now exposed as what it is.
Publishers do NOT want to have to wrestle with the notion that their mentality is at the root of the problem, that throwing numbers ( financial as well as more bums on seats) does nothing to deal with their underlying philosophy being fubar. It just buys you time and now that people can't buy time anymore they are falling to pieces.
EVERYONE who works in this industry is well versed in the standard ways of doing things that are wrong. The way we crunch to save features that dont affect the core dynamic of the gameplay rather than manning up and cutting things is indicative of the truth that mostly the people in managerial roles dont know what they are doing.
Most of those in managerial roles are there because they were promoted up the ranks without having gone to biz or management school, those that DID go and study this stuff went on to other industries unless they were C grade folk who ended up in the games industry as the more established ones wouldnt have them.
And there are a lot of issues like that underneath all this 'its the end of the world' nonsense that are harder to deal with now that the financial situation worldwide has exposed the chinks in everyones armour.
I think that if people want to think of it as evolution they can go right on ahead but that evolution period is going to last another year or so until the world financial situation is strong again and then people will go right back to doing things the same ass backward way they always did.
Then people will write up a hindsight retrospective on the great industry crash of the early 21st century and we'll continue merrily stumbling forward like we have always done!
The problem is that they are selling the same amount as they did the last generation but they cost 10 times as much to make. See the problem? Outsourcing is not going to cure that.
No of course not, it's a combination of things. If you outsource and are still sitting on a 150 staff team internally you're still burning cash at an insane rate. However, if you don't outsource and be smart about it'll be hard to scale that team back.
I have to agree with doc_rob. This industry's business model is outdated. The economic crisis facing the world has just served to trigger a structural collapse that was a long time coming. The constant quest for superior technology in games has hamstrung the industry, and increased the amount of risk a publisher or developer has to take on to ship a title. The sheer amount of growth that the industry enjoyed during the Playstation boom (PS1 and PS2) increased the number of competitors in the marketplace.
As such, any new game being released faces huge costs, incredible competition, and an insane amount of financial risk. It used to be that a game could get by fine by selling a certain, reasonable amount. But for the PS3 and 360, that is no longer the case.
The current crisis is just the culmination of years of stagnation. Fortunately, change is in the air. And there will be secure financial opportunities for those who are losing their jobs. The growing market for casual and core games is growing. Game's with simple gameplay systems and graphics are now proven money-makers. Flash is considered a viable development platform for games, and all the tools you need to create for it are free. PC games now have digital distribution services to secure their sales and track their statistics. Small teams, low development costs, and low risk. That is the future of game development.
Naturally, this will also mean smaller, simpler games. But I think the indie scene in gaming has proven that there is ample opportunity for creative expression without cutting-edge graphics.
blaizer I have to disagree about piracy, although yes it is a problem (and many people do it) not all probably less than half would actually buy the game if they didnt dowload it. Really Im just saying take the d/l figures with a pinch of salt.
the whole american car industry thing makes me chuckle- people dont have money to buy new cars- car sales slump- car company asks money from government to help make more new cars, now wheres the sense in that?
If people don't have money, they don't steal cars .
With games it's different, they are "free" in the internet, and they download the game easily and quite fast. In standard conditions, too many people would have bought the game, but that... does not happen now, because... "why pay if you can download it for free? are you crazy?"
The business is being killed (too many people are like blind because they also download, they have their interest LOL). For me is the first reason, you may be agree or not . There are too many reasons too.
As far as i can see, nobody will give a shit for a game when it's "free" in the internet (unless if you need an original key to play online as example). And of course, not all people will buy a determinated game, but if nobody buys the game... well, it's very bad for the studio (3-5 years of development means too much $$$$$$$).
With less than a half, a company could survive, just reading the BT number of downloads and people playing the game with the same key you can make an idea. when they play the game is for something... and COD5 is an example, astounding levels of piracy ¬¬.
What i really know, is that if someone wants to play a game, if he/she have the option to download the game for free, he/she won't pay the game in a high %. Proof: my friends and all ppl i know around me. 99% of them don't pay for games. They don't give 1 euro for a game, "because money is something to be wasted in other better things you can't access without money"
heh work in games, is like to work for the devil. We are not going to die, but surely too many won't be doing a living making games. enjoy.
I switched from games to visual fx right before all these massive layoffs........im pretty secure now. there is different jobs everyday........crazy shit
Games are having record breaking revenue. It's kind of shocking that a lot of studios are going tits-up, but this industry has always been harsh. I think a lot of these people getting cut will wind up in smaller studios with more talent and less dead weight. They will probably make some awesome games.
Lots of people are making MAD MONEY right now. Some people are doing casual games, or stuff for the iPhone.
I just want to be clear that I don't think the industry is in for a collapse. I just think that a lot of the folks who have been laid off recently are not going to get jobs doing the same kind of thing they were doing. I also don't think that the AAA traditional game is going away - that arms race will continue. I just feel that we have a lot of evidence now that it has reached a point of diminishing returns that very few players can participate in and still be profitable. The rest of us will do just fine if we can change with the market.
The problem of escalating costs is coincident with a huge opportunity with digital distribution coming into its own. Open platforms like Flash, Steam, and the iPhone will be massive business to those who can design great games to take advantage of them. WoW is the harbinger here.
