5 Reasons the Video Game Industry Is About to Crash

Are we headed for another crash? Short answer, yes. Long answer? Yes.
5 Reasons the Video Game Industry Is About to Crash

No one loves naysaying more than gamers: Everything that happens is the "worst ever" or the "beginning of the end" of a series. Well, I'm here to tell you that those people might be more right than anyone realizes.

I've worked on a few MMOs, as a programmer, game designer, lead systems designer, lead designer, and producer. My work hasn't won Game of the Year, but I've been around the block, and I can't help but notice that these days you can't browse a game forum without reading serious laments about the state of the industry and the occasional comparison to the video game crash of 1983 -- a collapse driven by a glut of indistinguishable games and an economic model that had stopped working long before anyone woke up and realized it.

So are we headed for another crash? Short answer, yes. Long answer? Yes, because ...

(Speaking of "crash", did you know science can't explain how bicycles work? Read more in Cracked's De-Textbook.)

We Put People Who Don't Know Gaming in Charge

5 Reasons the Video Game Industry Is About to Crash
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Not to stereotype here, but the type of person who knows how to make an awesome video game about fighting dragons with a giant chainsaw tends not to be the same type of person who is an expert in business and finance. So if you look at the CEOs and executives of game studios today, you won't find many that actually have professional experience working as game designers. And that would be fine, except for the fact that, due to the way games are made, these guys wind up making the creative decisions. It's similar to the problem with big movie studios, only much worse.

Creatas Images/Creatas/Getty Images

"... looking to Figure 3.11, we see profits increase by .054 percent for every bottle of Diet Coke on screen."

The result is that the gaming industry is driven by aphorisms. For example, it's an entrenched belief that the only truly successful games are branded titles, sequels, and reboots -- that's what the reports tell them. So what I found was that there was kind of a self-fulfilling prophecy at work. I was once told point-blank by a non-gamer CEO that "there's no market for sci-fi games" in a certain genre -- at the time, fantasy games dominated that market. And who's to say he was wrong? When has switching from fantasy to sci-fi ever worked out?


Oh, right.

It's not that they know nothing about games; it's that they know just enough to be wrong. Ever go to a game forum and notice how every player thinks he's better than the designers? That combat would be perfectly balanced if the developers would just change that +2 to a +3 for his class? Now imagine that those people are running the business, and you have a pretty good idea of what the problem is -- creating a perfect game looks easy from the outside, in the same way that from the outside it seems like it'd be really easy to make a snake. And those outsiders are in charge.

So why not just have the money folks focus on the business end of game design and let the actual designers do the designing? Well, it turns out "the business end" includes deciding how many hours of content are in the game, whether you have linear progression with lots of levels, how the DLC is going to work, whether powerful items get sold in the cash shop, whether the game is a first-person gritty realistic shooter with RPG elements or an action RPG with gritty realism and lots of guns ... basically, everything that matters. The people who have the most experience and actually know what they're doing are basically just polishing the ideas that the execs come up with.

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"New memo, guys: We're working on Call of Duty: Fuck Canada now."

We don't like it any more than you do. I can tell you that professional game developers are some of the most hardcore gamers you'll find, but for the most part, they're just not allowed to work on the kind of games that interest them (I consider myself lucky to have dodged the bullet and gotten to work on a licensed property that I deeply loved). And while a professional developer will instinctively know -- and I'm just pulling stuff out of my ass here -- that it's awful to require an online connection to play a single-player game or it's asinine to have pre-order DLC before the game's console is even out, the execs will think those are great for the bottom line, and they make the rules.


"Historically, the best thing about SimCity games is the Internet."

And it's only getting worse, because ...

Budgets Have Gone Insane, and That's Making Innovation Almost Impossible

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Nobody feels sorry for corporations, so when you hear EA or Activision groaning about how games cost too much to make, it feels like the consumers won. "That's right, now put it on a gold-plated disc and do a little dance while you're handing it to us, Mr. Blizzard!" But these budgets are, unquestionably, making games worse.

5 Reasons the Video Game Industry Is About to Crash
Digital Vision./Digital Vision/Getty Images

Man hours spent jet skiing aren't being spent on game balance.

Let's say you've been put in charge of planning a child's birthday party, for some reason -- maybe you lost a bet or something. You've got one day to plan, a $50 budget, and five people to help you. Not a big deal, right? Put some balloons in the yard and hire a clown. Done. But what if that party was for a rich kid and your budget was $50 million? Do you think that makes it easier or harder? Let's put it this way: Instead of five friends helping you, it's 500 strangers, and all of them have different ideas about what a party should look like. How long until you see your first fistfight break out? How far into the party before you hear yourself scream, "OK, who hired the stripper?!?"

Well, in the world of game development, this change from small-scale projects to massive productions happened overnight -- the average game costs freaking 30 times as much as it did in the days of the original Sony PlayStation. Back then, the average game could be made for $800,000 on the low end, but by the PlayStation 3 era, the number had ballooned to $28 million. With the new consoles, that's going to go up again. At this point, it'd be cheaper to just create real zombies to chase people around.

