Just Cause developer says AAA game development unhealthy, unprofitable

"Very few traditional $60 games make any money, and what used to make sense doesn't any more," Christofer Sundberg says.

The state of AAA development today is unhealthy and most big-budget games will never make a profit, Just Cause creator Avalanche Studios founder and creative director Christofer Sundberg believes.

"It’s really not healthy at the moment," Sundberg said when asked to give his assessment of the AAA business today. "Games have evolved, technology has evolved but as businesses we’re still stuck where we were 15 years ago. As budgets grow, risks increase."

Publishers and developers alike are handcuffed by this stagnation, he argues.

"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," Sundberg said. "It’s impossible to make everyone happy in the current equation."

Sundberg

And when a AAA title is released, it's unlikely it will end up profitable, Sundberg said

"Very few traditional $60 games make any money, and what used to make sense doesn't any more," he said. "Publishers and developers very rarely see a return of investment from a 5-8 hour long game."

Evidence of this is becoming apparent. Electronic Arts announced last week that it had lowered its revenue projections "due to the weakness in current-generation software."

Sundberg's comments are especially noteworthy considering he is currently working on multiplatform action game Mad Max, a bonafide AAA game to be published by Warner Bros., a division of the massive entertainment company Time Warner.

The game is coming to Xbox One and PlayStation 4, and while early sales numbers for both consoles are in Sundberg's words "fantastic," he's not ready to jump for joy just yet.

"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."

Game budgets are famously secret, but most agree that development for new platforms like the Xbox One and PS4 is more costly compared to past generations. Capcom even contends that next-generation game development takes 8-10 times more work compared to Xbox 360 and PlayStation 3.

Avalanche isn't putting all its eggs in one basket, however. The Sweden-based outfit operates Expansive Worlds, which created the free-to-play hunting game The Hunter, and is also working on a new game to be published by Square Enix, rumored to be the long-awaited Just Cause 3. In addition, Avalanche is currently creating a game based on a comic book franchise, but it's not Superman.

Also negatively impacting the video game business today is its hit-driven nature, the executive argues. A publisher relying on a proven formula instead of branching out and trying something new "kills innovation" and leads to fewer major new franchises coming to market, he said.

Sundberg's assessment of the gaming industry wasn't all bleak, however. He said the "way out" of the current situation comes down to developers and publishers working harder to foster closer collaboration as a means to create innovative and exciting new experiences.

"I hope and think we will see improvements over time," Sundberg said, making a point to say he is "really excited" to see Titanfall and Destiny coming to market from major publishers Electronic Arts and Activision, respectively.

Regarding the Xbox One and PlayStation 4 specifically, Sundberg said the new consoles are "maybe not saving the industry," but should provide a much-needed jolt that will inspire developers to take risks and create unique games.

Our full interview with Sundberg will run later this week.

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

Want the latest news about Mad Max?

Mad Max

Mad Max

Follow

Discussion

769 comments
Shinobi120
Shinobi120

IMO, I think that the AAA gaming market is going to wind up collapsing on home gaming consoles, especially when both Wii U & Xbox One sales are dragging down. And quite frankly, I'll be glad when that happens.


There needs to be a return to mid-tier gaming (middle market) & low-tier gaming, & both of them needs to be popular on consoles again just like back in the 80's through the mid-2000's. Indies could wind up being the future of gaming as well (which I don't mind, as most of their games are good, IMO).

spikepigeo
spikepigeo

This guy has been talking a lot lately, but funny thing...I actually listen to him. He usually has decent assessments of the industry that publishers wouldn't like their developers saying out loud. That usually means it's good stuff.


What he saying here is so true. AAA develop is absolutely ridiculous right now and is completely unsustainable. They'll have to look for alternative methods some day. Here's to hoping that Star Citizen pays off.

