The video game industry has lost its fun

E in sports: the video game market then and now

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The video game industry presents its latest games at Gamescom in Cologne. Photo: Oliver Berg / dpa +++ picture radio dpa +++

Photo: Oliver Berg

At least since the video game “Halo 3” broke sales and turnover records in a very short time in 2007, gamers like to argue that the gaming industry is, in fact, the most important entertainment industry. This struck me as strange in 2009, when I started delving into the medium.

At the school playground, I was alone with my hobby. This probably doesn’t happen to people who are 14 today. Games such as “Fortnite” or “Minecraft” as pop culture phenomena go far beyond the medium of video games. Esports tournaments attract tens of thousands of viewers and award a seven-figure prize pool. Video games, using an expression from the time, made their way into mainstream society. This is also reflected in the economic aspect.

Despite the economic success of investors, the gaming industry has long been ridiculed. In many minds there was a picture of unwashed nerds sitting high in front of computers and programs. It has long been the case that big games are also a product driven by market events and profit prospects. The direction is marked by people in suits. Back in 2009, Bobby Kotick, the highly controversial CEO of games maker Activision because he had reportedly allowed sexual assaults on his company, said in 2009 that he wanted to enjoy video game development. At the time, this statement made negative waves, but now this view is standard. After all, it’s just an industry. It’s about money, not fun.

Production cost of $ 500 million

It’s not that video games have ever existed independently of the market. Already at the beginning of the 1980s, Atari was ordering games which, due to the large brand, had special sales opportunities. In terms of content, developers were given more freedom, but the investment was also much smaller. Hiring a programmer for several months, as was the case with Raiders of the Lost Ark by Howard Scott Warsh, is a much lower risk than having a four-digit team for a few years on Red Dead Redemption 2. The cost of the latter: approximately $ 500 million.

When my beloved “Max Payne 3” was released in 2012, it was named one of the most expensive games of all time, with a development cost of just over $ 100 million. In the meantime, these costs are regularly exceeded. On the one hand, this is due to the increasingly complex technology, which requires specialists to work more and longer. On the other hand, games are getting bigger and longer as many gamers absurdly expect ever longer games for their money – even though video game prices have not increased significantly in the last few decades, adjusted for inflation. While length is often caused by very monotonous content, in order to keep running time and costs as low as possible, this results in increased costs.

High profit possible – but also financial risk

At the same time, higher investments were offset by potentially higher returns: of the ten best-selling video games of all time, eight were released after 2010. But first you have to sell in the tens of millions. The financial risk of spoiling high-budget games is correspondingly high. And even large distributors cannot afford many rivets of this type.

Where so much money is involved, it also becomes interesting for investors. EA and Ubisoft are two of the world’s largest shareholder-owned independent game distributors. It’s a business – and as such is now taken seriously. The US business magazine Bloomberg employs several editors who focus solely on the video game market. Also in German newspapers and magazines, the industry is increasingly appearing in the business department, although there are only a few large studios in Germany. Business section, not in a column. Industry is no longer just a trick.

Maximilian Jan

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