E-mail:
Password:
GameSpot Video Games, PC, Wii, PlayStation 2, GameCube, PSP, DS, GBA, PS2, PS3, Xbox 360, PlayStation 3

Small developers confront the high cost of next-gen games

With costs rising, what's a small developer to do? Go for broke (literally), or look for opportunity elsewhere?
By Daniel Terdiman, News.com
Posted Nov 18, 2005 9:29 pm GMT

At the Game Developers Conference in San Francisco seven months ago, there was an undercurrent of fear. Would sharply rising development costs, game developers worried, make designing games for the impending next-generation consoles--Microsoft's Xbox 360, Sony's PlayStation 3, and Nintendo's Revolution--prohibitive for all but the biggest publishers?

With the Xbox 360 finally hitting store shelves Tuesday, little has happened to assuage those fears.

Certainly, games for the next generation of consoles, led by the new Xbox, will come from a wide variety of publishers. And fears that the little guys won't be able to keep pace arise every time a new platform--whether it's the new version of Windows or a new game console--hits the market.

But it's increasingly clear that game development costs are squeezing the little guys.

Richard Doherty, an analyst with Envisioneering, said that while it's impossible to put a dollar figure on the base cost of developing games, the next generation of consoles, with their high-definition technology and motion captures, can double costs.

For giant game publishers like Electronic Arts and Activision, that's not so difficult. But for a little outfit, such development costs mean that one disappointing game can put the whole company on the ropes.

"It's really only big-name publishers that are going to be able to bring large numbers of next-generation titles to market," said Simon Jeffery, president and COO of Sega of America, whose Condemned: Criminal Origins is one of 18 Xbox 360 titles that will be on shelves when the console goes on sale Tuesday.

For most everyone else, the margin for error is going to be smaller than ever. "Success [of a game] is that much more crucial," said Jeffery, "and the barrier to entry higher."

Microsoft executives say their roster of launch titles is the strongest in console history. In fairness, the original Xbox launched with 11 titles. And some analysts, like IDC's Schelley Olhava, agree that Microsoft has put together a formidable set of games spanning most of the crucial genres, such as sports, first-person shooters, and racing.

But other analysts note that a lot of publishers decided it would be better to wait on developing games for the new consoles because they didn't have the wherewithal to produce titles Microsoft would want with the initial launch, and decided instead to continue developing for the current-generation consoles and their 20 million-plus users.

"I think there were decisions made in the last 12 months," said Doherty, "that [publishers either] want to be one of the [launch] titles or, 'Nah, we'll be part of the second group.'"

Since the initial 18 games come from only seven publishers, it seems the real innovation--that is to say, a wide variety of genres and types of games--in next-generation titles will come after the initial console buzz.

"Most developers had to decide to wait for the second stage of games," Doherty said, referring to the period in the months after the console launches when the number of people who have bought the consoles justifies the development costs for a new game.

The games that hit the market in the earliest days of the Xbox, Sony's PlayStation 3, and Nintendo's Revolution will largely be franchise titles--those that publishers update again and again, like Electronic Arts' Madden--and not the massive-budget games that may take the most advantage of the state-of-the-art graphics and sound capabilities of the new consoles.

Sony's PlayStation 3 is expected to launch in Japan next spring and in North America in the fall, while Nintendo's Revolution is expected to be out in the spring.

"These [games] are not going to [have] 100-person art teams," said Daryl Pits, president and COO of the small Santa Monica, California, publisher Jailed Games. As an example, he pointed to Tony Hawk's American Wasteland by Activision. "They certainly didn't spend $20 million on that game. So it's certainly possibly to develop a game without spending $20 million. You can take the work done in this generation and move it over to the next generation fairly easily."

Essentially, Pits argued, the costs of game development mean that in the first few months, publishers that do take the plunge in to the next-generation consoles will be forced to stick to existing franchises because they can't take the risk of putting tens of millions of dollars into games that may not do well. And that is even more true for small publishers like Jailed Games.

