Unfortunately, I'm not surprised. As many large tech companies have found out the hard way (see also Alphabet, Amazon, arguably even Meta and Microsoft), the games industry is not like the tech industry as a whole when it comes to success. Making games is difficult, and they don't lend themselves well to the same development strategies as websites or apps do.
Add this to how unpredictable success is for the most part (even established teams with dozens of years of experience have struggled to create hits on a regular basis), how deeply competitive the industry is and how hard it is to even recognise a hit if you're not already involved, and well, it's a bad fit for the average non gaming company in general.
I wholeheartedly agree, just to add that currently even the most competent industry leaders have been seriously struggling in the last few years.
- Bethesda's Starfield and RedFall flops.
- The tumultuous Cyberpunk 2077 story from the darling CD Projekt Red.
- Many masters of their craft have lost their luster after serious flops or stagnation: BioWare, Dice, Arkane, Crytek, Blizzard, Rocksteady...
- The long-term slow death of Ubisoft and its recent big-budget failures with Star Wars Outlaws and Avatar, underwhelming Far Cry 6, also AC Shadows is looking grim.
- EA has all but disappeared from the big picture, it was hated before, but now it's just ignored. They failed to properly take advantage of their Star Wars monopoly.
- Microsoft is volatile, with aggressive acquisitions and aggressive studio closures, seriously struggling to make Xbox competitive, and a Game Pass that will have difficulties in transitioning from a loss-leader to a real business.
- Sony's Concord crash, and generally confused strategy of exclusives vs PC ports/remasters.
- The whole failure of Embracer Group trying to gobble up most of AA.
Only Rockstar seems unscathed, but mainly because they haven't released anything major since Red Dead Redemption 2 (2018) and GTA 5 remains insanely profitable. It would be the first time, but I wouldn't be surprised if GTA 6 was a disaster looking at what has happened to other highly reputable studios like Bethesda, Arkane, Bioware or CDPR.
AAA games are just getting too expensive to make now. They can still be highly profitable when they hit the right notes, but it's so much riskier now, you can end up loosing hundreds of millions unexpectedly. Because of the risk, everyone is forced to make more and more anaemic games, which make the situation worse. There seems to be an industry-wide difficulty in leveraging properly creative and talented writers and game designers, even if they don't cost much.
It would be nice if it was just AAA, but it's not. There have been some recent success stories on AA with Baldur's Gate 3, Helldivers 2, Space Marine 2... But just as many failures too (you don't hear as much about them). Also, there's been a wave of acquisitions and investments from aggressive VC-like money, and even moderate successes are studio-closing failures for them (Hi-Fi Rush, an example of many).
And as usual, there are always a few fantastic success stories for Indie games, but big-picture the market is more saturated than ever and the vast majority of indie developers end up making less than minimum wage.
> As many large tech companies have found out the hard way (see also Alphabet, Amazon, arguably even Meta and Microsoft), the games industry is not like the tech industry as a whole when it comes to success.
I think two points are missing here, firstly these companies have hired a lot of proven talent from the games industry, and secondly it is arguable these companies have not been succeeding at executing in any domains for years.
The culture of the tech industry has been completely destroyed, largely by the adtech money hose. Compound that with the difficulties of the games market today and it is not surprising there are problems.
Well, they never actually released a game, so we can't really blame the product market fit for the shuttering. Seems more likely that this just follows netflix's strategy of aggressively canceling productions.
I wouldn't say that the games industry has unpredictable success. Games that are fun with a great story make money. Many games studios' don't make fun games. or don't try to evaluate why a success became a flop.
I'll give an example.
Ghost Recon wildlands was fun, had a great story and was a delight. It's squeal Break-point sucked because it was a different style of gameplay with nothing but micro-transations. It was a signal from the developers to the users that they didn't really care, they just wanted to extract money.
If you focus on fun and story you'll succeed. Many games studios try to paper over the lack of these things with shiny graphics and cool features. But people play games to have fun.
Asking as an ignorant outsider, are the economics of much different from that other the movie and TV industry? At least that's where Netflix is a lot more experienced than Google, Meta and Microsoft. (Whether they're good at it is another question.)
Netflix company ideology isn't cut out for gaming, games take huge amounts of money and if you're starting a new IP from scratch you're burning that for many years with absolutely nothing to show for it or sign it will pay off.
With Netflix rapidly ending shows, even ones that were critically and consumer acclaimed like that Dark Crystal reboot because they didn't hit whatever metric they internally consider a success it was just naive that this would ever play out in a company unable to make 8 to 10 year IP plays confidently.
I wonder what went wrong. But at the same time this feels inevitable.
The best AAA studios on earth still strongly depend on purpose built hardware to deliver their experiences. The broad spectrum of smart media devices is a hellscape compared to Xbox, PS, Nintendo and PC. There is no way you are going to ship something like GTA6 to a Vizio tv without doing rendering on cloud GPUs. Netflix would also have to compete with platforms like Steam, which are already expanding into broader ecosystems.
AAA game development without having an established IP/franchise is a real crapshoot, the first game must be great to draw enough players to a new thing, or you have poured $500M down the drain with nothing to show for it. Hell, even if it's great, it can still fail in the market. And the game has to be original, because if it's just derivative, people will just keep playing the established franchises (see Sony's Concord). But it can't be too odd, because the mainstream is all about established genres.
I wonder if it wouldn't have been better to make a dozen games costing $10-20M and build on the successful ones. Base some of them on Netflix series and movies for a little extra marketing.
