Just Cause developer says AAA game development unhealthy, unprofitable

The state of AAA development today is unhealthy and most big-budget games will never make a profit, Just Cause creator Avalanche Studios founder and creative director Christofer Sundberg believes.
"It’s really not healthy at the moment," Sundberg said when asked to give his assessment of the AAA business today. "Games have evolved, technology has evolved but as businesses we’re still stuck where we were 15 years ago. As budgets grow, risks increase."

[Gamesgbkiller]

If you make a BAD game then its unprofitable ( most of the times )
Anyway, I want to see Mad Max gameplay..

Where is the GAME ?!

[360ICE]

Yeah, you can easily make a good game and have it be unprofitable. Studios have gone bankrupt after making decent games. The returns needed on the biggest AAA titles are insane.

[erathaol]

Most of the AAA games seem geared toward tackling high sales, when its unfair to judge a market based on self made expectations or even expectations based on similar games success.

[360ICE]

@erathol

The expectations aren't "self-made". In fact, there's this new thing the kids are doing called "market analysis" and "focus-groups". Fact of the matter is that

A) You're gonna have to make a dazzling game if you want a new IP to sell.
B) Dazzling games cost a lot of money to make.
C) If they turn out bad (everyone can run into problems) it's extremely expensive to delay the game or have it sell less.

Of course, there are success-stories like Minecraft out there, but that doesn't stop the fact that for most studios, taking a chance on a new AAA IP is pretty bold.

At the end of the day, game development has a lot in common with other IT projects, and are subject to huge, unexpected issues. That costs money too. Especially for a project that's on a deadline.

[Prime157]

That's not true in terms of business. Look at sleeping dogs, even though it was a great game, their first Report was a loss, and then many months later they finally said it did well. They were talking to their investors. (It was a sleeping dogs or tomb raider)

Good games still flop.

[sashimi]

They flop though cause of bad management. Which SquareEnix seems to be failing hard at this whole generation.

[Skate-AK]

It happened with both Sleeping Dogs and Tomb Raider.

[Gamesgbkiller]

Sleeping dogs only issue was the marketing

I swear there a lot of people didn't know the game exists .

And about Tomb Raider .. Its SE fault rather than the game.

They expected to sell more than it should be.

Good or bad .. it could be Win or loss ... You can't always win :)

[3-4-5]

* Take the $100 million you were going to spend on a game and make 4 $25 million dollar games.

* 4x the ability to get creative and try things out and your risking the same amount of money.

* 1 of the 4 will stick, and become profitable enough to make your money back on all 4, and then you have a new franchise which you can build off of.

* Do that again and so on and you build new IP's, while taking the same amount of risk, yet pushing through all the new ideas you want to try, but aren't sure.

Not sure why this isn't happening more.

It would work.

[GraveLord]

Not true. Make a good and innovative AAA game and people will buy it. Just look at The Last Of Us.

[cyguration]

The Last of Us wasn't innovative at all. It was a good game with solid gameplay and a very good story with detailed characterization.

There was nothing innovative about it, though.

[SnakeCQC]

Compare it to the myriad of games that don't do those things. Innovative is the wrong word but it was definitely what a mature game with a story should be like and hell the mp is pretty awesome too.

[Allsystemgamer]

Innovative no but as you said it blended every element nearly flawlessly

[MegaRay]

The last of us sold very well cuz it was ND game, everybody trust ND.
theres alot of great games with high budget doesnt sell well, especially if the dev ísnt that popular

[dcbronco]

Also it was one of a few games at the end of a consoles lifespan. People were ready to move on.

[Mikefizzled]

Just Cause 3 free to play iOS and Android exclusive. $4.99 for ingame grapple hook dlc.

[NYC_Gamer]

That's just an excuse used by many developers who bring out average games and expect to break records

[hiptanaka]

If you learned how to budget and reduce all the marketing hoopla, AAA would be more viable and people would still buy your games.

[BluP]

^^^ This. Why don't pubs get it?

[dcbronco]

Just Cause 2 sold pretty well. And wasn't heavily marketed. Gaming cost have gone up but the price hasn't. Just look at your own paycheck. All of your cost have risen over the last ten years. But most peoples salaries have barely moved. Games have cost the same thing for almost 10 years without a increase in price. But salaries in the areas of people needed for gaming have been going up because it's a demand field.

That's why games have gotten shorter and mechanics haven't changed much. We might need to just pay a little more. Or maybe the multi-player and core game need to be sold separately. Or maybe episodic content. People don't like micros-transactions. Or day one DLC. But companies have to do something.

[BluP]

I don't think it's that simple. We're still paying ~$60 for a game, but that one game is also selling millions more than previous generations. More people are playing games, which means more sales (generally), which balances out the increased development costs.

Also, digital sales are rising, too. Publishers make a lot more profit off of a digital sale than they do a retail sale. Then there's DLCs, remakes, special editions, etc. If they weren't making enough money, there wouldn't be so many games for consoles. They'd all move to tablet and mobile.

[dcbronco]

There are a lot of things people don't take into account. Taxes, labor, administrative overhead, license fees and royalties. Many people seem to believe that the developer gets every dime of that $60. They first pay taxes, 20% or more. Then the $10 royalty to the platform maker. That's over twenty dollars there. Fees for middleware, disc cost, packaging, electricity for months of the development process, rent. Pressing master disc, then duplication. Transportation to retail. Publisher fees(Some of this stuff comes under publisher cost). And don't forget advertising and retail mark-up.

A game that cost forty million to make may sell a million copies. Okay, they sold 60 million worth. Now subtract all of those things. You immediately lose more than twenty million to taxes and the royalty to the platform holder. Everything else is a loss. Also remember a lot of games used to launch with gift cards or rebates toward a future game. All of that hurts too. Which is why you rarely see that anymore.

