RE: We chat about videogames and videogame accessories.
04-12-2013, 03:45 AM
On the subject of bloated budgets, its a business model that I don't think can sustain forever in the gaming economy.
When the game industry initially rose in budget, they not only had a high ceiling of technical quality, but a huge untapped pool of consumers. NOW, the amount of space for technical improvement is a good bit smaller, and there's not a huge untapped market of people looking for the type of game you're churning out, and there's quite a few other companies using the same business model to compete with. And none of that is to mention that a good portion of the consumer base is becoming increasingly fractured and jaded with the current state of the industry. Now, as Wheat said, a lot of the gross income is used to cover the huge amounts of money that go into making a game, so when you're projecting 5 million sales and you get 1 million, that alone could be a major crippler. And if you were to continue your usual practice and continue to get underwhelming sales, then you get a bankrupt company.
And if you think companies, especially those that are international, wouldn't continue their usual practices despite increasingly dire financial issues, boy let me tell you a story from outside the video gaming world. No, this is from a seedier world called Online Poker that I have been a part of because I was just the most adorable degenerate. I'll spoiler it though.
The overall point of this spoilered story is that, even with obvious and predictable insolvency staring directly in the face of a company, as long as the top are getting some money and the layman is none the wiser, they can continue to go about their daily routines and practices like nothing's the matter until the bitter end, when the top will still probably get away with it but a lot of other people are kinda pissed. This is the kind of mentality that can lead a huge company like THQ to not only default on a 50 million dollar bank loan, but to wait a bit before saying "Oh okay we're gonna have to declare bankruptcy aight cool". And this was after basically an ENTIRE YEAR of financial failure, a year that STARTED with this
https://www.gamespot.com/news/thq-issued...ce-6349477
If game sales continue to underwhelm game companies, I'm sure some of them will scale back budgets to avoid consistently hemorrhaging money and taking on debts. I'm also sure that some of them will continue to do the same thing full force for as long as they can, until they're forced into bankruptcy, conglomerate merger, or get really goddamn lucky with a couple of huge hit.
When the game industry initially rose in budget, they not only had a high ceiling of technical quality, but a huge untapped pool of consumers. NOW, the amount of space for technical improvement is a good bit smaller, and there's not a huge untapped market of people looking for the type of game you're churning out, and there's quite a few other companies using the same business model to compete with. And none of that is to mention that a good portion of the consumer base is becoming increasingly fractured and jaded with the current state of the industry. Now, as Wheat said, a lot of the gross income is used to cover the huge amounts of money that go into making a game, so when you're projecting 5 million sales and you get 1 million, that alone could be a major crippler. And if you were to continue your usual practice and continue to get underwhelming sales, then you get a bankrupt company.
And if you think companies, especially those that are international, wouldn't continue their usual practices despite increasingly dire financial issues, boy let me tell you a story from outside the video gaming world. No, this is from a seedier world called Online Poker that I have been a part of because I was just the most adorable degenerate. I'll spoiler it though.
Spoiler
The overall point of this spoilered story is that, even with obvious and predictable insolvency staring directly in the face of a company, as long as the top are getting some money and the layman is none the wiser, they can continue to go about their daily routines and practices like nothing's the matter until the bitter end, when the top will still probably get away with it but a lot of other people are kinda pissed. This is the kind of mentality that can lead a huge company like THQ to not only default on a 50 million dollar bank loan, but to wait a bit before saying "Oh okay we're gonna have to declare bankruptcy aight cool". And this was after basically an ENTIRE YEAR of financial failure, a year that STARTED with this
https://www.gamespot.com/news/thq-issued...ce-6349477
If game sales continue to underwhelm game companies, I'm sure some of them will scale back budgets to avoid consistently hemorrhaging money and taking on debts. I'm also sure that some of them will continue to do the same thing full force for as long as they can, until they're forced into bankruptcy, conglomerate merger, or get really goddamn lucky with a couple of huge hit.