Hollywood Killed the Video Game

A Slate.com article blames something other than the economy for video game industry layoffs and studio closings. Now that's news.

N. Evan Van Zelfden, who has written for Reuters and the Economist, may be onto something when he says that game publishers routinely spend more than they make. But I wonder if his pitch toward the end of the article about scaling back games to fit the Depression-era nickelodeon model of Hollywood will encourage powerhouse publishers like EA to make more shovelware instead of quality gaming experiences?

Even more interesting, though, is his analysis of the blockbuster model in the video game industry:

The industry has long discussed going with this "Hollywood model," in which a few games/movies turn a profit, those hits more than covering the other losses. The analogy between the Hollywood blockbuster model and the games business falls apart, however, because of the huge difference in overhead costs. Electronic Arts steadily employs 7,400 developers. The industry standard is a $10,000 man-month, meaning the company burns through more than $74 million for development each month. The big Hollywood studios, by contrast, make movies by giving money to temporary production companies, which then hire temporary crews with one-project contracts. The temporary entity will make the film from start to finish. And once production is complete, the studio receives a finished product that it can distribute to theaters-without the continued overhead expenses that game publishers often face.

That could lead to more temp workers in the industry – more developers, artists, programmers and writers living the lives of vagrants QA testers, always waiting for the layoff sprees. It may be a better way to make games; but I don't know that it's a better way to employ workers.

If only the video game industry had labor unions…

Hollywood Killed the Video Game

Cheers for the tip, Frederic!

What's Killing the Video-Game Business? [Slate.com]