On Realization and Recoil

I’m not sure if I am still allowed to say These Troubled Times without causing readers to roll their eyes or close their browser window, but last I checked we are still in a recession. While the video game industry admirably held its ground despite the lousy economic conditions for as long as it could, we are seeing more and more evidence that the industry is not recession-proof. Sure, this might not be a shock to everyone but it seems like each day the industry is dealt another reaffirming blow to remind us all that the same money that makes this industry thrive can also be its biggest downfall. Companies have been downsizing and consolidating as the fiscal year comes to an end; no company is too big to fail. Along with workforce consolidation, financial reports and projected earnings are being tempered to adjust to consumers becoming more frugal with their funds. The latest victim is Ubisoft.

The future is hazy, but I’ll guide you through the fog of uncertainty.

The ever-diverse Ubisoft recently adjusted their financial reports to reflect estimates for the fourth quarter of the fiscal year, and with those adjustments came some interesting bullet points regarding their development and production plans for 2010. Splinter Cell: Conviction, a game near and dear to the hearts of the Talking About Games community, was delayed (again), a multiplayer component was announced for the Assassin’s Creed franchise, and Ubisoft CEO Yves Guillemot said that Ubisoft plans to focus “development resources on our major franchises and on the Xbox 360 and PS3, the two consoles that are expected to see sales growth in games for gamers in 2010.” Citing poor performances from their more casual lineup than expected, Ubisoft’s accountants were no doubt fearing for their lives as the final beans were counted. There is no telling when this recession will end, and until then disposable income for purchases like video games will continue to dwindle. Guillemot could have decided to continue to pump out low-investment, low-return games moving into 2010 or cut back on the projects that are distracting valuable resources and focus on established franchises with a noticeable demand across the world. Yes, Splinter Cell’s latest delay is not the best news in the world, but I’m willing to sacrifice a couple months if we receive a new drive and direction for the rest of 2010.

Naturally Ubisoft isn’t the only company reacting to the economy with a revised approach to the start of the decade. SEGA was one of the few companies to give maturity on the Wii a sincere effort. Games like MadWorld, The Conduit, and Dead Space: Extraction might have had the noblest of intentions, but they returned virtually empty handed with sales reports ranging from poor to extremely poor. SEGA did their best to cater to the more enthusiastic gamers on the Wii but the numbers do not lie. After a year of sincere effort, SEGA of America studio director Constantine Hantzopoulos, speaking on 1UP’s “4 Guys, 1 Up” podcast, all but confirmed a new direction for this company – “Are we gonna do more mature titles for the Wii and it’s like … probably not.” Like Ubisoft, expect SEGA to return to their core competencies. I’m not sure what competencies they have left, but I see SEGA “playing it safe” during the next year. SEGA took a risk in putting out new games and the risk did not pay off. With budgets tightening, these types of risks will be less and less common until revenue streams open back up.

I’m not sure if I ever officially commented on all of the delays we saw this past holiday season in the wake of Modern Warfare 2. Game after game, quivering before the hype of Infinity Ward’s juggernaut, was delayed into the beginning of 2010 and beyond. If a game is good enough then gamers will respond accordingly. Word of mouth is a powerful ally in the game of sales if the final product can stand on its own as a quality gaming experience. Of course there are a number of decisions that factor into a release date, and if the decision-makers deem February a better opportunity than December, that’s their prerogative. However at some point, enough is enough. Splinter Cell getting delayed again? Gran Turismo 5 delayed again? I get it, a game needs to be complete. I do plenty of complaining about Day 1 patches, so I can respect a minor delay to ensure a bug-free gaming experience, but I don’t know if some of these companies can continue to bleed money in their projects without anything to balance the equation. Anticipation for Gran Turismo 5 is still high — just look at the download totals for the demo — but how much enthusiasm will remain if the game continues to be delayed? Especially with no other revenue streams for Polyphony Digital, it would seem they need this game more than their fans do right now.

If these games are getting delayed because the additional development time will genuinely improve the final product, then you wont hear any complaints from me. If companies are delaying games and cutting their losses on this fiscal year as a response to over-expansion and high expectations, then that’s tough for shareholders, but not me. As much as the initial pain of another delay stings the senses, personally I could use the opportunity to catch up on games I have missed or simply enjoy the games that are coming out as scheduled.

With the recession finally reaching interactive entertainment, projects that were once a fun side project must be contracted. Teams need to be downsized. Developers and publishers will be slowly returning to their comfort zones. Until companies can afford to branch out again we will be hearing more about returning to “core competencies” and refocusing on what is most likely to be a sure thing.  But I do not think this is the end of the world, real or virtual. I’m willing to sacrifice the short term’s lack of quantity for a more stable long term business plan. Assuming these companies could keep to it, we will be much better off. Take the time to ensure a level of consistency and quality and gamers will return the favor.

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