Raph's Website » The next next gen

The next next gen

April 21st, 2006 (Visited 18223 times) Tags:

So here we are, in the next gen land of 75+ person teams and $30 million dollar budgets. What do I see when I look out across the future landscape?

I see an inflection point.

We’re hitting a wall on the financial side. Barring major breakthroughs, we’re looking at incredibly high costs for content generation. Unless we change how we make graphics completely, we aren’t going to be able to afford to make them. No publisher can afford to ante up $100m for AAA games repeatedly, not with a 90% miss ratio. We can call this Big Development, akin to how we used to speak of Big Iron.

We’re not seeing the sorts of alternative revenue streams that other media do. A book can spin off to a movie, an audiobook, a desk calendar. A movie can go to DVD, to pay-per-view, to premium cable, to TV. A song can go to radio, to sales, to TV or movies, to elevators. A game goes nowhere but downstream to lighter platforms or to embedding in other games. A lot of the high-end graphics we chase today will never make sense on a two-inch screen.

Because of this, movie-style alternative financing won’t materialize for the average project. Some big blockbusters maybe, but the ROI just won’t make sense. Instead, we will see the average industry game budget shrink for the first time, as nimble mammal developers run around the dinosaur developers making a different kind of game.

Our distribution channels are in upheaval. This coming generation, we learn that the sole remaining North American games retailer makes a majority of its revenue from used games that do not pay ongoing revenues to the publishers. We will see other retailers following suit, offering more and more used games and fewer new ones.

This means a shakeout of the current Big Development publishers. But the talent pool won’t shrink, which means it’ll flow to wherever it is still allowed to exist. The growing markets won’t be AAA games anyway. Some of the Big Development folks will adapt to the new models (most likely, the ones we see having done so today), but several won’t.

Because of the crunch, digital distribution will be the only logical play. Games will move more and more towards services, and away from box product. As the publishers get cut out, we will see some high profile failures. Instead of publishers, we will see more and more portals and aggregators; because of the economics, they will have less power than today’s publishers do.

Digital distribution will force a different style of game. Bite-size games with quick conversion and easy entry, a far lower graphical load so that content can be streamed or downloaded. Epic games will not be the norm, and fans of epics will have long waits between them. Instead, serialized and episodic games, and multiple varied games themed around IPs will be the norm.

The ecology of the game industry will shift to be more varied. As the big old-style industry falters, we’ll see even more indies and small developers spring up. Sometime in the next few years, we’ll hear that a web-based games portal is bigger in terms of revenues than one of the old-school publishers we’ve come to know.

The noise level in the marketplace will rise. So many small devs and games will eat up the infostream. We’ll have trouble hearing about games, even worse than now. Tastemakers and celebrity will matter much more than today as followings are established for certain devs, and as certain editorializers become the way to find fresh content. The challenge for new devs, as with musicians or writers today, will be getting noticed.

PC gaming will grow back with this market. Consoles are the last bastion of high-end graphics, closed platforms, and Big Development. The freer distribution channels and easy entry for development mean that everyone forced out of console, handheld, and mobile games will go to PC. Big Development will have toruble forcing open the channels they previously held closed — it’s not in their nature.

Consoles will specialize or become more like the PC. We’ll see a dramatic divide between console and PC developers until consoles acquire more of the capabilities of PCs — and by that I mean forums, blogs, news sites, and the fan ecology that makes gaming amidst too much product even possible. Epic games will continue to be made for consoles, but they will be the loss leaders subsidized by the hardware makers.

Everyone will be trying to lock customers into branded lifestyles associated with gaming brands, such as loyalty-driven sites, “club” sites akin to book clubs, demographically targeted portals, niche-driven aggregators, etc. A few will shape themselves into networks that combine several of these, via smart targeted partnerships.

Bottom line: The next next gen isn’t graphics; it’s stuff that fits into the new paradigm for distribution, and leverages the business models possible there. Assume a world where there are no game retailers, where there are no publishers (but lots of aggregators and portals), where there are a lot fewer artist jobs (but lots more procedural content jobs), where games are services and not products. In such a market of bite-sized games, celebrity is going to matter more than ever in order to gain eyeballs.

Only a few years ago, I was saying that developers could not lowball budgets or quality and play on the AAA field. Now, I’m saying the AAA field is so rarefied that soon even the AAA studios won’t be able to play there.

The current industry is dinosaurs highly evolved for an ecological niche that is changing out from under them at an extraordinarily rapid rate. Revenues from downloadable, casual, and MMO games equaled that of the entire PC games retail market this year. Next year…? Three years from now…? The only reason why even the current console model works is because of the captive platform and generally superior user experience.

Looking out at the future, what I see is an extinction-level event.

The nice thing about that is all the new species that spring up.

[?]
Type in a relevant tag, and click the button, and help organize this blog's information.
[More Help]

You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

...on pampers, programming & pitching manure wrote on November 30th, 1999 at 12:00 am:

Broken Toys » Blog Archive » Dodging Falling Dinosaurs wrote on April 21st, 2006 at 10:13 pm:

[...] Every so often, Raph pops up and reminds us that yes, he does actually know what he’s talking about. [...]

Psychochild's Blog wrote on April 21st, 2006 at 11:19 pm:

The indie revolution is coming! Probably…

Raph posted on his blog about “the next next gen” (http://www.raphkoster.com/2006/04/21/the-next-next-gen/). The summary: indie developers are the mammals running between the traditional industry’s soon-to-be-extinct dinosaur legs. Welcome to the…

GameDevMike wrote on April 21st, 2006 at 11:35 pm:

[...] For some time now I’ve heard people preach that consoles will kill the PC game industry. Raph Koster is predicting a much different scenario - a world where downloadable PC games reign supreme and the “dinosaurs” of the AAA retail industry become extinct. He says new species’ of game developers are coming. I agree. They are coming and they will all evolve from today’s indies. It’s a thought provoking read. [...]

Tales of the Rampant Coyote: Indie Revolution or Evolution? wrote on April 22nd, 2006 at 1:27 am:

[...] among the guys looking for the opportunity.Long live indie games! - posted by The Rampant Coyote @ 10:51 PM (Permalink) Comments: Post a Comment <<Home [...]

categories | The Cesspit. wrote on April 22nd, 2006 at 5:25 am:

[...] Bloggers I Do Not Have Super Jump IRL 5 hours 1 min old, KillTenRats - Ethic Second Life on the cover of Business Week 6 hours 46 min old, Raph’s Koster Website Post Nasal Friday 8 hours 22 min old, Geldon The next next gen 9 hours 11 min old, Raph’s Koster Website Dodging Falling Dinosaurs 12 hours 11 min old, BrokenToys - Lum March of the dykes 14 hours 15 min old, MMODIG - unbeliever The Epistemology of Anshe 18 hours 54 min old, Terra Nova - Academics playground Repost: MMO Survey 20 hours 5 min old, Mischiefbox Good For Us! 20 hours 47 min old, Zen of Design - Ubiq The House that Nanking Built 23 hours 9 min old, Amber Night Gone but not Forgotten 1 day 1 min old, AFK Gamer - Foton WoW at 60 review 1 day 11 min old, Tobold The Zul’Gurub Enchants and You 1 day 37 min old, AFK Gamer - Foton Gaming Families 1 day 50 min old, AFK Gamer - Foton Friday Humor: LFG 1 day 1 hour old, Aggro Me If you love PvP, start making a Horde character 1 day 5 hours old, Tobold Banning as publicity stunt 1 day 5 hours old, Tobold The Nerfbat Tavern 1 day 7 hours old, Nerfbat - Grouchy Gnome HDMI, DVI, 360, 8300HD 1 day 7 hours old, Raph’s Koster Website It’s the Little Things 1 day 9 hours old, Moorgard (Steve Danuser) Oblivion Review: Day Two 1 day 10 hours old, Grimwell Game Rules as Art 1 day 12 hours old, Raph’s Koster Website Grand Text Auto’s Notes from Massive 1 day 13 hours old, Raph’s Koster Website Sping 2006, Week 3, Day 4: 3-Day Weekend 1 day 15 hours old, Geldon The big crunch 1 day 16 hours old, Game Matters more [...]

