Why Booming Sales Can’t Save Studios

Games are doing great these days. I mean, really great. We’re talking about records being broken en masse here, as we head to what seems like the end of the generation. Every other major release is either some sort of huge milestone, an overall broken record, or some combination thereof. At the same time, it seems like video games have never been so unstable. Studios are closing left and right, games are failing, and major publishers talk about games not “meeting expectations” during investor conference calls. So what gives? Why is there such a wide divide between “massive success” and “dismal failure?”

Part of it is just the unpredictable aspects of the market. You would think a Tomb Raider series that started out doing so well in reviews would do great, but it seemed to fizzle as it became a franchise. Then there’s stuff like LawBreakers, which had the Cliffy B name attached to it, that was pretty much dead on arrival. Or how about the second big Deus Ex title, which had tons of marketing juice and talk behind it, then proceeded to sink? You never know sometimes what’s going to be a hit and what isn’t.


Then, there are those hits. I can’t even remember the number of times I’ve read a press release on the latest entry of a franchise being the “fastest-selling” game in that franchise. This is especially true of Nintendo in 2018, with the Nintendo Switch not only being a surprise hit, but the software attach rate being unbelievable. Outside of Nintendo, games like Kingdom Hearts III and God of War are the fastest selling in their series, and Marvel’s Spider-Man ended up being the fastest-selling PlayStation exclusive ever.

These “fastest-selling” accolades are interesting. At first, you might think that it’s some WWE-style “make new accolades as time becomes less forgiving” sort of thing, but it also speaks to the power of the preorder. Day one sales seem to be higher than ever for big games, with most sales driven by preorder exclusives and marketing/social hype. Then, prices drop pretty quickly, usually after a few months. If the game wasn’t a smash hit, the price can drop even sooner, as we’ve seen with Fallout 76.

kh3 2519.jpg

Meanwhile, while plenty of indie games are seeing big successes (especially on the Nintendo Switch), we aren’t really seeing games in that “in-between” space unless they’re smaller, niche Japanese games from companies with safely dedicated audiences. I would have figured Ninja Theory’s Hellblade doing so well would have spurred more mid-budget and smaller games, but that doesn’t seem to have happened. Usually, game devs and pubs rip over themselves to copy successes, but Ninja Theory’s surprise success move may have been too risky (or there are moving parts that haven’t been made public yet).

While there are plenty of success in the AAA space, it’s also important to note how even the big companies are struggling to actually make money. So far some recent stories have been Blizzard being pressured by Activision to straight up make more games, several studio closures including Capcom Vancouver and Telltale Games, and companies like Square Enix reporting losses despite high sales, thanks to high development costs. Destiny 2’s ostensibly successful Forsaken expansion didn’t please Activision, causing a split with Bungie making the game independent. Finally, Monster Hunter: World, my favorite example of weird business stuff in the industry, caused a Capcom stock drop when investors panicked at its numbers dropping slightly well after launch, after already gaining the title of Capcom’s literal best-selling game ever.

Lucas White
Lucas White

Writing Team Lead
Date: 02/12/2019

blog comments powered by Disqus
"Like" CheatCC on Facebook