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This is the current hot topic issue the game industry has. If you are not the type of person who keeps a constant eye on the industry, here is a brief summary of how we got here.
2017 was the year where several AAA titles came out, all having either microtransaction, loot boxes and other in-game “micro-purchases”. Again the problem comes when you realize that the game you bought with your hard earned 60$ (or region equivalent), wants you to spend more. The biggest examples of this are Middle Earth-Shadow of War, NBA 2K18, and Star Wars Battlefront 2. The last of which had such a negative impact, that it prompted several countries worldwide to question whether or not loot box system is a form of gambling.
And from there, other issues got reminded, such as pre-orders, season passes, day 0/1/2/3 DLC. etc. etc. News outlets, forms, and the general public focused their outrage on these supposed greed driven tactics that major companies use. And what does one CEO or project director or whatever to do? Go to big news outlets, or have a conference and mention how expensive gaming has become, and maybe the standard 60$ price tag is no longer enough for major titles to be profitable.
And that is the spark that set of the powder keg. Starting multiple debates to the point where some consider, gaming to be divided into two.
How true is the statement: “60$ is not enough for gaming titles.“
Now, outside of corporate PR people, there is a big enough group of fans doing the math and either sympathetically or begrudgingly admit that, yes, owning and managing a big company is expensive. Often pointing things like modern cost of living and office expenses, the large number of employees need to finish on time, how competitive the market has become, marketing, and how the strive for high fidelity titles with constant server support is a constant money sink.
The recent video-research that has shown the numbers, is the one by the youtube channel “Extra Creditz”. And in that video, they calculate everything a major gaming company they will need, from office space to marketing. In the end of it all, for AAA games to be profitable, they should cost even more than 60$. Or at least, for gamers not to be mad about the extra income methods in use.
Now EC is a group of game industry veterans: scriptwriter is a noted game designer and business consultant, and everyone else is/ was an artist/ animator that has worked in the industry. And their video series are often well researched and in a way educational for all, from gamers to developers. So they are well respected enough, so when they posted their research, plenty of people started using it as the prime defense. And while they did make plenty of good points, with time there have been plenty of problems with their video.
Here are some of them:
Also, let it be known that this is just part of the arguments. There are many others, but this is currently the most popular one, so that's why I'm focusing on it.
But now let's move on to the prosecution.
Are games NOT expensive to make?
Now, when we set aside general disgruntlement from players, there are multiple examples of cut corners, tax evasion and lies coming from the same CEO's that cry about how expensive everything is.
Let's start with the biggest cut corner: disposable employees. There are plenty of stories from ex-coders/ QA/ Artists and others, who have only almost bellow 6-months work experience since a common business tactic is to fire people before they hit that mark, so they don't have to give them a better contract(with better insurance and pay in general). There is also outsourcing or opening a studio in a country where they can cut expenses on employee salary by almost half.
Youtube “Super Bunnyhop” made a video a while ago, where he researched and found out that major publisher like Activision/Blizzard, Microsoft, EA, and others create tax shell companies in the Netherlands and Bermuda, where due to law loopholes, they avoid all taxes. Which, research shows that that rounds up to half a billion for most of them.
Now for the biggest for the biggest blow for the defense. Some of the same managers and CEOs after or right before go and talk to the general public about how expensive things are, go on a board meeting with investors, boasting about how much of a success the title was, and even how via microtransaction they raked in almost double the sales units.
The other main point that people bring up is that some expenses are unnecessary. Which logic is also faulty. Here is why:
So what is the conclusion? Well, the truth is, that since numbers keep going around, each one having dubiousness to it. No answer is the right one currently, and there might not even be an answer. However, personally, I'm part of a small third group, the “it does not matter” people. Companies are companies, and companies want profits. It does not matter if the game is free or 100$ if a company can find a small excuse to add microtransaction, DLC, season passes or whatever new comes along. If it can make money, they will be implemented. But maybe with a big outcry, they will consider not doing so aggressively.