With the way the gaming industry is going in the Triple AAA sector nowadays, with layoffs and general doom and gloom at every turn, I thought it would be prudent to discuss the biggest contributor to these issues, endless growth.
You see, when investors want to put money into your publicly trading company they want to see a return in their investment. This usually is in the form of sharing in the profits of the company, especially if they do good in that financial year. However, the biggest hurdle from this comes from the fact that investors want to keep making more money, and any sign of profits being less than what they were will cause investors to jump ship and latch onto something else to put their money into. This means that companies need to continously make more money than they did in the previous year, which for the gaming industry is an issue. This is because games as a product are a static item (usually) and so companies that have a lot of investors need to do things such as provide deluxe editions, extra additionals to buy outside of the game, slightly raise game prices and of course, put microtransactions in their games. These are all things that should, in theory, provide more money than just selling us a game and thus providing more growth per year.
This gets worse however when you consider that, naturally, we as game players don’t want this kind of crap and so push back on them, causing less game sales, causing less growth. To combat this, game companies have started laying off employees and restructuring their corporate ladder to technically spend less money while still retaining their initial profits, giving the impression of growth. Due to the fact that games in particular can’t really be ‘made quicker’ and thus more products can’t simply be shoved out to provide more sales this is a strategy with a cap, and once investors see the money no longer rolling in, they will leave on mass, causing a market crash. This is bad news not just for the companies, but for us too. Not only will lots of people lose their jobs, but projects and games that we adore will simply disappear due to the funds drying up, and nobody wants that.
So what’s the solution? Well, you all know that I’m no financial expert so I don’t really have an answer to this issue. Perhaps finding a way to get more games out rapidly to provide more opportunities for profits in a year, but that will just lead to sloppier and rushed games being pushed out just to make money, so that won’t work. Perhaps making the actual process of game creation easier will help to provide more opportunities for unique ideas and potential for game releases but that would mean most game developers would have to re-learn their fundementals in game design which would take time away from the actual making of games. Ultimately, it’s a difficult discussion and it’s one that the gaming industry at the highest level will need to make soon before its too late. Don’t think purely of the monetary cost, think also of the human cost. The gaming industry crashed once before, we don’t want it happening again.
What do you all think? Do you have an idea that could help curb the rapid and uncontrollable growth of the industry? Let us know in the comments! That’s all for now, and as always. It’s not just a game, It’s a Life.