This topic has been bugging me for quite a bit, but after EA announced that they would be laying off another 300 of it’s employees, I think this may be a good thing to discuss.
For those of you who don’t remember or are not old enough to remember, back in 1983 the American Video Game Industry outright crashed, total industry value dropping 97% over the course of two years. Nintendo of course revitalized the industry 5 years later when the original NES became a hit on the market.
A few things that caused the crash included:
~An over abundance of Consoles on the market. At least 12-14 of them depending on clones.
~Atari had nearly reached Market Satruation, and new consoles had been slated for release the next year.
~High Profile Failures, and rehashed sequels.
~And an American Dollar Value Drop.
In recent years we have seen several similar scenarios, such as:
~An over-abundance of consoles on the market. Last generation we had 5 (Wii, Ds, PS3, PSP, Xbox 360) + 2 if you count Steam/Pc as a console-like service and if you consider Android/Iphone games it’s own group. In the coming years we will have; Wii U, 3DS, PS4, Vita, Xbox 1, Ouya, Pc/Steam, Iphone/Android, and the rumored upcoming “Steam Box”, leaving us at 9, 10 depending on how long Sony supports the PS3 for. The market is getting very crowded. A counter argument to this is the fact multi-plats have become far more common, but how does that balance out with Hardware Sales in general? The hardware manufactures won’t make money if there is too many choices to make.
~We have reached Market Saturation and are moving into another Console Generation. Which on the TV Hardware side has either had poor sales (Wii U) or poor press (Xbox 1), and with the Vita seemingly getting ready to take the trip across the river of Acheron. The 3DS seems to be the main exception to this, as they have sold 30 million copies and haven’t even released a Pokémon Game yet.
~High Profile Failures and Rehashed Sequels. With so many big companies playing it safe, slowly having all of their IP’s degenerate into sequel rot, people are outright getting tired of this strategy and have stopped buying sequels. Even Satoru Iwata admitted that was to be something that Nintendo have to change to avert a total disaster on their end.
This is also highlighted by the fact that too much money is getting poured into games to ever possibly make a profit. EA has recently said they wanted to milk an extra $80 in DLC off the consumer, and are no longer putting up any not-online games on the market to once again help promote their online market.
~I know there are better experts on the site, but this seems to be the only point that hasn’t repeated itself. But if it does, the soup of Disaster will have been made again.
So what do you think? Will this happen or will the industry avert this course in time? If we do face another video game crash within the next year or two, what do you think will happen? Which companies do you think will live though it? And which companies are going to get hit the hardest?