bubble burst

Destiny is costing Activision $500 million. Is this real life? Have any of us actually considered the implication of that?

GTA V was the previous record holder for most expensive video game – with $260 million. Using my sharp mathematical skills, I can tell you that this is “around double” that.

It’s also more than any Hollywood studio has been willing to spend on some enormous blockbuster or the other.

To me, it’s a symptom of a larger issue in the industry, a runaway train, an ever-expanding bubble that I feel may just be ready to burst.

The first of the new Disney-produced Star Wars films is expected to have a budget of around $200 million. That’s for a massively anticipated installment in what may be the biggest film franchise of all time.

So why is Activision spending $500 million on Destiny? Because, I assume, they feel that they have to.

That Escalated Quickly

The current state of the video game industry has devolved into a juvenile game of one-upmanship, where each new title has to be bigger, flashier and more powerful than the last.

This means studio execs throwing enormous piles of money at massive development teams, who work in some of the worst and most stressful circumstances possible.

The problem here, is that when you’re investing this much money in a single game, you can’t afford to take a risk. That’s why we have an endless procession of franchised titles coming out every year – they’re an easy sell.

Franchises like Madden, FIFA, Call of Duty, Battlefield etc. are what keeps these studios in the green. Can you imagine dropping $200 million on a game that flopped? Some studios couldn’t recover from a loss like that, they’d fold within the year.

What if ambitious new IP Remember Me had cost $500 million?

What if ambitious new IP Remember Me had cost $500 million?

Your only other option is to build your next big thing on a foundation of hype. Enter Destiny. Spending $500 million on a brand new IP seems risky, but less so when the people behind it created one of the biggest video game franchises in the world.

You had better believe Activision is hammering home that Halo hype until release, heaping on generous helpings of tech demos, videos and heavy-handed marketing.

People are probably really excited for Destiny, but it’s arguably not because of what we’ve seen of the game or the people behind it, but because we’re told to.

We’ve been told that is The Next Big Thing, we’ve been told how much money has been spent, how awesome the developers are and how our brains are going to explode out of our noses the second we get past the menu. We’ve been told that, so we believe it, and thus we buy it.

It’s the same reason we buy Call of Duty or Battlefield; almost as some kind of twisted force of habit rather than on the merits of the game itself. We buy it because everyone else is buying it; the group consciousness dictates that these will be the multiplayer shooters of the year – pick one and tell owners of the other one that they’re stupid.

Haha, Call of Duty players are such casuals.

Haha, Call of Duty players are such casuals.

The Tipping Point

However, if Call of Duty: Ghosts tells us anything, it’s that gamers are getting weary of recycled crap being shoveled down our throats.

The reviews were mediocre, the game was quite universally panned by consumers and the sales, for the first time, did not exceed that of the previous title.

Perhaps when the next Call of Duty game comes out, we might actually wait a while and see what it’s like before handing over our money. Maybe we won’t pre-order just because Kevin Spacey and guns and stuff.

Perhaps the same thing will happen with Destiny. I said quite some time ago in a column that Destiny may just be the next World of Warcraft. In hindsight, that opinion was probably based on Bungie, Activision and enormous amounts of cash.

Is that enough? Early opinions of the game have been somewhat lackluster, and I’d be lying if I didn’t say I’d lost a significant amount of enthusiasm for it. It may just be a somewhat generic, not-that-interesting shooter.

A generic shooter that needs to sell 15 million+ copies just to recoup the expenses.

Of course, we saw all this before with the famous 1983 video game crash, the one that resulted in all those Atari cartridges becoming a landfill that documentary makers would dig up 20 years later for our amusement.

That crash happened because a bunch of mediocre games were pushed out too quickly to try and capitalise on hype and holiday seasons. You know, kind of like Call of Duty‘s mandatory November release, which arrives so riddled with bugs and lacking so much basic functionality you feel like you’re playing an early access alpha.

Will we see another crash like that? No, fortunately not. Video games are here to stay, in one form or another. But we may soon see a significant change in how these games are created and consumed.

Kind of like this, except Kevin Spacey's face instead of E.T.'s.

Kind of like this, except Kevin Spacey’s face instead of E.T.’s.

People Don’t Really Understand the Industry

Now let me put a disclaimer here – I’m not saying that I understand the industry either. But the fact is, the enormous rising success of video games in the last 10-15 years has been so fast, it’s apparent that nobody really knows where the ceiling is or what is actually valuable.

The biggest indicator of this has been the casual games market, in which companies like Zynga have really demonstrated the volatile risk it poses for shareholders.

You just don’t know if you’re going to have a sustainable franchise like Angry Birds, or see your shares dive off a cliff with an investment in a game like Draw Something.

King.com had a massive IPO recently, but that company is almost entirely Candy Crush Saga. They have tons of games, but that one game alone is basically that company’s entire value; they haven’t been able to recreate that kind of success with their other games. So what happens if tomorrow everyone decides they’re tired of hopping lollipops around?

What happens if everyone decides the military shooter just isn’t that interesting anymore?

Honestly, how people haven't lost interest in this yet I'll never understand.

Honestly, how people haven’t lost interest in this yet I’ll never understand.

People like to demonise people like Bobby Kotick (myself included), because he runs his company like a businessman, not a passionate gamer.

The industry has shifted from hardcore developers like John Romero and John Carmack running the company to bringing in business-savvy CEOs to make the tough decisions and drive profits. Kotick isn’t interested in what is fun, he’s interested in what will sell.

The problem sets in when people like Kotick are making creative decisions – which, as we know, they are. Developers aren’t given freedom, they’re told to stick to the formula that works until it stops working, at which point the franchise is discarded.

I think people like Kotick believe they have this all figured out – the formula, the behaviour of their consumers, what sells and what doesn’t.

But we’ve learnt from television, movies, books and music that things aren’t quite so cut and dry. If you don’t have your finger precisely on the pulse of what your audience wants, you’re headed for a fall.

I think we’re headed for precisely that. These games will continue to push and push each other into dizzying heights, budgets will continue to inflate and all the while our games will become increasingly stale, until the entire house of cards comes crashing down around us and the studios are forced to re-evaluate what kind of product they’re putting out there.

Honestly, I can’t wait.