This is all the result of what Facebook/Zynga started and mobile/Apple is now finishing. It's a tricky time for Microsoft and Sony in regards to their consoles, because who's going to be making games for them? Can Call of Duty/Skyrim and possibly GTA keep the AAA console market going?

I agree it's a hard time for a lot of developers but equally it's fairly clear where to pitch your tent and that's mobile and probably Unity.

You make some good points. Rather than a bubble bursting it's like a baloon slowly deflating. Not that it's nessessarily all doom and gloom. We're seeing a resurgance of the bedroom coders and my library seems stuffed with decent quality titles, some that I've yet to play. The main difference is my library is on my monitor rather than my shelf. Digital distribution may make it hard for good titles to get the publicity they deserve, but at least they are getting out there.

"The future is digital distribution I hear. Well, it’s been definitely profitable to Valve and Apple"

I don't know about Valve, but this is mostly a myth for Apple: the App Store is a profit center, but a very tiny one (something like 3% of revenue and 1% of gross profit). However Apple would likely keep running it even if it was a cost center because it fuels device sales, which is their real profit center.

Another one of the reasons it is embarrassing to watch so many other companies jump into opening their own stores. Unless the store is moving your really profitable product hand over fist, it's probably just going to drag you down.

I think the reason you are calling it a “very tiny profit center” is because you are reading the percentages. Remember, this is Apple we are talking about. Last quarter, they reported 8.8 billion in profits. That 1% you are quoting represents 88 million dollars they made during the past 3 months on the app store alone. Not too shabby.

i think mobile gaming is the next bubble to burst, and after that, there will be nothing else to pop!

Great points Jorge...the question is where are all the players going?

some good points. It was obvious a few years ago. Fewer people want to pay for "mid-tire AAA" titles when there are so many free to play products. It is kind of with Netflix, Hulu etc streaming I realized I do not go to my local video rental store... and considering I spend flat rate $8 month instead of at least 2 movies/week at $3.50 ($28/month), this is what movie industry lost.

The alternatives for developers... 1. Join one of remaining "super titles" developers (Halo, COD etc)... 2. join/form small, very efficient company where there are no "extra people" and costs (and sometimes many people are remote). Release a lot of products, do updates etc... Carefully analyze player/purchasing stats... maybe some of the products will sell. 3. If you have a good offer outside games - take it.

There is one scary thing though... I switched from console games to Unity/iOS a bit over a month ago... I did not really know OSX, Unity, iOS, C#/JS... After a month (and participating in 3 small projects already...) I feel like I begin to "understand" them. There is no way you can come to a new AAA project (even written on C++/lua/assemblers/shader languages/Havok/Physx/scaleform that I worked with for many years) and "know things" in a month... You might "know" graphics or tools or some systems or something... but not all of it in a month... learning curve is just much higher and things are just much more complicated. This is different. Look at questions people asking on unity forums... Many people seem to have basic "how do I find an object in the scene"...

So with all that simplicity... I'm not sure I can justify senior developer's salary... The company probably can/should just replace me with some mid-junior developer and he can do similar things... Not a bright future.

"the question is where are all the players going?"
I believe many are gone, never to return again. Like you probably don’t use that home gym you bought 3 years ago, these guys and gals are over videogames.

"3. If you have a good offer outside games - take it."
This is something that developers should consider seriously. Being a fulltime developer is like being a pro athlete where you will have a salary that fluctuates a lot, and have to uproot your family every couple of years. And that’s probably if you are lucky. I know most developers have a lifelong dream of creating games for a living and I truly respect that. But that dream should be weighed with the overall happiness one can experience in life. No matter how much you love games, the crunch time and stress that any given day you are going to get that pink slip are going to wear on you. It will have an adverse effect on your health. The Super Meat Boy developer said the success the game he had was not worth all the suffering he had to endure. I’ve heard this type of remark on more than one occasion from the people who “made it” in video games.

Remember that the end goal is always happiness. You want to create games because you believe that will make you happy, and I don’t doubt for a second that it would. But this should be balanced with other things that can also make you happy. Some things you may have not yet even discovered. I encourage developers to balance the wisdom of “Never, ever, ever, give up” and similar positive quotes; with the wisdom of “If you fail, fail quickly” or “If three persons go down the wrong path together, the first one to turn back will reach the goal (happiness) first.”

"Epic, Valve, Unity, and Apple are good examples. The people who sell the tools or own the digital stores."

I hate to be "that guy" (really, I get tired of needing to), but this is the perfect example of what happens when the "workers don't own the means of production". Right or wrong, those that provide the "glue" for the market end up in the catbird seat despite almost all of the "meat" of the market being made by those with low wages and severe job instability. I will admit that this is not an attack against the companies or platforms you mentioned (I actually like Epic, Valve, and Unity, though Apple is a different story -- http://articles.latimes.com/2012/apr/11/business/la-fi-tn-ebook-apple-ant itrust-
publishers-20120411, http://www.molleindustria.org/blog/gatekeeper-and-the-rise-of-the-total-a pple-co
nsumer/), but it is an attack on the general positive feedback-loop and lack of developer cohesion that gives platform holders tremendous profits and stability off our work while we are racing to the bottom against the world in a manufactured globalization landscape, despite all the entertainment that _we_ contribute to society.

"No matter how much you love games, the crunch time and stress that any given day you are going to get that pink slip are going to wear on you."

