It's not just Microsoft. Big publishers continue to exit the mid-sized game business.

Avatar image for bigsocrates
bigsocrates

6431

Forum Posts

184

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

#1 bigsocrates  Online

@zombiepie has accused me of downplaying the gravity of Microsoft, and by association Phil Spencer’s recent actions so I want to start off by acknowledging that the recent job destruction at Microsoft is a choice, made by someone at Microsoft, totally unnecessary in a company as rich and profitable as it is, and inexcusable in both their existence and execution.

But while Microsoft’s implementation of its “new direction” (if it even has a direction) has been particularly awful, I think it’s important to note that it’s part of a broader pattern. Sony has cut basically all of its smaller scale development to triple down on huge single player tentpoles and live service games as seemingly its only first party offerings going forward. Sony was once known specifically for its quirky weird experiments like Parappa The Rapper and Tokyo Jungle. Now it’s got Spider-Man, God of War, whatever Naughty Dog is working on, Gran Turismo, Destiny, and not a lot more. We’ll probably see another Ratchet & Clank some day and a few other things but the days of Puppeteer are long over.

Square Enix recently announced that it was taking over $100 million in losses to cut back on smaller games and focus on its tentpoles. Activision, long ago and well pre-merger, cut back on making almost anything that wasn’t Call of Duty or a mega Blizzard franchise, very occasionally putting out a Crash Bandicoot game or a Tony Hawk remake, often to great critical and even commercial success, before shrugging and going back to making more COD.

Take Two just gutted Private Division, its mid-sized division. Ubisoft occasionally puts out something smaller, but Ubisoft is a baffling company at this point and it just released the world’s AAAA game so who knows what its direction is.

Capcom seemingly makes Resident Evil, Monster Hunter, Street Fighter, and remasters of its old properties. Exoprimal is live service, and Dragon’s Dogma II seems like it’s AAA, though admittedly it is not a core franchise. But prior to that the last games that don’t fall into one of those categories were the weird Ghost and Goblins Resurrection game and Devil May Cry 5. That’s fewer than one game per year.

EA, of all companies, is one of the few publishers still regularly trying new things, with its EA Originals label putting out the Hazelight games and some experimental stuff like Lost in Random and Tales of Kenzera: Zau. But it too has announced that it intends to shift focus towards its core IP. Maybe we’ll see another Hazelight game in the future, and I’m sure it will take some shots at tiny games like Unravel or Fe just to generate good will, but it seems unlikely we’ll see another year with a slate of mid-size titles like Wild Hearts, Immortals of Aveum, and Deadspace ever again, after all three seemingly underperformed despite none of them being outright bad and Deadspace being very good by most standards.

Nintendo will continue being Nintendo and part of that does include making mid-sized games to fill in its schedule between tentpole releases. The Bayonetta series has gotten 2 releases on Wii U, there’s been a new Pikmin game, new 2D Metroid, new Warioware, and a host of remakes and strange one off experiments. It doesn’t seem like Nintendo is stepping away from mid-sized games because its business model requires a constant stream of games and it doesn’t have enough mega properties to fill in the schedule.

So who does that leave outside the big N, and perhaps Bandai Namco, which puts out a bunch of mid-sized licensed stuff? There are still a few mid-sized publishers who have survived the various consolidations in the industry. Koei-Tecmo comes to mind. Sega could be seen as mid-sized, though it’s almost as big as Square by market cap, and it has been focused on megaprojects and core IP over the last few years. There are also some boutique publishers who are putting out some bigger games that are larger than what traditional indies are. Annapurna, Kepler, and Focus Entertainment all come to mind. Embracer and its various appendages seemed to specialize in this kind of game, but who knows what’s going on with Embracer these days. My point is that there is some hope for the mid-sized game out there, but mostly from these smaller companies. The biggest companies are only interested in the biggest games.

Why does this matter? There are a few reasons. For one thing, mid-sized games benefit from being made in large organizations. Not only is there (or rather should there be) financial stability provided by being part of a big company that’s not a couple flops away from going out of business, but the shared resources and marketing muscle mean that these companies have traditionally been better positioned to get the mid-sized games to break through into the cultural consciousness. When Sony put out a quirky project people paid attention because it was Sony. Ubisoft got people to notice Starlink: Battle for Atlas and Immortals: Fenyx Rising despite their terrible titles because, again, they are Ubisoft. Tim Schafer talked about how when Double Fine joined Microsoft he was able to both offload a lot of overhead work like administering benefits to the parent company and was also able to use internal Microsoft resources to help develop Double Fine’s games, while bouncing ideas off other people within Microsoft Studios. That might have just been PR, but ideally that’s how it should work. Big companies have unique advantages beyond just being big.

