Transcript Hey, what's up everyone? Got another episode of Nobody Knows Best here, and we're
The average AAA game costs $60, despite inflation. Publishers and game studios have taken to DLC, Season Passes, and microtransactions to offset the costs and make their products last longer once they’re in the market. But that’s not enough. A game can’t merely make its money back; it must exceed all previously set bars to prove that their game was successful.
While I cannot speak for non-US countries, wages have been stagnant for the low/middle class for a long time. The tech industry has grown significantly the past 20 or so years and has given many people well-paying jobs on paper, yet, in some of these areas making $100,000 is cutting it due to how expensive homes, food, transit, and daily expenses are becoming. The industry is in a cost spiral due to self-fulfilling prophecies and success stories: developers want to be in X area because that’s where all the talent is, which incentives people to go to that area.
But those areas aren’t cheap. Income inequality is growing significantly, with no signs of slowing down. The North American game industry is centered and driven by California; with the Seattle area becoming the next major tech hotspot. However, Seattle is rapidly getting more expensive too. Unfortunately, more people are trying to justify the costs of going to and living in these areas than wondering why the industry is so West Coast heavy and growing beyond the coast.
Working in more affordable areas in North America is a death sentence because as far as the game industry is concerned if you’re not in those areas, you don’t matter unless you have a well-known publisher backing you or you’re one of the few major success stories on release. There are a few exceptions in small parts of the East Coast and Canada, but for the most part, if you want to go into games seriously, you’re hampering your growth not being where everyone else is.
It becomes the player’s problem to fund a lifestyle that’s probably forced them, or their family out of their homes. Also, there’s a stigma associated with working in these areas. It’s hard to admit it but, there’s this idea that if you’re not working in a major tech hub that maybe you aren’t that good, because if you were, you would be where all of the “talent” is. Let’s not get into how a lot of the game industry feels about Middle America, despite those people contributing to their livelihoods due to efforts (i.e., marketing) by the same industry people.
We live in a time of oversaturation of content. Not only are there a ton of games being made/published every day, but there are also YouTubers, Twitch Streamers, TV shows, music artists, and more fighting for your attention and dollars. To stand out from the noise, studios and publishers have to spend way more on aggressive campaigns to make sure people remember that their game exists.
That’s not cheap.
On top of that, the content marketplace has adopted a race to the bottom mentality for their products. Thus, there’s no urgency in making a purchase. I would argue that players having the ability to wait and carefully choose what they want to consume is pro-consumer, but it stresses out content creators. Did it not sell because people forgot about my product? Did it suck? Or are people waiting for the 20 percent price drop because they’ve been trained to think that way? If they do buy at the price drop, how do I recoup the 20 percent?
With oversaturation, what’s the easiest way to create urgency?
- Give away something for a while
- Threaten to take something away after a while
- Create incentives to make them play with friends, rooting the experience in their personal lives
- Hamper a player’s progress to make them feel inadequate compared to their friends and the broader community
- Give the player a chance to get something if they keep returning to your game
These techniques are what drove the mobile industry into generating billions of dollars and is what’s affecting game monetization today. Because despite how little the low/middle-class person to spend on entertainment, that urgency is enough to make them give their dollars away. Once this behavior became normalized, it became less of a question of “If,” and more “How?” to the game industry. Now games are becoming services; things you never put down despite how much content is thrown in your face every day. And while it’s nice to praise and point to that One Indie Game™ that made it as the example for the industry to follow, a lot of them fall by the wayside, leaving their developers riddled with debt, stress, and regret. The players almost never hear their stories.
This cycle isn’t sustainable. At some point, a correction in the game industry will happen, and when it does, it’s going to be nasty. As an industry, we have to learn how to spend better, budget better, and diversify our investments. And I’m not just talking about studios and publishers; consumers need to step it up too.