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Published on March 31st, 2012 | by Shawn Long, Features Editor

Are We Heading Towards Another Video Game Crash?

Things are changing in the video game industry, whether we like it or not. However, not since the North American video game crash of 1983  has the industry changed so much in a short bit of time. History is important, but only if you learn from your mistakes. Unfathomably, it doesn’t seem that the industry has learned from that.

SEGA has recently announced its restructure plan and massive losses, and now SEGA of America has been for the most part wiped out. This isn’t a small indie company, this is freaking SEGA. You know, the developers of Virtua Fighter, Sonic the Hedgehog, House of the Dead, along with countless other franchises. SEGA used to be one of the biggest console companies in the industry, and now its being reduced to rubble. It’s sickening to me, because SEGA has always stood out to me as a developer, publisher and console maker. The company has taken risks, and now it seems like its catching up to them. SEGA dying is just going to lead to less companies taking risks and trying new things, which is a shame.

SAVE SEGA DAMMIT!

SEGA isn’t the only company hanging on by a thread. THQ has been rumored lately as having the same fate of SEGA, reporting massive losses and cancelled projects. This isn’t another small company, this is THQ. The publishers of the UFC and WWE game franchises, games that constantly sell over $1 million each year. Ever heard of a game called SOCOM? Of course you have. Did you know that the studio that makes the SOCOM series just got shut down? Yeah, I’m shocked too. SOCOM was one of the biggest franchises on the PS2, and now Zipper Interactive, the company that was making them, is no more. Why is all this happening?

There is a number of reasons that could be leading to all the these recent happenings. Some are more possible then others in my opinion, but I think they should be mentioned anyways. A lot of people like to point to tablets and smart phones taking up a portion of the gaming market. I can understand that, but in no way do I think that a tablet will ever replace a handheld or a console for two simple reasons: Reason one is that a tablet and a phone lacks a clear and concise control scheme and doesn’t offer a traditional controller. Reason two is no matter what games come out for the devices, they will never have the AAA first-party titles that a gaming device needs to stand out from the crowd.

Developmental costs is another reason that is thrown out a lot, and I think is a valid point. Current consoles cost a good bit to develop for, because of the technology involved. Piracy is running rampant and companies are losing money. While I understand that point, I can’t help but feel that developers should have a base idea of what their game is going to sell, and should use their assets more wisely. If you are making a niche game, don’t throw $70 million into it to have an awesome graphics engine, then complain when you don’t sell a ton of copies.

The main reason I think all of this is happening is simple: Greed. The gaming industry has adopted a cut-throat business model, with your cookie cutter games being the ones of choice. Companies that make a profit aren’t satisfied; they want more profit. I understand the basic business model, but there has to be a point where you say enough is enough. Look at the rumors for the next Xbox and PlayStation consoles. The most popular thing being talked about is not being able to play used games on the system. Are you kidding me? That is the stupidest thing I have heard in my 20 plus years of gaming. So, I won’t be able to buy games from eBay or GameStop, I will have to buy a new copy to play it on my system? Well, what if I want a game that is four years old and isn’t being sold in most stores anymore, what do I do then? Exactly. It’s not a well thought out business model, and will fail miserably if implemented.

Final Truth:

The combination of greed, piracy, rising developmental costs, and companies being afraid of breaking from the norm is leading us down a very scary path. We may be heading towards another video game crash, but we may not. It may just end up changing the way games are developed, and who is making the said games. Regaurdless, something is changing in the gaming industry, and I think the next three years are going to be very interesting, in all the wrong ways. Expect to see your favorite companies going out of business, or changing their business model. It’s a sad state of affairs, but I don’t see the light at the end of the tunnel…yet.

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About the Author

Gaming for 23 years! Primarily into Nintendo systems, but play everything. Add me on Facebook, Shawn Long, on Twitter @ShawnLong85 or email me at slong@gamingtruth.com



4 Responses to Are We Heading Towards Another Video Game Crash?

  1. DeejayKnight says:

    AMAZING article, Shawn. Great questions & hopefully it enlightens gamers to what’s truly going on in the industry.

  2. Another thing to consider is that most articles like this one come from the perspective of so-called “hard-core gamers”. These folks are the early-adopters of new consoles and handhelds and have the idea that the industry somehow revolves around them.  There is not room enough in the industry for 3 major console companies if the only adopters are hard-core gamers. Tablets and smart-phones are pulling the so-called “casual gamers” away from traditional consoles, leaving behind only the hard-core gamers to prop up the whole console industry. This won’t work. AAA blockbuster titles appeal to the hard-core crowd, but aren’t enough to sustain the whole thing… especially when sequels to franchises like Call of Duty are pumped out every year, trying to get the bulk of the cash from these gamers. This is where the “greed” factor really fits in. These days, the fact is there ARE tangible controllers one may purchase as well as HDMI cables that connect these tablets and even some of the phones to a TV, turning them into a “video game console” that DOES have some decent titles with 3D graphics that really are half-decent. These games usually sell for around $5-$10 and look and handle almost as good as any console game. Look at Shadowgun or NOVA for Android, for example. Not quite as good as Gears of War or HALO to be sure, but for $5..?  Now… I am a video game console and game collector, I have and play it all, including PS3 and Xbox 360, but I take no position n the matter. Whatever will be will be, and rest assured there will always be AAA blockbusters out there to be played…on something. There will just be fewer, and the ones that will be selling will be the sure-fire winners, or they will quickly disappear. The dedicated console won’t die, at least for awhile, rather it will shrink down to a niche audience (the hard-core gamer), with no sign of recovery to the former status quo. Don’t take my word for it… just watch as time goes by. 

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