Faith wrote on April 22nd, 2006 at 6:55 am:

[...] The indie revolution is coming! Probably… Raph posted on his blog about “the next next gen” (http://www.raphkoster.com/2006/04/21/the-next-next-gen/). The summary: indie developers are the mammals running between the traditional industry’s soon-to-be-extinct dinosaur legs. Welcome to the other side, Raph. Of course, most of this is what I’ve been saying for a while now. There’s still a few snags along the way to gaming Nirvana, though. 7 hours, 36 minutes ago by Psychochild [...]

The next next gen - Quarter To Three Forums wrote on April 22nd, 2006 at 7:01 am:

[...] The next next gen Raph makes a post about the "indiefication" of the video game publishing scene (My words) and the death of Big Games. Quote: [...]

Archives | MetaFilter wrote on April 22nd, 2006 at 8:14 am:

[...] [...]

you get to drink from the fire hose! wrote on April 22nd, 2006 at 3:15 pm:

[...] metafilterhttp://www.metafilter.com/mefi/51101The next next gen of video games. With the rise of digital distribution models for video games, and the rapid increase in development costs, Raph Koster has predicted an end to the big publishers, with a new system of online content aggregators. Others in the industry agree, but will this really be the end of large epic games? linkpost comment [...]

Chamfering » Blog Archive » $100 Million? wrote on April 23rd, 2006 at 8:57 am:

[...] Mr. Koster has an interesting read over at his blog…posted on Friday (damn I am so far behind). Its more or less his take on the future of gaming. I am just going to comment on the cost issue. His speculative figure of $100 million sounds high, but I imagine a game like WoW was close to that. Just quickly running the numbers through my pee-brain, unless a company is paying a shit-load of money for an IP, they have a bloated staff or over-priced talent, or a 4+ year dev cycle, its hard for me to believe you could drain that much cash. Maybe I am just niave, having struggled with a small developer for many years, but if games like Auto-Assault, Vanguard, Guild Wars, etc., is burning through anywhere near $100M then my opinion would be that there is/was something funny going on. [...]

Shattered Keyboard wrote on April 23rd, 2006 at 3:54 pm:

Raph Kosterposted some speculations on where this is all heading. Similar ideas have been passed around before, that the production costs for mainstream video games are ballooning out of control and will simply be too expensive for most publishers and developers.

Jeff Freeman » Firebirds vs. Wild Arms 4: Will movies ever be considered ‘art’? wrote on April 23rd, 2006 at 4:35 pm:

[...] Raph blogged about the Next Gen something I find myself wishing for as a consumer: Digital distribution will force a different style of game. Bite-size games with quick conversion and easy entry, a far lower graphical load so that content can be streamed or downloaded. Epic games will not be the norm, and fans of epics will have long waits between them. Instead, serialized and episodic games, and multiple varied games themed around IPs will be the norm. [...]

Translated Version of http://www.raphkoster.com/2006/04/21/the-next-next-gen/ wrote on April 24th, 2006 at 3:18 am:

[...] Translated Version of http://www.raphkoster.com/2006/04/21/the-next-next-gen/ [...]

TES4: Oblivion · PlanetCrap 6.0 wrote on April 24th, 2006 at 7:27 am:

[...] Do we think Raph and then Lum are right? I think they are chicken littling it a bit too much, but some of the things Raph said at the beginning of the article are spot on: We�re hitting a wall on the financial side. Barring major breakthroughs, we�re looking at incredibly high costs for content generation. Unless we change how we make graphics completely, we aren�t going to be able to afford to make them. No publisher can afford to ante up $100m for AAA games repeatedly, not with a 90% miss ratio. We can call this Big Development, akin to how we used to speak of Big Iron. We�re not seeing the sorts of alternative revenue streams that other media do. A book can spin off to a movie, an audiobook, a desk calendar. A movie can go to DVD, to pay-per-view, to premium cable, to TV. A song can go to radio, to sales, to TV or movies, to elevators. A game goes nowhere but downstream to lighter platforms or to embedding in other games. A lot of the high-end graphics we chase today will never make sense on a two-inch screen. Because of this, movie-style alternative financing won�t materialize for the average project. Some big blockbusters maybe, but the ROI just won�t make sense. Instead, we will see the average industry game budget shrink for the first time, as nimble mammal developers run around the dinosaur developers making a different kind of game. P.S. - you’ll have to cut and paste the link for Lum’s I think.”me did a sneak attack to smack the demons off my back” [...]

Raph’s Website » www.sicher.org: The Game Content Dodge wrote on April 24th, 2006 at 8:52 am:

[...] Raph on The next next gen [...]

www.sicher.org: The Game Content Dodge wrote on April 24th, 2006 at 10:36 am:

[...] Meanwhile, on the other end of the net … Raph Koster is talking about game-dev dinosauriasis. Others tell similar stories. [...]

SteinBLOG: Channel Shift to Force Creative Shift in Games wrote on April 24th, 2006 at 3:48 pm:

[...] Channel Shift to Force Creative Shift in Games Ralph Koster has a long and very convincing blog post on the next generation in video games. No, he’s not talking about some killer new graphics engine or artificial intelligence breakthrough. Rather, he sees a significant shift coming in the nature of game creation coming from business pressures.Read the post. He has about a dozen different drivers, but it all boils down to a rise in creation costs coupled with an increase in the power of individuals to participate (and create) games. I’m not a part of the gaming world, but I do see this as a good analysis of how the realities of getting quality products force innovation–but from new places. [...]

mbf tod@y: The Next Next Gen wrote on April 25th, 2006 at 1:21 am:

[...] Read more. [...]

ksleet: It certainly is a red-letter day! wrote on April 25th, 2006 at 11:33 pm:

[...] of Earthsea last year, they made a few changes. And… no, well, you should just read the rest.(Post a new comment) Log in now.(Create account, or useOpenID) [...]

TorilMUD Discussion :: View topic - O.... M... G!!! wrote on April 27th, 2006 at 12:47 pm:

[...] Speaking of overblown expensive 3D graphics and rising production costs in computer entertainment…. http://www.raphkoster.com/2006/04/21/the-next-next-gen/ _________________Shevarash — Code Forger of TorilMUD [...]

Week-Old News at MMOG Nation wrote on April 27th, 2006 at 7:15 pm:

[...] Raph knows what he’s talking about. Bottom line: The next next gen isn’t graphics; it’s stuff that fits into the new paradigm for distribution, and leverages the business models possible there. Assume a world where there are no game retailers, where there are no publishers (but lots of aggregators and portals), where there are a lot fewer artist jobs (but lots more procedural content jobs), where games are services and not products. In such a market of bite-sized games, celebrity is going to matter more than ever in order to gain eyeballs. [...]

Metaly fled! wrote on April 28th, 2006 at 11:24 pm:

Raph Koster looks at a transition away from “Big Development” towards digital distribution in the next-next-gen. (That’s like PS4, Xbox 3602, Wawawiiwa next-next-gen.)

Moorgard.com » Blog Archive » Digital Ash in a Digital Urn wrote on April 29th, 2006 at 12:20 am:

[...] I enjoy reading Lum’s current exploits on Broken Toys. I was, of course, a fan of his back in the day, and I still am (and I really wish I had his habit of posting frequent updates). He recently referred to a piece that Raph Koster wrote about where he sees the next generation in game development going. [...]

Massively Multiplayer Online Round Table wrote on April 29th, 2006 at 9:01 am:

s current exploits on Broken Toys. I was, of course, a fan of his back in the day, and I still am (and I really wish I had his habit of posting frequent updates). He recently referred to a piece thatRaph Koster wrote about where he sees the next generation in game development going. I can almost hear the hecklers already. “Hey Moorgard, this sounds exactly like the kind of incestuous cross-blogging you bitched about when you started this silly site.