5 Reasons the Video Game Industry Is About to Crash

You can buy a lot of actual bullets for $265 million.

In the older, simpler days (way back in the 1990s), you probably had a core team of a dozen developers and one or two vision holders who could keep the entire design in their heads. The producer had about nine months of planning until launch. Fast forward to today: Star Wars: The Old Republic cost upward of $500 million. Games require massive teams (some of them in another country) and years of development, and that's not including the umpteen false starts during preproduction. And this change happened too fast for studios to adapt -- they've refused to change with the times and are still operating with the same basic structure.

Not that it's any easier on their end. Remember, it not just the development that's changing so fast, it's distribution as well -- today, studios are competing in a market that's permanently saturated by $3 indie games on Steam and the nostalgia-driven GoG.com. Time-honored marketing strategies don't work anymore, and the industry is struggling to find a replacement. Even though it feels like prices have gone up, if you take inflation into account, right now games are the cheapest they've ever been. Add it all up, and most studios are one failed game away from bankruptcy.

5 Reasons the Video Game Industry Is About to Crash
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If you find the buying habits of frat boys depressing now, try working for EA.

So from the gamers' end, it's easy to complain that the market is saturated with first-person shooters (the new consoles are picking up that banner with Killzone: Shadow Fall, Titanfall, and Destiny, in addition to the uninterrupted stream of Call of Duty and Battlefield games), but the fact is that the market is utterly reliant on those games' sales. The consistent success of go-to franchises like Madden NFL is probably the only thing separating the current industry from a 1983-style crash right now. It's not that they're playing it safe by going back to the same well again and again -- they're doing the only thing that will let them survive.

Publishers Are Gaming the Review System

Albert L. Ortega / Getty

Raise your hand if you've paid $60 for a heavily promoted game that got near-perfect review scores, only to find it to be a frustrating, cookie-cutter mess that had you doing a mental inventory of all of the things you could have bought with the cash instead ("three remote control flying sharks!). Do the critics, like, get a different version or something?


"It's a triumph!"

No, the system is set up so that big games rarely get the scores they deserve.

This is a huge problem from the consumer end -- games are a much bigger time and money investment than movies, books, or any other media, so having honest reviewers you can rely on is crucial. You're trying to get an opinion on what might be the only game you buy for the next couple of months, but it's becoming increasingly apparent that critic scores and user scores just don't sync up. Call of Duty: Ghosts currently has a score of 74 on Metacritic -- not a fantastic score for a AAA game with that kind of budget, but check out the average user score: 2.3.*

*Metacritic uses a 100 scale for critic reviews but a 10 scale for users.

5 Reasons the Video Game Industry Is About to Crash
Malene Thyssen

Equine gamers are fairly unified in their rating.

Is that just a bunch of young gamers throwing a tantrum because they thought the game would have actual ghosts in it? Well, read the reviews -- the critics' write-ups boil down to "It's a recycled version of the old games, but still good," while the users' consensus is "$60 is a lot to pay for recycled material, guys." You can see that same divide with lots of games -- Total War: Rome II had a respectable 83.5 score at launch (currently down to 76), but the user reviews? 3.9/10. Mass Effect 3 is at 89 for critics vs. 5.0 for users, the latter group being way less forgiving of an ending that rendered every previous choice in the franchise meaningless.

So why do the critic scores skew so much higher? Well, behind the scenes, studios are doing everything they can to obtain the highest Metacritic score possible at launch -- some teams even get bonuses for hitting Metacritic targets. From the publication's standpoint, those reviews exist to bring website traffic. That traffic turns into revenue from advertisements ... that were purchased by the studios whose games are getting reviewed.


This is officially a black hole of journalism.

If you give the game an award or especially high praise, the publication could appear on that game's box -- the reviewers aren't paid, but they get valuable exposure. Basically, the publishing companies are paying the review site's bills by buying ads and handing out free publicity, so from the struggling writer's perspective, it's bad business to give bad reviews.

EXPLORE A WORLD OF ENDLESS POSSIBILITIES The possibilities are endless - Wiredcouk With multi-city play. Interact and influence region of cities-alo

They use that word, but we don't think they know what it means.

And there is a very close interaction between the game journalists and the game makers' PR guys. So with a few exceptions, most major game previews go like this:

Journalists are invited to the studio or a rented room at a convention. They play the most polished level and/or segment of the game for a couple hours, maybe over the course of a few days. Drinks and meals are on the house. Keep in mind that they're getting dropped into the middle of the game somewhere, because complicated gameplay that builds on lessons learned in previous levels would be extremely frustrating, whereas you want the journalists to experience fun and excitement. So we're talking graphics, simple combat, flashy cinematics, and controlled linear environments that look really good -- as long as the journalists never stray from the path, which is why there are marketing execs looking right over their shoulders and telling them where to go. And it's amazing how intuitive level design becomes when the guy who designed the level is there to explain it.

