XBOX AND THE PC

Where do you start? The PC market shows perhaps better than any other exactly how much of a stupid mess the games industry has got itself into on account of the absurd economic model under which we operate. Hundreds and hundreds of PC games are released every year, yet about five will have even the slightest chance of making any real money. Trouble is, those five will make so *much* money that (a) it becomes insane for the publisher to do anything other than keep churning out more games in the same franchise until they die and cockroaches rule the Earth, and (b) the developers of those games will become so rich that they never have to care about doing their jobs properly ever again. The obvious illustration of the second point is Daikatana. Three years late, completely crap and STILL full of bugs (the first patch disgruntled consumers were expected to download to get the damn thing working properly was a staggering 44MB in size), the farce surrounding the game is undoubtedly partly responsible for the ugly situation Eidos currently finds it in - a situation which could have far-reaching implications for the whole business. How much, though, does Ion Storm’s John Romero have to care about that? This much: Not at all. If he gets tired of the avalanche of criticism, all he has to do is go for a nice relaxing drive in one of his Ferraris, after all. If you’re Eidos, and you really want to hurry him up a bit, what can you threaten him with? That you won’t buy him any more? Ooh, that’s going to hurt.

Now, you might just think that’s the voice of bitterness and envy speaking, and of course it is. But it’s also a serious point. The all-or-nothing economic model of the games business means that your company (whether development or publisher) is either in debt up to the eyeballs or, if you get lucky, suddenly richer than God, and neither of those situations is in any way conducive to a healthy creative or business atmosphere. You’re either desperate to jump on the latest bandwagon and churn out some crappy me-too play-safe rubbish in order to stay out of the bankruptcy courts, or so set up for life that you never have to give a monkey’s whether you ever do anything good, profitable, or on time ever again, and neither scenario is any good for the industry as a whole. In the short term, the industry can get away with it, because we’re still living on the creative talent that grew up in the early 90s when it was relatively easy to break into game development. In the slightly longer term, though, we’re going to run out of people who have even the vaguest grasp of the mindset required to come up with the new ideas that everyone else can then exploit for several years.

If you’ve noticed that we’re talking in fairly general terms here rather than about specifics of the PC market, then hey, well done for still paying attention this far in. But also, that’s because the PC market specifically is so evidently screwed and dying that even the keenest exponent of the bleeding obvious shies away from going through it all again. We’ve been making the same stupid mistakes for so long now (bugged product, writing for specs that only the tiniest fraction of the potential market really has, the nightmarish inability to make hardware compatible with other hardware) that even when we do finally wake up and do something about one of them (binning those bloody awful cardboard boxes at long last) it’s way too late to make a difference. With the advent of the Xbox, even the PC’s most diehard supporters are conceding that its days as a leading edge format are about to be over for ever, and if there’s one good thing to be taken from the whole depressing current situation, it’s surely that.

And speaking of the Xbox, what of its chances? It’s still too early to really say, but Microsoft’s much-mooted monster machine is rapidly becoming the one beacon of hope for many in the industry, which just goes to show just how desperate our situation is if we’re counting on Microsoft to bale us out. It takes a major triumph of hope over experience to believe that a company who after five years of trying still can’t even produce simple operating systems and web browsers that work properly is suddenly going to come up with the goods with regard to the cutting-edge tachnology of a games console. (Because, of course, you can’t just bung it out anyway and release a patch every time someone finds some disastrous bug in it). And yet, everyone seems to be crossing their fingers and praying that it’ll, somehow, happen anyway.

Even if it does, though, it’s hard to see that the fundamental problems described earlier, in terms of new consoles offering nothing new in the way of gameplay to refresh the enthusiasm of weary consumers, won’t afflict Xbox every bit as much as they have the DC and PS2. Even if you accept the arguable notion that PC development has historically been more innovative and diverse than that on consoles (and personally I don’t), there’s no guarantee that PC developers will necessarily move to the Xbox. Most of them are far too used to being able to up the specs of the target machine every time they encounter a coding problem, far too dazzled by the prospect of being able to show off on the latest fancy graphics card - far too indisciplined, basically, to ever make a decent fist of console development. Which will leave us with yet more of the same old tosh, only by the time the Xbox makes it out the punters will be even MORE fed up of it.