RPGnet: RPGnet MegaNews Page: Online Game Blogs wrote on May 1st, 2006 at 1:59 am:

[...] The Sunday Poem: The City the Genius BuiltYou could walk forever and never run out of streets tripleproofed and wired with maps on every corner The police carried ray guns and there was a rocket launch before breakfast once a week – anyone was welcome to watch The genius himself presided from inside his marvelous house glass panels translucent paper walls Passersby wrote on the walls tales of the genius and the genius read them backwards from [...] Some historical precedentFor the next time that your friendly local government starts using your hobby as a weapon in the culture wars… Wired catalogs past “threatening” media. It’s interesting to me the way in which control of idea flow is truly a nonpartisan concept. If it’s not the right bashing evolution, it’s the left protecting the children. Both [...] Massive, XFire, what’s next?CNet says that the Wall Street Journal says that Microsoft is going to buy Massive, the in-game ad people. This mere days after we learn that Viacom is buying XFire for $102 million. Obviously, it’s great to see Chris Kirmse, one of the pioneers of MMORPGs, get his fair share of all the riches that are being [...] New laptop: a tablet PCSo I settled on a new laptop, and I got the Toshiba M400 convertible Tablet PC. I’ve been wanting a Tablet PC ever since Mark Terrano and Mike Steele showed me theirs, since I frequently design and think while sketching. They both have Motion Computing’s slate models, but I wanted something with a better keyboard [...] Mischiefblog has a surveyJust helping spread the meme: take the MMO Survey, improve human knowledge or something. http://www.sicher.org: The Game Content DodgeOver at http://www.sicher.org there’s a post discussing the “next next gen” issue that ends with a challenge and an interesting speculation. The challenge seems a close cousin of the annual Indie Game jam: I would like to see a contest that is a little different - that has a different focus. I would like a challenge with [...] The Sunday Poem: So I RememberIt seems that mortality is around me everywhere these days. Relatives left and right are failing, and a few days ago, my sister-in-law’s mother passed away. I have many poems about death and dying, because I have had a lot of people die in my life — most specifically, a lot of peers. Over time, [...] Second Life on the cover of Business WeekI guess our hobby is mainstream now. My Virtual Life article, discussion at TerraNova. The article also features an assortment of extra goodies, such as a slideshow of the evolution of online worlds. Image of the cover: The next next genSo here we are, in the next gen land of 75+ person teams and $30 million dollar budgets. What do I see when I look out across the future landscape? I see an inflection point. We’re hitting a wall on the financial side. Barring major breakthroughs, we’re looking at incredibly high costs for content generation. Unless we [...] ( vote for this news ) [...]

Raph’s Website » Monthly Report, May-June 2006 wrote on June 1st, 2006 at 5:10 pm:

[...] The next next gen [...]

Tide's Horizon wrote on October 4th, 2006 at 8:27 pm:

in Eve since Nov and Second Life since maybe July (?). Both of these “games” (in quotes for SL) are the darlings of the media these days. SL really very much so… But both are really acquired tastes. People like Raph used to refer to them as niche. Now they are more clearly known as “Blue Ocean” offerings. On that case alone I’m interested in them. But I can’t get into either meaningfully. I’ve said repeatedly hands down Eve is the most interesting MMO out there right now for design. But

WorldIV » MMORPG Genealogy wrote on January 24th, 2007 at 1:30 pm:

[...] Among those with the surname MMORPG, Second Life and a very few others, have a distinct genetic code. This lack of genetic diversity among those bearing MMORPG surname presents cause for concern. At least one MMORPG-geneticist has commented that this might well contribute to the extinction of the MMORPG surname in the face of growing environmental pressures. Of particular interest to this budding genealogist are the direct descendents of UO (Diku, Sand-Box, Monopoly, Ganker-PvP/WTF), including SWG (Diku, Sand-Box, Monopoly, recessive Ganker-RvR) and EVE (Diku, Sand-Box, Monopoly, Ganker). [...]

G�r spiludviklingen for langsomt til PS3 - Gamereactors forum wrote on March 28th, 2007 at 8:45 am:

[...] men flottere grafisk og lydm�ssigt. En interessant artikel om fremtidens gaming kan l�ses p� : http://www.raphkoster.com/2006/04/21/the-next-next-gen/Skrevet 2007-03-28 18:43 Citer [...]

Game Tycoon»Blog Archive » Celebrity wrote on April 2nd, 2007 at 3:40 pm:

[...] the kind possessed by famous movie directors and producers) and if so, how? Raph Koster frequently talks about this, and I believe his rationale is fairly solid. But Raph, who does a good job of reaching out to the [...]

...on pampers, programming & pitching manure wrote on April 7th, 2007 at 12:02 pm:

[...] that I’d much rather see the list ranked by contribution margin rather than just revenue. To borrow Raph’s metaphor, (which is also his business plan, I guess) I think you’d see a lot of small mammals ranked higher [...]

Hot Topic #1: The dumbing down of Oblivion - The Nexus Forums wrote on September 26th, 2007 at 9:54 am:

[...] This is just part of a bigger trend. I blame Bethesda for much bigger things in my opinion, that was the way they did not tell the truth about minimum requirements, telling unwary gamers that they could play the game with their system when it would not be possible. That was diabolical and put PC gaming even more into the second-hand car selling type sleaze! The second was selling official mods in a crass way of making money! to pay for horse armour was patently a rip-off at even $2, because it ratcheted up the bigger mods! This is also part of a trend of giving us less for the same game price. As much as I love HL2, for example, I am not so blind as to see that 5 hour expansions selling for $20 retail is going to lead to more 12-15 hour $60 games rather than the 35 or so we have had for 15 years up to about 3 years ago.Last year saw the smallest number of PC game releases. This year doesn't look like it will be much better. The over emphasis on graphics and the lessening of content is killing PC gaming in front of our very eyes. Oblivion and Bethesda are part and parcel of this problem. Why there was not an outcry over the dumbed down Oblivion like there was for Deus Ex 2 is about the fact there are fewer PC gamers who care. They have given up and are moving into console gaming (reluctantly), and independent games and retro games that they know have the gameplay they don't see in modern PC games. You only have to look at the growth in 'abandonware' sites and the opening last year of the ebay retro section to see where the interest is going. And what major PC gaming site and magazine doesn't talk about the growth in inde gaming? In fact the huge success of the Wii is as much about a resurgance in retro style gaming as it is about the control sticks! If Fallout 3 is dumber still, and other PC games continue to go down this route of less gameplaying hours for the dollar, I can see PC gaming coming to a quiet close sometime in 2009. As a 20+ year PC gamer, that saddens me.There are plenty of warning voices out there. You should start opening your eyes as a PC gamer! This blog is a good start: http://www.raphkoster.com/2006/04/21/the-next-next-gen/ [...]

Everyone’s A Prophet This Week « Broken Toys wrote on January 2nd, 2008 at 11:39 pm:

[...] users, more paid users, and more money than the vast majority of “old school” MMOs, as Raph Koster is vindicated in spades, over and over, when people start to actually notice that more people play Maple Story than World [...]

Jessie wrote on January 9th, 2008 at 5:17 pm:

Jessie…

lovely marketer blog, nice article….

Balloon flights UK wrote on January 23rd, 2008 at 11:13 am:

Balloon flights UK…

Many books you locate have everything you are searching for….

Blake said on April 21st, 2006 at 9:58 pm:

Honestly I look forward to the day when the obsession with photo-realistic graphics goes away and the focus returns to the content. It seems, to me, that developers have put so much effort behind the graphics that gameplay has suffered for it. Now we’re seeing these SHORT games come out, and yes they have nice, pretty graphics, but when I’m finished playing in ten to twelve hours you can be sure I’m not going to waste more money with that company in the future. Nothing miffs me more than being ‘cheated’ in terms of gameplay.

Tying this to the online worlds, WoW aside, I really don’t see great stides in the MMORPG market since UO. Each generation that comes out stresses bigger, and prettier graphics, and a lot of the time it seems to be in lieu of content. UO was unique, and if it came out today it still would be unique — in terms of what it offers the players. I’d love to see a UO style game with updated graphics, maybe on par with something like Dungeon Siege or NWN, for example.

