« Home | Anger: Tipoffs » | Gluttony: Sugar » | Sloth: Funny » | Sloth: Family Fun » | Pride: Open Trackbacks » | Pride: E85 Price Check » | Envy: Iran » | Greed: Fundraiser » | Anger: Moussaoui » | Envy: Screedy Fun » 

Wednesday, May 10, 2006 

Greed: Game Industry

This Reuters story kicks off the much dreaded "E3 Media Blitz". It sure sounds good:

The video game industry, which supported 144,000 full-time jobs and accounted for more than $8 billion in game sales in 2004, had an $18 billion impact on the U.S. economy that year, according to a new study to be released on Wednesday.
A little quick math reveals that there is a little over $55,000 of sales for each of those employees. Remember that is SALES, not PROFIT. Assuming that these numbers are correct, what does this mean for the game industry’s future?

From what I can see this means the industry is in some severe trouble. A quick look at the Game Developer salary survey for 2005 shows a median salary that is well over that sales figure. How long can the industry continue to pay more in employee salary than it takes in via sales? This does not even account for benefits, production costs or overhead.

Now add to the mix that the “big guys” are turning a healthy profit, reportedly based on abusing their underpaid employees and driving them to burnout. What slice of the pie does that leave the little guy creating new and interesting games instead of “Madden Football 5137”? I have maintained that it is insane to start a game development company in this environment for quite some time, the fact that venture capital has all but dried up tends to validate this view.

My feeling has been that the game industry has been stagnating for at least 5 years. Publishers/Big Guys are unwilling to give new ideas a chance (with “The Sims” being a notable exception). Development and Marketing money flow to sequels and rehashes of other successful games. These games are seen as “Safer” bets than something new. We are truly heading toward a choice between “Grand Theft Auto 45”, “Major Theft Vehicle 3” and “EA Presents: The only sports game available 23”. The costs of development and the risks of flopping in the marketplace conspire to bring this about.

Eventually the industry will see a shakeup like in the 1980s. If it rebounds again, and that is a big “if”, it will need to have creative (i.e. not burnt out) people doing it for the joy of the hunt again. New genres need to be explored, new ideas need to be funded and creative people need to be encouraged for a comeback to happen. The current climate does not bode well for the industry.

Given all this, I still see game development schools advertising their degree programs based on the hopes and dreams of naive kids that think that working in games is “all that and a bag of chips”. These are the people that the EAs of the world exploit. One former boss once told me to “Hire ‘em all, let God sort ‘em out”. Nothing has changed except the scale of the crime.

Linked: basil's

| | Trackback URI

Blog Info

Praise for The 7 Deadly Sins


"I have to admit that you do sloth like nobody's business."
- tee bee
"omg...you're even nerdier than my bf. That's hawt."
- trouble
"Not everybody remembers the glow of green text on black monitor with fondness"
- cathyf
"That's just crazy talk"
- tee bee
"Holy crap! Where's the ACLU pukes this time?"
- justanothermngirl
"Quick, edit these before anyone sees them!"
- Chris
"See? Getting old isn't all bad."
- David
"THIS IS GOOD, SPREAD THE WORD."
- RICHARD
"Best wishes to my Blog Brother."
- Retired Geezer
"Congratulations to one sinner from another."
- basil
"I just sic them on punks like that like a couple of pitbulls."
- digitalbrownshirt
"I hate to say anything negative about someone I've never met (OK, that's a lie), but that guy is a $#@*& idiot."
- John from WuzzaDem

Video Game Voters Network

My Blogfather

Feed The Sins



Weblog Commenting and Trackback by HaloScan.com

Open Trackback Alliance

Open Trackback Alliance


101st Fighting
Keyboarders



Powered by Blogger and Blogger Templates
Listed on BlogShares



Top100 Bloggers
Top 100