Video Game Industry Stalls, Stocks Plunge. What’s Going On?

Layoffs and closures — the beginnings of a major shakeout.

By Adam H. Williams, Senior Associate at E911-LBS, LBSglobe.com, for WOLF STREET:

Video games have become the largest entertainment industry worldwide by revenue: $138 billion in 2018 – beating TV ($105 billion), film box office ($41 billion), and digital music ($17 billion). But in 2019, after two decades of incessant growth, something unthinkable is lining up to happen: Sales are projected to decline, according to analysts at Pelham Smithers, cited by Bloomberg:

A lack of big hits, expensive flops, consumer frustration, and a slowdown in China all are to blame, according to the analysis. While true in general, it does not tell the whole story: A gamer-revolt against practices, deeper trouble in China, a decline in mobile gaming, and changing spending patterns have stalled growth and are beginning to cause serious waves.

With easy Fed policy, money flooded into Tech, and beneficiaries cashing out turned around and invested heavily into video games. But to their detriment: In the last year or so, many of the major game corporations have suffered extreme losses to their share prices. These are major multinationals that include the Chinese giant Tencent.

For example, the chart below shows the combined market capitalizations of Activision/Blizzard, Electronic Arts (EA), Ubisoft, and Take Two Interactive. Since their peak in July 2018, their combined market cap has plunged by 40%, a drop of $55 billion. These are not all the impacted companies, just some of the biggest that are traded in the US (data via YCharts):

Layoffs and closures—the beginnings of a major shakeout.

The layoffs are in the thousands, and could easily spill into tens of thousands before this shakeout plays out. The industry employs hundreds of thousands of people worldwide, and while layoffs are not uncommon when a project finishes, something feels different. The layoffs are not focused as in the past; they are across the board — development, support, marketing, even whole studios. The shakeout started with smaller firms, but now big players are joining.

Some high profile Layoffs:

  • Activision Blizzard – despite record profits has laid off 800 staff of workforce (about 9%)
  • EA – Closed Studios, rumors of canceled projects; Laid off at least 50 (25%) at its FireMonkeys studio in Australia
  • ArenaNet – Laid off 143 employees out of approx. 400 (or 36%)
  • TellTale – studio closed and laid off 275 – After laying off 25% the prior year
  • Carbine Studios – Recent Chinese Acquisition – Shut down, 50 people, after laying off half the workforce 2 years prior

Countless smaller studios have had layoffs or closed outright. Hanger 13 (significant), Midway (25% laid off), Daybreak (70), CCP Games (~100), and GOG Store (10%) are all previously hot firms that are pulling back. Major players like Microsoft – laid unknown number of support, closed Ensemble Studio in September, and laid off 90 or so developers. A few years ago Zynga was the media darling – dominating Facebook and mobile games. It is now a shadow of its former self. When was the last time Farmville was on the news?

But the real story – hiding out of sight of Western Media – is the slowdown in China, with two major players’ announcements suggesting serious trouble ahead.

  • NetEase – a Chinese gaming company recently announced layoffs. Some areas of the company are laying off up to 50%. Numbers remain scarce, but these are not minor rightsizing.
  • Tencent – Another major firm; while no layoffs have been announced (yet), the company did announce a restructuring would occur.

China has countless smaller studios in the mainland that are likely to be affected, and when investment capital becomes scarce, expect another wave of layoffs.

Many more, smaller studios worldwide have laid off or closed entirely, tallying up to at least several thousand layoffs in the last few months resulting in 10’s to 100’s of millions of lost wages.

Trouble in Corporate

What’s going on? Profits are up, and sales still at near record high levels.  That said, Major Publishers in the Western Market seem to be feeling the pain. This could be partly seasonal – and many studios are one hit wonders. Big Publishers are ruthless when it comes to eliminating underperformers. One issue seems to be a growing antagonism between publisher practices vs. their customers. A number of new trends have infuriated many gamers, making claims that games are being designed for profit over fun, which seem well founded. Here’s a few of the major complaints:

Pay to Win: This mechanic allows players to purchase items in-game with real money –particularly annoying as others can simply outspend you. Star Wars Battlefront and Call of Duty are two notorious examples of AAA publishers forcing this into games for monetization. Games essentially ramp difficulty to force the player to pay up – or walk away – after already investing in the game. Note: Western Gamers largely view Pay to Win with disdain. Mainland China has no such qualms.

Loot boxes: These “random chests” supposedly contain desirable items that can be purchased with real money. Not just a little money either; it is estimated to be a $30 billion sub-industry.  The FTC has recently started a probe. In 2018, officials in Hawaii attempted (unsuccessfully) to regulate it. Other countries like the Netherlands and Belgium have deemed them gambling and illegal.

Generally, the major complaints of loot boxes are:

  • Mechanics – No published odds – Companies will advertise that you have a chance but refuse to give you the odds (1:100 or is it 1:1,000,000?).
  • Addiction Potential/Gambling – Loot boxes have been shown to neurologically activate the exact same pathways as other gambling. There are several concerns around child/adult addiction, and a potential issue with violating gambling laws. Currently, companies skirt this issue because you buy in-game tokens, and then used for purchases, similar to how arcades use tokens vs. quarters.
  • Rating/Warning – ESRB currently does not include loot boxes or microtransactions in its ratings or consider them Gambling. The presence of these mechanics does not impact their rating nor is it on the package. Horror stories of children spending $1000’s on these games are legion.

Unfinished / Incomplete Releases: Many companies are notorious for releasing games with crippling bugs – which they patch afterward. Bethesda’s Fallout 76 for example.  Hyped games have costly preplanned downloadable content and gamers often wonder: Why was it not in the original game? Destiny 2 had repackaged cut content which was clearly removed from the main storyline to be added as optional purchase.

Altering mechanics after release/review: Black Ops 4 added an in-game store after launch, meaning it avoided reviewer critique of its infamous Red Dot.

Politics into games: A number of political and cultural controversies have occurred with game companies and gamers fighting in social media or at conventions for the insertion of politics into the games.

Media Controversy: A number of gaming websites/reviewers seem to have opinions disconnected from the broader community. Reviewers give say and 80%, users give it a 2 out of 10. Allegations of Privileged Access and gifted merchandise are rampant. The line between review and advertiser is not clear.

Harassment of independent reviewers/journalists/streamers: Companies have pulled “favored status” for game streamers when they review and find that they didn’t really like the game. Essentially punitive action.

Preorder scandals/No Refunds: Marketing pushes pre-orders to bring in early revenue.  Not allowing preorder cancelations has irritated customers. Even more scandalous has been bait-and-switch merchandise incentives – Fallout 76 being the most recent examples with its (Nylon) Canvas Bag and (Plastic Encased) Nuka Dark Rum. Broken games are not being refunded; documented stories lurk in places like Reddit even when refund policy is met.

Pay for early Access: Bizarre trend where you pay extra to play a week or two before everyone else.