In the end I hope that you’re right and the bigger budgets go to the consoles with their fixed hardware, and the smaller companies are given a real chance to develop unique, and ground breaking products for the computer market. Just some late night thoughts while I watch the Mets in the 13th inning … long game.

MikeRozak said on April 21st, 2006 at 11:06 pm:

Random comments:

Less emphasis on graphics - A pixar movie team is 100+ people costing $50M(?). From watching their making-of-DVDs, it seems like only a handful (5?) are actually involved in the story. The rest are devoted to eye candy. Why should mass market games be any different?

Cost of graphics - In some ways, the cost of graphics goes DOWN as the GPU speeds up. A lot of human effort goes into minimizing polygons, textures, and pre-rendered animations. With more GPU, less human effort needs to be spent on this.

Example with CPUs: No one codes in assembly any more because CPUs are fast enough. In 1980, allmost Apple ][ games were assembly. Now, almost all PC games are C++. In the future, almost all games will be script. For the same effect, assembly is much more work than C++ (2x-4x), which is much more work than script (another 2x-4x).

My game’s graphics are very slow right now. The basic reasons for this are because (1) I’m not using a 3D accelerator. I’m not using the 3D accelerator because (1a) it will cause me (a single-person development team) all sorts of headaches when users E-mail me saying that shadows don’t work on random video-card A, or similar problems. (1b) Because I want better/different rendering than accelerators handle. (1c) I’m not optimizing my code as much as I could because I know that optimizations introduce bugs, which require a larger team. (2) In order to make graphics easier for the author (also a 1-person operation) (2a) I’m not providing rendering optimizations that would require extra work/comprehension from the author, like baking in shadows. (2b) I have a lot of procedural models and textures, which ultimately produce more polygons/pixels than hand-tuned ones, so they render more slowly.

Retail stores - I suspect there will be two types of game: Those shipping retail with 10+ GB installs, and downloads with 500MB installs. Why? Even though the internet gets faster, data sizes keep up. A 100K file used to take a LONG time to download on my 300 baud modem, when the average game was one 140K floppy. Now a 1GB file takes a LONG time on my 512 kbps satelite, when the average game is one 2-4GB DVD. There’s no real change, a AAA game is still too large for me to want to download it.

Consoles will become more like PCs - Consoles are already PCs… minus the keyboard/mouse, and with a crappy (but large) monitor. (And an emphasis to ease of use.) As people buy HDTVs, the monitor problems disappear.

Alternative revenues - “My brother went to Molten Core and all I got was this stupid T-shirt!” How about ads in games? Movie spin-offs?

Michael Heilemann said on April 21st, 2006 at 11:33 pm:

Now we’re seeing these SHORT games come out, and yes they have nice, pretty graphics, but when I’m finished playing in ten to twelve hours you can be sure I’m not going to waste more money with that company in the future. Nothing miffs me more than being ‘cheated’ in terms of gameplay.

Dear God NO! Games need to be shorter even (and of course cheaper); I don’t have the time to play through the Oblivion or Baldur’s Gate’s of games any more. And seriously, most games with 20-25 hours of gameplay are usually pretty repetitive anyway.

I salute the era of episodic content. No longer will I have to dedicate my life to autopilot through filler-content. W00t!

Lars said on April 21st, 2006 at 11:43 pm:

Quick comment re. ’short’ games: it’s all relative. For me, a game described as having 10..20 hours usually means 20..40 hours of actual playtime, stretched out over the course of a month or three - and by that time I am often eager to see the end and just get it over with (most recent example: I played part of the end level of Far Cry in God mode).

Morgan said on April 22nd, 2006 at 12:03 am:

I know this is off topic, but I just had to respond…

Mike: I don’t know what game you’re developing or why, but I think you need to partner with a software tester. The recommended ratio is a single tester per programmer. Granted, this would mean you would be spending more time on fixing bugs; however, ultimately you would produce a higher quality product, and you wouldn’t be spending time finding bugs. Those of us in software quality assurance typically voice the unwiseness of even allowing programmers to test their own software. We have bumper stickers!

Charles Ellis said on April 22nd, 2006 at 12:33 am:

While I agree with you 99% on what you’ve said here… I don’t necessarily think that publishers will really go away. Aggregators and portals are fine and certainly will be able to be the “new” retailers, but they don’t necessarily fit the model of publisher quite as well.

Even if no one is making games that cost more than $30m, or even more than $10m, someone still has to provide that investment. Sure, more traditional software investments like VCs have sort of appeared, although they’re still extremely rare.

The publishers will definitely change, and maybe a lot of the large ones will die away forever, but that role of providing investment for studios is still going to have to be filled by someone.

MikeRozak said on April 22nd, 2006 at 12:58 am:

Morgan wrote:

Mike: I don’t know what game you’re developing or why, but I think you need to partner with a software tester.

It’s an atypical non-Diku virtual world: http://www.mxac.com.au/mif

Thanks for the concern, and having experienced plenty of development befure, I fully agree with you, although reality may dictate otherwise. If it’s any consolation, despite the fact that every developer claims they write bug-free code, my code has historically been less buggy than a typical developer’s. (Not bug free though.) Working alone also reduces the number of bugs over what a gaggle of programmers would produce.

However, even with a single tester, my point still holds… I’d bet that SOE has 100+ machines for their test labs, all with different configurations, especially configurations of video cards. Being compatible with 100+ video cards on several different OS’s is probably a full-timer tester, half a developer, and many product support people to deal with angry/confused customers whose video cards don’t work. If CPUs were fast enough to replace GPUs, every game developer would render on the CPU in a heartbeat.

Raph said on April 22nd, 2006 at 11:07 am:

Wow, lots to reply to both here and on other sites.

First off, a lot of folks are reading this as my stating that “indies will win.” No, they won’t. The portals, aggregators, and yes, a few big publishers will continue to be funders, editors, and bottlenecks. There will just be more of them because the funding load will not be as high, because there will be greater territory and demographic segmentation (the Internet is rapidly becoming a bunch of Internets broken by national boundaries), and because there’s no tyranny of shelf space to cap the number of products. Under a scenario like this, the definition of “indie” just changes.

Over on Quarter to Three, we get this:

The only thing that pisses me off is that I like large, epic games. If the world of the future is either an MMORPG, playing irc equipped poker, or one of 5 million copies of Bejeweled, count me out. I like high production values, strong plots, and long games, which is why I play jRPGs and RPGs. I play them for the gameplay, but I also play them for the full motion video, plots, and pretty pictures. I really don’t want to see a web based RPG with 1998 graphics and a procedurally created plot.

and

“Lock customers into branded lifestyles associated with gaming brands”. HATE HATE HATE HATE. I don’t want your T-shirt. I don’t want to go to the forum, most of the time it’s a cesspool. I don’t want advertisements for your other games whenever I play your game.

Epics will only survive if they are broadly based brands, not single one-off titles. The investment is not worth it for an epic that doesn’t carry with it associated fandom. I like epics too, but if you can’t broaden the revenue stream, the economics make no sense.

“Lifestyle” could mean something like “subscribe to several fantasy worlds, get a free sci fi book club membership” too. You’ll hate it only as long as it is poorly targeted. Once it is aimed exactly at what you love, you’ll buy it.

Also there:

Meanwhile, all the big-budget games will move to the consoles (and cross-platform).

As long as the consoles subsidize the costs for those developers who make those games, sure.

Psychochild offered up caveats, many of which I agree with.

To start with, he (and others) mention that it’s not guaranteed that all the old publishers will die. Of course not. We see all three of the console makers moving towards these models already, so they are all likely to survive. As I said in the post, some of the Big Development folks will adapt to the new models. One form of adaptation is to secure your niche. Being the only AAA gamemaker on a given platform is one way to do that.

Brian also states that the talent pool could decrease; I doubt this will happen given the way that game development is dangled before the young as a career path. My 8-year-old wants to make games when he grows up. There’s college programs, there’s summer camps for high schoolers. There’s a pipeline forming. Yeah, a lot of us older folks may fall out, but there’s a lot of young people coming up.

A toss-off sentence in there: “It’s still going to be a challenge to convince grandma that it’s worth $20 to download the latest indie masterpiece.” — I don’t think that we should count on prices remaining stable. Glutted markets mean smaller revenues.

