I think many problems of the Gaming Industry is due to themselves.
With all of the hardware that has been stuffed inside each console, both of them are shaping up to be quite the investment at launch. A recent rumour suggests that the standard model of the PS5, the one with a disc-drive, will cost 499,- at launch; the same price as the PS3 something that turned out to be rather problematic for that console. Now, the digital-only edition is rumoured to sport a much more agreeable price of 399,- but that’s still too expensive if you ask me. You’re (hard)core fanbase will buy your console no problem, but for more casual gamers and newcomers these prices are without a doubt too high.
It does fit in a trend of the gaming industry though: the rising development costs forcing them to either raise the price of their products, something they’ve up until now been very hesitant to do or find other ways to offset the costs. This last reason is why earning-models like free-to-start, microtransactions, DLC and loot boxes have become so dominating in the industry in the last few years, even getting included in premium AAA-games. While the industry is saying that these price hikes and earning models are just the next inevitable and logical step in the industry I feel that this is view is misleading. Factors are influencing the higher production costs and price hikes, but I feel that the biggest reason is one that the gaming industry has done to themselves. They’ve been so occupied at pushing the technology forward, to get bigger, better and faster experiences, that they’re not enough time for said technology to become commonplace, improve and affordable.
How have I come to this opinion?
First I want to tell the story that explains why I feel this way. A few weeks ago I had a discussion with my intern supervisor and one of the things that came up was the question why many old-fashioned and often outdated techniques were still used instead of the newer ones. The answer to this is simple: costs. Yes, the new methods would be more effective but they also cost (considerably) more. Why? Because these methods often use techniques/equipment that are relatively new themselves and are thus expensive to produce and/or work with.
Every new piece of equipment, technique, product etc. under development follow the overall same few steps of development. It’s first made just to see if it can be done, to show what it’s capable of and what it can mean for the future. It’s functional, but often not ideal using expensive equipment, hard to work with or has a lot of downsides to it. After this initial development it is commonplace that, if it looks promising, you continue by looking into how you can make the process more efficient and manageable. After a few years, because you developed the technique further and made it all more efficient and cost-effective you end up with something that more and more people can and/or will use because the lower costs and the better performance makes it more appealing and affordable for people to buy and use. It becomes more commonplace. Sure, you have people buying the product before this point but these are the people with big pockets or who just really need that specific product, mostly when said product is (at the time) the only one of its kind.
It’s in this 2nd step of the process, where the product is made better and more affordable, where the problem the gaming industry made comes into play. There is no shortage of console developers and game developers pushing the envelope, that’s how you got things like 4K support and hyper-realistic graphics in the first place. Nothing wrong with that at all, you actually need those people if you want your industry to progress, but the problem is the pace at which they do it. They’ve put so much effort into getting things like 4K and 60fps running that once they do they don’t give enough time to develop it further and already move on to the next thing before it has enough time to become commonplace and affordable yet. Let’s take the whole 4K/8K thing as an example.
4K, 8K: Why?
4K TV’s and monitors were first brought to market by LG in 2012, while the first 4K supported consoles, the PS4 Pro and the Xbox One X, were released four years later in 2016. 4K TV’s were, and still are, expensive with most 4K TV’s I’ve seen currently selling for around 5000,-. This was even worse back then, but by 2016 the costs had come down a bit and the amount of 4K TV and Monitors sold took a noticeable jump. OK, I can see why Sony and Microsoft decided to introduce their 4K supported systems that year. The 4K market was starting to get off the ground and from what I could find, 4K penetration in the US (the gaming industries main battleground) in 2018 was around 31%, meaning almost a third of all households in the US-owned a 4K product with 2019 having been projected to rise to a penetration of 35%. I admit the whole story that was in my head about the two big platform holders pushing 4K and such so hard while the amount of 4K TV’s and monitors in the wild was so few that only a very small percentage could make use of it doesn’t hold up. With 8K though, it’s a different story.
