Back in the 1980s, when I started gaming, it took a few people perhaps a few weeks to make a good game. Even the mighty Elite - the first proper 3D game and arguably the first proper open-world game - took two guys a few months to put together. A few years later, during the 16-bit era of the Commodore Amiga, SNES and Megadrive (Genesis for you American types), this had increased to teams of a dozen or so taking a few months to a year, tops, to put together a game. The gaming industry was in the good health, with the biggest mega-hits making tens of millions of dollars but even a game selling just a few thousand copies could still turn a profit.
How times have changed. Today, it takes teams of several dozen people anything from two to six years to make a game, with budgets in the tens of millions of dollars. Dozens of game development studios have closed over the course of the last generation of gaming (which began in 2005 with the release of the X-Box 360), in many cases despite selling millions of copies of games. It's no longer enough to be successful. Now you have to produce a fast-selling megahit from day one, otherwise your company might go bust.
It's been a disturbing period. Several of my favourite games of all time are Hostile Waters, Anachronox, Planescape: Torment, Freespace 2 and the Homeworld trilogy, all moderately-budgeted games that sold reasonably well on release but nothing to write home about. Those games simply would not exist in today's publisher-driven marketplace. The entire midlist of gaming - those games that are well above the indie level in terms of both cost and sales but below the mega-hits - has simply evaporated.
A good example of this is Rockstar's May 2012 release Max Payne 3. This game cost an estimated $105 million, not including marketing. The game was required to sell 3 million copies at full price in its first few weeks on sale to break even, which it rather spectacularly failed to do: the game 'only' shifted 440,000 copies in its first month. It is questionable if the game has broken even yet, and if it has it's only a moderate success, especially by Rockstar's standards. Their previous game Red Dead Redemption (released in 2010 had sold 8 million copies since release and, before that, Grand Theft Auto IV (2008) has sold more than 25 million.
Rockstar obviously aren't going bust over this disappointment. Their latest game, Grand Theft Auto V, launches in September and will likely be the biggest-selling game of the year (this year's Call of Duty title notwithstanding). However, with a much vaster gaming environment that GTA4 and with three major protagonists to voice and write rather than one, GTA5's budget is likely considerably larger than even the $100 million of its predecessor.
Last week, Sony announced the existence of the PlayStation 4 console, due for release later this year (probably November). In April Microsoft are expected to announce the release - either this Christmas or early next year - of their successor to the X-Box 360. Both of the new consoles are going to be more powerful and more impressive than their forebears. The PS4 has 16 times the memory and a vastly more powerful graphics card and CPU than its forebear. Crucially, it's also based around off-the-shelf PC hardware rather than dedicated technology, keeping costs down and making games development and porting between the platforms much easier. Nevertheless, the arrival of the new consoles is hugely problematic for studios. Games will now require more advanced graphics and even more resources to make them look as good as possible. Some gaming companies are already warning that budgets for the next generation of gaming could balloon out of control and leave very few companies and franchises standing. The massive popularity of Facebook games and mobile games is also begging the question: do gamers really want even moar graphics? Sony desperately need the PS4 to be a huge hit to help arrest their company's decade-long decline, but it's far from certain it will be.
Some companies are already taking avoiding action. Obsidian Entertainment are developing their new epic fantasy RPG, Project Eternity, for PC and Mac alone (but don't be surprised to see mobile/tablet versions later on), forsaking the console race altogether. Project Eternity is a game using hand-drawn 2D artwork for its background and 3D character models. This keeps costs and development time down immensely. The game was greenlit (via the Kickstarter service) only in October, but is expected to ship in early 2014, after less than 18 months of development. The Dragon Age games, on the other hand, are full 3D titles, which each item in the game taking anything from hours to weeks to create and texture. The original Dragon Age title took about five years to make, with its sequel re-using many of its assets. Dragon Age III, due in 2014, will have taken about three years to develop. All three games had budgets comfortably in the tens of millions, whilst Project Eternity's budget is only about $5 million ($4.1 million or so of that from Kickstarter). As the above screenshot shows, Project Eternity is still a good-looking game by any measure. Obsidian have simply been a lot more careful about where to put its money and to minimise its risks.
If a lot more companies take steps like these, the next generation could be a fruitful time for innovation in gaming. However, the blunt forces approach taken so far by Sony, and likely by Microsoft as well, is not encouraging. If sales of the new consoles and their games are down whilst budgets continue to escalate past the point of sustainability, we could see the entire notion of a video game console disappear altogether. Of course, that may not entirely be a bad thing if it results in more rewarding and original games appearing on other platforms. As always, time will tell.