Rehashed / Reskinned titles: Many games, particularly sports (FIFA 2016, 2017) and shooters, have become cookie cutter, with the player roster being changed while everything else remains the same. Several other big titles have been identified as being straight reskins – not necessarily bad, but the studios claimed it was brand new. Bethesda’s rushed Fallout 76 has many mentions of Skyrim in the code when users looked through the files.

Executive Leaders aren’t actually gamers: Activision CEO is on the record for wanting to “take the fun out of video games”. World of Warcraft Creator Mike Morhaime was forced out of Blizzard, shortly before Activision fell apart. Many suggested he was forced out for being too game focused.

Compensation management: Employees’ wages/jobs tied to review scores – management gets profit sharing either way.

Subscription-based games: This is both monthly payments to play online and to pay to have access to a catalog. Catalogs seem popular, but most major games are failing to replicate World of Warcraft’s amazing run. Black Ops Season Pass left a bad taste in many mouths requiring a purchase of both the game and a season pass to access many features and maps.

Older gamers are sick of the above – and younger gamers are easily caught up in its traps but usually only once or twice before getting burned.

The internet has become a battleground between gamers and AAA publishers. Publishers seem to be doubling down in their stockholder reports; gamers seem to be walking away. It’s not just trends that are designed to drain your bank account that has these studios and publishers in trouble – it’s also resource allocation strategies.

Games as a service dominate corporate thinking. Stock analysts are totally disconnected from the games, as Jim Cramer’s thoughts show; it doesn’t even make sense to any gamer. The backlash is becoming increasingly severe, and while some companies are pulling back, the majors are doubling down, and by trying to appease Wall Street, major players are alienating their customers.

Game mechanics that force a numbing grind or additional purchases became common overnight. Many big publishers are also still spending huge on marketing. Many firms spend $1 on marketing for every one $1 on R&D. Often this can be much higher. For mobile games, this marketing spend can be as high as 10:1. In olden days, getting your game noticed was a big deal, but the hype train seems to be losing passengers who crave the complete products of yesterday.

Many of these companies still turn out great games, but games are quintessentially an experience. Many fans still have faith that companies that brought them amazing titles and have lost their way will return to the days of old. Companies may return to value-driven approaches, seek to refocus on compelling games and mechanics, and bring customers back into the fold. The stock market run-up was extreme, so sometimes these things happen. Either way – it will be an interesting year. By Adam H. Williams, Senior Associate at E911-LBS, LBSglobe.com, for WOLF STREET

But back to “normal” hurts after a good run. Read… Formerly Red-Hot Retail Sales Fizzle Back to Normal

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  84 comments for “Video Game Industry Stalls, Stocks Plunge. What’s Going On?

  1. Iamafan
    Mar 13, 2019 at 10:02 am

    Thanks for the article as this hits close to home.
    This isn’t an area that’s very familiar to many.
    My son works for ACTI and and luckily kept his job after the announced layoff. I think the whole industry is waiting for a Google, Apple, or Amazon to make a major acquisition to survive and continue.

    • Peter Starr
      Mar 13, 2019 at 5:44 pm

      Moore’s Law is busted, as is AI. Resolution processing power have also hit a brick wall. The same old shooter up is all she wrote.

    • KFritz
      Mar 13, 2019 at 7:07 pm

      Not to put too fine a point on it, but the second sentence needs to read, “This isn’t an area that’s familiar to many–in the Wolf Street commentariat demographic.” There are plenty of young people who spend money who are very familiar with the topic–those revenue numbers don’t lie.

      • Javert Chip
        Mar 13, 2019 at 10:24 pm

        KFritz

        You might be right about the “Wolf Street commentariat demographic”.

        You and I read the numbers differently:
        o You see positives from the admittedly impressive rise in revenue
        o As an experienced investor, I see mucho rojas flags; 2017-18 revenue growth = +15%, 2018-19 = -1%. No bueno.

        • KFritz
          Mar 14, 2019 at 4:08 am

          Agreed. But the revenue for gaming is significantly larger than all tv revenue, and dwarfs motion pictures.

        • Eferg
          Mar 14, 2019 at 7:31 am

          A bit off topic, but this exchange between KFritz and Javert Chip epitomizes one of the features that draws me to Wolf Street. Two people expressing different views without profanity laced tirades about the other’s IQ, genealogy or whatever. Rather, two adults in an intelligent and civil discussion about their points of view. What a refreshing rarity on today’s internet.

          Wolf, I suspect we do not know how much effort it takes to achieve this kind of discourse, but we very much appreciate it.

    • Mike
      Mar 13, 2019 at 7:21 pm

      ‘Get Woke Go Broke’ is the favoured line of gamers due to the retarded SJW agenda in games. When gamers are told ‘if you don’t like it then don’t buy the game’ (Battlefield 5) then that is exactly what the gamers did. Can’t complain when they abuse customers especially calling them ‘uneducated’ for having a different opinion. No sympathy here for these companies; better companies will emerge.

    • Mar 15, 2019 at 5:50 pm

      I’m glad to hear that your son made it through @Iamafan. Automation through deep learning is going to keep tightening down jobs for people with adaptable skill sets and a willingness to learn. Even Elon Musk decided to go back to humans after seeing how we naturally adapt to change so that is hopeful. I hope we can correct these business structures or make new ones. Not only are the people creating the platforms getting harmed by acquisition fall-out, but the people who fill the platform with entertainment (sadly referred to as “content”) have been devalued as well. Such an interesting parallel can be draw from in-app purchases in games, commodified music as and add-on data provider service, and open platform real-estate sales automation. You can pay to win in a game the same way to can pay for false fame on social media in hopes that people might listen to your music ($39 per month on SocialFight.co). It’s set up this way on purpose. Spotify requires that one of your songs have more than 1000 streams (valued at .0004 for >30 second play) to allow your next song eligibility to be added to a large Spotify playlist with an audience that would increase your plays. To make a great song takes thousands of dollar in time effort and equipment if it is produced to the best quality possible. YouTube won’t let you have a custom URL unless you have more than 100 subscribers. I think pay-to-win should be made illegal because as a blanket policy it is a form of bribery. I can’t imagine a football player opening his wallet in the middle of a game and start paying the other players to stay away so they can run a touchdown. It takes sportsmanship and quality out, is unethical, and goes against altruistic business principles, which are the ones that last. I came to this article because of my artist right organisation ASCAP’s newsletter. I think we have over generalised music, games, art, tv, movies, and everything uploadable and postable as “content”,which has become a disservice to our culture. I hope your son keeps beating out the competition out there. ACTi solutions are no joke! Thanks for letting me “soap-box”. Everyone can hear my virtually free music from the music tab of my website http://www.msdefacto.com if your are curious. Smart humans rule! <3

  2. Paulo
    Mar 13, 2019 at 10:08 am

    Gee, maybe millenial basement dwellers are finally tired of playing army or blowing up aliens. Maybe they are actually trying out for a soccer team or going for a walk. Did they go out into the sunshine and enlist in the military? Maybe their thumbs are seizing up? Could they now be working and involved in life instead of playing with their controllers? Did an avatar tell them to, “Get a life”.

