In my day job, viewers, I’m the Features Editor of a videogames trade newspaper called Computer Trade Weekly.

This job comes with all sorts of glamorous and exciting benefits, such as ones I can’t remember right now, but it also means I get to be privy to lots of detailed financial information about all the companies in the games industry. Yeah, NOW you’re jealous.

Anyway, as a result of this, I recently conducted an investigation into how the world’s games firms had done in 2001. And the answer was, “Not very well”. Even though 2001 was the biggest year for videogames sales ever, with both number of games sold and amount of money generated at all-time highs, almost no games firm actually managed to turn a profit. Even huge firms like EA and Square were posting big losses, and the industry as a whole spent hundreds of millions (whichever currency you choose to measure with) more than it earned. Although the industry’s oft-trumpeted claim that it brings in more money than the movie or music businesses is basically true, the difference is that those industries actually make a profit from all the money they bring in, where the games biz doesn’t. So far so “Why should I care?”, right?

Wrong. There IS a reason that you should care about the fact, although don’t worry, it isn’t that you should feel sorry for all the poor old videogames companies. No, the mess they’re in is their own stupid fault. But while they try to dig themselves out of the horrible financial hole they’re nearly all in, the implications for games fans could be positive. And not just because it might mean that 3DO will go bust and stop inflicting unbelievably terrible Army Men games on us all, either.

By now you’re probably wondering how on Earth the imminent bankruptcy of every videogame company in the world could possibly be good news for gamers. How convenient, then, that the answer is to be found on the very next page.

The reason that so many games companies are in so much financial trouble nowadays is that the economic model of selling videogames is no longer viable. Selling games to a fairly small audience for £40 each was okay when they only cost you a couple of hundred thousand to develop, as most games did back in the days of the 16-bit consoles like the Mega Drive and SNES. But while the games audience has grown since then, it hasn’t grown nearly as much as development costs have.

You can see the proof of this in the sales of "Who Wants To Be A Millionaire?"
I bet almost none of you have any serious-gamer friends who own a copy of this game. And yet, by selling so many copies (it was last year’s biggest-selling game by a huge margin) to casual gamers – the mums, dads, kids and granny market – WWTBAM showed exactly how far away we are from having a true mainstream market for gaming. Games are still a niche interest, and that’s no good to games companies when their development costs are at least ten times as high as they used to be but the audience is only twice as big.

Anyway, we’re getting near the bottom of the page and I haven’t told you why all this is good news yet. The reason it’s good is that the economic unviability of modern games for all but a very few publishers means that game firms are turning their attention away from the sort of dull, overblown epics we’ve been drowning in for the last few years, and looking again at ways to make snappy, short, fun games that they can turn out quickly and make a profit on. Which in practice means Game Boy Advance games, mobile phone games, and all sorts of similar low-tech options that will mean we all actually get to use our imaginations when playing games again.

And personally speaking, chums, even the state-of-the-art specs of the Xbox are a pathetically poor substitute for the power of my imagination. Games can never completely recreate reality, and the closer they get the harder it becomes for your mind to do the job itself. Let’s have games again with simple graphics whose only purpose is to show the relative positions of objects, and let’s let our brains fill in the rest. Trust me, it’s really a lot more fun that way. And Lord knows, most of them could certainly do with the exercise.