So, it's not all doom and gloom. Just tough times for the people who are pushed out of the increasingly competitive traditional business, and who haven't moved on to the new stuff yet.
Vig - those numbers are revenue. If you look at the big publisher's financials, you will see that many of them are losing money in spite of record revenue. . .
Since this thing called money is clearly malfunctioning and people download games for free, lets make everything free. Sure people will rush the Bang&Olufsen store during the first week but after that things settle. I will make games for free as long as I can eat free tacos.
I'm surprised no one has mentioned the "U" word :poly136:.
but seriously, I plan on graduating college in about 6 months and just realizing this trend seems very insecure for someone like me with a wife and two kids. Is there anyone out there whos made a habbit of moving around every six months to two years succesfully?
This seasonal cycle seems fine to me. like some have mentioned before, this is a great opportunity to take advantage of starting new studios and expanding the world of game development.
The fact that old studios have made poor decisions by sticking to their old ways is sad, but it can be inevitable to anyone with out realizing it. These are trends that happen all the time, hence the term "oldschool". It should be a lesson to learn from, but most importantly be aware and prepared to make considerations when it comes around to face it.
Vig - those numbers are revenue. If you look at the big publisher's financials, you will see that many of them are losing money in spite of record revenue. . .
I'd like to see the hard numbers but they don't exactly make that easy to find, even to shareholders =/
Just out of curiosity where did you happen to catch those? All I keep running into are articles about a bullet proof industry, rock solid, making green hand over fist. It would be refreshing to hear another take.
If its true, it might be mostly because they are publicly traded companies who where using cash they never had. They just thought they had more time and could either get out, or figure something out.
If they claim to have 100bil and know that money can evaporate overnight is it a smart bet for them to base their budget on that 100bil being around, or worse barrow against it? That's what they've been doing, borrowing money they knew they probably couldn't pay back in the hopes of striking it rich. Then instead of using that money wisely, they gambled and lost some.
There are success stories out there, I work for one of them as do a bunch of other people who are and still will be employed. Places that make their payroll and do business as usual don't make the news. It's not impossible, if you're not stupid with your money, your plans or don't abandon basic logic.
It's sad that Publishers are just now catching on to a pretty old get rich quick scheme. Create a start up, crap out an OK title, sell the studio for millions, rape it of the loyal talent while you create another start up, with the hopes that the big dumb pub will bite again, and again... and if they don't, some other pub would.
If you take a look at all of the layoffs in the past few months (ends of quarters) and when they were made then most larger publishers made a profit despite letting go lots of people. While this does happen every year, I haven't seen it this bad in a long time, not since the Sierra days and the belligerence of EA's acquisitions of smaller companies and even then it wasn't like this.
I think Doc_Rob is right on many fronts. Most companies have not innovated or even thought beyond the quick sales launch or the next project, mostly due to inept business practices, terrible foresight, and almost unrestricted access to capital. This economy is the eye opener, the catalyst that will start firming up the business again until the market is safer to tread on. There's a lot of excess to remove which can be good or bad for us all.
Yeah I think this is the best course of action. Work on your portfolio till the storm passes. I also disagree with people who say this is just trimming the fat and not an all-out collapse; it's actually somewhere in the middle. 6% of EA, all of Nickelodeon (animators and 3d artists included), Free Radical, Midway, 16000 from Sony (not sure if that included dev people), and a few others I forget is no small isolated 'fat trimming'. All those people are now contenders for people who are also looking for employment; which pretty much means juniors are shafted for the time being.
Yeah I think this is the best course of action. Work on your portfolio till the storm passes. I also disagree with people who say this is just trimming the fat and not an all-out collapse; it's actually somewhere in the middle. 6% of EA, all of Nickelodeon (animators and 3d artists included), Free Radical, Midway, 16000 from Sony (not sure if that included dev people), and a few others I forget is no small isolated 'fat trimming'. All those people are now contenders for people who are also looking for employment; which pretty much means juniors are shafted for the time being.
EA was at 6% when you wrote that. They've now announced up to 10% layoffs, about 1000 people, and you can say goodbye to Black Box in Vancouver. This is clearly not just seasonal fat-trimming, this is a bad economy magnifying the problems of a bad business structure.
Work on your portfolio till the storm passes...All those people are now contenders for people who are also looking for employment; which pretty much means juniors are shafted for the time being.
The storm is hitting other industries even harder, remember. Working on the portfolio is fine if you still live with your parents. Not so much when you're struggling to find enough work to pay the rent. And other bills.
I was afraid this would happen. For months, everyone has said the game industry is "recession proof". Not to thousands of workers it's not. And that was the point. Thousands of experienced workers looking for work elsewhere in an industry that is shrinking. That's a big impact. Breaking in is now more challenging.
On the other hand, for the industry itself, it's a good thing. Right now, while few titles are selling like crazy, most others are not worth playing and crowding store shelves.
On the other hand, for the industry itself, it's a good thing. Right now, while few titles are selling like crazy, most others are not worth playing and crowding store shelves.
really? seems like there are so many good games that I haven't had time to purchase them all.
I wanna drop my 2 cents in the bucket. Yes I think things look pretty bleak right now, but I tend to agree with doc, I think the old model of the "AAA" title is going the way of the dodo, the market is oversaturated and too competitive.
The cost of developing a modern "AAA" game is such that if a medium size company does not have a hit it's almost certainly lights out, it's a serious gamble. Now look at all the "AAA" titles this year alone, there are just too many games for the market.
