How the Industry is Eating Itself Alive

Next Generation has a pretty interesting opinion piece on how the commercially immature gaming industry is hurting its long-term commercial prospects by adopting big-business models that hurt independent and creative thinking.

(An evolution needs to happen in the industry in order to support independent developers working on next-gen consoles,) Mottes argues. (I had hoped that by this point the financial pressures of next-gen development and the fact that more and more publishers are becoming publicly traded would have meant that publishers would start to see the sense, as the film industry did many years ago, in having independent developers that are actually profitable and have a good chance of surviving.)

Mottes says that applying film industry funding models to the games business would allow companies to finance more efficiently, to carry out (risk management in the sense of bonding productions or insuring productions against delays or failure in production”. He believed that (the attractiveness of that to a listed company like EA or Activision would have started to influence the industry’s business models) to a greater degree by now.

(I have to worry about the fact that this industry is so immature commercially that it sticks hard and fast to a model which crushes the innovative independents forces. Looking at the consolidation that has happened and the number of innovative studios that have been bought up or have been forced to sell through the financial model that exists in the industry, I worry that the big publishers really don’t understand the value of independent development to the industry and to their own futures. I think that if they really did an analysis of the origination of the big revenue drivers in the last ten years that they would in fact find that a lot of that revenue, IP innovation or development growth has come from independents that have then been bought up.

(The capital requirements and financial risks being taken by independents have grown but publishing models have failed to accommodate that, meaning that publishers are going to be left in a situation where they’re going to be more and more reliant on IPs from external sources like movies and TV series’ and so on. The games industry is going to become a secondary market in itself for other industries rather than a primary IP developing industry and that’s going to kill, or at least limit the growth of the industry hugely.