Digital sales will make a difference. That is very true. That is why there has been a push toward that. As well as a lot of resistance to it. And you must have missed all of the developers that have moved to mobile gaming or have closed period. It's why we live in the world of the annual series. The people have spoken and they have made it clear they want more of the same. If it ain't broke, don't fix it. I would rather pay a little more and get better quality and new mechanics. If someone would really try something new.

[BluP]

I'm not sure I agree about those fees (the amount, not whether they exist) as I'm not familiar enough with the industry.

I doubt that we're getting sequels because that's what people want. We're getting sequels because

A) They're generally cheaper to make, as you already have an engine (if it's in-house), story/canon, characters, world, assets that can be reused, etc

B) There's less risk involved in making a sequel because it's almost guaranteed to sell as long as it's predecessor sold well. And because it's already cheaper (usually) to make than a brand new IP, it makes it even less risk. That's why we have games like Lightning Returns.

Just my opinion, thanks for an actual civil discussion btw.

[xX-StolenSoul-Xx]

"Publishers and developers very rarely see a return of investment from a 5-8 hour long game."
Well I would think most people would want a much longer game if they're paying $60, so yeah. Likely correct.

[ExPresident]

I have a hard time believing this. The first thing I want to point out is that he refers to EA lowering projections due to weakness in current generation software. This could be because BF4 was a complete cluster fuck out of the gate, and word of mouth did a lot of damage to that game. Also consider people are just getting tired of EA's crap, and Madden isn't doing them any favors either as its getting stale.

Additionally, consumers are a bit to blame, for the constant expectation of games every week. We've got this 'I need it now' mentality and we're pushing developers and publishers to release garbage to keep us satisfied. I can't blame them tho, if we're willing to spend the money, then they are going to sell the product, whether it is good or not.

I also have difficulty seeing how XBox One and PS4 development can take 8-10 times longer. Understandably it should possible take a little longer if the console allows you to do more, but both of these consoles are now more PC like to make it easier to develop on, hence all the fanfare the PS4 is getting from Devs.

This opinion from the Dev sounds a bit like an agenda to push micro transactions in order to make the guaranteed buck, regardless of how good the game is.

I still contend if you make a great product people will buy it. Stop taking advantage of the ability to ship a broken game and patch it day 1, and you may see better results on the sales end.

We as consumers need to also expect better products and not spend money on rushed games, or from Publishers that continue to burn us in the end (Here's looking at you again EA and Activision).

[stavrami-mk2]

gta 5 and TLOU says hi

[mhunterjr]

But those games took a fortune to develop... Not every developer has the resources to take such huge financial risks, hence the dilemma.

[stavrami-mk2]

so did insomniac with fuse but it still bombed .. yea sure money helps but making a decent game is the 1st goal

[mhunterjr]

That's the point. No one sets out to make a bad game. I'm sure insomniac thought they were going to make a hit. But millions of dollars later, that's not what they have. Should they keep working on it (which costs more money) or release it and cut their losses?

Most companies can't afford to take the type of risk insomniac took, but to make a game like gta5 or TLOU, it's going to take $

[stavrami-mk2]

i see your point .but my point is if they say triple aaa are not worth it when billions of pounds have been earnt from triple aaa titles they are flash out wrong ...games like fifa ,cod, assassins creed triple A titles that earn loads year in year out and I'm not a fan of half of them but to say there not worth making is flat out wrong

its not all about the cash ,mine craft ,thomas was alone ,journey loads of indie titles do well without the expense so if u have the cash to make a triple aaa title do it right and listen to what people want ,or flop thats not the fault of triple aaa titles its the fault of the moron who has a vision thats donkey crap

[mhunterjr]

I see what your saying but it's about mitigating risk. With an assassins creed game there is little risk, as it's an established franchise. Same as the other games you mentioned. That's the reason why you keep seeing sequels and clones. There's far less risk when making AAA games that way.

Mentioning the indie games only supports his point. The making new AAA IPs is too risky a proposition, while idie is becoming a healthier way of doing things. That's why games like Tomb Raider can sell 3milliom copies and still be considered a failure.

[1nsomniac]

Ahh the talkings of a company who know they have a poor product to sell...

[Pintheshadows]

If you have a game that is genuinely great, and you don't throw money at things and work intelligently within your budget then you should not have a problem being profitable.

I am sorry, but I just don't buy this at all. He just wants some sympathy and is trying to set up a money grab.

[Coach_McGuirk]

take some risks and make a product that separates you from the others. that's what business is all about right?

[Tex117]

He should have said "AAA development as a widespread business model to be emulated by all developers and publishers is unhealthy."

[Golden_Mud]

So what's actually happening is trying to attack Rockstar Games who gained over 3 Billion dollars after there budget for GTAV being over 200m , yeah it's unhealthy right ?

[bunfighterii]

I think the point is that's one game - think of all the good games that get released that totally flop - there's heaps. Remember how Tomb Raider sold over 3 million copies last year on 360 and PS3 and it still made a loss for Square Enix, because they needed it to sell over 5 million to be profitable? In a world where a game has to sell over 5 million copies just to start turning a profit, then there's something that needs to be done. it's unsustainable for the industry.

Games like GTAV come around once every 5 years, but gamers demand new, AAA titles every few months.

[e-p-ayeaH]

Yes it affects inovation

[bunfighterii]

I think Sony has gone a way to helping the situation by allowing self-publishing and supporting independent studios - there's some great looking titles coming to PS4.

I agree though - 4-5 major studios/publishers can't support the whole industry. If we want new IP's and variety - something online communities scream for but the average gamer seems to vote with their wallet against - then we need more studios and publishers taking risks. They won't if it's too expensive.