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Just Cause Dev: AAA Development Is "Not Healthy"

Avalanche Studios' Christofer Sundberg predicts a rough generation for AAA development.

By Mike Williams. Published 2 months ago

Remember when you bought a $60 game and you got a (hopefully) finished product? These days, big-budget developers are having trouble making ends meet as they continue to create massive experiences and visual feasts for players. So they've turned to alternate models: premium subscriptions, microtransactions, and early access. They're just searching for any port in a storm, which is also why they're taking less risks in what they make.

AAA development is in a precarious position right now, according to Avalanche Studios founder and creative director Christofer Sundberg.

"It's really not healthy at the moment," Sundberg told Gamespot when asked about AAA development. "Games have evolved, technology has evolved but as businesses we're still stuck where we were 15 years ago. As budgets grow, risks increase. The publishers are nervous because they have to project a game being a massive hit three years into the future and the developers are frustrated because they need to be flexible to every move the publishers make. It's impossible to make everyone happy in the current equation."

Avalanche Studios is in a unique position because it isn't currently owned by a larger parent company. The studio is developing games for larger publishers like Square Enix and Warner Bros Interactive Entertainment, while continuing to dabble in mobile development through its Expansive Worlds offshoot studio. That keeps Avalanche moving in different directions and preparing for market shifts if its titles happen to fail.

Avalanche's next game will be Mad Max, a game which Sundberg says has "fantastic" pre-order sales numbers. Still, profitability is a concern for Avalanche.

"It's a bit early for me to feel comfortable though," Sundberg said. "The investments in a AAA game these days are huge and even if everyone of those two million people bought a copy each, most big games would not break even if they were next-gen exclusives. Very few traditional $60 games make any money, and what used to make sense doesn't any more. Publishers and developers very rarely see a return of investment from a 5-8 hour long game."

That's why we've been seeing more additional multi-player modes in games that would otherwise be single-player. Sundberg's statements also make sense of the crazy sales expectations that major publishers have for solid titles that aren't super blockbusters. High sales expectations lead to risk-averse behavior in publishers, which "kills innovation" according to Sundberg. Despite that, he's not all doom and gloom.

"I hope and think we will see improvements over time," Sundberg said.

The best community comments so far 11 comments

  • SatelliteOfLove 2 months ago

    This generation for NA/W.EU development will look alot like JP development last generation. There are fewer and fewer that can handle it, same as yesteryear JP. The money is too risky, same as yesteryear JP.

    Mark my words.

  • docexe 2 months ago

    I have said it before but I repeat it: If AAA games “die”, that will not have anything to do with the raise of mobile or F2P, and everything to do with the unhealthy tendencies at the core of this sector that are mentioned in this article. The worrying thing is that it doesn’t look right now like the eight generation of consoles will change or improve on this situation.

  • docexe 2 months ago

    @danger.to.others You know, it might be easy to blame developers for being lazy or incompetent but that might not necessarily be the root cause of the problem (and really, just because developers at EA behave like that doesn’t mean it’s a generalized case of everyone in the industry… if anything that kind of corporate culture actually explains A LOT of things about EA).

    The problem is that the sentiment expressed in this article is not an isolated case of a midlevel developer complaining because they have had it rough. It’s a sentiment that has been shared by many developers, studios and publishers, some of them responsible for some of the best-selling games of the past generation: Costs have increased so much, budgets have become so bloated and sales expectations so high that the entire AAA sector is becoming unsustainable. While in the past a big game could sell a million units and be considered successful, nowadays those numbers are not enough anymore.

    Just for a simple example, let’s remember that the Tomb Raider reboot was considered a failure when it launched (despite selling around 3 million of units!), it only managed to become profitable many months later primarily thanks to the sales of DLC, a practice that we gamers abhor but that is increasingly becoming the most effective method for some games to break even.

    And let’s not forget there is a reason why platform exclusives have pretty much disappeared outside of 1st party studios or direct negotiations with platform holders, why so many studios (and even entire publishers) have died in the past generation, and why most big publishers (both Western and Japanese) have invested so much on next-gen engines in order to ameliorate costs.

    Don’t misunderstand me, I’m not trying to be a doom monger here. I don’t want the AAA market to disappear or implode. If anything, the peril of that happening is what has me anxious, as truth of the matter I still enjoy many of these kind of games, not to mention that my preferred platforms to play (home consoles) are inextricably linked to them. But it can’t be denied that the AAA sector is becoming increasingly stagnant, with fewer games released every year, and many annualized franchises that have very similar gameplay and themes. That’s not right.

    A healthy entertainment industry needs variety and creativity in order to thrive, but that can’t happen in an environment where risk taking is punished because the development costs are so high that a single failure can bring down the entire studio. Something really needs to change in the coming years, but hell if I know what can be done to solve this issue. The entire situation is very complex and without a simple solution.Edited February 2014 by Unknown

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