    Couldn’t see this one coming, /sarc. Of course maybe online offerings on smart phones are filling that gripping need to clack away, mindlessly.

    They eat, breathe, and play games on a screen….hours per day. Is this really living? (maybe if you’re doing 47 months for election fraud and stealing). I was surprised it took this long, to be honest. You can only oooh and ahhh so much over improved graphics.

    • LessonIsNeverTry
      Mar 13, 2019 at 10:42 am

      “millenial basement dwellers are finally tired of playing army or blowing up aliens” – I don’t play video games, but the disdain you clearly hold for those that do seems… intense.

      “Of course maybe online offerings on smart phones are filling that gripping need to clack away, mindlessly.” – Mobile gaming is part of the chart breakdown. “Mindlessly”? Did you know that e-sports is now supported by large numbers of schools and the highest performers make millions per year?

      It is hard to see this spending decline as anything other than the recent economic slowdown. I suspect indie games will fill the void if the big companies keep annoying their customers.

    • Rory
      Mar 13, 2019 at 11:15 am

      Yea what kind of idiot would rather play a fake war game when he can enlist and get his legs blown off in an actual war fighting for the corporate war machine?! Stupid millennials…

      • Javert Chip
        Mar 13, 2019 at 10:29 pm

        Yea, stay in your reality-free-zone-basement polishing participation medals.

        • BridgetownBeast
          Mar 14, 2019 at 11:20 am

          100% agree. Look at the benefits of the war in Iraq and Afghanistan; look at all the WMDs they discovered and disarmed, and all of the peace and stability NATO brought to the region, and how the lion’s share of military contracts totally didn’t go to a company that was run by the U.S. Vice President.

    • chillbro
      Mar 13, 2019 at 11:23 am

      Why so salty? I thought this was a free country where a person can enjoy his or her free time as one pleases.

    • Quick Nick
      Mar 13, 2019 at 1:20 pm

      This is a bit idealistic. Make no mistake, video games are the future, and this is not indicative of a grand awakening where people will stop staring at their screens and learn to live “real” life again. As someone who remembers learning to use the first Apple IIe that came into our home, and spent hours of my childhood with Intellivision, then Playstation and PC games, and so on, I feel qualified to say that people are spending way more time with video games than ever before, increasing by the decade, and the introduction of mobile gaming has drawn demographics (housewives, for one) into gaming when they traditionally spent time doing better things. I feel sad by this, by the way, and as a father I will be limiting how much time my kids play video games. My wife, thankfully, learned to put the Candy Crush away a few years ago. Sorry to say that I think this is just a temporary correction and rebalancing of the profit vs product, and unless an EMP or war takes out electricity/Internet access, you will find that 10 years from now collective videogame play time will only have increased.

      • Cynic
        Mar 13, 2019 at 2:58 pm

        Is the absorbing popularity of this puerility among (technically) adults a product of the dystopian public environment we have created since WW2?

        Preferable to the crap we see around us , the monotony and emptiness?

        It must certainly suit our masters…..

      • raxadian
        Mar 13, 2019 at 3:55 pm

        The Nintendo Nes was marketed and used by the whole family. Parents didn’t started to steal their kid videogame console with the Wii. Is just that after the Nes craze ended and we entered the 16 bit generation Nintendo tried very hard to market the Super Nintendo to kids while Sega did market the Sega Genesis for teens.

        So parents who still wanted to play games either keep using the beloved Nes or noticed that computers now had color graphics and tons of games and used those instead. There were tons of PC games in the nineteens marketed for young adults so adults used those. Maybe also got a Sega Genesis since it had less censorship of adult stuff in games.

        And then game the so called 3D generation of videogame consoles, everyone believed the Nintendo 64 was for kids and by the time they started to market games like Goldeneye and Conker Baf Fur day it was a bit too late. The Dreamcast was awesome after the failture of the Saturn, but it died young and the Playstation had whatever kind of game you wanted.

        And then came the “Better 3D” generation, the Playstation 2, the Xbox and the Gamecube. And this time Nintendo won the whole family … with the Wii since the Gamecube didn’t last long even if it did last more than the Sega Dreamcast.

        And is with the Wii that most people believe gaming became for everyone, forgetting that even grandmas used the Nes!

      • intosh
        Mar 14, 2019 at 5:27 am

        Very true. This tiny decline is just a hiccup. The industry is simply readjusting.

        I’ve been “gaming” for 30 years and follow the videogames scene quite a bit. Videogame is the undisputed king of entertaiment now. It’s not longer the stuff for only kids and for “gamers”. The smartphone has a lot to with this democratization. With its habit-forming schemes (backed by psychology theories), no wonder smartphone games dominate. Soon, with companies like Google getting into the market (rumoured to be launching a game streaming service next week) will only solidify the ubiquitous nature of this form of entertainment. The pro competitions and spectators aspects are also growing tremendously.

        There is no turning back, most kids and millennials will spend more time indoors.

      • Bologna
        Mar 14, 2019 at 4:38 pm

        Speak for yourself I quit gaming and became a hobby farm Vegatable garden ,,I feel great

        • Quick Nick
          Mar 16, 2019 at 4:49 pm

          I am actually not speaking for myself but rather to my opinion about what will happen over the course of time re: the general population and video games. Like you, I also have a hobby farm with fruit trees, vegetable plots, compost bins, chickens, ducks, berries, etc. I am also married with young children, so for me, again like you, my gaming days are over. I do feel great when I’m outside, but for those cold winter days when nothing is to be done outside except watering the poultry and getting some eggs, and the kids are in bed, and my wife is at work, I might sneak in some time on Skyrim or an older Fallout. I think people like you and I are not the majority though, especially among the younger generation, and that goes double for areas of the world where land ownership is either not allowed or prohibitively expensive. Countries around the world, including the biggest (China), are pushing people into cities. Those hundreds of millions of young people won’t have a hobby farm. They’ll work mundane jobs 4-6 days a week, if they have a job, and play video games in their spare time; that is how I see it playing out anyway.

    • Prairies
      Mar 13, 2019 at 2:11 pm

      The gamers that play all day tend to stream for income. The millennials have turned the arcade of old into a stay at home side job or full time job.

      As for why sales drop, a video game isn’t discarded like a warn out tire. A game can be used endlessly if the servers stay up to allow it. I am sure the sales have hit a plateau because there are so many games to choose from, people can’t play them all at this point. So they play what they have until sales tactics are corrected.

      Just a phase, like all the grunt work you did living in the big city before finding the island life more relaxing.

      • alex in san jose AKA digital Detroit
        Mar 13, 2019 at 5:24 pm

        I think there’s a lot of nostalgia for older games which you can get for free. And indeed, they don’t wear out like a tire or a phonograph record. You can set one aside for decades and it’s still as fresh as ever.