For the large studios that can release multiple titles a year it's not quite a "do or die" situation, but they are bleeding, take EA for example.
This leads to stagnation of the industry, you'll see that the larger studios will be relying on proven franchises, and not taking chances on new ip. And I think that is an extremely boring place to be, come on how many versions of game "X"do we need?
My hope is for a new model to arise from this current situation, smaller cheaper games.
With the advent of viable middle ware and electronic distribution, the cost of development has actually come down enough that it is possible for very small teams to produce quality products, but the mentality needs to be there to support, by that I mean, not applying the same old standard that is killing the industry now. so dont expect fallout or gears of war,(those games will always be around) but a middle ground, higher quality then current downloadable games but not the multi-million dollar extravaganza failures we say today. My 2 cents,
The market grew 10% this year. That is pretty massive. These big companies and publishers want to exploit that bigger market. They need people to do that. Obviously then the people they are cutting and the shops they are closing are ones they feel are were not going to help them do that.
Some of these closures are the result of a knee-jerk reaction by very risk averse business people. In 3 months when they see holiday sales are strong, banks will start loaning money again (especially with the 0% fed rate). As bad as things are, I am sure it is much worse in other industries, so you may as well work on that portfolio.
I think we will see a return to smaller development teams with workers that are more skilled. There has been a big influx of people who have had some formal education in video game art, and perhaps more of those people have been hired based on their diploma rather than their portfolio. While some of those guys are top notch, a lot of them don't have the desire to stay on top of new technology or the drive to improve that is required in this industry. We only see the cream of the crop here at Polycount-- even posting stuff online is a huge accomplishment. You guys wouldn't believe some of the stuff I have seen from game art "graduates".
Finally, "outsourcing"; the idea of which is really dumb. Am I outsourcing if I hire Bill or Per to make badass art for my game since they are not in the US? The fact is that you should be afraid of people in India and China taking your jobs, not because their country is poor, but because some of those guys are badass artists.
The market grew 10% this year. That is pretty massive. These big companies and publishers want to exploit that bigger market. They need people to do that. Obviously then the people they are cutting and the shops they are closing are ones they feel are were not going to help them do that.
Some of these closures are the result of a knee-jerk reaction by very risk averse business people. In 3 months when they see holiday sales are strong, banks will start loaning money again (especially with the 0% fed rate). As bad as things are, I am sure it is much worse in other industries, so you may as well work on that portfolio.
I think we will see a return to smaller development teams with workers that are more skilled. There has been a big influx of people who have had some formal education in video game art, and perhaps more of those people have been hired based on their diploma rather than their portfolio. While some of those guys are top notch, a lot of them don't have the desire to stay on top of new technology or the drive to improve that is required in this industry. We only see the cream of the crop here at Polycount-- even posting stuff online is a huge accomplishment. You guys wouldn't believe some of the stuff I have seen from game art "graduates".
Finally, "outsourcing"; the idea of which is really dumb. Am I outsourcing if I hire Bill or Per to make badass art for my game since they are not in the US? The fact is that you should be afraid of people in India and China taking your jobs, not because their country is poor, but because some of those guys are badass artists.
thats what I dont get I remember reading about the industry supposibly GROWING in the last year but all I hear is company XYZ layoffs 10k people or whatever.
but on the outsourcing note, I agree with you about BAD ASS artists but companies dont necessarly outsource for bad ass artists they do it for cheap labor
example in my job i work as the ONLY artist in a programming house, I spend more time cleaning up outsourcing work from china then I do actually 3d modeling here yea sure there might be like 1 or good artists out of the 20 that are making out out sourcing work but the saying goes "get what you pay for" and its cheaper to get crappy work for cheap thats just minor work (debree/ background buildings etc) then it would be to pay soem bad ass outsource guys like per or b1ll it isnt a matter of afraid of losing work based off quality its based of a dime a dozen rate
thats what I dont get I remember reading about the industry supposibly GROWING in the last year but all I hear is company XYZ layoffs 10k people or whatever.
To dramatically oversimplify the issue and remove all nuance and environmental factors (which you could have ascertained yourself if you were actually reading the thread...)
Growing pains.
Go work on art, man. Job security in the game art industry depends on being a great artist -- have the best artists on these forums ever had trouble finding work, even if the company they were with shut down?
And even if the sky falls enough traditional art skill will still net you some illustration work, or give you the foundation to easily adapt to another market for cg.
A lot of us keep pointing to the 10% industry growth this year as proof that things are just fine. Let me tell you where that 10% growth came from. It starts with an "N" and ends with "intendo." That's where your industry growth in these lean times is coming from. And as it has already been established, Nintendo has been expanding into non-traditional markets with non-traditional software and hardware.
Nintendo broke the traditional development structure and has been reaping success and cash money as a result. Expect more developers to follow suit. We've already seen Sony and Microsoft frantically scramble to mimc Nintendo's attempts at broadening their market.
I think there are interesting points going on in here. Some funny and others in my opinion hitting the nail on the perverbial head.
I think Kevin is pretty close with his idea of the issue being management. I believe that management becomes the wrenches in the machines. Companies running out and not having money because of bad business practices is common in all industries not just ours.
