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Is the Video Game Industry Too Rigid to Succeed?

One of the biggest conflicts in video game development involves the frame of mind of the video game studio or the creators on the one hand and financiers and publishing companies on the other. This conflicting viewpoint is often hidden from view. Most people would look at a very successful game franchise like Call of Duty and just see a high quality product with an evolving brand. Most consumers would look at Grand Theft Auto and see a really solid game that seems to withstand the test of time. But as polished as deep as these games may be, there’s a lot more going on beyond what you can see. In fact, for every successful video game title, there are many unsuccessful video game titles. They are unsuccessful because of the conflict between what developers want and what financiers want. Financiers, on their part, don’t really care about the game so much as what the games product life can mean in terms of branding and in terms of revenue. For example, if you are going to invest in a game, it doesn’t matter how awesome the game is currently. The question is, can you scale the game up so that it continuous to produce money after you update it every several years long into the future. If not, it may not be worth your time and money to invest in it. In a very real sense, video game companies are looking at their products in a very different light than previously. They are looking at it from a very different angle than producers. Producers, video game companies, video game studios look at their creations more like movies. When you have a movie, you hire a script writer, you get a producer on board that producer gets director, the director taps actors and a production crew and everybody pulls their efforts together to produce a movie. But once the movie is done, they’re gone. Video game makers tend to look at the project in a very short term basis. It’s a lot like the passion only goes for what a particular project can do and how they can turn their creative ideas into reality.

As you can imagine, this conflicts with the long term perspective of the financing end of the business. The finance end of the business thinks that the current iteration of the idea is important only as long as it fits a longer term strategy. So, it is not a surprise that as video game companies pour millions and millions of dollars into video game development that there is an inherent conflict between this two viewpoints. From the producers perspective, cost is not an object, we need to pour in the money to make this product the best it could be to succeed now. From the financing perspective, they don’t have a problem funding the project, however, the funding must make sense in terms of the long term viability of the brand. The biggest trend in the video game industry is that, on the one hand, it’s fast evolving into like a hollywood movie studio type of system with its bloated production costs and big name branding. On the other hand, it’s also under a lot of scrutiny from investors in terms of return of investment. Remember for every one successful title, there are many, perhaps dozens, that fail and those failures also cost a lot of money. So we hope that this conflict may come to an end soon and this is a big deal because this will impact how games are developed. It will impact which types of games are made, and also, it will impact how the relationship between the end-users and producers are laid down.

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