Should we Care About the Business of Games?

in Blog, Business by LAS on September 30th, 20093 Comments


 Obsession among videogame players about the business of games is nothing new. We have long joked about ‘the console wars,’ and every podcast I listen to has a discussion of NPD numbers after they are released.

The question I want to ask is: why do we care? Why should we care whether the company who published a game of which we’re a fan made a ton of money or struck out? Why should we care which console is selling better? There are several logical reasons, but I don’t think we care for logical reasons.

 We should care some of the time

 I’m not saying we shouldn’t care about the business side of the industry we love. It’s important if we like a new IP that it’s successful so sequels are developed and we can continue to explore the new world to which we have become attached. If you buy a console and it’s struggling, you don’t want your initial investment to have been wasted when software support diminishes.

It’s important that the industry as a whole expands so that games have larger development budgets and can be more ambitious in scope. These are all step function concerns, however, where once a game is over a certain threshold it doesn’t matter how much additional success it has. Is a developer going to cancel Halo 4 if Halo 3 sells 6 million copies instead of 8 million?

You know who else cares about the business side of videogames? Yeah - This guy

You know who else cares about the business side of videogames? Yeah - This guy

 An additional reason for which we should care about the business side of games is the direct cost to us. If digital downloading gets off the ground, many gamers hope the cost of games will come down as retailer margins are removed from the supply chain. Barring that, games might remain the same price to the consumer but developer budgets will be able to grow as retailer dollars are removed from the equation.

 I rarely see the above reasons stated as explanation for why gamers care about sales numbers.

 Is anybody out there?

 There are additional logical reasons to care about the business of games. If we’re buying a multiplayer game or committing our monthly fee to an MMORPG we don’t want the community to be so tiny that it becomes difficult to find an online game or group up for a raid. In addition, with DLC these days, the greater the base playing a game, the more likely the publisher is to put out additional content.

 This still isn’t the reason why most people care about the business.

 Bigger is better?

 For most people, it comes down to petty competitiveness. I believe we simply want to support what’s popular and instinctively demand group validation of our favorite games. For some reason films and games are different from music. Everybody seems to want their music to be underground and not well known so that they can share it with their closest friends and be ahead of the curve. In this generation of hardcore games, however, the Xbox360 is ‘winning’ and the PS3 is ‘losing’ and therefore PS3 games are the scrappy underdog despite almost every game being identical on both consoles.

I understand wanting the PS3 to sell more because some developers have struggled to code PS3 games correctly due to lower resource allocation. I don’t understand fans of the Call of Duty franchise wanting MW2 to outsell Halo: ODST just so they can win and brag about it.



 Will game sales become more or less relevant in the future?

 While the concern over game sales currently seems to revolve around bragging rights, I see the industry at an inflection point. As downloadable games become more prevalent and studios like Popcap and Twisted Pixel can release popular games on smaller and smaller budgets, the investment required to produce a game will shrink.

Companies like OnLive and Gaikai will make the up front investment required to play games much smaller and the barriers to entry to both playing and development will shrink. Much of the pressure on developers to lock players into presales and estimate how many discs they should print before a game ships will diminish and some of the competitiveness among consumers might simultaneously dissipate. In addition, having most people on a single platform will create more of a community and less ‘us vs. them’ sentiment.

Smaller, cheaper to produce and ... dare I say it ... fun?

Smaller, cheaper to produce and ... dare I say it ... fun?

 The smaller up front costs of games and greater internet exposure increases the potential for real time, community centric development. This might make Valve Software’s vision of microinvestments in games pre-release by players a reality. That would make more of us investors and give us reason to care about game sales. At the same time, knowing that other gamers are funding some of the cost of every game release would take some of the fun out of hoping a game fails.

All I’m sure of is that the current situation of rising development costs and lower potential profits due partially to cross platform compatibility and platform-exclusive brands is unsustainable, and our encouragement of the competition as gamers does nothing to help.

 I’m interested in your thoughts on the matter. Hit up the comments!


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