This is a picture of a transition, and some of the mammals will be those who can charge next to nothing, or even nothing, and find alternative revenues. I think it’s safe to say that price competition in the downloadable market will ensue. This will spell hunger for many small devs as well. Competition will be cutthroat. Over on MetaFilter one commenter states

I think the real winners won’t be the tiny underdogs, but rather mid-sized studios that can keep real Talent on staff, but are big enough to promote themselves and get in on cross-marketing.

and I think that’s very astute.

MetaFilter also has some wacky statements, naturally:

Lack of alternative revenue streams? Claptrap, sir!
For the first time ever, the 18-30 male demographic spends more hours per week playing video games than watching TV. (according to UK statistics, anyway) Improvements in graphics and mass online capabilities make in-game advertising and/or sponsorship an obvious way to go. Critically, unlike television commercials, gamers tend to view certain types of in-game advertising as a positive addition, lending authenticity to real-world environments.
Big epic games will continue to be produced, hoovering up ever-larger amounts of cash, as long as large numbers of people buy them. The Dragon’s Quest series, for example, shows no signs of running out of steam.

The revenue generated by those hours of playing games versus those hours of watching TV are not at all comparable. The ad revenue from those hours of TV, particularly if they are in primetime, covers the entire dev budget of a midtier game. The revenue from those hours of gameplay doesn’t even come close for a midtier game, many of which do not even break even.

In-game ads is of course a good thing for Big Development and epic games. There’s no doubt it will be pursued. But The epics are not sucking up “ever-larger amounts of cash” at a rate anywhere near the curve of rising costs. Using SquareEnix as an example is exactly wrong — they are exactly the sort of company that is most trapped by Big Development, and even though they have been trying to change their production processes to make them less wedded to the giant epics, they have so much institutional inertia around their current way of doing things, they are finding it very very hard. But they definitely do see a wall ahead.

Koster has one success and one flop under his belt

Lack of consistent track record + wishful thinking favorable to self = take with a grain of salt.

I’m sorry, but this is just false. Bash SWG all you want, but it made a hell of a lot of money. Nor is this picture particularly favorable to me. MMOG’s are, along with the Japanese RPG, right at the leading edge of Big Development, and hitting the wall first.

Until graphics become photorealistic, the day will never arrive when the gaming public ceases to equate progress with prettier pictures and rewards publishers accordingly. One of the fundaments of Koster’s perceived paradigm shift is that ever-increasing graphical requirements in ‘AAA’ games lead to budgets so large that flops can destroy publishers. But do AAA games flop? I’m not aware of any big budget failure since the days of Daikatana, and that was a long, long time ago in computer years. On the other hand, the creators of Elder Scrolls IV: Oblivion or the GTA series are hardly crying in their beer over their success.

AAA games fail all the time. A glance over the bargain bin will give a laundry list of them. The whole industry has been watching Duke 3d, Starcraft: Ghost, and The Godfather teeter on the edge for how long? Big budget messes like many of the Tomb Raider games can kill even massive brands.

Yes, the public will continue to want better and better graphics. That’s not the question — the question is how the industry provides them.

it doesn’t follow that games-as-product will vanish in favor of games-as-service, unless someone is arguing that Steam (the model for digital distribution) isn’t selling a product to you when you download Half Life 2.

Steam is embryonic; yes, the smart thing for it to do is evolve into a service. It’s halfway there now: it lives on your machine, rather than being a place you visit; it advertises multiple products, but could advertise many more plus provide additional products outside of games but related; it could roll in upsell services akin to XFire quite readily…

Now, to comments here:

The Incredibles is estimated at having cost $92m to make. However, it grossed $631m worldwide, box office only. In 2005 it sold an additional 17.5 million copies on DVD. And we haven’t gotten to toys yet.

By comparison, WoW was in that cost ballpark,and has only reached 6m people worldwide. It has ongoing revenue, which makes it the best case scenario. What about something like The Godfather? Michael Pachter estimates the cost for it at something like $30-40m across all platforms. Let’s be generous and say it only needs to make 1/3 the box office revenue, then. That’s 200m. At around $25 is actual revenue to the publisher, that’s a required sales of 800m copies to match the economics of the movie ticket sales.

But ticket sales is the smallest part of movie revenue these days.

Basically, the economics do not compare, not even close. That’s why.

In some ways, the cost of graphics goes DOWN as the GPU speeds up. A lot of human effort goes into minimizing polygons, textures, and pre-rendered animations. With more GPU, less human effort needs to be spent on this.

The issue is that the model today is brute-forcing it with armies of people. The amount of content required has skyrocketed. Yes, you’re avoiding the timesinks of minimizing polygons. But now you’re actually modeling the welds on the chrome (an actual example given during the PS3 keynote at GDC). What used to be one texture is now eight, and at much higher res.

Speaking from experience, no they don’t.

The real issue here is that the PC as communications medium is superior. We could not have this discussion via a console, for example. And fandoms need communications to thrive. It is telling that hardcore XBox Live addicts check their GamerScore on a website, using a PC.

It is that ecology that will become valuable — it’s the trappings of a powerful IP and brand. The console facing will be only one facing; the real money will be in brandbuilding and building ecologies of fans.

Lobosolitario said on April 22nd, 2006 at 12:40 pm:

MikeRozac said:

I’d bet that SOE has 100+ machines for their test labs, all with different configurations, especially configurations of video cards.

Raph can correct me on this, since he’s worked there, but as a tester for one of the biggest publishers around, I can say that, while this is what should be the case, it probably isn’t All those machines (and all those work hours testing different setups) cost too much money, so it’s easier to wait for the complaints to filter back, and patch later…

Morgan said:

We have bumper stickers!

And great ones they are too! Although “Gamebreaker Award: 2006″ is missing

Lobosolitario said on April 22nd, 2006 at 1:17 pm:

On the graphics front though, I get the feeling that what we’re really suffering from is a lack of decent tools. After looking at Spore (Link to Homepage) I realized just how out of date a lot of the tools we’re using really are. 3D Studio is a great program, very powerful at what it does, but the amount of work needed to make a good high-poly model in it is huge. MikeRozac mentioned Assembler and C++, and I find the analogy fitting, although I’m not sure if I’m thinking along the same lines - current graphical design programs are like Assembler, and we need to create some tools that automate a lot of the functions that currently have to be done by hand, in order to speed up the process and allow the artist to make higher quality models, faster - a 3d model should take no longer to make than, say, a clay sculpture (okay, a great sculpture could take months or years to create, but a good sculptor can make a decent model in a matter of tens of minutes). With more intuitive tools, high quality graphics should be no harder to produce than low quality graphics - after all, those low-qual gfx are based on concept art just like the high-qual ones are, and what needs to be reduced here is the gap between making concept art and making the end product.

Disclaimer My own artistic skills are fairly limited, that is to say, null, so if anyone with more experience in the area feels I’m way off base, feel free to say so

MikeRozak said on April 22nd, 2006 at 2:17 pm:

Raph wrote:

There is a really neat and easy-to-use 3D modeller called Z-brush. It’s just like sculpting. You can paint geometry and textures directly onto the surfaces of the objects. It’s easy. It’s fast… It produces about 100x as many polygons for the same object as a human modeller would.

Alternatively, you can laser scan heads, buildings, objects, and get huge amounts of detailed geometry for very cheap. Unforunately, it’s way too many polygons.

I suspect that in the future, models and textures are the CHEAP part. Animation is EXPENSIVE. Pixar has far fewer modellers than animators.

Lobosolitario wrote:

So your management has decided that having 1%-5% of your customers calling product support in furstration, or telling their friends how lousy your game is (based on their buggy graphics card… which they assume works perfectly fine), is better than spending the money on a few more testers, some space to put 100 older machines with a variety of video cards? As much as Microsoft may be reviled, there are huge testing labs throughout Microsoft that are used for compatability testing.

Raph said on April 22nd, 2006 at 2:47 pm:

Actually, keeping 100 old machines doesn’t always make sense; you keep a smaller amount of machines and just a zillion video cards and sounds cards, and swamp cards between tests.