Look at what happened with Bernard Madoff and his "Ponzi Scheme" This guy sucked 50 billion from people over the past 20 years. The only reason he was discovered doing this was because of the economy. A bunch of people were taking their money out of the stock market (7 billion dollars worth) and he couldnt pay them their money because he was taking money from Paul to pay Peter and then trying to go back and pay Steve.
This philosohpy of business obviously will work for a short period maybe with exceptions last a bit longer. Nothing that is run with the idea of getting things done with no funds is never the right way. These things are all being exposed now and the people who screwed up in many ways are beign exposed.
Our industry always has down times and is naturally unstable. Granted this is a bit more tough this time because of the economy but our industry is not going to go anywhere and the cycle continues as does the cycle of life. Until a giant flaming meteor comes out of the heavens and decimates everything our industry will continue with growth and hardships its the natural cycle of things.
Just remember that if any of us ever get into management roles think of how we are effecting our fellow employees and avoid stupid mistakes.
Whew, sorry for the long post. Just make good art stay humble and treat others the way you want to be treated. if that doesnt work just point and laugh...
I think Kevin is pretty close with his idea of the issue being management. I believe that management becomes the wrenches in the machines.
On the one hand, that is an interesting idea. On the other hand, I find it hard to believe that all of the companies that are currently in trouble are shutting down their doors due to faulty management. Perhaps I just feel that management is a very obvious scapegoat.
But then again, this argument may have merit. Most of the industry that seems to be affected the worst is large publishers, and studios owned or controlled by large publishers. And if there were ever a segment of the industry prone to too much bureaucracy, it would be large publishers. It is quite possible that mismanagement could have been the cause of this. Perhaps more depressing, it is unlikely that upper management will actually suffer for these shortcomings. The rank and file in the development trenches are the ones getting kicked out on their asses.
But even if this is true, it points to a fundamental flaw in the nature of the industry. The industry has been fearing for years the advent of the mega-publishers. We were all worried that in a few years there would be nothing other than EA and Activision. But with this economic crunch these huge publishers are getting hit hard, and are closing studios left and right. Everyone is realizing that being under the financial umbrella of a super-publisher is no longer a guarantee of success or financing.
And regrettably, that means that fewer AAA projects are going to get produced. If no publisher is willing to finance independents who want to produce a 10 million dollar title, than the number of next-gen epics are going to dwindle. Even some indie titles for download services end up costing $100,000 or more.
Smaller studios, smaller budgets, smaller scope, smaller games. That's what the upcoming future of this industry is. Self-publishing, on-line subscription, on-line communities, and digital distribution. Get used to it.
If anything, games are at the very tip of a renaissance. They will just get sicker and sicker as the years progress. There's already mind-blowing shit out and more to come, and I don't see any real economic roadblock to that progression. Games are a really cheap form of entertainment when you consider how much playtime they offer. Yes, they're becoming more expensive to produce, but maybe that just means the business model should change. Look at films, the majority of which are complete shit but on average cost way more than any game and require far more in the way of organization, logistics, and material resources. Talk about a risky business.
To tie-in, I think games will eventually become the superior medium of entertainment, there's so much that has been untapped and it only takes a few innovators to pave the way. Eventually we may see a large migration of talent from would-be film makers to the game industry and maybe game development will come to mimic that of film, with different specialties banding together on a per project basis, writers, directors, programmers, artists, instead of housing everything under one roof. </tangent>
Hoping to have a job in the industry this year, might have to wait until the storm blows over. Of course I'm going to continue working on the portfolio, but to be honest, the experience I was trying hard to get before, now takes a back seat to those that have lost their jobs and have experience already - this is fair enough. Those people that have been made redundant must be fuming.
About the economic model that companies have employed. The whole FPS syndrome could have died a death now. There were far too many games that had done the basics this year, without pushing anything majorly new. Like with success in music, when corporations see something making money, they throw their money towards it hoping to recreate the same award winning cash flow into their pockets. It works sometimes, but then again it doesn't if its a rehash of something else. EA will survive because of it's sports franchises.
With so much talent now without work, what about going back to the hobbyist, non-big budget bedroom games, that created what the corporation has now sunk into obscurity? Don't get me wrong, I'm willing to work hard for what I want to do, but if its to just be a corporate slave, its missing the whole point of developing games surely?
Target: bit off-topic for the thread, but it might be useful for you, and some others: beatnik games in London, a small indie-dev -just about to finish their first game- are looking for someone, so if you're interested in working with a small team, without any demands being made by publishers or the mother-company, send your cv there.
Mind you, zbrush sculpts alone won't do you any good, as they're unlikely to need that any time soon.
The end is near? why should i ware that sign? because i see the situation is bad? It may be good for you but for others is terrible. Is inevitable to think about risks when we would like to work in the videgame industry. Is quite normal to be worried about it.
Too many should hold the pirate flag... piracy is not a problem, cough cough :poly142:
I understand perfectly the point of this thread, it's very normal to say the same as Seforin when all news are about layoffs and studios closing. Not all of us are teenagers working in videogames, and of course we don't think as teenagers saying silly nonsense phrases to make the laugh...
And well, to work in your portfolio is a good option if you have time and if you are under the protection of your parents ($$$).
It would be funny to see ppl running to the hills... bahh
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I think every one of you who works for a third-party studio or a big publisher needs to take a look at your future. Is your livelihood based on a boxed product for 360/PS3/PC? Is your product a genre king? If not, your days may be numbered.