Albert L. Ortega / Getty

"Ahh, now I see the merits of Sonic the Hedgehog."

But that disparity between user scores and critic scores is going to catch up with us, and it won't just be the critics who get bitten in the ass. If the gamers don't have any critics to trust, they're going to stop buying games the day they come out. And since the industry puts so much emphasis on launch day box sales, that's going to look an awful lot like a crash to the people in charge.

(The people in charge of our country have MOSTLY been a bunch of lunatics. Read about them in our De-Textbook.)

You're Always Flying Blind

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Every gamer has had the experience of seeing some amazing preview trailer for a game set to come out a year or so later, only to have the game arrive and look nothing like that preview (although some are worse than others):

You may ask yourself why they're allowed to get away with that -- isn't it false advertising? Or fraud? After all, don't these game makers know what their own final product is going to look like? No, we don't. In fact, it's almost impossible to know. Why?

Well, think about your hypothetical child's birthday party earlier. Imagine going through that hectic process, only to find that the guest list changes about once an hour. Suddenly you have to accommodate more kids. The backyard you planned to use isn't big enough. The one clown you hired won't be enough to terrify all of them. So you rethink your plans, some of which means re-doing work you've already done. Then, an hour later, it changes again -- this time it's not just more kids, but different kids. Some of them have peanut allergies. Each little change means you have to completely re-think what you're doing.

5 Reasons the Video Game Industry Is About to Crash
Stockbyte/Stockbyte/Getty Images

Surviving children: 3 out of 7

Well, in the world of video games, it's the hardware that's changing under our feet -- beyond having new consoles every few years, new video cards for PCs are arriving constantly. To use each feature on a given video card, you write render code, and sometimes you're writing render code for hardware that isn't even out yet. Remember, it can take several years to make a game, and in that time the available hardware is going to change multiple times. You can be pretty far along in the process and still be unsure of how the graphics are going to look ... in an industry where the main selling point is graphics.

So, once the coders figure out how to implement the features, the artists have to make assets, and then designers are given all of those beautiful set pieces and told to "add gameplay." Put it all together, and 80 percent of the work on a game generally gets done in the last 20 percent of the schedule. Up until then, it's all promises: hardware developers promising that their shit will be able to do what they say, level designers promising they'll be able to use it, programmers promising they won't have too much stuff to fix, and the whole time the company is releasing promotional material that they totally promise is what the final game will look like.


Incredibly, this is a promo for Call of Duty: Ghosts and not BuildingFucker IV: With Helicopters.

Right now we're in the middle of a new console launch -- these periods are the worst of all. Remember, all of the games available at launch started development long before Sony, Microsoft, or Nintendo even knew what their consoles were going to look like. It takes so long for developers to catch up and figure out the hardware that by the time the true power of a console is discovered, it's time to start all over -- an unfortunate reality that is apparently deliberate.

If this makes game designing seem like kind of a rough job, well ...

The Industry Is Extremely Exploitative, and It's Driving Away Talent

5 Reasons the Video Game Industry Is About to Crash
stokkete/iStock/Getty Images

I'm not exaggerating when I say that, for the vast majority of studios in the game industry, working conditions are awful, and the burnout rate is pandemic. The frantic period before a game releases is called crunch time, and it's marked by 60- to 80-hour weeks. And "crunch time" can last up to a year. No, it's not as bad a job as that guy who has to crawl up the constipated elephant's butt at the zoo, but it's bad enough that it's hurting the games. The best and brightest veterans get driven away.

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"To hell with this. Back to the pachyderms and their sweet, simple anuses."

It's easy to see why. Around your late 20s and early 30s, most people are looking to settle down and start a family. This means a stable, secure job that doesn't demand 12-hour days plus weekends, with no overtime and the looming threat of layoffs after the project ships. Producers and programmers can easily work on commercial software for banks or oil companies, and designers can easily transition into anything related to front-end user experience -- and in both cases, they'll be making way more money for way less work.

So the game industry is exporting experienced game developers while importing businessmen with no game industry experience to oversee the starry-eyed inexperienced juniors who remain. The only ones who tend to stay behind are the artists, because they're stuck with highly specialized skills (like animating boobs), which skews the industry's expertise in that direction.

5 Reasons the Video Game Industry Is About to Crash

We've mocked them before, but those jugs are some kids' college tuition.

The result of all of this isn't that games are going away -- it's just that the industry may look very different a few years from now. That might not be a bad thing.

Dave Williams recently went indie. He is currently working on Astrobase Command, a low-tech science fiction sandbox RPG which is currently on Kickstarter. Go help him change the future of gaming! You can follow him on Twitter. J.F. Sargent is a Workshop moderator and dick joke journalist for Cracked.

Related Reading: Video games that survive the crash are about to get a lot more annoying. Microtransactions and persistent connectivity are here to stay, as are their annoying little friends. Some problems with the game industry will just never be fixed. Click here to learn why. Then read up on ominous gaming trends and maybe go cry in a corner or something.

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