Lobo, Spore is certainly a harbinger of the future (hence why I mentioned procedural methods) but it’s also essentially R&D — Will & co have been working on it for years. It will take time for those methods to become broadly applicable.

At least there are now some procedural terrain methods sold commercially, procedural trees via SpeedTree and NatFX, and a proceudral texture middleware company…

Lobosolitario said on April 22nd, 2006 at 3:03 pm:

So your management has decided that having 1%-5% of your customers calling product support in furstration, or telling their friends how lousy your game is (based on their buggy graphics card… which they assume works perfectly fine), is better than spending the money on a few more testers, some space to put 100 older machines with a variety of video cards?

Unfortunately, yes. That isn’t to say that there’s no testing on this area, but testers cost a lot of money, and while equipment isn’t that expensive, the space to house it is. Since money into this area produces diminishing returns, there comes a point where management decide that the money would be more productive in marketing (combating negative press). Microsoft have a slight economical advantage, in that they have a virtually assured revenue far beyond that of any mere games publisher with which to fund exhaustive testing. If they only made games, I think you’d see those testing labs shrink dramatically. Am I happy with the situation? No, and CS certainly aren’t, as they have to deal with the fallout. But QA and CS are at the very bottom rung of the corporate ladder, below the programmers even (who are shockingly low on the ladder, considering that they’re the people the company relies on) so the chances of this situation changing are pretty slim.

Psychochild said on April 22nd, 2006 at 3:04 pm:

You got the link wrong. It is also up in the trackback section.

I knew you’d agree with most of it. I just wanted to provide a flipside for some of the people thinking you’re being too optimistic. And, they do.

Brian also states that the talent pool could decrease; I doubt this will happen…

Sure, there’s going to be a lot of supply (people wanting to make games, training to make games, etc.), but you’re looking at it the wrong way. Let me pick out another quote you made:

I don’t think that we should count on prices remaining stable. Glutted markets mean smaller revenues.

You are correct, so let’s assume prices will fall. Perhaps $10 per game, or maybe even $5. Let’s assume $10/game. Let’s do some back-of-the-napkin calculations for a business.

The portals want 80% of the cost of a game if you’re “unproven” (meaning, you’re the most desperate to get your stuff up on their site). So, for a $10, you’re making $2. Let’s assume you want to make about $30k/year (a modest but still middle-class salary in most locales), and you have 3 people working at your studio. Add in 30% more for taxes, benefits, etc, and you’re looking at $117,000 per year in salaries. Let’s assume that your games are a modest success, and sell about 10,000 copies each on average. (In reality, you’re probably going to have a few that sell almost none with others that sell amazingly well, but let’s assume an average.)

So, this means we’ll make $20k on average on a game. In order to cover just our salaries that means we’ll have to crank out a game every 2 months. If we assume a $5 price point (meaning we get $1 per sale), we have to crank out a game every single month to stay afloat.

Now, this is just a bit of handwaving. We’re not considering other costs, such as development hardware or software licenses, that are necessary for starting up a business. I’m also ignoring the now infamous Long Tail; your games could sell a trickle, and that will contribute to the bottom line once you have a nice catalog of games, assuming you retained some rights to the game. Note that these factors make it harder for the newbie, but easier for the established company. But, the fact remains: this is a bit depressing to consider. I think many people are going to be weeded out when they simply can’t hack the reality of being an indie developer.

MeFi poster says Raph sucks.

Yeah, and I’m only “nursing a decade old game”, so my years of experience don’t count, either. What do we possibly know?

My thoughts,

Lobosolitario said on April 22nd, 2006 at 3:13 pm:

Very true, although now the big developers are staring the bill for creating a next-gen game in the face, there may well be a big push in that direction. Necessity is the mother of invention

Morgan said on April 22nd, 2006 at 3:15 pm:

Raph: First off, a lot of folks are reading this as my stating that "indies will win." No, they won’t.

Right. The games publisher provides business development, marketing, management, and quality assurance functions that most indie development groups cannot provide themselves with sufficient comptence and expertise. Sure, indies can outsource these functions, but publishers are positioned as gateways to national and international markets.

It’s still going to be a challenge to convince grandma that it’s worth $20 to download the latest indie masterpiece.

Only if game developers continue to blatantly ignore and/or devalue marketing. The problem is not price. The problem is positioning. (There are many other problems with traditional games marketing practices too.) Most game developers haven’t provided potential customers with an intelligent and compelling Unique Selling Proposition (USP). "You should buy our products or services because…" Why? They don’t know and leave potential customers to squabble over price.

Games have become commodities due to pure negligence. Games are not sold. They’re placed on shelves, in bargain bins, and simply expected to be bought. Games are not marketed as personalized solutions. They’re marketed as "art", passively awaiting buyers in a gallery of shades of grey. As long as industry executives think "business as usual" is good business, I’m not optimistic about the future of their companies.

MikeRozak: I’d bet that SOE has 100+ machines for their test labs, all with different configurations, especially configurations of video cards.

The size of the development and testing teams are project-dependent. For example, SOE also develops and publishes PSP titles. System configurations for PSP titles are standardized, and the number of developers and testers is much smaller due to the requirements of these small projects.

Lobosolitario: … cost too much money, so it’s easier to wait for the complaints to filter back, and patch later…

Thankfully, that’s not possible with console and handheld titles.

Lobosolitario said on April 22nd, 2006 at 3:22 pm:

Morgan:

Good point Which is why they’re so popular to develop for. Much as I like watching the march of technology, it would be nice for the PC world to settle down for long enough to devise some kind of homogenous hardware standard.

Raph said on April 22nd, 2006 at 3:25 pm:

Oh, and Mike — everyone is already using ZBrush, have been for a couple of years. Anything that looks like a tool, people are using. FaceGen? Check. SpeedTree? Check. Automatic lipsync middleware? Check. The cost is still going up incredibly fast.

Tige said on April 22nd, 2006 at 3:51 pm:

Meh, if Raph is right on some, most or all of his forecast it all amounts to a correction. Take mmos in particular, the only thing that has gone up is the cost. We still have game after game of rewrapped tank, healer, damage dealer. Where is the ocean? Where are the flying machines? Where is the mounted combat? Where are all the neat ideas and innovation? Oh yea, thats right, all much too difficult for the average player. Except of course when it comes to patching and troubleshooting technical difficulties. Have you read some of the tech support pages out there?

Is it any mystery why costs are high when a game spends thousands upon thousands of dollars for voice actors, hailing it as one of the defining moments of next gen games. Then they put in an option to turn it off. Half of the players turn it off immediately for performance, the other half turn it off after hearing once or twice.

The big conglomo companies are now faced with smaller companies being able to turn out higher quality products at a fraction of the cost. No longer can they sit back and churn out the same old worn out template, adding nothing but bugs and frustration to a market that no longer tolerates half baked games.

Oh, in case you a wondering. The oceans are in the upcoming Flying Lab game “Pirates of the Burning Sea”. The mounted combat is in “Mount and Blade”, made by a team from behind the old iron curtain. The flying machines are in “EVE” from CCP, a small company from Iceland (well not so small any more). You’d think companies with 5 times the amount of budget of all three of these combined could have added one of them to a game along with the trinity.

MaxS said on April 22nd, 2006 at 4:36 pm:

I still vividly recall GDC keynote by Carmack few years back. He mentioned something along the lines “On Wolfenstein a designer could make a level in 30 min. Now on Doom3 team of 20 spends few months on it”. Carmack probably meant it proudly “how far away we came” etc etc. However, I think it should be looked at in different light.

Remember the *time* of Wolf. What we had? Mark Hamill staring in Wing Commander for MM$ budgets (adjust for growth potential & inflation to modern equivalent). Sierra pushing 8 CD multimedia quests. So the whole 3D shebang Carmack & Romero launched then was really about one thing: 4 guys in that lakeside shack have found new content production model which *obliterated* canned CDs on all fronts – costs, speed of production, user experience.