There is a fundamental shift going in our industry's way of making money. Only a very few games can justify $30 Million plus budgets with their box sales. There is an incredible amount of money being lost on games in this generation. There is no way in hell we are going to get a PS4 or a Xbox 720 that is an extrapolation from the NES to where we stand now. Sony is dying. Nintendo already bailed on that direction with the Wii - they've moved on to different markets where money can still be made.
What we are seeing now is partly due to the global economy, and partly due to that the fact that most of these companies being shut down have been losing tons of money for this entire generation of consoles. Big PC games have been on the decline for a while as well. Boxed games have become a money loser.
The gaming industry as a whole is not going away, and the big AAA games aren't either. Genre kings like Gears of War will stay around, but they will have less competition. What will happen is a major shift to different types of games, and different types of game players. Casual games, Social games, Flash games, in-browser engines, MMOs, Mobile games, XBLA, PSN, etc. That is where the future is. If your company is only making money through Gamestop and Wal-Mart, they better be one of the best.
All, the superstar 3rd party studios have other ways of doing business. Epic has engine sales. Valve has Steam. id has Quake Live. Everybody is moving on from the old ways. Places like Free Radical, Ensemble, et al. . . they did not evolve fast enough. Likewise, Midway based its business on that old way, and I'd bet that at least one more big publisher will die in the next year.
I think we are going to see a big contraction in the number of jobs out there until we can all figure out how to make fun games and make money in these new areas.
The problem is one of efficiency. There are already a number of smaller studios out there that have the right idea. Keep a small highly experienced core team and buy the services you need. It just doesn't make sense to keep a huge team any more, it never did.
I'll echo what others have said too, if you have talent and drive you'll land on your feet. If you're sitting in a closet at a big studio somewhere and getting by with minimum effort be very afraid.
And I do outsourcing so take this for what it's worth, some people would argue I'm wrong.
I'm not saying there's going to be an explosion in downloadable versions of Bejeweled and Diner Dash. I think we'll continue to see a broadening of the kinds of games that are available, but when most games can be tried for free, accessible games will be the ones that prosper. Accessible does not equal "Casual." WoW is accessible. For a lot of players, WoW is casual.
I think you'll see lots and lots of "small" successes in the nature of Braid, World of Goo, Maple Story, Runescape, Whirled, Desktop Tower Defense, on and on and on.
I think there will be a few, rare mega-hits that take all of the traditional market. Big console shooters, sports games. But, there will be less of those than we are used to. The PC-only title that is not multiplayer is dead as a mega-hit. The same will go for consoles in the next-gen. Even sports games will be mainly about online content.
Okkun is right about a few things. People will still try and make those big games. There are ton of companines dumping absurd amounts of cash chasing WoW right now. Most of them will fail miserably. There are lots of companies trying to make the next great AAA shooter. That's the genius of Epic. They make a ton of money from their competitors off engine sales and still stay way ahead.
The problem with chasing those hits, "win or lose," is that when they lose, they lose so big their business fails. The studio dies or the publisher dies. Efficiency is a band aid when the entire business model is poison for 95% of them.
I don't have all the answers, but I think social gaming is going to be the biggest piece of it. What "social gaming" means is up to interpretation.
The problem is that they are selling the same amount as they did the last generation but they cost 10 times as much to make. See the problem? Outsourcing is not going to cure that. Only the biggest of the big hits can actually make that business work for them.
Haze is a perfect example. Free Radical basically had to bet their future that they could compete with Gears, Halo, MGS4, Resistance, COD4, etc. They couldn't. They died. In the last generation, they did fine with Timesplitters. In this generation they lost because not because their game stopped selling, but because it cost too much to make.
ive been hearing of alot of flash based games /downloadble games flash based doing really well, but I thought that tied into the casual market of things?
me wants to work on some zelda/secret-of-mana like game run in the browser.. MEWANTS!!!
Honestly I think its the big expensive AAA titles that might be slipping to AA or A that are in danger. If they can't continue to wow like they did in the past or start to loose their luster it could be disastrous, big budget, shrinking profit, not good. Little budget, big profit, very very good. It might not be about the quality of the game, but more about what makes profit as to who sticks around.
Really? What news are you looking at?
http://news.cnet.com/8301-13772_3-10121667-52.html
http://www.efluxmedia.com/news_Video_Game_Industry_Up_18_on_Strong_Console_Sales_29121.html
http://seekingalpha.com/article/110579-nintendo-dominates-strong-november-video-game-sales
http://www.itworld.com/software/59195/us-video-game-sales-grew-10-percent-november
I'll cut to the chase, here:
http://news.google.com/news?hl=en&client=firefox-a&rls=org.mozilla:en-US:official&hs=lWl&ie=UTF-8&tab=wn&ncl=1278737494
More like an incredible amount of stock loss, and the companies that based their business on money they never had are the ones hurting. The ones that actually set their budgets by the profits they take in, are the ones who are just trimming the fat and will probably be able to ride it out.
Q: What will hurt us?
A: Freaking out like its Y2K. Why bother getting all spun up about something that hasn't happened yet? Why not be cautious and make wise plans for the future but don't choke yourself with stress over things you have very little control over...
I think theres a tendency to want to label things when theres blood in the water but the problems right now really are just being exagerated by the financial climate.
