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Thursday, May 19, 2005 

Greed: More thoughts on the game crash

Today's ego stroke to those of us that believe that the games business is headed for a crash comes from this article on Yahoo! Here are some bits, but read the whole thing!

Someone agrees with me:

"Some developers are scared. They are as white as ghosts," said Ankarino Lara, a director of online gaming site GameSpot.
The little guy squeeze:
That raises the technology bar for every developer in the $10 billion industry, and some may not be able to pay the hefty price.
Just what the industry needs, less small developers (i.e. creative risk takers) making games. A greater percentage of released games created by EA or the other big boys is not going to help the state of the business. These guys take no chances and allow no new ideas to come forward. "Need for Speed 45", "Doom 32" and "Halo 328" can't be far behind.

Verification that costs will be higher:
The development cost of a high-end game, now about $10 million, could rise to $15 million to $20 million in the next five years, said Doug Lowenstein, president of industry trade group Entertainment Software Association.
I think that those numbers are exceptionally low. Content will have to be on par with major animated motion pictures to push the new hardware. "Monsters Inc." cost around $150 Million. Since game people work for peanuts, cut that in half and you still get $75 Million without the technology team. Publishers can't pass the costs on to the end user. Will people buy $99.95 games for $500 consoles? Where is the point where the costs drive the demand down? I don't think that the market will buy games at anything above $69.95 except for a few over-hyped titles that will blow the higher price on advertising or something. The extra revenue will not get to the team, that much is certain.

Yep, hard times are a-commin... Hope you got your parachute ready.

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