JDFS
JDFS

''Publishers and developers very rarely see a return of investment from a 5-8 hour long game''.
And this is exactly the main issue with AAA games but they're too stupid to understand, which is why I buy more indie games than AAA now, I want gameplay and replayability and for example in 2013 I didn't buy any AAA games because they are not worth 60$, Arma 3 is now indie and this is the only game I bought over 40$, the last good AAA I bought was Skyrim... which was released in 2011.

dirkradke
dirkradke

Basically, what a took away from his comments were that "everything is bloated and unsustainable" as things stand in the video game industry.  For the most part I agree with him, but what a lot of publishers rely on is tie-ins and name recognition and other things not directly related to the video game itself.  People constantly complain how IT services are expensive and drag an organization down.  However, without those same services the organization probably couldn't compete in today's economy.  So while his comments are accurate to a degree I doubt it explains the whole story.  Of course I don't think he was trying to explain it anyway - just express his thoughts.

corteztheg
corteztheg

I support his views being that video game sales even in the last generation had rendered many publishers and developers bankrupt while causing the lucky ones to be acquired or downsized. the current gen might as well inflict a far worst calamity on publishers and developers being that more is expected now by the gamers which would guarantee a higher development cost . the last GTA game cost over $200m to market and develop, whats the next one gonna cost?


it makes you wonder if the lack of backward compatibility of last gen on current gen was no accident in order to capitalize on already existing and well known IPs by re-releasing as HD or 3D ports on current gen. the higher the cost, the greater the risk aversion. expect more of the same old or just the same old like gears of war trilogy 3D remix in the future ( microsoft already bought the franchise).

FabledVeteran
FabledVeteran

Am i the only one who thought Just Cause 2 was an awesome game ?? 


Story sucked, it was a bit sparse... but the scale of the game and the freedom was awesome...

juhis815
juhis815

I'm baffled about this, but most people on earth just want to play those Call of Duty games, because they have no other choice on their pathetic "lifes"...

chieflion
chieflion

THE PROPHECY:

One day, microsoft will finally let sony into their vagina, to create the Sicropox. Thus all game companies will join together and compile their shit tons of money to create, 'The Experience = Now.' It will have every character ever, including an HD Commander Keen, Spyro, Mario, A Space Invader,Tingle, and A Pickle From Pickle Wars. The Year?

You Decide...

Gamer_4_Fun
Gamer_4_Fun

He paints such a grim picture, makes it distasteful to get excited for Mad Max

Gamer_4_Fun
Gamer_4_Fun

Well, as much as I love gaming in various price points, 60$ triple A games I play the most.

dcno07
dcno07

Well if this leads to more games like NBA2k14 where you pay full price AND get to spend real money in game to actually enjoy the game I'll just resort to more pirating. Good thinking devs. I have no problem paying full price for a GOOD solid game but these new video game models - in game purchases - are just driving me to pirate. 

ioshilee
ioshilee

Very funny to hear that from a dev, whos games aren't that great at all. Why don't you go and tell Blizzard, Rockstar, CD Project, Bethesda that AAA games are not profitable, mr. Sundberg?

jgn77
jgn77

Wow. So surprising another dev blames everything but the quality of the games themselves for the state of the gaming industry. Make a quality game and it will sell hand over fist. Gamers are dying for it.

rickphoenixxx
rickphoenixxx

I think this is how Nintendo has so much profit, and why we may never see a new big Metroid of Starfox game. It is a business and all, so we will only get the big titles that stay the same every year mostly.

RPG_Fan_I_Am
RPG_Fan_I_Am

lol. urge to troll.... can't stop...

1"Very few traditional $60 games make any money, and what used to make sense doesn't any more"

Just cause a games $60 doesn't mean it's a AAA game. AAA games are usually big budget/Big payout games. A lot of $60 games have been coming out that really aren't worth $60. Thats just the set standard of PS3/360 new game cost.

2." Electronic Arts announced last week that it had lowered its revenue projections "due to the weakness in current-generation software.""

Right. It's the PS3 and 360's fault you guys aren't making great games worth buying.

3." next-generation game development takes 8-10 times more work compared to Xbox 360 and PlayStation 3."

This is my favorite one. So you admit here you can't afford to develop games on the PS4/Xbone. Yet your the ones complaining about the limiting hardware of the PS3/360 making it impossible to develop a good game........