The idiocy of the 'AAA mentality' and the 'at all costs ship for xmas' mantra have been around a lot longer than this generation of technology as have steadily rising team numbers.
Whats different now is that without loans being easy to gain in order to continue robbing peter to pay paul , what was always a short sighted system is now exposed as what it is.
Publishers do NOT want to have to wrestle with the notion that their mentality is at the root of the problem, that throwing numbers ( financial as well as more bums on seats) does nothing to deal with their underlying philosophy being fubar. It just buys you time and now that people can't buy time anymore they are falling to pieces.
EVERYONE who works in this industry is well versed in the standard ways of doing things that are wrong. The way we crunch to save features that dont affect the core dynamic of the gameplay rather than manning up and cutting things is indicative of the truth that mostly the people in managerial roles dont know what they are doing.
Most of those in managerial roles are there because they were promoted up the ranks without having gone to biz or management school, those that DID go and study this stuff went on to other industries unless they were C grade folk who ended up in the games industry as the more established ones wouldnt have them.
And there are a lot of issues like that underneath all this 'its the end of the world' nonsense that are harder to deal with now that the financial situation worldwide has exposed the chinks in everyones armour.
I think that if people want to think of it as evolution they can go right on ahead but that evolution period is going to last another year or so until the world financial situation is strong again and then people will go right back to doing things the same ass backward way they always did.
Then people will write up a hindsight retrospective on the great industry crash of the early 21st century and we'll continue merrily stumbling forward like we have always done!
No of course not, it's a combination of things. If you outsource and are still sitting on a 150 staff team internally you're still burning cash at an insane rate. However, if you don't outsource and be smart about it'll be hard to scale that team back.
As such, any new game being released faces huge costs, incredible competition, and an insane amount of financial risk. It used to be that a game could get by fine by selling a certain, reasonable amount. But for the PS3 and 360, that is no longer the case.
The current crisis is just the culmination of years of stagnation. Fortunately, change is in the air. And there will be secure financial opportunities for those who are losing their jobs. The growing market for casual and core games is growing. Game's with simple gameplay systems and graphics are now proven money-makers. Flash is considered a viable development platform for games, and all the tools you need to create for it are free. PC games now have digital distribution services to secure their sales and track their statistics. Small teams, low development costs, and low risk. That is the future of game development.
Naturally, this will also mean smaller, simpler games. But I think the indie scene in gaming has proven that there is ample opportunity for creative expression without cutting-edge graphics.
Piracy on the Internet is the 1º reason for me. It's killing the market, totally.
The situation is very simple, to make games has become a bad business and a bad profession.
the whole american car industry thing makes me chuckle- people dont have money to buy new cars- car sales slump- car company asks money from government to help make more new cars, now wheres the sense in that?
chris
With games it's different, they are "free" in the internet, and they download the game easily and quite fast. In standard conditions, too many people would have bought the game, but that... does not happen now, because... "why pay if you can download it for free? are you crazy?"
The business is being killed (too many people are like blind because they also download, they have their interest LOL). For me is the first reason, you may be agree or not
As far as i can see, nobody will give a shit for a game when it's "free" in the internet (unless if you need an original key to play online as example). And of course, not all people will buy a determinated game, but if nobody buys the game... well, it's very bad for the studio (3-5 years of development means too much $$$$$$$).
With less than a half, a company could survive, just reading the BT number of downloads and people playing the game with the same key you can make an idea. when they play the game is for something... and COD5 is an example, astounding levels of piracy ¬¬.
What i really know, is that if someone wants to play a game, if he/she have the option to download the game for free, he/she won't pay the game in a high %. Proof: my friends and all ppl i know around me. 99% of them don't pay for games. They don't give 1 euro for a game, "because money is something to be wasted in other better things you can't access without money"
heh work in games, is like to work for the devil. We are not going to die, but surely too many won't be doing a living making games. enjoy.
Posting lots of threads won't engage people and get you hired fella; go work on your folio and apply to some places.
-Buddikaman
Lots of people are making MAD MONEY right now. Some people are doing casual games, or stuff for the iPhone.
The problem of escalating costs is coincident with a huge opportunity with digital distribution coming into its own. Open platforms like Flash, Steam, and the iPhone will be massive business to those who can design great games to take advantage of them. WoW is the harbinger here.
So, it's not all doom and gloom. Just tough times for the people who are pushed out of the increasingly competitive traditional business, and who haven't moved on to the new stuff yet.
but seriously, I plan on graduating college in about 6 months and just realizing this trend seems very insecure for someone like me with a wife and two kids. Is there anyone out there whos made a habbit of moving around every six months to two years succesfully?
This seasonal cycle seems fine to me. like some have mentioned before, this is a great opportunity to take advantage of starting new studios and expanding the world of game development.
The fact that old studios have made poor decisions by sticking to their old ways is sad, but it can be inevitable to anyone with out realizing it. These are trends that happen all the time, hence the term "oldschool". It should be a lesson to learn from, but most importantly be aware and prepared to make considerations when it comes around to face it.
I'd like to see the hard numbers but they don't exactly make that easy to find, even to shareholders =/
Just out of curiosity where did you happen to catch those? All I keep running into are articles about a bullet proof industry, rock solid, making green hand over fist. It would be refreshing to hear another take.