In the meantime, say industry experts, there should be no shortage of new game development for the original Xbox, and especially for the PlayStation 2, which Sony seems primed to continue manufacturing and supporting through 2010.

Doherty said that Microsoft has told him that the company has enough parts and supplies to continue manufacturing the original Xbox through next summer and that it will evaluate its plans for that console then.

John Baez, a producer at The Behemoth, the small, independent San Diego publisher of Alien Hominid, agreed. He thinks that a lot of smaller developers are likely to see much more upside in the coming months developing for current-generation consoles than for next-generation consoles and their initially small install bases.

"I think [that] would be a smart move for a smaller publisher that knows it can't go head-to-head with EA and Activision," said "There are millions of the current-generation consoles out there today, and people are not going to trash them the day the new consoles come out."

Still, Jailed Games' Pits explained that publishers who are working on new titles--as opposed to the latest versions of franchises--are going to feel pressured to build their games for the new consoles. And that's something the EAs of the world are in a much better position to do, given the tens of millions of dollars they can more easily throw at the problem.

"If you're doing something from scratch," Pits said, "you need to be on next-generation systems. It's always better to launch a brand-new game on new hardware." And therein lies the problem for publishers who can't easily toss tens of millions of dollars at development: How to justify the development of brand-new games that may or may not resonate in the marketplace. Game innovation, at least in the short term, could end up suffering.

"Once people become locked in to that world view, that cycle, it becomes self-fulfilling," said Russell Williams, an executive producer at tiny Flying Lab Software. "I can't make a game for less than $30 million, and if I get someone to give me $30 million, I'm not going to take a risk on something original. Everybody ends up saying, 'Let's do what someone else has done that was proven in the market.'"

Sign up now to post a comment on this story!

28 Comments

First to Last Latest
red_rushes_in

I'm seriously getting sick of this next gen BS. I don't care about how much faster the processor or GPU is compared to the other guys. I want solid games that are fun and that 10 years from now I will find myself playing, not a bunch of hit and miss crap. Smaller dev companies make some killer games compared to alot of the mainstream crap that gets spewed from EA, Activision, MS Studios and the other giants. I'm tired of the repeat games that hold no substance like the last 3 Zelda games, Halo2, Megaman X5678, and all those other crap franchises.
Give me a game that has the substance of Quake 2, Half-Life, Halo, A Link to the Past, GTA, FFVII, MGS and Doom. If some one could mash all the good qualities of those games together I'm sure no small developer, or big one would have any problem making a hit game*unique*. Balance is a good game not just good graphics , sound, or f-ing gameplay it's all of those things blended like a beautiful video game margarita that says "Drink me b*tch!"

Posted Nov 20, 2005 11:43 pm GMT
Login to rate this comment
/ (+0)
neothe0ne1

I find it interesting that the "critical" genres are sports, first-person shooters, and racing. Maybe it's time to put out some ANALysts.

Then again, I also find it interesting that Revolution is expected in the spring, while PS3 is expected in the fall.. certainly good news for Nintendo if true, and bad for Microsoft and Sony.

Posted Nov 20, 2005 6:56 pm GMT
Login to rate this comment
/ (+0)
clutzyaj

Perhaps what the little guys could do is just simply quit worring. Yeah, the next gen. consoles are here, but who on Earth has over $750 for an XBOX 360? If I were them, it would make a few more games for the past consoles and build up some revenue. So what if they don't get started now. I getting sick and tired of powerful, super HD graphics and sound. I'd rather play games that have good stories over that. That's why I'm buying a Nintendo Revolution since Nintendo doesn't put graphics first. I just think everyone in the gamming industry keeps getting dumber and dumber.

