The Video Game Industry

Essentially, Square Enix's New CEO said he was going to come down with a hammer and he did so by canceling a big game and maybe a few smaller titles.

Guess there's diminishing returns to the great graphical arms race after all.

It's kind of a growing issue that AAA games are becoming incredibly expensive to make.

Can the corporations afford to let up, though? I can imagine that if enough companies decide to scale back on the graphical fidelity, the one that doesn't will have a serious competitive advantage, even though it is self-destructive for everyone to participate.

I'd imagine there's an "Investorism" problem involved:

Basically, the company makes big games because it makes them look like a big company so that investors will invest in them.

Yes, they could make smaller games, but the problem is investors would lose interest fast.

But they ultimately need to make smaller games or have other developers make spin-off games to off set gaps between long development times.

Nintendo EPD (their main internal studios) did not have a new game for two and a half years, between Animal Crossing: New Horizons and Splatoon 3. In between, there were games made by Nintendo owned studios, Nintendo owned I Ps made by close partners, a Nintendo owned IP made by a third party studio, and multiple spin-offs and remakes made by third party studios.

I'll note that Nintendo is a company that largely avoid investorism, and a lot of what's good about Nintendo comes from the specific fact that they do.

fwiw ¥22.1 billion is about $140.8 million USD with current exchange rates. Still a lot but not as bad as it sounds.

And yeah, Square should probably make more mid budget games. I believe the Live A Live remake did well, so they could probably give that treatment to a couple other old games like Bahamut Lagoon.

Nintendo's CEO grew up playing Nintendo. He doesn't want to damage Nintendo's brand to make Nintendo attractive to investors, and he also knows he doesn't need to - Nintendo has Mario, Zelda, Kirby and...huh...what was that other little franchise...oh, right, Pokemon, the biggest IP in the world. The "we must make all the money" financialist mindset isn't likely to take root there any time soon, and they don't have to "act like a big company" because they already know they are.

Some more detail is needed on the $140m loss Square announced that that tweet didn't translate. First it's not actually set in the books yet, it's a prediction they're putting out to shareholder ahead of time before the full fiscal year numbers come out. And second, they're calling it a "special loss" because it's not a loss from their total operating costs, it's because they cancelled a whole bunch of games they had in development and since those aren't coming out now the roughly $140m they already spent on development of them is going to be recorded as a loss.

Not just money spent but also lost revenue from the projections.

x7 @Protagonist 506

There's an interesting video on this by Moon Channel.

Basically, a LOT of the industries practices mimic big techs right down to chasing trends and similar hiring and firing practices save for a few companies. The stuff about big budget games fits in since it's the big ticket item followed by big hiring waves that get investors throwing money at them because it looks good to them. The companies ride the wave and when the looming fall comes around, you "trim the fat" by laying people off.

That video's actually what inspired me to come up with the term "Investorism".

The video IS a bit depressing since you see the impact it has on the community. Months before the announcement of GTA 6, there was a lot of murmurs and noise about the less than savory conditions over at Take Two and Vivendi. The instant that the game got announced, it all went away. It's the same with Naughty Dog and how there were a LOT of articles about their toxic work environment, but a great deal of it got swept under the rug after TLOU 2 and the TV series. It's gotten a bit more traction again since people have noticed that they've not made anything new in YEARS that isn't TLOU related. There are MANY other examples, but those were the most immediately noticeable.

Edited by doomrider7 on Apr 30th 2024 at 11:58:23 AM

Also SE has a few of their biggest exclusives meant to be moneymakers. FFXVI and Rebirth as playstation exclusives and even though Playstation 5 is the clear winner of next gen, articles keep talking about how 5 is seen along the lines of a disappointment in installbase. SE not making those big moneymakers widespread is clearly a massive contributor to not meeting sales expectations. They got a gun, shot themselves, then wonder why theyre bleeding out.

KH in its entirety is still exclusive to the epic games store and that just shows exclusivity aint working for SE.

The Switch has shipped over 2.5 times as many units as the PS5 (source: Wikipedia)

IGN has put out a video on how Square Enix is taking a $140 Million hit on “content abandonment” losses… whatever that means.

They decided to follow the Zslaz school of tax write-offs?

I think it’s gonna because their Splatoon rip-off isn’t doing as well, among other things.

Edited by BigBadShadow25 on Apr 30th 2024 at 5:52:14 AM

David Zaslav, the guy who cancelled a bunch of movies? Blah. I'd love to see people who work at WB deciding their job isn't going to be fulfilling if what they're making won't get released, and start looking for jobs elsewhere. I'd love to see that happen in some corners of the video game industry.

Yeah, no, they’re saying they’re gonna cancel a bunch of console games because they don’t think they will yield a profit.

That just sounds like straight up business to me. Cancel things that will cost you more in the long run. Totally understandable, even if regrettable.

As long as I get KH and FFVII Reduce/Reuse/Recycle.

Hopefully, this will help them move away from chasing tech bro trends like NFTs and AI and stuff.

Meanwhile, Hasbro is making a big bet on AAA games and has invested a billion into internal studios. Source is Game Industry.biz.

https://www.gamesindustry.biz/hasbros-1-billion-bet-on-internal-game-development

Edited by BigBadShadow25 on Apr 30th 2024 at 9:07:28 AM

I know Hasbro found out that their most profitable division is Wizard of the Coast stuff, while toy sales have been decline because of technology upstaging them. Inflation making people not buy toys is also eating them up.

Also I looked this up, on this wikipedia article about ninth gen consoles it makes the Switch sit as a competitor to the current ninth gen, but calls it a late eight gen. Thats why I dont call it a current gen console, even if its still relevant

Edited by M1gamiTensei on May 1st 2024 at 3:09:55 AM

That's kind of why directly comparing "generations" is at best an art rather than a science. Nintendo's in a position to go "eh, our console is rockin' till the night is gone and we don't need to update right now."