If its true, it might be mostly because they are publicly traded companies who where using cash they never had. They just thought they had more time and could either get out, or figure something out.
If they claim to have 100bil and know that money can evaporate overnight is it a smart bet for them to base their budget on that 100bil being around, or worse barrow against it? That's what they've been doing, borrowing money they knew they probably couldn't pay back in the hopes of striking it rich. Then instead of using that money wisely, they gambled and lost some.
There are success stories out there, I work for one of them as do a bunch of other people who are and still will be employed. Places that make their payroll and do business as usual don't make the news. It's not impossible, if you're not stupid with your money, your plans or don't abandon basic logic.
It's sad that Publishers are just now catching on to a pretty old get rich quick scheme. Create a start up, crap out an OK title, sell the studio for millions, rape it of the loyal talent while you create another start up, with the hopes that the big dumb pub will bite again, and again... and if they don't, some other pub would.
If you take a look at all of the layoffs in the past few months (ends of quarters) and when they were made then most larger publishers made a profit despite letting go lots of people. While this does happen every year, I haven't seen it this bad in a long time, not since the Sierra days and the belligerence of EA's acquisitions of smaller companies and even then it wasn't like this.
I think Doc_Rob is right on many fronts. Most companies have not innovated or even thought beyond the quick sales launch or the next project, mostly due to inept business practices, terrible foresight, and almost unrestricted access to capital. This economy is the eye opener, the catalyst that will start firming up the business again until the market is safer to tread on. There's a lot of excess to remove which can be good or bad for us all.
Yeah I think this is the best course of action. Work on your portfolio till the storm passes. I also disagree with people who say this is just trimming the fat and not an all-out collapse; it's actually somewhere in the middle. 6% of EA, all of Nickelodeon (animators and 3d artists included), Free Radical, Midway, 16000 from Sony (not sure if that included dev people), and a few others I forget is no small isolated 'fat trimming'. All those people are now contenders for people who are also looking for employment; which pretty much means juniors are shafted for the time being.
EA was at 6% when you wrote that. They've now announced up to 10% layoffs, about 1000 people, and you can say goodbye to Black Box in Vancouver. This is clearly not just seasonal fat-trimming, this is a bad economy magnifying the problems of a bad business structure.
The storm is hitting other industries even harder, remember. Working on the portfolio is fine if you still live with your parents. Not so much when you're struggling to find enough work to pay the rent. And other bills.
I was afraid this would happen. For months, everyone has said the game industry is "recession proof". Not to thousands of workers it's not. And that was the point. Thousands of experienced workers looking for work elsewhere in an industry that is shrinking. That's a big impact. Breaking in is now more challenging.
On the other hand, for the industry itself, it's a good thing. Right now, while few titles are selling like crazy, most others are not worth playing and crowding store shelves.
really? seems like there are so many good games that I haven't had time to purchase them all.
The cost of developing a modern "AAA" game is such that if a medium size company does not have a hit it's almost certainly lights out, it's a serious gamble. Now look at all the "AAA" titles this year alone, there are just too many games for the market.
For the large studios that can release multiple titles a year it's not quite a "do or die" situation, but they are bleeding, take EA for example.
This leads to stagnation of the industry, you'll see that the larger studios will be relying on proven franchises, and not taking chances on new ip. And I think that is an extremely boring place to be, come on how many versions of game "X"do we need?
My hope is for a new model to arise from this current situation, smaller cheaper games.
With the advent of viable middle ware and electronic distribution, the cost of development has actually come down enough that it is possible for very small teams to produce quality products, but the mentality needs to be there to support, by that I mean, not applying the same old standard that is killing the industry now. so dont expect fallout or gears of war,(those games will always be around) but a middle ground, higher quality then current downloadable games but not the multi-million dollar extravaganza failures we say today. My 2 cents,
The market grew 10% this year. That is pretty massive. These big companies and publishers want to exploit that bigger market. They need people to do that. Obviously then the people they are cutting and the shops they are closing are ones they feel are were not going to help them do that.
Some of these closures are the result of a knee-jerk reaction by very risk averse business people. In 3 months when they see holiday sales are strong, banks will start loaning money again (especially with the 0% fed rate). As bad as things are, I am sure it is much worse in other industries, so you may as well work on that portfolio.
I think we will see a return to smaller development teams with workers that are more skilled. There has been a big influx of people who have had some formal education in video game art, and perhaps more of those people have been hired based on their diploma rather than their portfolio. While some of those guys are top notch, a lot of them don't have the desire to stay on top of new technology or the drive to improve that is required in this industry. We only see the cream of the crop here at Polycount-- even posting stuff online is a huge accomplishment. You guys wouldn't believe some of the stuff I have seen from game art "graduates".
Finally, "outsourcing"; the idea of which is really dumb. Am I outsourcing if I hire Bill or Per to make badass art for my game since they are not in the US? The fact is that you should be afraid of people in India and China taking your jobs, not because their country is poor, but because some of those guys are badass artists.
thats what I dont get I remember reading about the industry supposibly GROWING in the last year but all I hear is company XYZ layoffs 10k people or whatever.
but on the outsourcing note, I agree with you about BAD ASS artists but companies dont necessarly outsource for bad ass artists they do it for cheap labor
example in my job i work as the ONLY artist in a programming house, I spend more time cleaning up outsourcing work from china then I do actually 3d modeling here yea sure there might be like 1 or good artists out of the 20 that are making out out sourcing work but the saying goes "get what you pay for" and its cheaper to get crappy work for cheap thats just minor work (debree/ background buildings etc) then it would be to pay soem bad ass outsource guys like per or b1ll it isnt a matter of afraid of losing work based off quality its based of a dime a dozen rate
To dramatically oversimplify the issue and remove all nuance and environmental factors (which you could have ascertained yourself if you were actually reading the thread...)