And what they also have is a whole lot of IP. Microsoft alone is hoarding a huge chunk of gaming’s most venerable franchises, from all the Activision stuff from the 2600 days to Fallout, Elder Scrolls, the ID software stuff, Crash Bandicoot, Spyro, the list goes on and on. And that’s just Microsoft. Each of these companies have a treasure trove of IP buried in their vaults. This matters for a couple reasons.

The first is that this IP can boost sales for these mid-sized projects. There are a bunch of indie extreme sports games out there right now but all of them combined probably have less attention and sales than the Tony Hawk remaster brought in. Part of that is because Activision put some budget into it, part of it is the quality of that product, but part of it is that people care about the IP so they pay attention to it and are willing to give it a chance and talk about it. Tony Hawk will always get more attention than some no name game, even if they were the same in every other way. The same can be said about Crash Bandicoot 4 and even something like Sackboy’s Big Adventure. It’s easier to launch a game that’s not going to be a blockbuster supported by 9 figures in advertising if you’re doing so with an IP people know and care about.

The second is that there needs to be a way for people to access old games without piracy. People say “emulation” a lot, but what they mean is piracy. I’m not passing a moral judgment here, but piracy is going to be something a lot of people aren’t comfortable with and that isn’t even possible in certain situations. We saw what happened with the Switch emulators and while that was for current gen stuff, Nintendo has taken down “emulation” repositories in the past. Additionally, piracy just isn’t a possibility for cultural institutions like universities or museums, which can carve out exceptions for their own academic pursuits but can’t provide ways for other people to access the material they’re talking about. For a medium to thrive people need to be able to access its past, especially its recent past, and for many games that’s very difficult to do legitimately these days. The more these companies are oriented towards only putting out mega hits the less interest they have in making their catalog available.

In addition to the promotion issue and the IP issue, there’s the issue of institutional knowledge. It’s not just about people losing their jobs and leaving the industry, or leaving the industry because they don’t want to be support staff on Call of Duty for the rest of their careers. It’s also about teams being broken up and companies losing the ability to manage projects at a reasonable scale. I think we’re seeing the fruits of this in the way that Microsoft can’t find people who can actually lead teams and get games out in good shape. And Ubisoft seems to have similar issues. When you don’t let people cut their teeth on mid sized projects and you don’t have teams that cohere and learn to work together the product suffers, regardless of the size. And while some of these teams are reconstituting in smaller studios, often enough is lost that it just isn’t the same. Parts of the Burnout team have gotten back together but the games they put out aren’t Burnout. Playtonic isn’t Rare. Even if Microsoft wanted to make a new Tony Hawk game, Vicarious Visions isn’t Vicarious Visions anymore, and that team, build over 30 years, was sacrificed to the alter of crappy Call of Duty games even though Tony Hawk 1+2 outperformed expectations.

Your team makes a game, even a great game, even a game that makes money for the company and gathers acclaim and positive press, and these companies do not care. They’ll absorb the team or disband the studio or whatever. Nothing makes people invest more in their jobs than seeing colleagues get a pink slip after crunching to put out a great piece of software that’s received well and makes the company money.

So why are these companies like this? Every company is a little bit different, and Microsoft’s current manifestation of sociopathy is clearly partially a result of overexpansion, but I think that there are two other primary causes. The first is that these companies don’t know how to do things economically. Yes they can budget a mid-sized game at mid-size but they no longer have the capacity to promote games that aren’t massive blockbusters. They may have had some mid-sized studios but they didn’t have mid-sized promotion teams so you got a lot of games that came out and tried to sell either based on the strength of their IP or review scores or, conversely, got too much money poured into promotion so they underperformed. We still get breakout mid-sized games from time to time, like Helldivers 2, but they seem to either depend on the games themselves doing something clever (Helldivers with its wholesale ripping off of the Starship Troopers movie’s tone) or being fantastic or just getting lucky. That’s not a great way to run a business. Helldivers 2 is also a live service game, which meant that Sony actually did care about it.

