The following is a slightly more condensed version of a blog originally posted on the RetroNeo Games website.
I recall that as we entered 2016 there was still talk of the Indiepocalypse – 2015’s hot topic. It remained on everyone's lips (either seriously or derisively) for the first half of the year and then it gradually petered out. Curiously, it didn’t seem to resurface when Steam Spy more recently released the alarming statistic that approximately 40% of all games on Steam were released in 2016.
Instead, what I have heard about in the last few weeks is talk of disasters coming to the AAA world!
2016’s final quarter release schedule was jam-packed with huge titles, and the news from most of them was that they were under-performing. Battlefield 1 was first, and did pretty well, actually, but Titanfall 2 came out straight afterwards and did extremely poorly despite great reviews. This is most likely because people were already playing EA's Battlefield 1 still and/or waiting for this year's Call of Duty (Infinite Warfare) to release just a few days later, or Dishonored 2 a few days after that.
To look at Call of Duty a moment, apparently Infinite Warfare has sold only half as well as last year's Black Ops III and a leading reason why is that many COD players are still playing BLOPS3. Activision are competing with themselves! The multiplayer in each game is extremely similar, after all, so there’s really very little reason to move on. The game’s reveal trailer was also the second most disliked video of all time on YouTube.
Activision should probably give COD a break for a few years, but the problem is that they have 3 studios each creating a different COD game at once, so we'll probably see one next year and maybe one the year after that even if they decided today to apply the brakes.
Ubisoft did wisely decide to give Assassin's Creed a break this year, but in its place we had The Division and Far Cry: Primal early in the year, and then Watchdogs 2 releasing in that same crowded end of year schedule (not to mention the Assassin's Creed movie). Watchdogs 2 also performed way below expectations. This could be because people are tired of Ubisoft open world formulaic games, or because there were too many games to choose from at the end of the year (Final Fantasy XV and The Last Guardian also released in this same period for PS4 owners). However, it's also quite likely that people’s disappointment over Watchdogs 1 caused them to adopt a wait-and-see approach with the sequel.
The problem is that most gamers don't wait and see, even if they mean to. They wait and move on to the next giant title in a few weeks, maybe picking up the forsaken game at an 80% discount 12 months later and playing a few disinterested hours.
To look solely at Ubisoft for a moment, they’re continuing to push Rainbow Six: Siege and The Division content, while their next big launch, For Honor, is due in just over 6 weeks, with Ghost Recon: Wildlands due later next year. And let's not forget that Assassin's Creed will likely make a return. They've also numerous smaller titles like South Park, and multiple sports/racing games like Steep or The Crew.
Most of these games, and many similar ones from other publishers, are multiplayer focused, hoping to keep players engaged long term and buying DLC and other microtransations until that company's next big game comes out.
These current AAA strategies seemingly ignore the fact that there are a half dozen other massive publishers doing the same thing, and the market is getting carved up into smaller and smaller pieces while game budgets grow and grow.
It's unsustainable! The games market in 2016 was most definitely over-saturated, and that's even if you count only AAA releases and ignore the indies. Most gamers didn't have enough time or money to play everything that they wanted to. You could argue that Final Fantasy, Overwatch, The Last Guardian, Battleborn, Doom, XCOM 2, and others weren't annualised releases and so next year won't be as busy, but you'd only be half right. Those same publishers will have new games next year even if they're in different IPs. And people may still be playing Black Ops III, or finally have moved onto Battlefield or Infinite Warfare. You also have to consider that many who drank the Overwatch cool aid in May haven't played a single other game since!
So, AAA-pocalypse? Can the indies take some guilty pleasure in seeing the big guys fail for once? Well, no, not exactly. But something has got to give.
CryTek, admittedly less of a content creator and more known for their CryEngine game engine, just announced that they're closing 5 studios. One of these, Black Sea Games in Sofia, Bulgaria, then announced that they're becoming an indie studio. So for every major studio that does suffer poor sales and has to close down, we should remember that many of the talented and experienced developers in that studio will decide "now's the perfect time to try to make my dream game", and suddenly where you had one big competitor, you now have a dozen smaller ones, all of whom are likely to be more talented than the vast majority of Steam's overpopulated developer base. Indies must be aware of this.
That's all assuming that we will have companies failing left and right. Despite disappointing performances, Infinite Warfare and many of the other games mentioned still grossed millions upon millions of dollars. After breaking even, profit is profit. Profitable studios don't usually close. But companies who see declining profits do usually try new things.