Pretty sure netflix does exactly that with their other studios. I guess the big names mentioned in the article (Joseph Staten, Rafael Grassetti) wouldn't go to netflix for a 10 mio. games project, if what they already achieved is 20 times bigger. Heck, the compensation of these two probably consumes a 20 mio. budget.
I think Netflix for a few years now has been optimizing for "the cost of production of each consumed hour". They have been doubling down on acquiring/producing international content, reality tv and live specials—which are all cheaper, and less risky given the formula repetition. And when they have an expensive show that is not viral and super-successful, even if it was good by many standards, they cancel it. Many have noticed the reduction in quality and the increase in rate of cancellations, but it doesn't seem to be hurting their subscriptions much, at least not yet.
[+] [-] CM30|1 year ago|reply
Add this to how unpredictable success is for the most part (even established teams with dozens of years of experience have struggled to create hits on a regular basis), how deeply competitive the industry is and how hard it is to even recognise a hit if you're not already involved, and well, it's a bad fit for the average non gaming company in general.
[+] [-] oersted|1 year ago|reply
- Bethesda's Starfield and RedFall flops.
- The tumultuous Cyberpunk 2077 story from the darling CD Projekt Red.
- Many masters of their craft have lost their luster after serious flops or stagnation: BioWare, Dice, Arkane, Crytek, Blizzard, Rocksteady...
- The long-term slow death of Ubisoft and its recent big-budget failures with Star Wars Outlaws and Avatar, underwhelming Far Cry 6, also AC Shadows is looking grim.
- EA has all but disappeared from the big picture, it was hated before, but now it's just ignored. They failed to properly take advantage of their Star Wars monopoly.
- Microsoft is volatile, with aggressive acquisitions and aggressive studio closures, seriously struggling to make Xbox competitive, and a Game Pass that will have difficulties in transitioning from a loss-leader to a real business.
- Sony's Concord crash, and generally confused strategy of exclusives vs PC ports/remasters.
- The whole failure of Embracer Group trying to gobble up most of AA.
Only Rockstar seems unscathed, but mainly because they haven't released anything major since Red Dead Redemption 2 (2018) and GTA 5 remains insanely profitable. It would be the first time, but I wouldn't be surprised if GTA 6 was a disaster looking at what has happened to other highly reputable studios like Bethesda, Arkane, Bioware or CDPR.
AAA games are just getting too expensive to make now. They can still be highly profitable when they hit the right notes, but it's so much riskier now, you can end up loosing hundreds of millions unexpectedly. Because of the risk, everyone is forced to make more and more anaemic games, which make the situation worse. There seems to be an industry-wide difficulty in leveraging properly creative and talented writers and game designers, even if they don't cost much.
It would be nice if it was just AAA, but it's not. There have been some recent success stories on AA with Baldur's Gate 3, Helldivers 2, Space Marine 2... But just as many failures too (you don't hear as much about them). Also, there's been a wave of acquisitions and investments from aggressive VC-like money, and even moderate successes are studio-closing failures for them (Hi-Fi Rush, an example of many).
And as usual, there are always a few fantastic success stories for Indie games, but big-picture the market is more saturated than ever and the vast majority of indie developers end up making less than minimum wage.
Tough times.
[+] [-] fidotron|1 year ago|reply
I think two points are missing here, firstly these companies have hired a lot of proven talent from the games industry, and secondly it is arguable these companies have not been succeeding at executing in any domains for years.
The culture of the tech industry has been completely destroyed, largely by the adtech money hose. Compound that with the difficulties of the games market today and it is not surprising there are problems.
[+] [-] root_axis|1 year ago|reply
[+] [-] gonzo41|1 year ago|reply
If you focus on fun and story you'll succeed. Many games studios try to paper over the lack of these things with shiny graphics and cool features. But people play games to have fun.
[+] [-] madeofpalk|1 year ago|reply
I suspect it's a lot more expensive to find out if you have a good idea with games vs tv/movies.
[+] [-] em500|1 year ago|reply
[+] [-] Dban1|1 year ago|reply
[+] [-] akimbostrawman|1 year ago|reply
[+] [-] whywhywhywhy|1 year ago|reply
With Netflix rapidly ending shows, even ones that were critically and consumer acclaimed like that Dark Crystal reboot because they didn't hit whatever metric they internally consider a success it was just naive that this would ever play out in a company unable to make 8 to 10 year IP plays confidently.
[+] [-] bob1029|1 year ago|reply
The best AAA studios on earth still strongly depend on purpose built hardware to deliver their experiences. The broad spectrum of smart media devices is a hellscape compared to Xbox, PS, Nintendo and PC. There is no way you are going to ship something like GTA6 to a Vizio tv without doing rendering on cloud GPUs. Netflix would also have to compete with platforms like Steam, which are already expanding into broader ecosystems.
[+] [-] disqard|1 year ago|reply
Probably also needed is patience, which (for example) was missing with Stadia (Alphabet) and with Luna (Amazon).
[+] [-] kryptiskt|1 year ago|reply
I wonder if it wouldn't have been better to make a dozen games costing $10-20M and build on the successful ones. Base some of them on Netflix series and movies for a little extra marketing.
[+] [-] sod|1 year ago|reply
[+] [-] notfried|1 year ago|reply
[+] [-] cranberryturkey|1 year ago|reply
[+] [-] sofixa|1 year ago|reply
[+] [-] akimbostrawman|1 year ago|reply
[+] [-] unknown|1 year ago|reply
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