But the flipside is that even when the games do break through and do well, like Tony Hawk, it’s not enough to move the needle for these behemoths. Activision did call out Tony Hawk as a profit center in its financial reports, but at the end of the day having the occasional game hit every couple years is not the reliable firehose of revenue that Call of Duty is or Overwatch and WoW have been. When you have a golden goose even the very productive other animals on the farm get neglected and sacrificed to pamper it. We’ve seen this before in other ways. Valve more or less stopped making games because Steam got so big. Epic lost interested in franchises like Unreal, once its big driver and the thing its engine is named after because Fortnite blew up. Grand Theft Auto and Red Dead Redemption are now the only games Rockstar makes, and they used to make a lot of different stuff. The huge money makers come to dominate the company and everything else becomes an afterthought. Something to move off the balance sheet when things dip. Gaming has always been a hit driven business but the hits were never this big and they never lasted this long. GTA III exploded but Rockstar had to follow it up so we got Vice City, San Andreas, but also a bunch of smaller titles and other attempts at franchises. GTA V ended that because it just kept making money year after year. Now we’re going to get GTA VI, probably 12 years after the last one and with one game from a different sub-studio in between.

I don’t know if the way these companies do business is actually right economically. The fact that so many are going down this route could be group think, or it could be that it’s just how the numbers work. What I do know is that it’s frustrating for me and devastating for developers. In many ways it has broken the business of making games. A lot of other media has gone the same way. There are fewer movies from the big studios than ever before, and they take many fewer fliers on mid-budget releases. It’s mostly blockbusters and indies these days. The book publishing industry is in turmoil. Media is a complete and total mess in so many ways. But while mid-sized games are still getting made, and some are doing well, the exit of these big companies from anything but the top end of the market is a loss, primarily for the developers affected but also for the art of game making and the consumer.

None of this is to take the spotlight off how badly Microsoft has handled its cuts and its business in general. I’ve got more to say about that in another post, but it’s not just Microsoft. It’s most of the huge legacy publishers at this point.

Avatar image for thepanzini
ThePanzini

1425

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

#2  Edited By ThePanzini

Nintendo is pretty much planning to double the size in the next four years, they will encounter the same problems everybody else has just a generation or two later, they are insulated from the fact their AA games still sell, but when the development rises with Swich 2 that'll be the litmus test seeing if those smaller games still make sense..

[Famitsu] Nintendo President says, "game development will become even longer, more complex, and more sophisticated in the future"

He also expressed the belief that it is inevitable that game development will become even longer, more complex, and more sophisticated in the future, and while M&A may be considered as a means to deal with this, he added, ``First of all, we need to firmly establish Nintendo within the company.'' The company's basic policy is to work with developers who understand the brand and have built the company's brand over the years to develop human resources who will be responsible for Nintendo's future development.

Nintendo confirms that its new development centre has been delayed to make it bigger

According to Nikkei, Nintendo hired 130 new graduates in fiscal year 2023, which it says is 50% more than three years ago.

The article quoted Nintendo president Shuntaro Furakawa as saying: “The development resources required per piece of software are increasing. We would like to maintain the level of recruitment of the past few years.”

How can Nintendo Switch 2 surpass its predecessor? | Opinion

I also know that Nintendo is actively meeting with independent developers to find new partners. Some of that is around publishing indie games, which Nintendo does from time-to-time, but it's also seeking studios that could work on some of its IP. Nintendo regularly works with third-party teams, including Bandai Namco, Team Ninja, Platinum Games, MercurySteam, WayForward and Grezzo. But the company is looking to add to that roster, and I know of three studios that are deep in conversation around making games based on Nintendo brands.

Avatar image for allthedinos
ALLTheDinos

1151

Forum Posts

0

Wiki Points

0

Followers

Reviews: 2

User Lists: 0

Defector had an article this week (Monday maybe?) about why ESPN and sports media in general has been cramming sports gambling into every pore of their coverage. Their argument was that ESPN+, their streaming service, was largely unchanged for a long time and making steady profits in an era of most streaming platforms being unable to do just that. But now it needs to grow forever, and the only way to do that was cram odds or betting app partnerships into it. And of course, that might provide a quick jolt, but is it going to move the needle at all in another quarter or two?

It's really tough not to put the vast majority of blame for the current entertainment landscape on investor thirst for infinite profit. I don't know enough about finance to sound remotely intelligent about it, but it all feels like it more closely mirrors speculation than growing assets. For their part, company executives seem to so whatever they can to kowtow to these fickle requests, which doesn't feel like leadership so much as supreme cowardice.