        There’s also the feeling that as things get worse in the physical world, CO2 hits 500 and upward, the gasoline runs out and food gets scarce, video games will be pushed and kept going because it’s a way to keep people busy and entertained.

    • OPisMoronic
      Mar 13, 2019 at 2:26 pm

      Wait, what? Maybe the site you’re looking for is ZeroHedge or the Youtube comment section…perhaps you missed where gaming is the largest form of entertainment…larger than movies, larger than music.

      And you attribute all of this to what? People who live in their mom’s basement. Ok buddy, yah, they’re all making minimum wage, living in a basement, never going outside and somehow are single handidly supporting the LARGEST FORM OF ENTERTAINMENT EVER TO EXIST. Gotchya.

      • alex in san jose AKA digital Detroit
        Mar 13, 2019 at 5:30 pm

        Yep, people who really *are* poor, like me on my $15k a year, are not playing video games. I never got into ’em as a kid because if I had a quarter, I used it to buy some food, not play a dumb game.

        I didn’t even get into computers until 1997 in my late 30s because computers and everything connected with them, are expensive. My IBM Aptiva running Windows 95 cost me over $1500. It’s only very recently that used computers have become cheap.

        So no, it may be basement-dwellers all right but basement-dwellers coming from a lot more wealth than the real working class has. They were probably the kids who had new shoes, went to movies, geez I dunno, had their own TV set in their bedroom? I’ve heard of that.

        Working-class people read books from the library and have a computer if they need it for their work, and watch stuff for free on youtube, not play expensive games.

        • Prairies
          Mar 13, 2019 at 11:31 pm

          Working class folk can afford a $500 USD computer and $500 USD can go a long way in computers now. The smart phones people run around with are worth more.

        • alex in san jose AKA digital Detroit
          Mar 14, 2019 at 2:29 am

          Prairies – Yes, even a $200 computer or a freebee can do a lot now. But that’s only in say the last 10 years things got that cheap. By then the habits are established.

    • Petunia
      Mar 13, 2019 at 2:51 pm

      My basement dweller is finally working in the Trump economy, so has much less time to play. His group of gamer friends was mainly to poor to partake in the micro transaction mania and disdain the practice. He tells me he and his friends have all agreed to play older games to avoid the micro transactions. He says yesterday, they all bought a bunch of older games on GOG at a blowout sale.

      His expert opinion is that Microsoft is finally getting their act together by producing games that can be used across platforms. Had they done this in the beginning, they would own the gaming business.

      • will
        Mar 15, 2019 at 3:33 pm

        “His expert opinion is that Microsoft is finally getting their act together by producing games that can be used across platforms. ”

        Nah I don’t think so, they’re trying to consolidate the Windows monopoly as they’ve always done (and as ruthlessly as they ever have), it’s just not that obvious because MS isn’t the big baddie on the block like they were in the 90’s. However, they may be taking a different take with games deciding to actually get into producing games themselves that don’t completely suck..

        They just acquired two excellent boutique studios for example: InXile and Obsidian.

        It remains to be seen if they actually do something positive with this seemingly new development or ruin a good thing – like they’ve been doing ever since Windows 95. Or… well, 3.1 if you really want to think about what a better system OS2 actually was at the time..

        But I’m pretty certain that they won’t be interested in producing any games that run on PS, Mac, Linux, Google’s-to-be console; or that are sold on Steam, GOG, any of the above system stores – because the company hasn’t done that in any consistent manner ever since it was a company..

    • MCH
      Mar 13, 2019 at 11:32 pm

      It’s odd, I remember when this trend of selling online crap for real money first started. It was a game called Ultima OnlineIback in the late 90s. At that time, it was just kind of fun playing with friends, and then I saw characters walking around spamming text about sell gold in game for real money on Ebay.

      I had a couple of chats with some of these guys and went on Ebay just to see how it worked. A few months later, I made back all my subscription costs and the game cost. I was happy, and after doing it a couple more times, I quit, and hopped onto another game, Star Wars Galaxy, and yep, same thing, fake in game gold, and “stuff.” Rinse and repeated just enough to make the game free, and saw the proliferation of companies doing this digital goods stuff.

      This was all in the early 2000s, and then I grew out of the trap and never looked back. But then I read about things like Farmville and Zynga, and whales. Talk about totally F***ed up. Knew someone who worked at Zynga, and she told me that their revenue model confuse the accountants because the bean counters kept asking about where the inventory was coming from, and the programmers would just say: “it’s available whenever we want it.” It was hilarious in a dark sort of way.

      So, finally, it seems the scam is up, people are running out of money. Yayyyyy.

    • Ethan in NoVA
      Mar 14, 2019 at 6:55 am

      A younger friend spends a lot of time in a VR chat world. It’s like the older style text chat rooms I grew up around (IRC) except a 3d avatar world in full immersive VR.

      I checked it out for a few minutes. The irony of a virtual movie theater full of avatars that are talking to each other during the movie, and the movie being fed by one member (technically pirated) was amusing to me. Is this the future?

      Apparently he has traveled a good bit to random new places for in-real-life meetups with the other people he met on the system. Disney World and similar type things. I think I saw the future.

  3. Maria Bernadette Ferrer
    Mar 13, 2019 at 10:33 am

    Sharing Asia News perspective: “The year 2019 is expected to see the start of the 5G era with global companies planning to roll out new products using next-generation wireless networks that will enable broadband-like speeds for smartphones.

    This development will drastically affect the electronic gaming industry.”

    https://asia.nikkei.com/Opinion/A-game-changer-for-gaming

    • Adam Williams
      Mar 13, 2019 at 6:16 pm

      Hi Maria – thanks for the share! I’m the author of this piece – I agree, 5G has the potential to transform the gaming industry in several ways, namely addressing the networking bottleneck. Smartphones are just too variable to offload serious computation on, to say nothing of screen size issues and interface. Most mobile games are either fairly simple or are huge data hogs and require wi-fi to avoid data problems. Currently, mobile sales seem to be plateauing (following smartphone adoption which is now saturated), so it could go either way.

      • intosh
        Mar 14, 2019 at 5:33 am

        It’s no wonder Google will soon enter the videogames arena.

    • fajensen
      Mar 14, 2019 at 3:49 am

      The insects will not like it. At the frequencies used by 5G, their antennae are literally antennae, now of the electromagnetic RF-kind, and maybe not so much the “find me some hot bunnies to mate with”-kind. Kinda like if we suddenly receive shock-jock radio with our noses and can’t turn it off.

      • intosh
        Mar 14, 2019 at 5:32 am

        With all the other living creatures “taken care of”, it’s about time we deal with the insects. /s

  4. Bankers
    Mar 13, 2019 at 10:41 am

    Being given ten pence to play space invaders at the local pub used to be a real treat, then it would be off to try to sleep in rain filled trenches near freezing at the army range with LeeEnfields strapped to our arms while having thunderflashes thrown at us – much more realistic.

