Stormfront Studios president Don Daglow has been writing games since the mainframe days of 1971, spanning titles from the original MMO-based Neverwinter Nights through Stronghold and The Lord of the Rings: The Two Towers, and since then, he's seen quite a few console generations come and go.
At the recently-held Vancouver Film School Game Design Expo, Daglow reflected on the way industry patterns follow each console generation in stages -- from early, middle to late phases, and pointed out a few things that make the present generation of consoles different than those that have come before.
Looking back retrospectively on his career, Daglow began, “If I can offer one piece of advice, it’s to be born at the right time. And if you don’t think you have been yet, it’s not that you haven’t been -- it’s just that we don’t know what time you were born for yet."
The Early Years
In the early years of "next-gen" cycles, says Daglow, it's hard to profit with such a small installed base, even from cross-platform titles. “There are over 120 million PS2s. There are less than 10 million PS3s. For any cycle, not just this cycle, it’s simply harder for the publisher to make more money. Your audience is smaller,” he said.
Exclusives, however, get extra resources. “Halo got extra resources by benefit of being a platform-justifier,” says Daglow. But for non-exclusive titles, the prior generation hardware still offers an attractive alternative, with lower price points. While publishers and developers won't see "the numbers they once did," its still somewhat comparable.
Developers are under extra pressure as well, having to learn the ins and outs of new hardware, elaborated Daglow. “Whatever creed of craft you’re in, figuring out what this box will do... It’s kind of like having your stuff moved to another apartment at night, the lights are off, and you have to find your stuff. It’s still your stuff, it’s in a logical place, but you have to find your way around.”
This affects the hardcore, early adopter audience most, "those of us for which this is religion,” Daglow explained. The press and retail target the hardcore early in a new cycle. “The entire industry forgets about mass market and focuses on the one true religion and its followers,” says Daglow.
And yet, there's a demand for "the completely different," said Daglow. "That’s actually a contradiction, because of resources and chances, and yet there’s this demand. The economics pull us one way and our creative hearts, desires, and the consumer pull us another way."
It's a great time for new intellectual properties, Daglow explains, "It's a bad time for publishers to take new chances, but it’s a jumping point for new IPs — the opposite of a series and an existing license.”
The Middle Years
As the installed base grows, profit becomes more predictable. “Early on, we have to try to operate in a top 10 to 20 game range, but this number grows as the console gets established.”
The prior gen begins to become a hand-me-down, teams master the new machines, and the hardcore audience broadens. Daglow says there's a group on consumers resting on the thought, "'I'll wait around until the moment is right,' until their friend Irving who lives two flights up tells them, 'OK, here’s the best machine.'"
At this point, press and retail fight for eyeball-share. Daglow has a bit of advice for tracking cycles: "Watch supermarket magazine racks," he says. "At my supermarket, they have some magazine racks near the checkout stand. They make a lot of money on the impulse buys... so if you see video game magazines start to grow, you’ll know that the larger world is recognizing the money-making potential of our world.”
The Later Years
In the later years of a console generation, a broader install base enables major hits. Recalls Daglow, “In the first round of video games in about ’82 when that happened, even Quaker Oats opened a video game subsidiary.”
As the prior gen fades, developers have begun to master new hardware and are playing the new machines like a Stradivarius. “You start to get to where you just sense you know what you can do,” he says. At this point, the hardcore audience is still a significant force, but distinctly a minority.
It's also at this stage, with a growing glut of games hitting retail shelves, that publishers begin employing what Daglow calls his “Oreo” strategy: “25 years ago if I walked into a store and wanted Oreos, I could go in and get the Oreos. Now if I walk into a store, I can get Oreos, reduced fat Oreos, reduced fat, Double Stuf, reduced fat Double Stuf."
"What happened to all the other cookies that were on that shelf? The shelf didn’t change," he continued, "it’s likely the cookies from smaller companies left the shelf."
Says Daglow, publishers will tell retailers, in essence, "'You know, we’ve got these Halloween themed orange stuffed Oreos, and we’ll hold the other stock if you don’t put this on the shelf.'”
Daglow says a console will win if it has: Price parity, critical mass of good games, reliability, faith of the hardcore gamer.
What’s Different This Time?
“This will be the generation known for social gaming,” Daglow said, and is especially unique in its focus on looking as much backward as forward with services like Live Arcade and the Virtual Console. Daglow adds: “Who ever thought retro would be next-gen?”
Development is more challenging this cycle as well, adds Daglow, especially with parallel processing. "Multi-threading is not treading water... It’s not just the same old challenge.”
Companies are now also having to balance projects with internal and external teams, Daglow adds. "The scale has changed but the process is the same,” but what's different is that large projects are assembled globally by big teams. There are also lots of publisher MBAs analyzing optimal cost-loading for regional economic cost-to-risk factors, and looking to build their careers by outsourcing.
But despite these challenges, Daglow concluded on an inspirational note, “This isn’t something that you just do and stop doing. This isn’t just a passing fad -- I’m talking about big industry factors. One important thing to remember is the role of the individual. No one but you controls your creative initiative. No one but you controls your passion for games.”