I largely agree with your post Jorge, but I want to punctuate that the pain of developing a game is not the result of us having bad luck; it is the result of a carefully orchestrated era of robber barons siphoning a majority of the money of the market away from those that actually contribute to the market, then laying off the talent that actually makes the game when they're done with them. In other words, it is not something we should accept -- it is something we _must_ fight, or it will only get worse. Even your example (Team Meat) glosses over the fact that Microsoft pushed them to get the game out quicker than expected, and failed to live up to their promises of promotion which was salt on the open wound of severe crunching (http://www.gamasutra.com/view/feature/134717/postmortem_team_meats_super _meat_.p
hp?page=3). Very little in capitalist, sky-is-the-limit America is "accidental", and you can almost always find someone in the catbird seat exploiting a hard worker because of an utter indifference for the welfare of anyone other than oneself and one's goal to become richer than rich.

I encourage developers to network, share stories of unethical working conditions to help shed light on the less ethical companies, follow each other on twitter (@eiyukabe if you want to follow me; I tend to follow back if you aren't a spammer), and generally share knowledge so we can try to move the balance of power in this industry toward its creators. I promise you aren't alone. Post comments like mine citing corporate atrocities so they won't be forgotten, and don't be scared to post comments buttressing the good companies. Post anonymously if you have to; it may hurt credibility but it is best to expose the flaws of this falling industry the best we can so when it is rebuilt, it is rebuilt for us and gamers and not suits that couldn't care less about the artform.

@Jorge

For a company the size of Apple, 88 million dollars is a rounding error on their balance sheet.....

Jeffrey: your communist manifesto has nothing to do with the fact the the game industry is experiencing massive year over year losses. if the customer base isnt there, it doesnt matter how well workers are treated.

"3. If you have a good offer outside games - take it."

As a recruiter in the industry this is something that I have been hearing a lot more than I use to. One of the first questions I ask engineers is "are you willing to leave video games? Even though I am a video game industry recruiter, it is something that is becoming way more prominent and staying in the front of people minds more than it did the last couple of years.

Good points though

@Dave

"your communist manifesto has nothing to do with the fact the the game industry is experiencing massive year over year losses. if the customer base isnt there, it doesnt matter how well workers are treated."

Actually I disagree that there is no relation. If you can't increase revenue, you can cut spending -- at the CEO level. CEO pay is artificially inflated (http://www.strategy-business.com/article/re00116?gko=d8b2c is an example of how this is the case, but you can find others) even from a free market perspective, much less a human rights perspective (people have the right to reap the fruit of their labor, the lop-sided power structure under which employment is negotiated perverts this outcome so suits claim market shares that working men/women can't afford to claim then set up inescapable tax systems where the money the customer pays for the product ends up in the middle man/CEO's pocket instead of the pockets of the workers that we _actually_ need). And this is assuming we couldn't grow revenue faster by making better games by putting creative people in charge and incentivizing them with royalties instead of constantly paying them the lowest flat salary we can so they have to bow down and obey the suit class for fear of losing their jobs. I promise you I'm not going to work as hard knowing I'm getting laid off at the end of this project with no royalties and no creative control to make up for the poor wages and long nights. And as industry vets like me tell starry eyed college grads how it works, the ruling class is going to run out of people to trick into giving up the best years of their lives. The working conditions in the industry are hurting the quality of games that are made, which hurts consumer confidence, which hurts sales -- another way my concerns tie into the "year over year losses".

The truth is you can weave any economic narrative to buttress the ruling class -- "job creator" this, "risk taker" that ("slavery is better for blacks because it feeds them and gives them shelter" in the colonial south) -- but you are merely skirting around the issue that the vast majority of wealth in this world does not reward labor but instead recursively rewards wealth. This is just fundamentally wrong, no matter how much time and money the privileged of this world spend trying to pollute the discourse with justifications for their increased wealth in times of global strife. We might just have to diverge on opinion if you feel that the ruling class actually does deserves to keep getting money because of "job creation" (Jobs are done not created, that's all I have to say to that) or "risk taking" (I feel that is a distraction tactic and there is nothing keeping a reasonable ceiling on the payoff of "risk taking" even when the risk isn't risky, and it does not do anything to justify claiming markets that the working class could slowly develop into their own businesses and set higher personal wages if they did not have to compete with corporations) because I am not a good debater and all I can do is say that that feels unforgivably wrong to me. However, I hope I have expressed myself more clearly and explained why not only do I think lack of regulation (either by government or by worker revolt) over the ruling class in really any industry is not only a cause of poverty and misery (by claiming business opportunities and making markets harder to enter they are making it increasingly harder to start small businesses, forcing people into employment -- at which point the wage lowering begins until a genius designer/coder/artist/musician is making <100K to bring a hit game to market while the CEO makes millions, or even worse in other industries), it is _the_ cause of poverty and misery. It is the exemplar of greed and taking more than you are putting in. Only after we adapt a mindset to reward work instead of risk or finances or nepotism or having friends in government can we position ourselves to tackle other problems.

With all that said, I think the market size is not the root in which we should frame the discourse; markets will shrink or grow, but the best we should aim for is to make sure that the best games are being made (unhindered by DRM and other poor decisions driven by the business side) and that the rewards for making these games go to the people who actually make them. And if you're incredibly for the Free Market, then consider this post not as a communist manifesto but as a tactic to seed the discourse in such a way that the Free Market eventually works better to pay labor instead of capital.

Anyway, thanks for the polite response :).

If they don't plan on backing up a studio that can put out consistent quality products, and ones in more of the emergent market sectors, who exactly are they placing their bets on that's safer?

I really question this move strategically.

Agreed. Wipeout was one of those breakthrough titles in the infancy of 3D gaming that really gave us a good glimpse of the future. One of my all time favorite racing games. Man, this sucks...