  5. kitten lopez
    Mar 13, 2019 at 10:49 am

    Fascinating!

  6. Bobber
    Mar 13, 2019 at 10:53 am

    Microsoft is the number one stock today, in terms of market capitalization. I think they derive about $5B to $10B revenue from XBox and games. Any problems there would be felt by a lot of people, given Microsoft has a PE around 30. A collapse of that PE to a 20 would involve a large stock price drop. Amazon likely has a decent games business as well and also has a high PE.

    • Prairies
      Mar 13, 2019 at 2:15 pm

      Not exactly what the article is focused on. This article is about developing companies that create the games, Microsoft just creates platforms to use the products. Microsoft won’t take a huge hit if game developers go under because they make more money off cloud services and government contracts.

      • Bobber
        Mar 13, 2019 at 4:35 pm

        No, Microsoft does develop and sell games. Ever heard of Minecraft or Halo?

        I also beg to differ on the potential impact. High PE companies need to show consistent growth to fend off PE multiple reductions.

        • char
          Mar 13, 2019 at 9:30 pm

          Halo isn’t as shiny as it used to be. Minecraft is modern Lego with the same market (mainly young boys). Lucrative but not that big for a company like Microsoft

    • char
      Mar 13, 2019 at 9:24 pm

      Microsoft and making money of gaming? If they closed their xbox division their stock would increase as they never made money with it.

      • MCH
        Mar 13, 2019 at 11:35 pm

        So absolutely true, one reason the Kinect never made money and was ultimately scrapped was because the components for it, namely the laser diodes and the camera rigs could never come down enough in cost. Rumor had it that Microsoft paid to buy the coating chambers and the diode fabs and let old JDSU (now Lumentum) run it. But they never hit their cost target of laser diodes being less than $3 each at volume. Or some number like that.

  7. Leser
    Mar 13, 2019 at 11:56 am

    Interesting article and kudos to Wolf & DQ for including such external deep dives.

    Two points stick out for me
    1) industry revenues – it’s early days still for a 2019 estimate and I wonder on which basis they’re forecast to decline – I’d expect the opposite
    2) funders of these companies get more cautious as this particular bubble has been blown up quite far. Given the cash burn of many of these companies, new funding becoming just a little scarcer should indeed bleed through quickly on staffing and hiring.

    • Adam Williams
      Mar 13, 2019 at 6:27 pm

      Hi Leser – I am really thankful Wolf took a chance to share my work and am happy so many found it interesting.

      For Revenue – global sales seem to be stalling, mobile growth in particular. Some markets are seeing a pullback, and AAA titles are massively underperforming due to the consumer revolt I allude to – Battlefield V and Fallout 76, for example, are estimated to be massive losses. As other commenters suggest, mobile expanded the market significantly, but the “gamer” population grows in line with demographics. Console and PC sales are more stable growth, but Mobile basically doubled the market in 10 years. Younger people are more into games than generations prior, but it is still not for everyone.

      These major publishers are massive corporations, and can last a while – but you are right, particularly in smaller studios they seem to be closing quickly suggesting funding sources are drying up behind the scenes. Major players are highly stock price driven, so are attempting to stop the bubble decline bleeding. I also believe general tech weakness has caused some portfolio readjusting and it impacted the game sector. Indie game development seems to be on the rise however with things like Steam Early Access where fans can directly fund games in development.

    • char
      Mar 13, 2019 at 9:35 pm

      Microsoft is rumored to come out with the Xbox4 in 2020. The same is very likely true of Sony. The year before a change in console is always a bad year for the game companies for different reasons.

  8. Shawn
    Mar 13, 2019 at 12:12 pm

    Wow, check out Handheld, what a bubble! Most of the reasons outlined in the article have to do with the game’s construction; I doubt that’s the reason for all the layoffs since people can simply play other games if they are not happy with the one they have. I think gaming is part of the overall economic bubble we are in, there has been a huge amount of investment over the last decade, now that money is disappearing. For example, a few years ago I use to get a lot of employment interest from gaming companies. Now, many of those startups no longer exist.

  9. yngso
    Mar 13, 2019 at 12:13 pm

    Another sick canary in the coal mine…

  10. Old Engineer
    Mar 13, 2019 at 12:26 pm

    I wonder if there is a shift in the gaming culture in progress. Many of the younger players have grown up on the sandbox games (Minecraft, Roblox, Fortnite) and have a real attachment to the create your own world or game. They are able to set up small multi-player scenarios with only the kids they know involved so they seem safe enough that the parents encourage them over the more mature multiplayer games.
    And, I understand that with the birth rate down the population of younger players is no longer increasing. This doesn’t help the growth forecast.

    • Keith
      Mar 13, 2019 at 2:20 pm

      I was wondering about the games, too. I a kid from the 80-90s, I loved video games. One thing I have noticed about today’s games though, is they are all encompassing. A single game/quest whatever can take all day. I accidentally found that one out, they suck you in. Problem is that people do not have that kind of time to play a game.

      As a kid, I would recall playing a game, getting pumped up and going out and play, now it seems all the time needs to go to the game. The two were part and parcel. For adults that grew up with the games, we cannot spend hours upon hours playing a game, nor do many want to. That may be an area where they are missing.

      Also, I enjoy reading about the culture wars. They have hit gaming pretty good. Games do not seem to appreciated PC culture, and rebel against it, especially when various groups complain about bullying, which for most guys (the main demo) talking trash is part of the gaming experience.

      • Bologna
        Mar 14, 2019 at 5:24 pm

        This is part of the problem back in the days of packman there actually
        Was an end known as “game over” .now it is a never ending interactive
        Game with your alliance or buddies in the virtual world,
        ….. never ending wars sound famlier Afghanistan ,war on drugs

    • Cynic
      Mar 13, 2019 at 2:51 pm

      As for demographics, maybe ‘second childhood’ will save this ‘industry’?

      • alex in san jose AKA digital Detroit
        Mar 13, 2019 at 5:35 pm

        When I retire, I’m going to be outside doing things, not staying in playing games. I’ll be out fishing, picking seashells, playing music, etc. All things that cost very little, pay a little (fishing pays in fish, shell collecting can sell those buggahs, playing music pays enough for day-to-day expenses like food, bus pass etc.)

      • fajensen
        Mar 14, 2019 at 3:58 am

        Nope. Nostalgics like me build bar-top arcades to recreate the button-mashers we couldn’t afford to play when we were kids.

        We buy classics like DOOM for DOS and Half Life 2 for like 5 EUR on Steam.

        We don’t want to have a virtual career in some gaming world and hang out and interact with virtual people like we were still at work, for many, the decision is: “nothing good on TV, wife asleep on couch, ok, play something fun and simple for an hour or so”

        • Ethan in NoVA
          Mar 14, 2019 at 7:03 am

          Ah a fellow arcade collector!

