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."
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.