The reason we put up with large corporations is that, in theory, they can provide products and services more efficiently, of higher quality, and with more security for the people that make them. Most companies don't appear to be hitting any of the three of those anymore, and it doesn't seem to bother the companies enough to change. Like you said, the mid-range games don't make a noticeable splash (even when successful) for the decision-makers. This isn't unique to the biggest publishers, but when Xbox and Sony release critically acclaimed games that sell reasonably well (despite whatever insane expectations they might have), then lay off the people who made it, it's pretty much impossible to conclude that those organizations are not fundamentally broken.

Avatar image for bigsocrates
bigsocrates

6431

Forum Posts

184

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

#4 bigsocrates  Online

@allthedinos: I think this is certainly part of the underlying structural economic issue at play here, and partially affected by slowing population growth in the richer parts of the world among other things, but it has been an issue for as long as there have been gaming consoles. It's not like investors didn't want perpetual growth in the 80s, the decade whose slogan was "greed is good." People always say "why would you invest in a stock if it's not going to grow?" and the answer used to be "dividends." If a company was perpetually profitable such that it could throw off money at a higher rate than you could get from savings bonds then it was a good investment even if the stock price wasn't shooting up. We've gotten away from that and that may be part of the issue, but I don't think it's all of it.

What I'm saying is that none of these structural issues are new. They may have gotten worse in some ways recently, but it's not like trend chasing hasn't existed for a long time. You can point to the issues at Boeing and say "it's not just media companies" but there are other companies that seem to not suffer the same issues.

I do think a large part of it is just consolidation. You say that the reason we tolerate big companies is that they are better for everyone, but the actual conventional wisdom is the opposite. Monopolies are bad and anti-trust law is supposed to break them up. We've gotten away from that more or less because of corruption and a strong ideological push from the right, but I don't want to delve too deeply into politics and law here because it's a much bigger discussion than gaming.

What I think is driving a lot of it in gaming specifically is something I touched on but want to draw out further. The fact that in the old days there were no perpetual hits. There was no dream of the golden goose that could throw off unlimited money forever. Live services were not a thing and hit franchises came and went. This year Grand Theft Auto would be the best selling game but next year it would be something else, and companies constantly had to produce new things and new IP to try and find that next hit.

The rise of the live service game and also Call of Duty specifically as a franchise that was both annual and perpetually the best selling game changed that. The economics became "find the next big thing and milk it endlessly. Don't develop a bunch of new stuff to try and grow something, don't worry about hedging your big bets with smaller ones, just keep digging to try and hit the big pool of virtual oil."

I do think it's speculative and I think it's unhealthy, but the amount of money Minecraft and Roblox and Fortnite make just dwarf everything else in a way that games didn't used to. And they keep making money (seemingly) forever.

That plus spiraling development costs and somewhat changing spending patterns.

If I had to pinpoint the primary driver it would be that. In 2004 you could chase trends (and companies did; remember all the MGS and GTA clones) and you could milk IP but you couldn't build your whole business around one big hit. And now you can. If you can find it. Why look for anything else?

Avatar image for av_gamer
AV_Gamer

2914

Forum Posts

17819

Wiki Points

0

Followers

Reviews: 15

User Lists: 13

#5  Edited By AV_Gamer

Overall, it's looking like gaming has gotten too big and too costly to sustain. And the fact a lot of corpo sharks are now running many aspects of the business, certainly doesn't help. Are we in for another gaming crash like in the early 80s? Maybe not, and this is mainly because of small studios keeping gaming alive through indies. But it's not looking good, and it's only going to get worse.

Avatar image for allthedinos
ALLTheDinos

1151

Forum Posts

0

Wiki Points

0

Followers

Reviews: 2

User Lists: 0

@bigsocrates: I don't disagree with your core argument, but there has definitely been a noticeable shift the last several years in how companies flex their "greed is good" muscle. Also, I definitely qualified my statement about why we tolerate corporations with "in theory" because I personally think they actually exist just to exploit labor and make a select rich few richer and fewer in number. If this is incorrect, they have a weird way of disputing it.

Avatar image for bigsocrates
bigsocrates

6431

Forum Posts

184

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

#7 bigsocrates  Online

@allthedinos: I don't know that I agree with you that there has been a big sea change. There have certainly been examples, but do we all remember the subprime crisis? When a bunch of companies tanked the whole economy with greed and fraud on a scale so large it sent the whole world into recession? Compared to that some shrinkflation and streaming shenanigans, while annoying, certainly don't seem like an escalation.

What we have seen is consolidation of companies, which reduces competition, and that can increase certain of these activities. That's a real problem.