I just love how all the big gaming companies can find excuses as to why they aren't making any money. They just run you in circles.

rickphoenixxx
rickphoenixxx

The gaming industry is bigger than ever, so the GOOD aaa titles do indeed make money. There are cash grabs like capcom though, who have released the same fighting games over and over again like Streetfighter. They should have plenty of cash in the budget to make a new AAA mega man if they wanted, or another Resident Evil the quality of 4.

downloadthefile
downloadthefile

Funny enough, there's no other industry where I feel quite as ripped off quite as consistently as with video games.  I mean, wow, do I feel bamboozled a good amount of the time.  I almost applaud some of the developers for their ability to siphon my money with hype and no substance.  Maybe I'd have more sympathy if so many devs didn't make me feel like they stole money either intentionally or because of publisher restraints on the amount of time needed, either way the result is the same.

1wikkid1
1wikkid1

The reason it's "unhealthy" and "unprofitable" is because the big game companies grew to a point where they are run by paper-pushers instead of the developers. The people making decisions have no clue about gaming or games in general, they're still think it's something for the kiddies while most of the players are late teens and older. On top of that their objective is not making good games, it's making money, if the game happens to be good that's just icing.

Give the developers, the people who actually design and build the games, power to make decisions that have impact on the gameplay and let the paper-pushers do what they do best, push papers around. (or better yet, get rid of the paper-fiends, I dunno, they must be good for something... maybe we could make soap out of em or dog food or something.)

Ghosthunter54
Ghosthunter54

Skyrim, GTA V, CoD, etc. Plenty of AAA games (if you can call CoD a AAA game lol) make a crap ton of money. If you're making a AAA you need to go all out and make it great. Half-assing it will just leave you in debt. 

stailcookie
stailcookie

 JC2 was great, but it was down to $20 at record pace and continues to be sold for $2-3 on PC on a regular basis.  He says $60 games don't make money, I would agree when you sell them 95% off...  EA and SE do it more than any other publisher, yet they complain about profits more than all the other publishers combined.  Blame the pirates I guess...

Jacanuk
Jacanuk

This guy have no clue what he is talking about.


Most games are not profitable because it can cost a arm and a leg to develop, most are not profitable because they are not good enough.


Also their marketing costs are insane, think it was Activision who spend 100mill+ on global marketing.


Redsyrup
Redsyrup

The problem is he's lumping AAA sales with AAA quality. The CoD, GTA, WoW gravy trains will eventually run dry.

Redsyrup
Redsyrup

I wonder where he got his sleeves done?

xolivierx
xolivierx

It's funny because good CONSOLE games are very hard to find nowadays. I don't know if you remember the Ps1 and Ps2 era...we have seen A LOT of great games and some interesting franchises were born during that time. Now what do we have? Cod, Battlefield, Ass Creed, Nintendo with their fracking Mario games....everything is turning into a shooter. 

I miss the days of Silent Hill, Resident Evil, Parasite Eve, Panzer Dragoon, Legacy of kain/Blood Omen, Ace Frigging Combat, Sonic on the Dreamcast, Crash Bandicoot, Tomba..

I mostly play Rpgs nowadays because almost everything else is garbage. Kudo for the creators of Demons Souls for resurrecting a style that was dead.

Death_Masta187
Death_Masta187

The one thing I'm excited for this gen is the death of exclusives. since games cost so damn much to make. it only makes since to get these games out on as many platforms as they can. anyone who would be against this is either Microsoft or Sony or some fuck fan boy. Anything that is better for the consumer is better for the industry.

before you get your neck beard panty's in a bunch(if 12 year olds can even grow neck beards). I'm fully aware that there will still be exclusives but it will really boil down to only 1st party games. or they will be timed exclusives(like all the shit CoD DLC).

I think the fact that both of the next gen consoles are basically low end PC (x86) this will cut down in the BS cost/ issues that come from porting games across non standardized architectures that the rest of the real world does not use. (ie that shitty cell CPU in the PS3). So I tip my hat to MS and Sony for finally getting their heads out of their asses on that one.

Anything that makes it easier and cheaper for developers is better for the consumer.



Lastly

Since these consoles are basically identical (hardware wise). I really think this gen will come down to all the non game stuff a console can do. It really looks like MS is aware of this point as well and that's why it is focusing so much on non gaming crap. I'm not saying this is a good or a bad thing but where else can it go? I'm pretty sure this is the last generation of consoles as we know them(huge ass dedicated boxes under your TV). I would not be surprised if the next gen "console" was just a PS or XB app you launch from your TV or stream from your phone. the way mobile tech has been moving it wont be even 3 years before they are more powerful then the ps4/xb1.