          The pinball and arcade collecting hobby is pretty active. Prices are high. I think pinball machines might be something of a bubble. New titles usually sell for $4500 to around $9500 and they do sell, 90s A titles are $5000 to $10,000 usually. But with so many titles coming out people can only fit so many at home. And would they pay so much if the prices went down quickly versus sometimes increasing. Also some of the popular titles from the 90s in pinball are getting remade, so that messes with the prices. And they are targeted at a boomer market with recent titles like the Beatles, the Munsters, AC/DC, Metallica, Batman 66, Aerosmith and so forth.

        • Keith
          Mar 14, 2019 at 12:15 pm

          I think that is where the current games lack. A little simple entertainment to relax.

          That does seem like a good idea, collecting and refurbishing the games of yore.

  11. ThePetabyte
    Mar 13, 2019 at 12:26 pm

    Gamers are getting sick of absolutely blatant cash grabs by large corps such as EA and Activision. Hopefully the resentment funnels money into the more creative devs at indie studios.

  12. Eastwind
    Mar 13, 2019 at 1:23 pm

    “Politics into games”: I think this paragraph understates the issue and perhaps misses the point. Most of the AAA titles now include large doses of political correctness. While there have been a few visible dust-ups between various correctness factions fighting over what is politically correct, the larger point is the gamers who don’t like any political correctness with their games and are silently steering clear of these titles in the first place.

    They may not give up gaming, but they might spend most of their time and money on ten-dollar indie titles that don’t try to preach to the players.

    Another big factor is a lack of innovation. All but a vanishingly small minority of games fall into an identifiable ‘genre’, such as first-person-shooter, RPG, or 4X game. These genres have been done so many times that another game in the genre always seems extremely derivative and recycled. What little innovation these games contain is usually limited to one or two new “game mechanics”. Nobody has invented a new genre in years.

    The moneybags will say it doesn’t make “business sense” to spend the money required to make a AAA title on an “untested idea”. So we get nothing but attempts to milk the same old cash cow genres.

    What if I don’t want to be an Islamic avenger trans-lesbian person of color who parachutes into flyover country to shoot up white-racist MAGA-deplorable zombies?

    • HAL
      Mar 13, 2019 at 6:00 pm

      Found the gamergate incel.

      People actually really enjoy games that allow for a number of perspectives. Look at dragon age: origins, or the popularity and profitability of independent games like gone home or dream daddy – those games do fine. EA wants to make call of duty 7, underpay developers and overcharge consumers, and that’s why it sucks. It’s just like Hollywood, filled with sequels and superhero movies that are boring and formulaic but apparently low risk – that’s what keeps people away from the theaters, not the fact that Captain marvel is a chick.

      There are tons of games that have been ruined by corporate greed. There are zero otherwise fun, complete and playable games that have tanked because, like, the main character is black or because you have the option to flirt with someone of the same gender.

  13. Quick Nick
    Mar 13, 2019 at 1:39 pm

    You did your homework here Wolf. You danced around it, but make no mistake that SJWs are a large part of the civil war brewing in gaming. The “politics” you mention weren’t a problem when they were based on history or mainstream ideas; politics only became a problem when fringe beliefs and virtue-signaling were pushed into a business where the majority of the customers don’t want to have that stuff foisted upon them. The issue is really driven to a head when, other than simply include nontraditional characters or plot points, which nearly all players are fine with, a publisher or developer goes out of their way to push and force an idea to the forefront. Have a great game where one of the best characters is gay? No problem. Market a game as saying it is a “victory” for women and not liking it means you are an incel or bigot? Uh-oh.

    Greed is overall the biggest culprit, as many of the individual problem areas you highlight fall under that umbrella. Make a good game that people want to play, and you’ll make money. The problem is that the studios, and their investors, want “more” money. How much more? More. As much as they can get, so they started to think of all the ways they could make more money from their games that don’t involve making the game itself better. Some of the things, like including microtransactions for certain cosmetics, are either accepted or just prove to be an annoyance, but other things like changing the game so that you can sell it in China, taking out parts of it to satisfy the loud minority, or lying about what a game is capable of, well, these are the things that will turn fans against you. Just like with movies, one bad game won’t usually kill a successful franchise, but it definitely turns the tide. A few interesting case studies are (some you mentioned) Fallout 76, Anthem,RDR II (good and bad contrast there), the Diablo mobile game announcement cringefest, and the latest Battlefield.

    It will turn around again when one or two major companies take the lead and decide that a lot of money with a good chance at growing for the next 20 years as a fan favorite is better than squeezing as much as you can from a fanbase that is hating you more by the year.

    • stan6565
      Mar 13, 2019 at 3:34 pm

      just as any other parasitic growth, the “games” addiction is dependant on a steady supply of new and healthy host organisms to accommodate the parasitic “games providers”.

      like a parasitic Ponzi business plan.

      if you sit at home all day pushing buttons, the other gal/guy goes out and gets her/his mate and procreate.

      the buttons pushing organisms die off as they do nothing productive, for themselves, for their society, for their species.

      as they should.

      charles darwin called this “evolution “.

      • Quick Nick
        Mar 14, 2019 at 10:23 am

        And where “should” evolution lead when the world has 10 billion people with fewer and fewer jobs required? The governments of the world have seen to it that natural selection has no place in humanity. The people with no jobs will need something to do with their free time, and rising crime/environmental mismanagement will limit what people will or can do outside. Movies like Idiocracy and Ready Player One hit home more than most people will admit, because they are blindly optimistic. Not sure if you realize it, but there are plenty of people finding mates and procreating who do nothing but stream movies and play video games. Those ambitious people who go out and meet people the old fashion way are still around, but thanks to online dating and other technology resulting in virtual dating and sexual gratification with the swipe of a finger, you’ll find that within a generation those people that “do nothing productive” as you put it, will far outnumber those that go out and do what you deem productive. For a microcosmic look, consider Silicon Valley and the millions of people that make a good living building and maintaining websites or developing software relating to social media, video games, online dating, human interest, etc. Most of these things could be considered non-productive in real-world terms but that is the society we have created. The only way you’ll ever see a “productive” (in the ways I assume that you mean, I may be wrong) society again is if some near-world ending event takes place and the population is cut way down, requiring people to learn skills and use their own labor to keep life going again. Now? Technology is advanced to the point that we have all the working class we’ll ever need, and then some. Social welfare is beyond the tipping point, and my guess is you’ll see video games touted as one tool to keep the masses happy and appeased.

  14. mick
    Mar 13, 2019 at 2:25 pm

    The largest online game company in the world, Blizzard(World of Warcraft)has literally lost 70% of its subs over the last 9 years, and they are not alone.
    No idea how Bloomberg comes up with those ever increasing revenues until now, when the biggest players have lost over half their revenues. Guess the X-boxes of the world literally quadrupled their sales since 2009.