Exactly same moment we see today, next loop of innovation. All advantages 3D had 10y ago are now lost. Its not even stage of diminishing returns, its stage of NEGATIVE returns of investment (spending too much on pixels with shorter gameplay and higher expesnes makes it just makes much worse)

Will indies win? *some* of them will win who will find another breakthrough content/production/distribution model which obliterates current 3D dinosaurs. I’d put sufficient amount of money onto web games/web 2.0 probablity wave. Of course “extinction level event” shouldn’t be taken too literally: IBM sill sells mainframes. Dinosaurs will still ship 5y produced 5hr long “cinematic experience” software for years which by force of habit they will call “games”. just will have about as much relevance on gaming landscape as cobol has on software today.

Saddest part of the story: all these bright young minds studying right now how to multiply matrixes or bump mapping to work on “really cool games man!”. Going to be about as relevant as CD yellow book knowledge became in 95.

Antheus said on April 22nd, 2006 at 4:53 pm:

Spore reference made me think about evolution of games.

The original games were extremly simple. Single cell organisms, living in harsh and hostile environment. Through specialization, they grew larger, complex creatures evolved. Through various evolutionary advances and changing world they adapted, and world became less hostile (the internet popularization, 3D graphics cards, terraflop GPUs, middleware) and they grew and expanded. Eventually, they became dinosaurs. Huge, towering beasts, masters of their world. But once, through changes done to the world they could no longer support themself. And in meantime, small warm blooded rodents established a model that survived.

Through evolution of games, very little has changed. What do todays RPGs offer that rogue didn’t back in the day? What do FPS offer that space invaders didn’t? How is Grand Prix (sp) series different from Spyhunter. Presentation has improved, content hasn’t.

All development done in this time has gone exclusively to the technical merits. Anything dependant on content (adventure games for example) has died in the process.

Perhaps the future depends on a catalyst. But not a technical one (or why not), but not to further technical excellence, but to further substance.

Hollywood productions received something similar with advent of CG. And still their priority was recreating old movies, old stories with new presentation. All the advances provided very little in terms of content (Shrek 2, for example, is content-wise just a huge parody).

Are games destined to go the same way? Is the technical advancement just concealing evolutionary dead-ends?

Zak Jarvis said on April 22nd, 2006 at 5:09 pm:

A further note on ZBrush. It absolutely, positively speeds up the workflow on complex models. This is not the panacea it sounds like. Abstraction has traditionally been one of the biggest friends of computer gaming. The less abstract the visual representations are, the harder the developer has to work to populate all the visual nooks and crannies that players expect.

Creating something that didn’t exist before you started is going to be expensive for the forseeable future. People have been claiming that it was animation that as going to be cheap because MoCap was going to come along and nearly completely obviate animators.

I think Raph’s predictions for the industry are pretty much on the nose. Wanna see what buying a game is going to be like in the future? Try to find a new comic you want to read at San Diego ComicCon.

Patrick said on April 22nd, 2006 at 10:43 pm:

True dat! (dat = “that”)

Janey said on April 23rd, 2006 at 8:15 pm:

I like epic games too. The idea of mini-mmogs (minimogs?) intrigues me… Maybe. I agree with Quarter To Three in that If we’re talking about Bejeweled, no thanks; I’d rather watch TV (which I actually think is kind of funny because I came to mmogs through zone.com’s Bridge, but whatevah.. I’ve evolved). So I guess my next question is, and what should’ve been Quarter-to-three guy’s question before he said NFW without looking twice at it: What do these minimogs look like?

Oogami said on April 23rd, 2006 at 8:44 pm:

I feel that there is quite a large potential for merchandising MMO contents. I am just wondering what is stopping the producers from going for it.

For example, they could make a collectible action figure series, with interchangeable equipment. Although there could be one main problem with respect to different model sizes here. (A TaruTaru vs a Galka in FFXI) for example, would each require their own size of equipment.

There is another genre of ‘collectible game’ that originated from Japan.
Their current hottest product is “Sangokushi Taisen” or “War of the Three Kingdoms”. This is an arcade game, where players control combat units to conquer an enemy fortress. Each combat unit is represented by a physical card that is to be used on the arcade machine itself. Each player have their own battle record and can gain levels of command for new abilities. Finally, a player will be rewarded a random card everytime he completes a game (consisting of 2 battles). I have not played it myself, as it would get quite expensive after a while (approx. US$1.9 per game).

We can see here that even arcade games have gained some ‘persistent world’ features.

Ladnar said on April 24th, 2006 at 4:49 am:

Games have gone on to other media Raph. Dungeons and Dragons game spawned cartoons, books and a movie, Pac-man was made into a cartoon, Mario Brothers, cartoon and TV show, more recently Yu-Gi-Oh.

Personally I think Ultima could be made into a cartoon series or perhaps even better, a movie. It has a hero, villian, king, and several other memoral characters. Even the death of a muse.. God Rest her soul.

I could possibly see digital distribution changing initial scale of games. Instead of paying $50.00 for a world and $15 a month subscription, it’ll change to $10.00 for a virtual zone. Then additional zones can be purchased. This is similar to what happens now but on a smaller scale which could hopefully provide developers and publishers with a quicker turn around and more revenue. Additional marketing schemes will need to be researched. Here’s a few ideas..

Character blogs - Generated diary of the players character with blog capabilities, adding screenshots etc.., advertisers could add revenue for small adds on these.

Toys based upon your customized character.

Well back to work.. later

Trucegore said on April 24th, 2006 at 5:24 am:

procedural models and textures will never be as valued as mush as triditional.

I know i will not be buying games that use procedural models and textures.Spore being right off my list, while it looks impressive, it is also generic in its construction, and that is the limmited nature of procedural models and textures.

Mabye its just me, but its about as bad as “made in china” to me.

For one, they can only do so much, and nothing is better than that hand made tree expertly painted by someone who has studided art.

Bryce said on April 24th, 2006 at 6:58 am:

We’re hitting a wall on the financial side? Yes. And that is having the effect of slowing down the number of releases.

We’re not seeing the sorts of alternative revenue streams that other media do? Yes. Which is also having the same effect.

Because of this, movie-style alternative financing won’t materialize for the average project? Depends on the projects. In the film industry, most financing is not done in this happy alternative space, it’s done via a big-publisher driven studio system which is incredibly effective in securing tax breaks, investment and all the other corporate shenanigans. Expect EA and the like to become evermore sophisticated in this regard as time moves on. The “Independent producer” movie is very much still a thing of small-fry proportions.

Our distribution channels are in upheaval? No they’re not. They’re just adapting to a too-high price point that the market will not bear. Markets do not buy at the price that they are told to, they buy at the price at which they perceive value. Since the market does not value games that highly compared to other entertainment media, they opt to pay lower instead. 2nd hand has been available as an option in the market for a long time. Its recent upsurge is a reflection of market behaviour, not retailer behaviour, and the overall result is that prices will inevitably fall.

This means a shakeout of the current Big Development publishers. Yes it does. Those that do not become more sophisticated, nimbler with their staffing arrangements, more canny about price, better at marketing and so on will be in trouble. More importantly, it will also mean a shakeout of Big Manufacturers, which is far more significant. The next next generation is going to be a one-format generation, and it’s looking increasingly likely that that manufacturer is going to be Microsoft. With Nintendo becoming a sub-section (Apple equivalent) innovation leader.

Because of the crunch, digital distribution will be the only logical play. No. This is where your logic falls apart. Digital Distribution may be many things, but it is not a disc-killer. From the market’s point of view especially, it’s a hassle. The logical play, and it’s the play which has been playing out in the industry over a ten year timeframe, is dominance. It is Hollywoodisation, of far fewer releases from only a handful of publishers world-wide (maybe 6, including the Japs) and one dominant console format which will have significant buy-in and part-ownership from this top 6.

Nintendo will remain apart from this scenario, but everyone else is caught up in it. Sony in particular are the giant ready to be killed. What you will see is a proper mass-market gaming medium, in otherwords, like the RIAA and the MPAA, wherein there will only be maybe 150 releases a year on the Xbox 3 which, by dint of their calendar spacing, high production values and heavy marketing, will break the 90% failure rate. By reducing choice and continuing towards oligopoly, the industry is absolutely on course to rescue itself financially and become stable within another ten year cycle.

