How Long Can AAA Publishers Survive?

May 11, 2013 | By | 6 Comments

For all of the great gaming experiences that have come out of the current generation, it feels as if it will be better known as a time of bloated budgets. Just this year we’ve heard of publishers like Square Enix, Capcom, and EA say that big-budget titles like Tomb Raider, Resident Evil 6, and Dead Space 3 failed to meet whatever outrageous projections their bean counters were aiming for, all despite selling millions of copies each.

Perhaps more than anything, we’ll look to this generation as the point where the AAA publishers began to stumble towards an inevitable crash sometime in the near future.

It’s gotten to the point where one has to wonder if conglomerate publishers will even be able to survive long into the next generation. Even with successful games like SimCity, Madden NFL, and FIFA, EA laid off as much as 10 percent of their workforce in April — as many as 900 workers, if last year’s numbers held.

Job cuts seem to be nothing more than a bodily function for these companies. Completion of a project was once cause for celebration for developers; now workers are unceremoniously thrown out like yesterday’s trash. It happened recently with Activision’s Deadpool, and there’s no reason to believe it won’t happen again. Big publishers are no longer treating their developers like long-term employees, instead hiring them as if they were nothing more than summer interns. While publishers can repeat this to make fast cash, studios without a real sense of cohesion and identity aren’t sustainable in the long run.

There’s no doubt that game development is an expensive endeavor; the use of Kickstarter by fledgling startups and veteran studios alike are testament to that. That cost will only rise with the next generation of consoles, even with the PS4 allegedly being so much easier to develop for.

Meanwhile, AAA publishers have done nothing to suggest that they’re getting any smarter with their money. EA, relentlessly chasing after Activision’s Call of Duty, constantly pours untold millions into new engines for Battlefield and Medal of Honor games that will always sell less than the competition’s stalwart franchise. They don’t seem to realize that Activision has been raking in the cash by annualizing a series built on the same reliable tech six years running, making only the necessary tweaks to justify a yearly purchase from its massive fan base. Whatever the exact numbers, one doesn’t have to be a genius to realize that Activision’s method is not only more effective, but much cheaper.

Elsewhere, Capcom is promoting the upcoming Resident Evil: Revelations next week by taking an Olympic-sized swimming pool in London and filling it with fake blood and body parts. In addition to all of those props, they’ll hire lifeguards and deck them out in zombie makeup. The theatrics are amusing, but all of this is for a port of a handheld game that originally came out last year.

It all spells trouble for AAA publishers outside of the three first-parties. They inflate development teams during crunch time to get a game out the door, spend needless money on marketing stunts that ultimately don’t matter, and then turn around and tell us that online passes and microtransactions are necessary to turn a profit.

Bullshit.

There are smaller developers and publishers making games just as large and immersive, all while touting success despite selling less than something like Resident Evil 6. Demon’s Souls sold well enough for From Software to pursue developing a spiritual successor, which in turn did well enough to earn a proper sequel of its own. That’s because publishers Atlus and Namco Bandai marketed them correctly and didn’t prop them up against an established juggernaut, and everyone involved was rewarded for it. No day-one season passes for $20, just smartly budgeted games that were compelling enough to be worth the asking price.

The first parties aren’t without fault, but they seem less prone to the mistakes third-party publishers are constantly making. Sony and Nintendo can put out new releases in series like Infamous and Fire Emblem that aren’t as popular as their bread and butter franchises, simply because they know who they’re selling them to. Meanwhile, EA can’t justify putting out a sequel to Mirror’s Edge despite the highly vocal cult following it has, no doubt because they believe that they’d need a huge development and marketing budget to get it out the door.

Then there’s the growing number of small studios putting games out on digital marketplaces like PlayStation Network, Xbox Live Arcade, Nintendo eShop, and Steam that are just as much fun to play as anything put out by major publishers, all at a fraction of the cost. Hotline Miami sold 300,000 downloads on PC — a number that would cause Square Enix execs to heave themselves from a bell tower — and was enough for Dennaton Games to justify bringing the game to PS3 and Vita and start work on a full sequel. Not bad for a two-man operation.

AAA publishers are selling millions of copies of their games and are still losing money. Worse yet, they expect their customers to foot the bill for their shoddy business models. It’s only a matter of time before they crash and burn, leaving smaller, more intelligent companies to pick up the pieces. I just wish that they could see it coming and change course.