Growing pains.
Go work on art, man. Job security in the game art industry depends on being a great artist -- have the best artists on these forums ever had trouble finding work, even if the company they were with shut down?
And even if the sky falls enough traditional art skill will still net you some illustration work, or give you the foundation to easily adapt to another market for cg.
Nintendo broke the traditional development structure and has been reaping success and cash money as a result. Expect more developers to follow suit. We've already seen Sony and Microsoft frantically scramble to mimc Nintendo's attempts at broadening their market.
Make some awesome art pls
I think Kevin is pretty close with his idea of the issue being management. I believe that management becomes the wrenches in the machines. Companies running out and not having money because of bad business practices is common in all industries not just ours.
Look at what happened with Bernard Madoff and his "Ponzi Scheme" This guy sucked 50 billion from people over the past 20 years. The only reason he was discovered doing this was because of the economy. A bunch of people were taking their money out of the stock market (7 billion dollars worth) and he couldnt pay them their money because he was taking money from Paul to pay Peter and then trying to go back and pay Steve.
This philosohpy of business obviously will work for a short period maybe with exceptions last a bit longer. Nothing that is run with the idea of getting things done with no funds is never the right way. These things are all being exposed now and the people who screwed up in many ways are beign exposed.
Our industry always has down times and is naturally unstable. Granted this is a bit more tough this time because of the economy but our industry is not going to go anywhere and the cycle continues as does the cycle of life. Until a giant flaming meteor comes out of the heavens and decimates everything our industry will continue with growth and hardships its the natural cycle of things.
Just remember that if any of us ever get into management roles think of how we are effecting our fellow employees and avoid stupid mistakes.
Whew, sorry for the long post. Just make good art stay humble and treat others the way you want to be treated. if that doesnt work just point and laugh...
On the one hand, that is an interesting idea. On the other hand, I find it hard to believe that all of the companies that are currently in trouble are shutting down their doors due to faulty management. Perhaps I just feel that management is a very obvious scapegoat.
But then again, this argument may have merit. Most of the industry that seems to be affected the worst is large publishers, and studios owned or controlled by large publishers. And if there were ever a segment of the industry prone to too much bureaucracy, it would be large publishers. It is quite possible that mismanagement could have been the cause of this. Perhaps more depressing, it is unlikely that upper management will actually suffer for these shortcomings. The rank and file in the development trenches are the ones getting kicked out on their asses.
But even if this is true, it points to a fundamental flaw in the nature of the industry. The industry has been fearing for years the advent of the mega-publishers. We were all worried that in a few years there would be nothing other than EA and Activision. But with this economic crunch these huge publishers are getting hit hard, and are closing studios left and right. Everyone is realizing that being under the financial umbrella of a super-publisher is no longer a guarantee of success or financing.
And regrettably, that means that fewer AAA projects are going to get produced. If no publisher is willing to finance independents who want to produce a 10 million dollar title, than the number of next-gen epics are going to dwindle. Even some indie titles for download services end up costing $100,000 or more.
Smaller studios, smaller budgets, smaller scope, smaller games. That's what the upcoming future of this industry is. Self-publishing, on-line subscription, on-line communities, and digital distribution. Get used to it.
To tie-in, I think games will eventually become the superior medium of entertainment, there's so much that has been untapped and it only takes a few innovators to pave the way. Eventually we may see a large migration of talent from would-be film makers to the game industry and maybe game development will come to mimic that of film, with different specialties banding together on a per project basis, writers, directors, programmers, artists, instead of housing everything under one roof. </tangent>
About the economic model that companies have employed. The whole FPS syndrome could have died a death now. There were far too many games that had done the basics this year, without pushing anything majorly new. Like with success in music, when corporations see something making money, they throw their money towards it hoping to recreate the same award winning cash flow into their pockets. It works sometimes, but then again it doesn't if its a rehash of something else. EA will survive because of it's sports franchises.
With so much talent now without work, what about going back to the hobbyist, non-big budget bedroom games, that created what the corporation has now sunk into obscurity? Don't get me wrong, I'm willing to work hard for what I want to do, but if its to just be a corporate slave, its missing the whole point of developing games surely?
Mind you, zbrush sculpts alone won't do you any good, as they're unlikely to need that any time soon.
If you know enough Seniors/Leads that are currently unemployed, and willing to relocate to Quebec City, then you can assemble your own dream team:
http://www.ubisoftquebecaaateam.com/
haha very funny;
Too many should hold the pirate flag... piracy is not a problem, cough cough :poly142:
I understand perfectly the point of this thread, it's very normal to say the same as Seforin when all news are about layoffs and studios closing. Not all of us are teenagers working in videogames, and of course we don't think as teenagers saying silly nonsense phrases to make the laugh...
And well, to work in your portfolio is a good option if you have time and if you are under the protection of your parents ($$$).
It would be funny to see ppl running to the hills... bahh