Digital distribution will force a different style of game. No again. What DD is going to do is provide an outlet for the Long Tail game consumer, like the arthouse cinema does for the serious film enthusiast. It is never going to amount to more than a significant minority interest most of the time, which suddenly bubbles up the odd crazy hit every once in a blue moon and becomes a sort of self-streaming franchise reservoir for the mainstream industry to console-ize.

The ecology of the game industry will shift to be more varied. Maybe. It’s pretty varied as is, and hard to see what exactly is sitting around the corner in the innovation bag.

The noise level in the marketplace will rise. In the DD end it will. In the actual game industry, it will become far more concentrated and calendared around key releases.

PC gaming will grow back with this market. That’s unlikely. With HD TVs and funky controllers now to hand, there’s no room for the PC any more in most gamers’ homes. The PC itself is becoming more productised and less generalist as time goes on, but it will retain the ‘home of indie’ aspect that will be important (and from which Live will continue to reap the cream of the crop)

Consoles will specialize or become more like the PC. They will generalise. One or the other of Microsoft and Sony are going to pull a Sega over the next few years and have their gaming division collapse. My money’s on BIll Gates, you may say otherwise. At the same time, the cost of doing business for manufacturers in general is going to require that they gain publisher buy-in, making a de-facto single console format. Forums and blogs and all that nonsense are irrelevant in the face of a connected network and TV shows

Everyone will be trying to lock customers into branded lifestyles associated with gaming brands. Maybe. They’re doing that crap already with minimal success though.

Raph said on April 24th, 2006 at 7:43 am:

Of course they have. That wasn’t my point — those things require a whole new investment. The chains of alternative forms that I gave for books, music, and movies rely on reuse of the SAME content. It’s the same creative output being purchased multiple times over. The closest analogy we have today for games is buying a retro game on a handheld.

Bryce, very good alternative analysis… I think Sony will be a tough giant kill, personally. And it may be that the heavily calendared release thing will be the way things happen — in fact, I am positive it will happen to some degree. But you are describing essentially how the movie biz works, and I think there’s a lot of factors that work against it: the radically smaller audience, the lack of ongoing revenue from a given piece of work product, the lack of a locked down distribution system, and the lack of truly integrated business models on the part of the game publishers. Movies control nearly everything about moviemaking end to end — not the case for game pubs. Distribution for games with digital distribution will be more akin to book publishing than to how movie sales work. And the the audience for just consoles is always going to be smaller than the potential audience of PCs.

Bryce said on April 24th, 2006 at 10:51 am:

It’s also how the mainstream part of the music industry works and, lately, book publishing is following a similar path.

Nordramor said on April 24th, 2006 at 11:50 am:

Ultimately digital distribution still feels like it’s going to be the wildcard in this whole equation. Comparisons to the movie industry don’t hold up exactly as Raph noted, because game publishers don’t own their distribution.

Alternative scenario: Digital distribution services like Steam become the norm, only they’re wholly owned and run by EA, Sony, and Microsoft. They service a console, but that console is effectively a trimmed down gaming PC with support for web browsing. Huge publishers now own the hardware, the software distribution system, and one of the best ways to market their own products (their own portal).

Feels contingent upon broadband becoming cheaper and faster than the pace that content is growing in size.

In this situation, the gaming industry starts mimicking the television industry, not the movie industry. Still room for indies in this environment (see your average cable-service channel listing), but most people still watch the big dogs of network television.

Tess said on April 24th, 2006 at 12:03 pm:

Weirdly, I was just having this EXACT same conversation, just the other day. I think a lot of people are on the same page. Unfortunately, it’s difficult to figure out how to use this knowledge to one’s benefit, beyond avoiding having your ankle tied to anyone who is about to go careening off the edge of a cliff. Really, if there’s anything that people in the industry are good at, it’s careening off the edges of cliffs, even in the best of times.

MaxS said on April 24th, 2006 at 1:20 pm:

Because of the crunch, digital distribution will be the only logical play. No. This is where your logic falls apart.

No Bryce, it does not. This is classic Gutenberg moment. The Hollywoodisation works on one condition only – if there are NO alternatives. If the only way to print a book is to put hundred clerics (animators) into monastery cells (cubicles) and have them scribe for years then Church wins. As soon as printing press is invented, Church looses no matter how fast it burns them. No matter how many clerics it will thorow at it.

Here is what I think the main point you missing. Digital distribution is not about being disc killer. Its about alternative. There is no need to kill disc if it remains unopened since the owner is upstairs browsing/playing/socializing on the web. There is no artificial squeeze/demand created by calendared releases if there are ten times more easily discoverable alternatives in long tail. The only factor to track is attention. The Church is loosing control over how we spend those 1440 minutes. That lost its permanent, unrecoverable and fatal.

Wudu said on April 24th, 2006 at 5:50 pm:

I think the celebrity trend is going to be pretty stronge, for instance, I am eagerly anticipating the next game to have Raph Koster on the dev team. For your point of view, Raph, you have to be considering name recognition as a selling point for any future project. You can count one future customer here.

Ryan Shwayder said on April 24th, 2006 at 9:16 pm:

Am I allowed to simply nod my head in agreement in a comment? I guess I’ll have to try to build my “celebrity” (Read: People who play one MMO know who I am) so I can attract customers to any products I’m involved in in the future.

I guess I’m not just going to nod in agreement… Big budgets don’t make for good games, nor do big development teams. I’d like to start seeing more small teams with proportionately small budgets hit the specialization level in the online sector. Say, companies offering 3 or 4 focused games that do what they do well, and the subscription or other sale model will be based off selling them in conjunction with one another.

I actually had a conversation today with a major magazine writer discussing unification of online game services. We already see Xbox Live, which is an example of what we were talking about. But we discussed a deeper integration. A community on the PC (and cross-platform) that could persist between numerous games. It’s done to some extend with from the sales end with Station Access (all SOE games for one monthly fee), but it could go much further. Unified forums, blog space for all users, friends lists external to the games, instant messaging programs built-in so you can contact anyone in any game from within the games or without, etc. Somewhat related, but also somewhat tangential to the topic at hand.

There are things we can do to counter the forces converging against us, but it will take some developer/publisher agility to come up with solutions and to remain profitable in the market.

Morgan said on April 25th, 2006 at 2:32 am:

The best way to predict the future is to create it. — Peter F. Drucker

I’m uncertain if that’s how Drucker originally stated that idea, and I know many others have echoed the same opinion — but that mere quote sums my thoughts on these predictions. I don’t intend to bash… There is simply no physical (i.e., non-experiential) context provided by the authors of the preceding analyses. What I’d like to see is a formalized prognosis that includes historical and situational contexts, vivid examples of perceived transformations, and strategic foresight for seizing opportunities and/or resolving problems.

Michael Chui said on April 25th, 2006 at 8:34 am:

*wields Hammer of Nail Smashing +3* What futures are we predicting today?

Adam Miller said on April 25th, 2006 at 4:13 pm:

What about us working folks who would happily pay $50-$100 a month for:

High quality graphics and content
No one under 21 allowed, but not sexually oriented particularly
Good casual gameplay with a “club” type atmosphere
Quality customer service (just doesn’t exist in any MMOG yet)

Would that change the landscape any?

I heard that SOE soundly rejected the “lockout under 21″ idea at a recent conference. Doesn’t mean it’s a bad idea, however. No offense meant to the younger folks, but I want a place to play where our different worlds don’t collide and where I can play with the grown ups.

Raph said on April 25th, 2006 at 4:55 pm:

The age verification step is actually somewhat tricky, and potentially expensive.

The real challenge, though, is that the other items you listed are expensive enough right there, without adding in additional limits on the market… The price sensitivity for the $50-$100 market is unknown; all we know is the number of people who run multiple accounts, and we know that only very loosely. It could be argued that a substantial number of players NOW are already paying figures in that range…

The next next gen

75 Responses to “The next next gen”

Meta

Recent Comments

Categories