almost certain this is behind a paywall and usually FT is one you can’t get around, so some choice excerpts:
The $200bn video games industry is reckoning with its biggest slowdown in 30 years, as the huge growth driven by smartphone gaming and the latest generation of consoles reaches its limits.
Hardware sales are slowing, with Sony cutting its forecast for PlayStation 5 sales this week. Consumer spending on mobile gaming declined last year, down 2 per cent to $107.3bn according to Data.ai, which forecasts low single-digit growth in 2024.
Many in the gaming industry expected to bounce back quickly after 2022’s post-pandemic decline, last year did not deliver the growth initially hoped.
The latest quarterly numbers from some of the biggest publishers, including Electronic Arts and Take Two, has underwhelmed investors. Meanwhile, games developers have been forced to cut thousands more jobs this year after already slashing as many as 10,000 in 2023.
“There’s a lot of commercial anxiety: about growth, about profitability, about keeping budgets in check and about making an impact in the market when there are so many established products,” said Piers Harding-Rolls, games research director at Ampere Analysis, a market researcher. “We are in a much slower growth era.”
Cutting prices is a double-edged sword. The huge popularity of free-to-play online games such as Fortnite and Roblox consumes hours of playtime that had previously been spent on $70 titles. The strong network effects of multiplayer games, such as Call of Duty, also make it harder for new entrants to succeed. “Thousands of titles are hitting every month and the success rate is very low,” he said. “You’re faced with significant challenges in trying to break new product into the market.”
The rising costs of developing blockbuster games has also raised the stakes. “When you’re talking about a budget that’s $100mn plus, even for a big company, if you miss with two or three of those then commercially you’re on the ropes,” Harding-Rolls said.
That has driven a Hollywood-style dependence on rebooting the same big franchises by Sony, Microsoft, Electronic Arts and other big games companies. At the same time, entertainment giants are showing a renewed interest in gaming — adding new competition for existing players in a shrinking market.
Disney made a $1.5bn investment in Fortnite’s creator Epic Games this month to create what the studio’s chief Bob Iger called “a huge Disney universe that will be for gaming and for play”, while Netflix is also expanding its games offering.
IMO the industry as a whole has breached the “trust thermocline” by consistently releasing broken unfinished games. There aren’t as many people that will buy a game at release, and would rather wait for the bugs to fixed and buy it at a discount a year or so later; or, it’s realized the bugs will never be fixed and no one buys it.
Also with the realization that digital copies (that aren’t installed on your own HDD) can be taken from you at a whim. I think most people are fed up with it, and are sticking to games they already have or just not playing at all.
Quality reference. Also, in reverse, companies such as Larian prove that trust works.
Baldur’s Gate 3 is one of the buggiest messes I’ve ever played. In that, it gives me warm fuzzy memories of the originals, which were similarly buggy monstrosities.
Despite the bugginess, the deep involvement of Larian with the community at every step of the games development and release proves that trust can get you nothing but accolades, even when your game is a buggy mess for six months post-release.
I’m okay with the post-release bugginess because I can trust that Larian actually cares about resolving those things.
I’ve also stopped buying early access games. They may not be bad, but they’re not finished, and I don’t want to be bored with a game before I even get to see its finished form.
I noticed yesterday on Steam that a game I was interested in had a much higher percentage of negative reviews from its Early Access days. Since there weren’t enough votes overall to offset these negatives, it really hurt the game’s overall score.