This Week In The Business: It's The Little Things

Illustration for article titled This Week In The Business: Its The Little Things

QUOTE | “We can’t just be a company that’s only about gigantic big things.” - EA’s Patrick Soderlund, EVP of EA Studios, explaining why the company is working on games like Unravel.

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Elsewhere in the business of gaming this week...

QUOTE | “Starting your own business is a lot of fighting yourself.” - Nick Doerr, co-founder of Mr. Tired Media, talking about the difficulties of starting up their own game company to make Undead Darlings: No Cure for Love.

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QUOTE | “The trick with VR is, it’s going to be incredible, but everyone is going to have to be a little patient.” - Facebook CTO Mike Schroepfer, talking about hurdles like controllers that VR still has to overcome.

QUOTE | “It used to be the top 10, top 50 titles would generate, say, 90 percent of the business. Now it’s down to having to be in the top 10 to actually turn a profit.” - Avalanche Studios New York GM David Grijns, talking about how difficult it is making AAA games like Just Cause 3 today.

QUOTE | “Over a three-year term, based on the historical financial data for a lot of the games in the market at the moment, there’s a return of 438 percent.” - Sean McNicholas, co-founder of Project M, talking about their new mobile game where players can earn real gold, and investors can own and market levels of the game.

QUOTE | “It’s like this breath of fresh air into a franchise.” - Jack Buser, SCEA senior director of PlayStation Now, talking about how the streaming game service, which grew over 300% in the last year, can help game publishers by reviving interest in older titles.

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QUOTE | “There is no market segment or screen that has such a long tail of games and companies making their living from it.” - Peter Warman, CEO of analyst firm Newzoo, explaining why he thinks there is good money to be made on mobile games despite the fact most of the revenue goes to the top 100 games.

STAT | 10,000 – Number of attendees at Minecon 2015 in London, a convention focused on Minecraft; this set a Guinness World Record for the number of attendees at a convention devoted to a single game.

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QUOTE | “For VR as an industry to make progress, people who make content have to make money.” - Sony worldwide studios head Shuhei Yoshida, talking about why Sony won’t be asking for Project Morpheus exclusives from VR developers.

QUOTE | “We seem to like making completely new things.” - Gearbox president and CEO Randy Pitchford, talking about why his studio keeps tackling new IP as well as iterating on successful franchises.

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STAT | $3.8 billion – Amount of money expected to be generated in 2015 globally by game-related videos, according to SuperData; the company found YouTube draws more viewers, but Twitch generates more revenue.

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DISCUSSION

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“It used to be the top 10, top 50 titles would generate, say, 90 percent of the business. Now it’s down to having to be in the top 10 to actually turn a profit.” - Avalanche Studios New York GM David Grijns, talking about how difficult it is making AAA games like Just Cause 3 today.

I’d love to see a bit of a break down of costs for making a AAA game. I’m sure it is very expensive, but I keep reading articles about how the programmers and artists in the game industry don’t make as much money as they would doing the same job else where. That’s on top of all the stories of people having to work crazy long hours. And most publishers have their own engines for their studios to use, while Unreal is now extra cheep for independent studios (like Avalanche). Even during the release of the PS4 and X1, both Sony and Microsoft talked about how the new architecture would help developers make their games easier, and quicker. Sony’s Mark Cerny even showed a graph and went into greater detail about this new gen of games being much faster to make, which i’m sure saves money.

So what is it that is making it so hard for studios to make turn a profit? Is it just the large number of competition, and the relative uncertainties in the industry?