    Doubt that very much…

    • Prairies
      Mar 13, 2019 at 2:54 pm

      Did you not read the bloomberg charts? Mobile is currently 50% of the entire market. 10 years ago mobile was 10%. Blizzard is 10 years too late to the show and lost potential revenue while beating the same dead horse(WoW) for over a decade.

  15. raxadian
    Mar 13, 2019 at 3:30 pm

    Pay to win games are as old as Arcades, either games were made so hard you needed more Quarters or in some cases your character outright died or became useless without enough Quarters. Loot Boxes instead of pay to win is gambling al right, you keep paying and paying cash until you finally get something decent.

    Have you guys noticed how many games last years were remakes? Or ports? If you already have the game, why buy the new version unless something significant changed? Sonic Mania Plus added more characters and a harder mode at least compared to Sonic Mania. But the remake of the first three Crash Bandicot games? Wy bother if I have the PS1 games and they work just fine on my PS3?

  16. Lion
    Mar 13, 2019 at 4:18 pm

    Question for the younger set, or maybe Wolf can answer. How much does a gaming person spend annually on games ? My gaming career basically ended with Myst.

    • Mar 13, 2019 at 6:37 pm

      Maybe Adam, the author, can answer that. I’m not a gamer.

      Adam? TheDreamer?

    • Adam Williams
      Mar 13, 2019 at 9:17 pm

      Hi Lion – there does not seem to be any good metrics on averages or per capita spending. However, according to a 2017 report by Electronic Entertainment Design and Research about 67% of Americans (~211 million) play some sort of game. Newzoo estimates US game spend was about $32.54 billion in 2018. That gives us around $154 per year per person. Worldwide the same calculation is about $63 per person.

      I think that figure might be misleading, as with any hobby you can spend as little or as much as you want. Casual mobile gamers also likely skew the number down. I would imagine your standard gamer spends a few hundred per year in the US. A standard good game gives around 30-40 hours of entertainment (often way more), and costs between $10-$60. Usually about $1 an hour in entertainment spending. There are also many free to play games. Compared to many hobbies it is actually very affordable. A new game every month or two does not seem unreasonable.

      • Lion
        Mar 13, 2019 at 10:07 pm

        Thanks Adam

  17. fajensen
    Mar 13, 2019 at 4:35 pm

    Maybe gaming has run into the “Hollywood Blockbuster Problem” where games, in order to sell, have become colossal undertakings and then because the investment in them is so large, they cannot risk anything at all on creativity?

    The developers will focus solely on “what works” so the games, while beautiful, become quite formulaic and pretty much looks and works the same to target the same “safe and broad” market.

    From the customer perspective, really, if one has played one or two of one kind of Big-Money game, one “has seen them all” so why buy more?

    WoW used to be quirky and fun to play, with odd bugs and game mechanics to ‘sploit, like pulling some epic-level monsters onto gatherings of hapless low-level victims and such. There was also some kind of story to be discovered by sniffing around. Death and humiliation was lurking everywhere in the form of other players and some extremely high-level creeps prowling even in low-level areas.

    Blizzard gradually ‘fixed’ the quirks, nerfed what players could do, created ‘safe spaces’ and guards everywhere, removed the ‘Level Death’ creeps and in the end the whole game felt like running down corridors guided by invisible padded walls while gathering ‘resources’ – with some scheduled ‘breaks’ doing approved group activities like raiding on dungeons to break the monotony – pretty much exactly like *family*blog* Working!

    Of course people are leaving, even Netflix is more Fun!

    • Ed
      Mar 13, 2019 at 5:01 pm

      Good comment.

      I think this is definitely part of the problem. There have been mergers. So many games now come from gigantic gaming corporations with a low risk / low innovation mindset.

      Too many business managers stirring the kettle makes a bad soup, even elsewhere but particularly in creative businesses.

    • will
      Mar 15, 2019 at 4:07 pm

      This has been true for the AAA’s for a long while now (I’d say the trend was evident almost 2 decades ago). There are some exceptions to this though in the AAA space, Rockstar has spent big money on some of their AAAs while managing to make high quality games that push the envelope with design choices that are not blatant money grabs by bean counters. I think Grand Theft Auto V was rumored to have cost them $400+ million to produce. Compare this with Blizzard who managed to spend untold sums on Diablo III yet still somehow managed to be all decade-old technology under the hood that produced no innovation at all either technically nor creatively..

      On the other end of the scale are the the smaller and more nimble players that are still producing great games. Many of these guys are “small” only on a relative scale, like $1 million games vs the AAA guys. But there are really, really small guys too that will do a retro 8-bit style game for a handful of thousands of dollars. A lot of this action takes place on Kickstarter, largely because of the way the money works and the onerous relationships most devs have had to have with publishers – but these small guys are definitely doing the innovative stuff. Games like Factorio comes too mind.

      Then there are the studios who have managed to trudge along since forever through the ups and downs of the industry consistently producing high quality titles either in whole (Stardock or Introversion for example) or in part (Obsidian, InXile were remnants of Black Isle) that have been overshadowed by the AAAs and just haven’t been interested in a lot of the console/moble stuff generally, though have probably dabbled..

      I highly recommend Obsidian’s documentary about kickstarting their game Pillars of Eternity. It’s a brutal world out there:

      https://www.youtube.com/watch?v=NA8FfDskw4Q

  18. Saltcreep
    Mar 13, 2019 at 4:53 pm

    I wonder what the data looks like in respect of unit sales numbers, and how many of the unit sales per game today are more spread out over time and price points than previously. I would be surprised to learn that unit sales had gone down, but unsurprised to see average price per unit had gone down.

    There is simply so much choice on the market today that most people can probably easily find something they will enjoy playing at vast reductions relative to release price if they just go and browse the current offers of the various publishers.

    I reckon you need to be pretty keen on a particular game, or on supporting a particular developer, if you purchase games at release for the full price, together with the boatloads of expansions many tend to put out on top of the base game. If you instead just mark it and wait, then you can usually get the whole package at a greatly reduced price a year or two down the line, after the people who bought the game at the full price have been the lab rats that have helped provide a much smoother experience for you. And you can read the comments to determine whether it’s a game that is actually supported by its developers, or whether it’s something that has turned into abandonware.

  19. Tony Mike
    Mar 13, 2019 at 5:15 pm

    I am a gamer and have been one for nearly 35 years (yeah started with the IBM PC jr.) and I have seen a lot of the gaming industry from the ground up on monochrome monitors to my 50-inch 4k monitor. I also build computers and have done that for 30 years.

    Many have hit the points I wanted to cover such as lack of creativity on the part of the game makers, who are now all about squeezing every penny, yen, yuan, ruble, etc from the gamer through having them flog themselves grinding to obtain the next tank, cruiser, or what not. The so-called leaders of these companies are all about the benjamins and could care less about the end user, esp if you have ever read an end user agreement where you don’t really “own” the game..you are kind of leasing it.