Posted Nov 20, 2005 12:45 am GMT
Login to rate this comment
/ (+0)
hrah

no doubt about it , the game market, its going to have to evolve too, no just the games (graphics), having a higher cost of production, means that you as a game manufacturer have to put a lot of time and effort in a game , to make it a decent game , no more **** games (trucker games anyone???) , yeah its a risk for small companies but from here on they better deliver, I'am Tired of those games with a 45-50 price tag , that sucked, how would you think that make feel, if a game cost 60-65 bucks better be a good game, or its going to sit on store shelves

Posted Nov 19, 2005 8:03 pm GMT
Login to rate this comment
/ (+0)
magus704

It certainly will be tough for the smaller development teams to get out there and come out with something original. I'm even more worried now that I've seen the Psychonauts, A Time Schaefer game, get so much commerical hate.

Posted Nov 19, 2005 5:13 pm GMT
Login to rate this comment
/ (+0)
GunslingerMan

Great news for nintendo then

Posted Nov 19, 2005 1:21 pm GMT
Login to rate this comment
/ (+0)
inoperativeRS

There's the 360 arcade...

Posted Nov 19, 2005 9:33 am GMT
Login to rate this comment
/ (+0)
domicius

Here's my take - just an opinion!

a) Console developers release new consoles to drive the growth in the video games market.

b) Technically, if the video games market is growing, large companies can look to greater sales (on branded/genre games) in order to justify increased development costs.

c) Additionally, console makers have reduced incentive to try and reduce development costs for developers, and increased incentives to provide features consumers will like; hence the reason the consoles do more than "just play games".

d) Smaller developers *can* release for the new consoles using e.g. Xbox 360's download capability, which eliminates distribution costs and increases shelf life of product. The games obviously are less "polished" but can cater to niche audiences (e.g. those who really just wanted to play Bejewelled on their TV using their remote).

Essentially, console makers aim to drive console sales, then rely on big manufacturers to make "market establishing" games (and killer apps) which will then create a large enough customer base to mitigate development costs. Small developers can make cheaper properties with more limited sales ambitions, but by targetting a larger install base still make a return.

Posted Nov 19, 2005 8:26 am GMT
Login to rate this comment
/ (+0)
kokidkane

Its going to get easier as time goes on to make games alot of people talk about cost and dev of ps3 but its been the same way with ps1 and ps2 same things were said a bunch of titles were made and all that hatting washed away.

Posted Nov 19, 2005 7:26 am GMT
Login to rate this comment
/ (+0)
pex2

Are crappy games really something bad for the PC?
everyone can make a game for PC for free and i see there are good games for it..

Posted Nov 19, 2005 2:43 am GMT
Login to rate this comment
/ (+0)
pex2

A top game doesn't cost $30 million..its up to how they are developing it (+a license cost and a minimum number of workers to employ).
and you know- as there are more "crappy" games there are more top games..
there will be more developer teams that can make a game for the console and since every team* can make a top game (next-gen consoles only give the developers more possibilities but they doesnt improve the game), well you know- there may be more top games for the console (every team learn from reviews, or at least need to).
By the way, high cost also means less games for good companies.
After all, there are lists of top games and reviews, and best of all- free demos! so who cares if there are some crappy games.

Posted Nov 19, 2005 2:38 am GMT
Login to rate this comment
/ (+0)
malkav11

Most of the "big" developers of the moment started out as small developers and simply happened to succeed big with some particular title. The first couple of GTAs didn't really set the world on fire. It wasn't until 3 that they hit on their current formula and made it big. Bungie's always done pretty well critically, but on the first couple of games they were just one, then two guys in their basement. Even when they had some serious success with the Marathon games...it was serious success for the Macintosh. Still pretty small in the scheme of things.

If you want to see something besides endless sequels and games that might as well be, the small developer needs to be able to access the market.

(I think the changeover from 2D to 3D was premature, personally. Early-gen 3D ALWAYS looked hideous. I can remember laughing at the LEGO people in FFVII back when my friend first acquired it lo these many years ago. And I've always thought the first couple of Quakes paled in comparison to 2D shooters like Hexen or the Build engine games. Well, the good Build engine games.)

