The Game Industry had two shocking pieces of news this week. Hitman developer IO Interactive is no longer a part of Square Enix, and Mass Effect as a franchise is now on hold following the reaction of Andromeda. Both series have been critical successes; with Mass Effect being one of the biggest games from Bioware. And yet, this is a harsh reminder of the risks of making a game and the business of the game industry.
AAA development like the rest of the industry can be a mystery to consumers. When it comes to AAA titles, it’s not just about delivering a good game, but delivering a profitable game.
When you have overhead, employee wages, and the money from the publisher, a lot has to go right for a game to succeed. This is why the AAA market is the riskiest part of the game industry. The scope and work that goes into these games leaves no room for “minor hits.”
We’ve talked about the difference between the Indie and AAA markets before, but it bears repeating. When studios are spending hundreds of thousands of dollars on a game, you better get your money’s worth. On the other hand, we will never see a publisher take on the risk of an unproven game concept. There is a lot about that statement that we can talk about, but we need to move on.
With that said, it’s time to talk about the part of AAA development that you don’t hear about.
Keeping a AAA studio running is like keeping any major business going: It requires consistent profits. Publishers don’t want a studio to be searching for the next big game, they want proven concepts.
This creates a very nasty catch 22: The best game series comes from refining designs and concepts through iteration, but it’s impossible to get to that point with a single game. In turn, this creates a balancing act of trying to work on a game long enough for it to succeed, but not so long that it can’t earn back the development cost.
Most video games regardless of being AAA or Indie have a selling window of about 30 to 45 days for when they are at their most profitable. In turn, this provides Publishers with a time-frame to measure a game’s profitability.
If the game is successful enough to be profitable, the publisher may give the word to work on a sequel. Publishers love sequels despite the dreaded “sequelitis.”
Working on a sequel means having an idea of the fan base and potential sales, and is easier to market than a completely new game. This is the main reason why AAA studios become known for specific franchises and rarely new properties.
In a market where so much money is being thrown around, the following is a harsh truth: You are only as good as your last hit. We’ve talked about the challenges of sustainability in the Game Industry before, and this is why Indies are in the best position to be sustainable.
A five-man studio spending about a year working on game is a drop in the bucket compared to a 50+ man studio spending the same time. It’s far easier for the smaller studio to make a profit or just break even compared to the larger one.
Having a complete failure of a game is usually a studio closer, or series ender in the AAA market. However, I know what some of you are thinking, “But Mass Effect and Hitman weren’t failures,” but that sadly doesn’t mean that they were successful in their publisher’s eyes.
AAA Game Development is a high risk/high reward market. Publishers are trying to get every last cent out of their game sales, and this can create unwinnable situations for developers caught in the line of fire.
A few years ago, there was the craziness of EA expecting Dead Space 3 to make at least five million in sales to keep the series going. This is the other catch 22 of the AAA market: Publishers like sequels due to having an established fanbase, but that doesn’t stop them from demanding more sales and profit out of a series.
Mass Effect Andromeda was in development for five years. Given the success of the franchise and the time and money put into it, EA wasn’t looking for a “good” game, they wanted a blockbuster. Despite the praise and profits the original trilogy made, the second review scores were coming in lower than expected, the writing was on the wall.
As a fan of the Command and Conquer and the SimCity franchises, this isn’t the first time that the AAA structure has been the death nail for popular series. Despite publisher demands, there is no such thing as a game that appeals to everyone.
The expression, “You can’t get blood from a stone,” can apply here. If you have a dedicated fan base of 300,000 people, changing your game or throwing more money at it is not going to make that number go up.
With Hitman, despite having a critically praised game, reports say that the game did not earn the same amount that Hitman Absolution did. Another reason was the decision to stagger out the episodes instead of releasing a full game at launch. Not only does this make it harder to sell, but it also takes longer for the publisher to see the outcome of the game. This left Square-Enix with a well reviewed game, but not a profitable one.
And after that depressing discussion, I know some of you are hoping for an easy solution, but I don’t have one.
To the employees of IO Interactive and Bioware Montreal, I wish you the best of luck right now. The AAA market can be ruthless in terms of the demands and pressures of having a success. There is serious concern about dealing with that as an employee.
I don’t have an answer for this one, but there’s one thing I do know: Not every game can be a blockbuster success. Eventually something has to give — Either developers will be unable to keep up with the pressure, or publishers will have to figure out how to keep going with less profit. What that means to you, the fans and consumers, I have no idea.