Significant Financing in Video Games: The Perceived Hazard Some Identified a Decade Beforehand
It appears that the public is finally beginning to understand the problem of extravagant video game budgets, but regrettably, this realization came a decade too late.
In a recent piece for The New York Times, Rami Ismail delves into the reasons behind the unsustainable focus on high-end graphics, which led to a budgetary arms race that has negatively impacted the gaming industry.
And he's spot on. I've been discussing this issue since 2015.
The current wave of layoffs in the gaming world can be attributed to this out-of-control budget issue. But, as Ismail points out, this detrimental trend was set in motion a decade ago.
Modern games have a long production cycle of 7-8 years, with many taking even longer. The decisions and investments made to create today's games were primarily made a decade ago.
The issue here is that as gaming hardware advances in graphical capabilities, the necessary resources to meet these requirements increase exponentially. Our site also provides an insightful analysis of this problem, courtesy of former Valve developer Stephen Theodore.
Consequently, the layoffs we are witnessing today are a way for publishers to recoup the money they loaned to investors, who are understandably upset that their initial investments didn't bring them a return.
Reducing game development staff to pay back these investors may seem counterproductive, as it's akin to amputating one's legs while attempting to escape a raging lion. Unfortunately, most publishing managers are not the sharpest tools in the shed.
Worsening the situation is that this predicament was entirely avoidable. There was no need to investment heavily in game development; it was merely a choice made by publishing executives to attempt to scale a business that, in truth, is based on hits.
This is primarily why tech investors in Silicon Valley continue to be puzzled and perplexed by gaming. They are accustomed to funding startups that aim for infinite growth. Gaming, on the other hand, uses technology as a tool to facilitate creative and cultural output, which can be a hit or miss in terms of financial success.
Despite this, the future of gaming remains at risk. The layoffs have resulted in the loss of valuable expertise and knowledge, which may not become apparent until a few years down the line.
If the investors wise up and start funding developers directly, allowing them to self-publish, some of the talented individuals who have recently been let go might return to the industry. Eliminating the unnecessary middlemen in publishing would also save resources. However, I'm not overly optimistic about this, as the investors themselves fueled this high-budget trend to begin with.
Ideally, we need the mid-range games back that helped fuel the success of the PlayStation 2. The Switch has started to help in this regard, but it's crucial that this trend becomes industry-wide.
For now, I can only find solace in the fact that the warnings I've been issuing for the past decade are beginning to gain traction. But, it's a shame it took so long for people to catch up.
Connect with me on X, Facebook and YouTube. I manage Mecha Damashii and am currently featured in the* Giant Robots exhibition currently touring Japan.
The excessive focus on high-end graphics in video games led to a massive budgetary arms race, as noted by Rami Ismail in a recent article.
This budget issue has resulted in a wave of layoffs in the gaming industry, affecting many developers and publishers alike.
Modern video games require substantial resources due to advancements in gaming hardware, which increases the costs of development exponentially.
The future of gaming remains at risk due to the loss of valuable expertise and knowledge resulting from layoffs.
The return of mid-range games, like those that helped fuel the success of the PlayStation 2, would be beneficial for the industry, with platforms like the Switch making strides in this direction.