The industry is racing to embrace the Xbox, but for no apparent other reason than that it’s something new (and that it’s not as unfriendly as the PS2), but what little concrete information there is about development plans so far doesn’t suggest that publishers have any notions of actually doing anything new with it. Which means that we’ll be expecting people who’ve just blown several hundred quid on a PS2 to splash out another big wad of cash barely a year later, in order to play the same old games yet again. And that strikes me as a little on the optimistic side.

THE FUTURE, AND HOW TO STOP IT

So there we have it. Over the last three weeks, what we’ve seen is that the entire worldwide videogames industry is currently thundering like an enormous steam train at maximum speed directly towards a colossal brick wall, hoping against hope that sheer brute force and weight of cash will be enough to break through to the promised lands of infinite profit at the other side. In fact, though, it looks like what’s really on the other side of the wall is the edge of a cliff, and time to divert the train to safety is fast running out. Luckily, there’s only really one simple thing we have to realise and get a grip on in order to understand the situation and avert the catastrophe, and it’s this: THE ENTIRE ECONOMIC MODEL OF THE VIDEOGAMES INDUSTRY IS FATALLY FLAWED. Remember, we operate in a business that allegedly makes more money than the entire film or movie industries, and yet practically no-one seems to actually make a profit as it is (can *you* name three games companies who’ve published figures in the black in the last 12 months?), and costs are about to pretty much double across the board. Erk. Everyone’s bleating about "a transition year" is frankly drivel – the statistics don’t lie, and the statistics say that the industry has sold more games and brought in more money this year than ever before, yet collectively the industry has lost hundreds of millions of pounds (and that’s not taking share-price collapses into account). The simple truth is, there has been NO downturn in the market. So why is everyone still managing to lose truckfuls of money? Well, let’s try it just once more. And this time, listen.

As it stands, games are priced, for no good reason, at a position that takes them out of the mass market. Yes they are. We’ve kidded ourselves for far too long that the once-in-a-blue-moon success of a Gran Turismo or a Final Fantasy disproves that assertion. Much more than any other leisure industry, the drop-off from the top two or three to the rest is terrifyingly steep, and the vast majority of games sell what are in mainstream-culture terms piddly little figures, distorted by the stupid prices to look more glamorous and exciting than they are. For all our self-congratulatory puffery over the last few years, videogames are NOT a massmarket business, and at £40 a time simply never will be.

Of that inflated and offputting price, by far the largest proportions go to the people who do the least work, and have zero creative input – retailers take 40% (discounting notwithstanding, but discounting is in fact just a symptom of the problem anyway) for the onerous task of sticking the thing on a shelf, and the hardware manufacturer takes 25% for generously allowing you the privilege of writing the game in the first place. Add the 17.5% the government snatches in VAT and you’ve hardly got anything left for the people who put up all the money, take all the risk, come up with all the creative ideas and do all the work – the developers and publishers. This isn’t just morally wrong, it’s an obviously insane way of doing business. And yet who insists on perpetrating the status quo with regard to pricing? Publishers. It’s enough to make a strong man weep.

We HAVE to abandon the increasingly ludicrous all-or-nothing model, whereby 1% of games are huge hits and 99% lose money. Bruno Bonnell of Infogrames is absolutely right when he says that we have to stop trying to make every game a blockbusting epic, and concentrate on giving people more manageable games at much lower prices. Those lower prices (and that really means £15, absolutely certainly no more than £20) will generate higher sales across the board, spreading the money around a little more evenly, but far more importantly will enable sales of a much wider range of games, allowing publishers to release innovative games again and still have a chance of making money out of them. Because as we near the point where technology simply isn’t going to get visibly a lot better (at least until we have games that plug directly into your brain), there’s no other way of keeping the punters interested. (And it’s not even their fault. We’ve made them that way.)

"The current situation is probably symptomatic of an industry that’s been dominated by programmers for too long. If you want to get yourself a house, you get an architect to design it, not a firm of builders."