I would think that we'll see some shift away from the constant focus on multiplayer games and user retention. As a gamer, this year I more and more appreciated short games because they let me experience something in its entirety, and move on to the next thing. Most people who played Doom loved it and would recommend it to anybody, but nobody is talking about its multiplayer mode. It has its players, sure, but it's not the main draw. Gamers acknowledge that there's loads of games that they want to play, but AAA developers are still trying to keep them locked into just one or two titles for as long as possible. There's an opportunity to listen and adapt here.
While single player content is expensive to produce, it can be a safer sale, with gamers knowing that this one game won't demand all their time or hook them for the next 6 months. Single player games also don't need to reach a critical mass of players to populate their servers, and can have a much longer sales tail because the experience will be the same whether the game is bought at release or in ten years. iD's Wolfenstein and Doom reboots are my two favourite shooters of recent years because they gave me a high quality experience with a fun, passable story, and then let me move on. They're worth the money and I'd buy more of the same. I can't play 6 different ('different' being a generous word) multiplayer games simultaneously. I also sadly can't afford to pay €60 a pop for multiple games with only 5 hour campaigns. It's just not worth it. Black Ops III did start selling their multiplayer component cheaper if you didn't want the single player stuff. I'd love to see that in reverse!
One sign that the big publishers are sweating is the size of discounts on even their newest releases. I picked up Battlefield 1 and Titanfall 2 just a little over a month after their initial releases at 40% and 50% discounts respectively! Infinite Warfare was also heavily discounted and Deus Ex: Mankind Divided was a whopping 67% off on Steam!
That's unprecedented! It's also self-destructive as now next year there's likely to be even less pre-orders and early adopters for the new games, as they know they can probably get huge savings if they wait until the Holiday sales. So the early COD adopters may have nobody to play with and abandon the game by the time the Holiday sales purchasers arrive, who in turn will themselves have nobody to play with. That's short-term thinking on the publishers' parts, and they'll definitely have to think smarter to compete in an oversaturated (as proven by their discounts - increased competition decreases prices, after all) marketplace.
Pre-orders of most of the later games of 2016 were down too and I'd suspect that the massive disappointment that many felt over No Man's Sky and Mafia 3 earlier in the year has a lot to do with it. Square Enix's ridiculous pre-order campaign surrounding Deus Ex: Mankind Divided (adjusted after considerable backlash) wouldn't have helped things either, and I've already talked about why Watchdogs 2 had low pre-orders.
It can only be a good thing if consumers are finally doing as the watchdogs (and other consumers) have been urging them to do for the longest time and not pre-order, as it perpetuates a cycle of releasing less and less finished games and only maybe fixing things later.
In a crowded marketplace, this sort of thing won't fly for much longer. So that's one positive. Pre-orders also just don’t make sense for digital goods. The store can't run out!
Much as I couldn't resist ending the year with a twist on how we started it (AAA vs Indie -pocalypse(s)) I don't think we'll see either, really. Studios large and small will continue to make games, grow and shrink, hire and fire, and just do as businesses do. Talk of a repeat of the game industry crash surrounding Atari in the 1980s is alarmist and ignores the fact that digital distribution removes the need to shift physical cartridges from actual shelves. It also ignores that, unlike the 80s, when a games company goes out of business there are literally thousands of developers ready to take their place. Almost anyone can make and publish a game nowadays without the same skill or distribution barriers to entry. While consumer confidence is being eroded and genre fatigue is setting in, reviews, Let's Plays, and refunds do a lot to combat that problem.
No, I think the industry will be fine, though it will see some uncomfortable shifting, for sure. Companies who listen to their fans and innovate are likely to do well, while many suit-driven ventures to make the next big MMO or eSport are more likely to fall by the wayside. We may also see a lot of lower-cost, smaller AAA launches that focus solely on single or multiplayer as publishers try to protect themselves while figuring out just which way the winds are blowing. It's an interesting time to be a gamer and a game dev.
Unrelated, but I just want to add this. 2016 felt like a harrowing year for most people in the world, for all sorts of reasons. Games are a great way to escape to another world, to switch off, and to protect your mental energies from the whirlwind of negativity that plagues our media (social, real, and especially fake media).
Use that to protect yourself if you have to, but don't use games to hide indefinitely. We have to be able to still cope with the real world (because that's where the eyes, ears, and hands that we use for gaming live). Don't neglect your health, and don't neglect the world around you. It needs good people to stand up for what's right. We're more educated and have access to more information than any generation before us. We have to be able to find the right ways forward for all, and it will take your (yes, your) involvement in the real world.
If we could all act from a place of equality, reason, and conscience, the world would be a much better place to live in, and playing games might feel like a reward instead of an escape.
Let me leave you now with my personal theme song and motto for 2017 :)