Tomcat2007
Tomcat2007

Game development needs to go back to being considered an art and the developer an artist not an engineer.  Once it becomes nothing but a pure money-making franchise or a technical exercise in pumping out the best resolution and framerate the creativity is gone.  When I first started gaming we had PC games like the Ultima series, where the developer had a pure passion for the world they were creating.  We see that in George Lucas' original Star Wars films.  Now it's all about who has the biggest initial launch sales and marketing budget.  And what we're left with is a bunch games with short empty campaigns, unoriginal stories, but boy they sure look pretty in 1080p.   

mrpxiz
mrpxiz

@JDFS I hope you meant "arma 3 is NOT indie" instead of "now", because it's definitely not. Not even Dayz is indie which was made by a much smaller team. Bohemia has been around for more than a decade and they made and spent millions. I own all their titles btw, they are my favorite company since Arma Combat Operations.

corteztheg
corteztheg

@FabledVeteran just the story? what about the Voice acting, one of the voices portraying an Asian character sounded Jamacian

Coseniath
Coseniath

@FabledVeteran I completely agree. The game was so big that no other game is near it. 1k square kms to explore... nuff said...

corteztheg
corteztheg

@Gamer_4_Fun well i stopped being excited when its price lowered to 30.99 pounds on amazon. that is usually an indicator that the game is either lower on content compared to contemporaries for example Batman Arkham Origins or suspect to be an either average below average game for example Deadpool or Anarchy Reigns.

Lacarus
Lacarus

@dcno07  Don't blame the developers. Blame the publishers.

corteztheg
corteztheg

@ioshilee well $235 million on market and development is incredibly risky ( GTA 5).

corteztheg
corteztheg

@jgn77 Remember me, Prototype 2, Homefront, Hitman Absolution. all good games that sealed their developer's fate to either be bankrupt, closed or downsized. making and publishing game without brand recognition is risky and that is the state of the industry.

rickphoenixxx
rickphoenixxx

@downloadthefile Yeah, back in the day 60 bucks would buy you a game. Now that's the introductory down payment when you look at dlc season passes and stuff like $20 car packs in Forza 5.

garcia_jx
garcia_jx

But it's pretty expensive putting in that COD fish technology.

Kryptonbornson
Kryptonbornson

@Redsyrup Of course they do, but they just get replaced with another one. Halo gave way to Call of Duty and now Call of Duty will fall to something else.

TheMatrixCBC
TheMatrixCBC

@xolivierx  I don't know if you remember the NES and SNES, but more great games and interesting franchises were born during that time than any other - that's when they got started.

Say what you will about Mario games, but each game is enjoyable and entertaining because Nintendo takes the time to produce games that are high in content, low on flash, and fun to play.

I don't disagree with the sentiment that most games that come out, now, aren't worth $60.

Death_Masta187
Death_Masta187

@Tomcat2007

I cant help but think of that fourm post over on the Blizzard Diablo 3 forums a few years ago. about why new games just suck.

The cynic in me feels bad for these younger kids growing up and missing out on an industry run by people like John Carmak, Tim Schafer, Chris Taylor....etc. back when devs made games for the love of making games. not the love of making money.  they were happy if they could make enough to eat and keep making games. then somewhere along the line it was taken over by the EA's and Activisions. corporate suits that only saw dollar signs and unaware  consumers ripe for the exploiting. 

but optimist in me realizes its not all doom and gloom. sure triple A gaming sucks a big one these days and is a soulless industry of greed and generic crap. The indie scene still give me hope not all gaming is lost. and it's bringing back the "good ol days" of making games for the love of the art.  hell look at kickstarter in 2012/13. even those old school devs are sick of the BS.

