Why The Video Games Industry Will Crash
Superficially, it appears as if the Video Games Industry is growing at an exponential rate with no slow insight. What with the UK games industry being worth £4.2 billion in consumer spend in 2015, which is up from £3.94 billion (7.4%) in 2014 (source: http://ukie.org.uk/research). This is absolutly huge growth for an industry of this size, and this shows that it is simply getting bigger.
For the first time ever, China was ranked as first for consumer revenues in 2015, overtaking the USA which means that gaming is more likely to shift towards a focus on what audiences from Asia would enjoy over what the west enjoys (source: http://ukie.org.uk/research). Again, this shows growth as it shows that more people are taking up gaming as a hobby in the most populated country and continent on the planet! Therefore allow for more people to purchase video games, and thus, boosting revenue levels - signalling growth.
So if the video games industry really is growing so quickly and with such ferocity, why is it going to crash?
Well despite China being marked as the most prevalent country on the planet when consuming video games in terms of consumer expenditure, the majority of audiences are still in western societies. This would not be a problem if not for the fact that western consumers are increasingly frustrated with the video games they are presented with.
The people are angry.
No this isn't a revolution, but rather a slight reliving of history.
In 1983 North America woke up to a chaotic video gaming crash. Investors were beginning to realise that the American people were angry about the video games they were presented with. They had increasingly got worse for the past few years as developing businesses placed more and more stockpiles of work on to smaller teams of programmers, and wanted this work completed in a shorter space of time — simply put developing businesses were not scaling with the rapidly growing industry, they wanted more work done with the same workforce. This work ethic created horrifically unsatisfying games for the time, which decreased customer return rates and thus, decreased consumer expenditure (revenue for the developer businesses).
This all came to a huge crash on the stock market as less people bought video games, as the become saddened by video games such as E.T. the Extra-Terrestrial which at the time, was a testament to how low the industry had fallen, with expected sales at a loss of 3.5 million units. By 1985 the video gaming industry’s total revenue dropped from $3.4 billion at peak 1983, to 100 million by 1985.
This crash was caused by developing businesses simply not scaling to the rapidly growing industry of the time, which is not the case with today. However, we can take something away from history: people are not content with their video games.
This is so very visible from the huge, expanding list of AAA games that are quite simply being rejected by gamers. For example, the latest instalment of the new Call of Duty franchise, has it’s reveal trailer as the second most disliked video on Youtube. This is a surprise when one remembers that only in 2007 was Call of Duty: Modern Warfare released to the public, and for almost a decade developers have tried to unravel it’s equation to success as a first person shooter. In fact by 2013, it had sold 16 million copies worldwide.
Why are the people angry?
From my perspective consumers are angry for three reasons: They don’t have the correct equipment to play, developers are not listening to them and on moral grounds of consumerism.
Let’s look at the first reason: A lot of people and not subject to this issue. This is because of the fact that consoles have become increasingly more common, which in turn means that developers develop games for one unified platform- they can tailor their game to work perfectly on a console and thus, to work perfectly for everyone.
However this is not the case for the majority of people.
Most gamers play on a PC - which means that they can have any type of hardware they choose, thus creating a developmental dilemma for the developer - they have to cater for many people’s systems and optimize their game for multiple different systems. The solution to this is to have a flexible options system to allow for differing hardware set-ups, and listing required (as well as recommended) specifications before the user purchases. This is so as to prevent and disappointment for the user.
However, it seems that recently many gamers are upset with how demanding these specifications can be, thus resulting in anger and at the developer for not catering for their PC’s specifications. I believe that in actuality in order for gaming to progress to greater levels (and thus continuing levels of purchase rates) it is the gamer’s fault for not owning a good enough specification, developers are simply doing their job, if a consumer isn't happy due to their own specifications, they should either upgrade to the relevant specification type (required or recommended)or purchase a console. Either way, they can play the game at a satisfactory level and thus, can help boosts reviews and therefore the video game industry can boom.
Many developers are now completely ignoring the feedback they gain from their consumers. This causes for outrage by consumers at developers as it means the gamers simply do not get the products they want.
This creates a certain hatred by consumers for these developers, obviously decreasing sales (and thus revenue) but in turn completely eliminating any future sales by the developer to those customers!
The potential long term consequences for this is catastrophic. For example, the Call of Duty: Infinite Warfare has been subject to lots of criticism as of late due to the group of developers ignoring requests by their customers to switch to a different formula of gameplay for this franchise. This therefore contributed to the huge amount of dislikes on their reveal trailer and thus, the overall hatred of their franchise and therefore the movement of populations to the franchise’s competition, Battlefield. This therefore renders Call of Duty as out competed and out of customers for what was one of the biggest franchises of all time. What’s more all this distrust is spreading to all developers — even if they do not do what the malicious ones do. Simply put: all developers are met with distrust. This in turn causes for only small amounts of migration from one game to another (when relative to competition) but, causes for many consumers to simply ‘move on’ from games - to no longer play them. It is this that is killing the industry.
What must be one of the huge issues concerning the video gaming industry is the way in which developers have introduced consumerism into video games. Microtransactions - payments within a game - are increasingly seen as a blight of all AAA games, of which make up the majority of all video games. This is because many consumers see microtransaxctions as morally wrong due to the high price to low content ratio, they gain less whilst they pay more.
As developers pursue more and more revenue to satisfy investors via growth figures, they use more and more extreme methods to gain this revenue. Perhaps the most common method of gaining this revenue is through microtransaction, of which we now know as being one of the most hated mechanisms within a game ever. So, as more games attemp to gain greater revenue through this method, they gain significant more hatred as developers and thus, lose customers — and the industry loses consumers as a whole, decreasing overall revenue.
That is where the future could lie, and in my opinion, it will.
Author: Reiss Jones - rjones.me