Posted Nov 19, 2005 2:00 am GMT
Login to rate this comment
/ (+0)
colinjennison

Whilst there occasionally is good games from small developers, the vast majority of them suck, and even the good ones are usually just good because of some quirky feature or gimmicky and nothing that really lasts like a Metal Gear, a GTA, or a Halo. I don't see htis as a huge problem. Less krap on the shelves.

Posted Nov 18, 2005 9:23 pm GMT
Login to rate this comment
/ (+0)
Truth01

Somehow i see the revolution coming out and stealing the show away from the ps2 and 360, since it wouldn't be so flashy. Personally i rather see great game play, rather then fantastic graphics.

Posted Nov 18, 2005 8:54 pm GMT
Login to rate this comment
/ (+0)
Sagacious_Tien

It's sad to note that rising development costs will eventually win out over innovation. Does this mean less games, more costs? Let us hope things like the Xbox LIVE Arcade helps in this matter.

Posted Nov 18, 2005 8:11 pm GMT
Login to rate this comment
/ (+0)
m3z2t

Yo this i my look on things. Graphics may lure the hardcore gamer in but gameplay and plots may bring the big customers. I prefer to have a long game with great gameplay and mediocre graphics then some game with superblasted graphics, a mediocre story and a short game. i want uniqueness, originality, the same old can impress me but something with all this can really bring me in. and dlaqiun u r right, they overspend and replace old products with new more expensive equipment too fast.

Posted Nov 18, 2005 7:53 pm GMT
Login to rate this comment
/ (+0)
DalQuin

I completely agree, trj156.
Everyone, stop blasting the FPS. There are many innovative FPSs. Look at Quake. Do you consider the jump from 2D to 3D better graphics? That's innovative. Halo. Grenade system, vehicles. There had been vehicles before, but not so refined. Quake 3 had insane multiplayer. Half-Life 2. The graphics were amazing, but look at the physics, AI, presentation. And the faces! This demonstrates how a company like Valve with 1 good game can survive.
This is also why I the PS3. Its just raw FLOPS. The Cell processor isn't for gaming, its for networking and making things look pretty. The PS3 won't be a gamer's machine. All pretty graphics and nothing else. No great AI, physics, etc. 7 processor cores!? That's hell to develop for. Its also mega-expensive .

Posted Nov 18, 2005 7:43 pm GMT
Login to rate this comment
/ (+0)
trj156

graphics dont necessarily make the game, but they certainly help. one of the biggest problems i had with the ps one was that some of the games were actually hard to look at. all the pixelation and shifting polygons really took the concentration off the game. if a company is going to make a good game with a plot and excellent gameplay, why not make it look good too? start with the gameplay, finish with the graphics.

Posted Nov 18, 2005 4:51 pm GMT
Login to rate this comment
/ (+0)
VGMusicFreak

This is just what i love about DS and revolution. They arent focusing on making the games the prettiest but instead are focusing on innovation. DS is the first system in a while to have games that are not rpgs that i actually enjoy. On current gen systems apart from katamari, RE4,and the occasional Shadow of the Colosus, i find that most games that are not rpgs are not very fun or long lasting enough to be worth my money. DS On the other hand has given us meteos, Phoenix Wright, new animal crossing, and nintendogs to give fun game experiences besides the normal action/sports/racing/fps that we have to play besides my favorite the rpgs. I also think it will be a sad day if we only have bioware making their super shallow rpgs from the western front. I am very glad that we have titan's quest being developed because it looks like the kind of western rpg we have been needing, a quality deep, pretty, game and it even has the tools to make your own story centered areas so if someone wanted to they could make their own 50 hour quest as the dev in the interview states.

