What's Really Destroying the Video Game Industry Revealed
It was the year everything became accessible, all at once.
A few months ago, a prolific name in video games asked me what factors negatively impact the video game industry. Answering what I thought would be a simple question led me down a nightmarish rabbit hole of inverted best practices and amateur leadership in business. The articles I’ll be posting over the next several weeks on this topic are distilled synopses from my original report on what’s really destroying the video game industry.
Once you’re finished reading this article, don’t forget to read my follow-up articles about how Games as a Service and clumsy brand management are helping to destroy the video game industry.
But to start, I'm going to cover how an unprecedented confluence of events began to unfold in 2012. There was the rise of crowdfunding and the gig economy, the industry shifted toward digital distribution, the video game press gained an unprecedented amount of industry influence, and an abundance of IP was available for licensing. It was the year everything became accessible, all at once.
Earn passive income with Honeygain by sharing your unused internet bandwidth. Your privacy is protected and you get paid for the data shared. Install the app now and get a $3 starter gift!
Video game production on easy mode
When Double Fine Production’s Broken Age became the first video game to raise over US $1 million on a crowdfunding platform, it legitimized crowdfunding as an alternative fundraising route for small and independent video game studios.1 2
Amid the legitimization of crowdfunding, the gig economy was making all kinds of freelance talent easier to source through sites like Fiverr. All of a sudden, developers had access to large pools of money with no strings attached. They could then turn around and use that money to hire freelance creatives, programmers, and more at competitive rates with few hurdles.
The same year saw the introduction of Steam Greenlight, a feature of Valve’s Steam digital storefront implemented to help indie developers sell their games on Steam. For a nominal fee of US $100, developers could make their game eligible for Greenlight. Steam users would then choose what games were added to the service by way of a community-wide vote.
Supercharge your savings with a Canadian Tax-Free Savings Account (TFSA). Grow your money tax-free and enjoy financial flexibility. Open your TFSA now and maximize your wealth!
From journalists to gatekeepers
These trends made fundraising, talent acquisition, and digital publishing cheaper and more accessible than ever. But crowdfunding and Steam Greenlight depended on market exposure through mass communication. Where before developers needed to raise money to make their product and be noticed, now they needed to be noticed to raise the money to make their product.
Developers found that the most effective way to get attention for their fundraising was to be featured by the video game press. They had to appeal to video game news blogs, which were seen as the key to the wider video game consumer market. Indie developers’ dependence on the video game press would lead to an unhealthy power imbalance between the two, creating a kind of “slush fund journalism”. This came at a time when there was already an increase in conflict of interest controversies—such as when EA and BioWare released Mass Effect 3, in which a news reporter character was voiced by and modeled after the likeness of video game news “host and reviewer” Jessica Chobot.
Around 2014, many video game media personalities had begun to divorce themselves from the terms “journalist” and “reporter”. Instead, they opted for terms like “content writer”, “host”, and “reviewer”. Ostensibly, this was to skirt around issues of ethics and integrity, but in some cases may have been encouraged by employers due to the massive pay disparity between some job titles. For example, the daily earnings of a journalist can reach nearly US $700,3 while a mere “content writer” makes less than US $300 and typically isn’t salaried. In either case, it cheapened access to media attention for video game developers and publishers alike.
A license to anything
Over the next two years, major studios sold off or otherwise abandoned lesser-known intellectual properties to focus on flagship brands. This led to opportunities for IP licensing by smaller studios and left gaps in the market for similar titles and gameplay experiences. Meanwhile, the money generated or otherwise freed from shifting exclusive focus to flagship brands helped finance grossly inflated budgets for “AAA” studios.
In a single year, the need for the patronage of large publishers virtually evaporated due to low publishing costs. Freelance talent became cheap and easy to source. Video game news media personalities were eager to be in direct contact with developers, becoming critical influencers of video game development. Finally, industry veterans who could have brought their experience and best practices were priced out of the market for many sub-AAA development studios.
As a result, the video game market exploded over the next two years, with Steam Spy—a service that attempts to track the number of video game sales offered by Steam—reporting a nearly 3x increase in the number of games released on Steam from 2013 to 2014.4 5
https://www.cbr.com/broken-age-crowdfunding-kickstarter/
https://www.kickstarter.com/projects/doublefine/double-fine-adventure/description
https://www.indeed.com/career/journalist/salaries
https://steamspy.com/year/2013
https://steamspy.com/year/2014