Just like LG introduced a 4K TV to the market in 2012, they were the first to introduce an 8K one as well in 2018. You can already see the first problem taking shape: the PS4 Pro and the Xbox One X came to the market four years after the introduction of 4K when that market started to boom but as the both the PS5 and Xbox series X will be released this year, that gives us only a two-year gap. This is too early for the 8K market to have had a big enough impact, to be affordable and be in enough homes. It’s predicted to go big, but that hasn’t happened yet and most predictions state that it may take up to 2025 for that to happen. Even if the 8K market starts to boom, don’t you think that people would make the jump to the (relatively) cheaper 4K TV before they would even consider an 8K one? So that begs the question: why include 5K technology in your consoles if only a small amount of people will be able to take advantage of it? Like I said: it’s because the industry is moving too fast, not giving the current technology enough time to sink in because they’ve already ‘done’ it and they don’t see the value in continuing it. What sounds better: ‘Buy our new Xbox Series X, it has 4K (again)’ or ‘Buy our new Xbox series X it has 8K, that’s double the K’s!!!’.
Yeah, exactly. They keep pushing forward in their attempt to outdo the competition and wow gamers, leaving their earlier achievements in the dust. Remember, the PS4 Pro doesn’t have ‘real’ 4K support. The system essentially cheats by getting so close to actual 4K that the human eye can’t spot the difference, but technically, it’s not the real deal. In short: I think the 8K tech that Sony and Microsoft have decided to put into their new consoles don’t serve any other purpose other than a marketing trick and (will) make their consoles needlessly expensive.
|Hitman 4K resolution vs 8K resolution. Be honest here, can you spot the difference? I rest my case.|
Influence on the developers
I’ve put a lot of focus on the console holder up until now, so let’s look at how game developers themselves are affected by all of this. We’ve seen the release of some impressive games in the last few years. Red Dead Redemption 2, The Last of Us part II etc. Games pushing many limits in terms of scope, story and technical performance. With both new consoles sporting 8K, you know that Sony and Microsoft are developing games meant to take advantage of that. This means that those games will have a higher development cost as well and it won't stay with those few initial games. Many more studios are going to develop 8K games and not all will have the big pockets of Sony and Microsoft behind them. To get to the point here: many more game developers will try and make their games 8K compatible, increasing the development costs even further. I can’t blame them really. With how demanding and focused the (hard)core gaming crowd is on technical specs, even though the differences are minimal these days, they would receive more negative attention from fans if they didn’t at least try.
We’re currently in the middle of a vacuum of sorts when it comes to this. We don’t know what the price of the new consoles will be, only rumoured prices, and when it comes to the games themselves we’re starting to hear more. NBA 2K21 will cost 70,- bucks on new consoles (because that game needed it…) and analysts predict that most other games from the upcoming console generation will be 70,- as well, the first game price-hike since 2005/2006 I believe. That games are getting more expensive isn’t really the problem here. Development costs have risen considerably in the last few years, reportedly somewhere between 200-300%. While I think that a big part of this is due to developers working with very expensive technology before they’ve had time to develop more, become commonplace and affordable the whole shebang I’ve already talked about in spades, they’re also other factors in play here. Inflation is a thing that exists, higher taxes and paying your employees and giving them more time (that last one is debatable these days) all contribute to higher development costs as well.
This (very likely) price-hike is something that has been looming over the industry for years. It just took so very long to happen because developers were very hesitant to do so out of fear that many gamers would find that too expensive and stay away from their games. Instead, they turned to other, very unhealthy, ways of offsetting the costs with microtransaction and loot-boxes and the like. I could go on and on why this is such an unhealthy, and not to mention predatory, way to rake in the cash but I digress. This piece has gotten big enough already. I just want to say that I would find this price-hike easier to swallow if they would stop with these unhealthy and predatory monetization techniques, but I just know that won’t.
It’s my opinion that the gaming industry should slow itself down. It's focusing too much on ‘the next-big-thing’ instead of appreciating and improving on the things it currently already has. If it would just wait a while, let the price of equipment and techniques for current stuff like 4K catch up to reasonable levels, it would be much better and healthier for the industry. Sadly, I highly doubt that this will happen. The way the industry is going at the moment is unhealthy and unsustainable and that bubble will have to pop someday. When that day is, and what the impact of it will be, no one knows but we just have to hope it starts to do a course-correction to limit the damage before then.