Kryptonbornson
Kryptonbornson

@Tomcat2007 It's because used game sales kill the long tail sales. Rental doesn't hurt as much, people have to give the games back or buy them full price. Back in the day, the only place you'd find used games were pawn shops and then later specialty stores like Babbages and Electronic Boutique (later EBgames). You basically have to make a quick profit before people have option to buy the game in such a way they don't get any profit. That even forces games to be longer than they used to be because people will sell them quicker. And it forced many companies to shoehorn in multiplayer, which is supposed to keep people from selling their game.

ceaseless
ceaseless

@Coseniath @FabledVeteran I loved that the map and area was so big, but that's why I was so angry at the same time. I saw much potential in that map, but there was nothing to do (nah I'm not going to try and create stunts as an excuse for something to do hehe)

1wikkid1
1wikkid1

@Ghosthunter54 @Death_Masta187  Oculus Rift is not VR by any means... it's essentially just a monitor that attaches to your head, VR is much much more than that. It is a step in the right direction though.

xolivierx
xolivierx

@Kryptonbornson  used games sales....if games were actually good and worth keeping, people would not be selling their games. I barely buy games anymore, because most of them are pure crap. Games do cost a lot to make, but that doesn't mean they are good!

Kryptonbornson
Kryptonbornson

@Death_Masta187 @uchihasilver@buffaloblitz85@Kryptonbornson@Redsyrup They might not have paid. It was probably a back room deal when they were cutting Gamestop out of used sales with their policies. If MS and the publisher got a cut of used sales, then the exclusivity made sense. Since Sony overreacted and dropped their blocking of used games, then MS had to backtrack. Makes me wonder if that wasn't just a bid by Sony to undermine Microsoft because they were poised to be the more popular console by early adopters.

Death_Masta187
Death_Masta187

@uchihasilver @1wikkid1@Ghosthunter54@Death_Masta187 

Well no shit MS & Sony don't really care they make money off a few game sales. But publishers/developers do.  in an indasty you need to sell 6+ million to break even. you bet your ass Publishers are going to get their money. be it from MS/Sony or by putting it out on all systems. 

if you want more original games (ie not CoD 37) publishers need to mitigate the risk of making games. I'm pretty sure it will get to the point the only exclusive a console will get are 1st party ones(forza). or they will just be timed exclusives. where say the XB1 gets it 2 months early(CoD DLC). or it will just be exclusive to that one console but PC will also get it(titanfall).

MS/Sony make up the money lost on these exclusives with pay walls at every turn on their consoles. I think costs will get so high that even MS is not willing to pay to have them exclusive on their consoles for the life of the game. 

All I know is its going to be a great generation to be a PC gamer. we will be getting these games exclusive to just 1 console on PC as well. so it will be like having both "next gen" systems but cheaper, more powerful and it will have access to more exclusives than all 3 consoles combined.


TheMatrixCBC
TheMatrixCBC

@Kryptonbornson  I would disagree with your assertion that NES, Genesis, and SNES games can't hold their own compared to newer games.

While nostalgia certainly plays a role in the desire people harbor to replay these games, there is something intrinsic about these games that keep users coming back - quality.


Much of what we've seen over the past decade is the rapid increase in graphics capacity and quality that has far outpaced the quality of the content.  Say what you will about Final Fantasy IV and VI, but those two games were loaded with content that kept gamers coming back to play them, again.  Perhaps the best example of this is Chrono Trigger - this game has so many endings and variables that it takes no fewer than ten plays through to get them all.  As it stands, I can barely stay interested in AAA Square-Enix titles long enough to finish them once, much less play them, again.

Video game companies often conflate high production costs with high quality of content, and that just isn't the case.  There are tons of graphically astounding games that feature subpar gameplay, minuscule content, and loads of paid DLC to access content that's already on the damned disc.  If you're going to charge $60 for a game, you need to ensure that there is $60-worth of CONTENT in the game, rather than focusing so much on graphics that the basics of good gaming get lost. 

Kryptonbornson
Kryptonbornson

@xolivierx @Kryptonbornson I disagree, coming from the old school, most common games that get low scores are better than stuff in the NES, Genesis, and SNES days. If I thought enough, maybe better than all eras up to now. The standout gems people nostalgically remember still come around, but they are overshadowed the overwhelming quality of games nowadays. Great games are considered mediocore and fail. Too much competition, but the unique stuff doesn't succeed. Early last gen had a lot of unique kinds of games, but Call of Duty won out because it was what gamers purchased. It's Darwinism/capitalism.