jiggles wrote:Hey guys, watch this:
Assign a competitive 2 year salary + benefits to every name you see. Add the licensing fees for every copy of software each of these people have to use to do their job. That's your investment.
Take the revenue taken by AC Origins* (base sales only, no DLC). Cut half off for distribution and marketing costs. That's your initial return.
Do you think, given the risk that the game could turn out shite and not sell as well as forecasted, is that return alone worth the investment? When there are a ton of other safer, non-gaming ways to invest the money?
Nobody seems to want to acknowledge how risky putting money in game development is. The audience is extremely fickle and can just lose interest in long-running hyper-successful franchises at the drop of a hat. Making a 1.2x return isn't something you'd want to reinvest in if you only took the chance because of the potential for 10 times as much.
Activision-Blizzard are making bank on Hearthstone, but that doesn't justify pissing more money away on Heroes of the Storm. And I'm sure the revenue trickles for StarCraft and Diablo have dried up at this point. Call of Duty is performing worse than it did before. Tony Hawk's Pro Skater and Guitar Hero were two of the largest properties in the world and now they're both gone, the latter's DLC being a particular cash cow that I'm sure it hurts to lose. Destiny isn't doing as well as they were predicting, WoW subs are down and Overwatch is also in a slow decline, with an expensive eSports investment doing little to reinvigorate it. Again, the largest franchises in the world, either gone, in decline, on the shelf, or underperforming. If you'd taken the risk to invest money in those, year after year, would you be happy with how the projects are doing?
* Ubisoft forecasted 19 million copies sold lifetime. But remember most copies are not sold at full price.
I'm slightly worried about replying to this as I don't have the energy to get into a full-on barney at the moment, but I sort of feel I have to.
I couldn't agree with this opinion less.
What you've done up there is describe the basic functioning of the capitalist system. Invest money to create a product to sell for a profit to invest all over again. There is always risk involved in any such venture which is factored into the investment. Nothing you've said excuses Activision cutting corners whilst still making billions of dollars in revenue a year. Again, this is core to idea of capitalism.
The following, to me, is the centre of your point:
Destiny isn't doing as well as they were predicting
Destiny wasn't doing as well as predicted, this is true. But the point here is that the
prediction was wrong. Activision refused to share hard statistics regarding this "failure", but we can assume that the game continued to rake in huge amounts of money...just
not enough money. We don't even need to assume:
http://www.pushsquare.com/news/2018/11/ ... t_of_moneyAccording to SuperData, Destiny 2 was the highest grossing digital console game of September 2018 -- a month that saw juggernauts like Marvel's Spider-Man and FIFA 19 launch. It even managed to make more money than Fortnite, which we imagine by this point is turning over a huge amount of dosh every single day.
What does this tell us? Is it that the publishers are simply suffering the inevitable after-effects of an expensive creative venture, or is it that their predictions are massively over-inflated and based on nothing but the desire to appeal to shareholders?
The examples you have cited, Diablo and Starcraft especially, are games that are pushing 5 years old at this point and are still making money for Blizzard. Diablo 3 recently hit Switch
at full $60 price. WoW subs are declining as the game is 14 years old but it, alongside Overwatch are still some of the most popular games on the planet.
Check the graph here:
https://www.macrotrends.net/stocks/char ... it-marginsGross profits, after expenses, have continued to rise for almost 10 years. Operating costs have remained steady. They took a hit in net profits in 2017 but that's been increasing since then.
This isn't about a publisher buckling under the weigh of production costs and expenses. This is the video games industry as a whole being about more, forever more, profits for shareholders. It's about exponential growth with a finite consumer base and finite resources being mathematically impossible and as this idea settles in, it being the devs that feel the repercussions of this realisation in order insulate the shareholders that little bit longer.