And my point was that actually there is no "theory" that says that having a bunch of huge companies controlling markets is good for employees and consumers. I don't think anybody credible argues that it is. They just aren't being stopped but the theoretical underpinnings as to why tend to be legal in nature (i.e. this may be bad for society but it's legal) rather than under some kind of theory that actually it's a positive.

When Microsoft bought Activision it did make a few cursory arguments that it would be good for consumers but its real argument was that it wasn't so bad for consumers, especially with the carve outs it made, that it should be illegal. Not that it was a positive.

Avatar image for cikame
cikame

4485

Forum Posts

10

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

#8  Edited By cikame

Their approach... if there really is a plan anywhere in all of this, does not promote art, it's purely a money making industry that demands more and more.

The expected AAA games are too big and expensive so the logical thing to do would be to aim lower, make cheaper less ambitious games not that lowering graphical fidelity makes them any less ambitious, but you can't tell investors "we're taking a new approach, we're putting less budget in so our games will be smaller and look worse than the competition, we might also be able to hire more people to make even more games!!", that's a hard banner to rally behind.

The easy money option is to copy trends, make a Fortnite clone with simple graphics so it runs on every device, no single player so it's cheaper, save the budget for live service bs if it's popular enough, if not shut it down and try again because investors are only interested in explosive returns on investment. That option was more popular before we got live service oversaturation and every new release started failing, so AAA doesn't know what the f*** to do now and is just kind of doing a bit of everything, merging live service into places where it doesn't belong, taking the occasional stab at a gold generator, and pretending to care in between by giving a studio a chance at an honest game before shutting them down.

I have no idea what the new plan is, the honest games are fewer and fewer, whoever's got their gold generator is just sitting on it unwilling to take a chance on anything else, the trends that were chased are many years old now... everything's a bit of a dry fart really.

Edit: I had a video in my watch later list that covers some of what i said, but also brings up the intriguing practice of delivering millions of dollars of bonuses to executives based on how much mtx they sell, so if making lots of money for the company wasn't incentive enough to make garbage games they also benefit personally over the rest of the studio, i wonder if someone like Phil Spencer has a similar contract.

Loading Video...
Avatar image for junkerman
Junkerman

872

Forum Posts

371

Wiki Points

0

Followers

Reviews: 7

User Lists: 6

#9  Edited By Junkerman

@bigsocrates: With increased costs derived from the increased complexity and time needed to produce "modern" games I have to wonder if anyone is even asking for this to continue? Is there not a critical mass reached when striving for graphical fidelity and technical fidelity doesnt break even with time/financial/personnel risk?

A lot of old games still hold up to this day - and I'd rather have more of those then seeing the opportunities to encounter new ones or return to familiar Iworlds end simply because we're pushing to greater and greater heights with (in my opinion) vastly diminishing returns.

Dev time between Morrowind and Oblivion was like 4 or 5 years and Morrowind had massive expansions.

Oblivion and Skyrim was about the same but they also put out a Fallout game in between.

We had Mass Effects and Dragon Ages coming out.

We had Halos.

Now it seems like we're waiting 6-10 years for games and if they whiff at ALL then the risk and demand for return on investment is just too massive and these corporations cant stomach that and it seems like its encouraging safer and more milquetoast products that are farther and fewer between then they ever were.

I dont want that.

I want someone to take a chance and make Brutal Legend. Or Prey.

Avatar image for thepanzini
ThePanzini

1425

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

#10  Edited By ThePanzini

@junkerman: As I posted earlier Nintendo are expecting the same from Switch 2. Part of the reason is far fewer people are able to fund and produce 100m games which nets you less competition, along with some consumer expectations I'd imagine.

Avatar image for zombiepie
ZombiePie

9285

Forum Posts

94844

Wiki Points

0

Followers

Reviews: 3

User Lists: 19

#11  Edited By ZombiePie

Off topic, but why am I getting @-ed in every thread or blog you make?

Avatar image for bigsocrates
bigsocrates

6431

Forum Posts

184

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

#12 bigsocrates  Online

@zombiepie: DMs are open!

The answer is it has just been a confluence of some mostly unrelated events. You voted for Peppa Pig (and I called out everyone who did) in the Game Club post. For this post I was inspired to include the disclaimer by what you said. For the Redfall post you're just the most visible staff/mod who posts on this forum and I was worried about potentially duplicative posts. It wasn't intended to be like a trend, or anything, it just kind of happened. If it bothers you I can be more judicious about it but I call people out rather regularly because I thought it was like an intended social feature of the forums.