Posted Nov 18, 2005 4:43 pm GMT
Login to rate this comment
/ (+0)
_sean_05

katamrai had marginal gfx, and was one of the best recent games imo. i know i still play all my old smes roms frequently, because i enjoy the stories and ideas that went into those games. not just the same old recycled game concep with slightly better gfx

Posted Nov 18, 2005 4:22 pm GMT
Login to rate this comment
/ (+0)
Gamephilia

Ferumfierek, because the masses are slobbering and conformist, a poll like that would unerringly result in "Graphics over gameplay", completely ignoring the fact that appearance and sound are integral to a game. Really, the "Graphics over gameplay" argument is heavily regurgitated and has no support in practice. You'll notice that the best-looking, best-sounding, best-funded games tend to be the funnest. They also happen to sell better. Tell me, did Resident Evil 4, God of War, Ninja Gaiden, and Wind Waker have good graphics? Were they fun?

Posted Nov 18, 2005 4:13 pm GMT
Login to rate this comment
/ (+0)
ferumfierfek

there should be a gamespot poll on this:
which is more important, graphics or gameplay?

Posted Nov 18, 2005 3:15 pm GMT
Login to rate this comment
/ (+0)
ferumfierfek

you mean sacrifice graphics for game play ?

and yes, next generation console raise the ceiling, not the floor, if you get what i mean.

Posted Nov 18, 2005 3:11 pm GMT
Login to rate this comment
/ (+0)
_sean_05

when you say ' crappy teams ', are you talking about the people that bring us INNOVATIVE games like alien hominid and katamari damacy, or the prople that re-hash the same FPS game every year. this time its nazis, this time its zombies, next time its terrorists....>_>

Posted Nov 18, 2005 3:09 pm GMT
Login to rate this comment
/ (+0)
BlueBirdTS

ferumfierfek, you have expressed the thoughts of many. The key is to mind a balance between graphical touches and a well-developed core game. If the world isn't ready for the next-generation, perhaps publishers should just concentrate on making higher quality games with reduced costs, even if it means graphics that aren't so nice. I too will sacrifice gameplay for graphics anyday (although good graphics certainly heighten the overall experience significantly).

Posted Nov 18, 2005 3:08 pm GMT
Login to rate this comment
/ (+0)
ferumfierfek

acuatlly, Stiker71, it means we will be seeing the same games over and over again, just with better graphics and larger budgets.

i say screw the graphics and high def. functionality!
really good games that endure the test of time are the ones bsed on good ideas, not spend-lots-of-money-and-push-the-limits-of-the-console graphics.
and yes, a game could have an awful plot and game play and still sell lots of copies just because it had the best graphics, but it will be quickly be replaced when a game with better graphics comes out.

graphics don't make good games, ideas do.

Posted Nov 18, 2005 2:55 pm GMT
Login to rate this comment
/ (+0)
stiker71

hopefully this mean all those stupid game just stop getting made so we only got top brand games....

Posted Nov 18, 2005 2:37 pm GMT
Login to rate this comment
/ (+0)
Vegeta-sama

The crying of the last generation is just loader now that we can all hear it. Thing will just go on as they have been doing and the crappy teams will fall and the Biowares will keep on trucking and making money.

Posted Nov 18, 2005 2:32 pm GMT
Login to rate this comment
/ (+0)

Latest Entertainment Headlines

Latest TV headlines from
Emmy nominees warn against actors strike
Hollywood's leading actors union got a kick in the rear end Thursday from several Emmy nominees worried about the threat of a strike.

News Features

Featured Stories

E3 2008: SCEA unveils $399 80GB PS3, God of War III

Sony's press conference sees SCEA president Jack Tretton reveal Resistance for PSP and MAG, an all-new massive action game from Zipper Interactive; PS3 video store launching tonight; full video inside.
Posted Jul 15, 2008 7:31 pm GMT

Newsmakers

E3 2008: Video Q&A: Carmack on 'one-game' id-EA deal

Legendary Doom founder, id lead designer Tim Willits, and EA Partners GM David DeMartini talk to GameSpot about how Electronic Arts became Rage's publisher.
Posted Jul 15, 2008 6:47 am GMT