    The same people who run hollywood, run the gaming industry and thus, you get tired, played out serial games with little to no originality. I recall the decades ago when you could return a dog of a game for a full refund. Decades later you are still stuck with this terrible model that lends itself to having games pirated because the games suck, to be honest.

    Like the internet that has morphed from Prodigy and BBS’s, where we early adapters hoped against hope that the internet would not turn out like television, we lost that dream and now it is negatively impacting gaming. VR 2.0 is just as bad as VR 1.0 and will not get better until we have faster internet in this country. You ever visit SE Asia where fast internet is everywhere? Oh, and cheap unlike this country.

    Gaming will survive because like someone mentioned, the indies will save it. Big companies will swope in buy them up, but others will rise up to take their places and distribution is no longer bottled up with a few companies.

    Gaming still has a long way to go and will be the main form of entertainment for a lot of people as our phones become more powerful and augmented and virtual reality mature.

    No one from the gaming industry is here reading this and while the execs downsize employees and upsize their paychecks maybe they will listen to the gaming consumer and put the fun back into the past time that some many enjoy. One can hope. I am not one of them.

    Ok back to Warthunder. I need to shoot up some tanks.

  20. X-Pat DE
    Mar 13, 2019 at 5:38 pm

    As an avid gamer from the 80s and someone who owes their career to this early hobby I would add, to the other valid points from other commentators, that:
    modern games suffer increasingly from the overuse of “cut scenes”, which wrenches a player out of the immersion experience.
    An online-connection is required to play – many areas still have dire internet access.
    Play only allowed with the current version (Race Room, for example, regularly requires massive (1GB+) updates, so no way, as a middle aged adult, I can have a “quick” game, my free time slot is spent waiting for the update to download.
    Terrible PC ports. It is obvious that games are mainly developed for consoles and the GUI and, more importantly, gaming controls are dire for PC players (I use additional software to “emulate” a console controller on my PC).
    Also a result of console ports: “fixed” saving points in the game instead of letting you save the game where you want to.
    Every increasing hardware demands for modern gaming software which doesn’t come cheap.
    A plethora of cheaters, super-players or bots on multiplayer servers, taking all the fun out of playing.

    I now tend to play single player games, RTS or race/flying sims and the like but each passing year I spend ever less time gaming.

    The corporations are at the mercy of their CEOs and shareholders and they will ultimately drive themselves to ruin. The future is crowdfunding and indie games which are free from the shackles binding the AAA publishers. Less is more and, when you don’t have an army of script writers, voice actors, graphic designers, storyboard specialists etc. etc. you are able to concentrate on that which is all too often forgotten, gameplay and reacting to feedback from your gamer base.

  21. Harvey Darrow Cotton
    Mar 13, 2019 at 5:39 pm

    One issue, highlighted by Jim Sterling, is that a major feature of ‘AAA’ marketing, transforming games into a live service, fundamentally breaks the business model. People only have but so much time, and if they are required to buy a game, and commit to it by taking advantage of all of its multiplayer platforms and social media, buy all the DLC, and enroll in the season passes, that leaves them with less time and money to play other tentpole releases.

  22. Bill from Australia
    Mar 13, 2019 at 5:42 pm

    Pac Man was my limit ,but there again Im from ASSTRALIA!!

  23. Jko
    Mar 13, 2019 at 8:49 pm

    Total Annihilation (Chris Taylor / Cavedog) is still going strong after 19 years. Heaps of player patches, mods and maps keep it young. Online play with player owned servers and LAN. My original cd has bald patches on it, still works ok except for music jumps, but I play with copies. No daft CD protection. Torchlight 2/Forged Alliance/Civ3.All can be modded. FA has it’s own player servers for online play after Gas powered games gave up the ghost. Studios today don’t like mods. I stopped buying games when they got boring and had no replay-ability. Diablo3 was over-hyped, waste of money.

  24. Cyclops
    Mar 13, 2019 at 9:22 pm

    We have social disconnect in our society. I have heard woman friends complaining that their boyfriends are playing all day on video games. While their girlfriends are seating and working in less than perfect jobs.

    Remember the bowling alley and video arcades were a huge fad. Then now expensive golf courses are becoming too expensive to pay green fees and maintain the courses. Homes on golf corses will start to suffer with high HOA fees alongside with golf courses membership fees! With SALT 10K cap on tax deductions expect Vacation homes being dumped on RE markets!

    God Forbid!

    Sooner or later, FEDS will catch SSDI theives collecting false disability claims and catch the them in the act on Facebook postings. Video games won’t be innovative enough and start to bleed away in this latest fad!

  25. Martin
    Mar 13, 2019 at 11:04 pm

    Intersting article

  26. Mar 14, 2019 at 8:49 am

    I can honestly say I’ve seen what video games have done to the minds of the feeble victims from inception (the days of pong). Attention deficit disorder is a direct disorder linked directly to video games among other things. It truly is sad its taken 40 years for the imbeciles that play video games to finally figure it out.

    • will
      Mar 15, 2019 at 4:19 pm

      I disagree:
      TV has done vastly more harm to society than videogames have ever done, including in the case of ADHD/ADD..

      And, in my experience, all of the people who ended up successful in life were those who played videogames or D&D when they were kids. These were the only people who figured out how to ‘play the game’ and ‘win’ at life. The people left behind were the idiots who never developed any tools to objectively look at the structures around them and navigate them appropriately. (or realize that the game screws you over at some point).

      Games (and gamers) come in many flavors though, there have always been “loser” gamers too, and it remains to be seen how this dynamic may have changed as games and gaming technology has also changed. So I don’t disagree with your sentiment entirely, but I do disagree with your categorical generalisation of the issue..

      cheers.

  27. RangerOne
    Mar 14, 2019 at 10:57 am

    Major video game publishers are some of the most hated companies in the vocal online community.

    Pretty much every major AAA studio that made amazing games in the earl 2000’s has been bought out and destroyed by greedy exec’s looking to monetize games to justify ever more expensive and complex releases.

    There has been talk for years now that we are heading for a gaming crash/correction. As publishers are running into strings of multimillion dollar flops.

    There are some amazing smaller studios putting out great AAA games. But the old guard are mostly being asked to produce garbage weigh down with a desire to cash in on mobile and microtransactions.

    But I have to imagine most of the stall in growth is that the mobile space has hit saturation. VR and AR will be the next growth segments. But if that tech doesn’t improve fast it may be a very long time before it gains any mass appeal.

  28. Kenny Logouts
    Mar 15, 2019 at 11:18 am

    The games industry has always been a harsh place for the minions.

    Big developers/publishers appear to be horrors to their customers and their employees.

    Even small studios can be low on morals in my view.

    Hype trains and early access, then nothing is properly finished, then they move on to game 2.0 using all the stuff from 1.0 in a new package that gets finished.

    Clearly mobile has been a big sector, the margins must have been massive… (King IPO anyone?) but all the pay to play has worn thin and now reality has kicked in.

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