Here are a few things that came to my mind while reading:
"In a word: bytes. The relentless expansion of game file sizes correlates directly with budget inflation. Every additional gigabyte demands thousands of artist-hours creating higher-resolution textures, more elaborate environments, and increasingly photorealistic character models. Yet the efficiency gains from development tools have plateaued since the widespread adoption of engines like Unreal and Unity, leaving studios manually crafting ever-larger experiences without corresponding productivity improvements."
I do agree that AAA with no live strategy and related monetization have probably maxed out their audience and the revenue per user. The arms race of being bigger/shinier can't result in a victory for anyone.
But I am a bit doubtful here at making it the first argument parameter to explain the situation.
First, Unreal and Unity are rarely used for projects with budgets of that size. It's mainly engines developed internally. But it's true they are more used for large projects than before. Also, because when you invest 200M on a project, you don't want to leave 15% royalty to Epic or Unity. I would actually say that many of the internal engines have mainly evolved from a pipeline point of view (toolset) rather than a runtime point of view. Houdini becoming a core skill for many technical artists on this kind of pipeline would be an example. Same for Allegorithmic tools in the last decade.
But anyway, I don't think that's where the money goes. The complexity of the feature set (opposed to the content) has been growing exponentially for AAA and live service games. Finding the right direction and coordinating the efforts for its execution, being able to entangle the complexity of the dependencies, keeping the build stable and usable despite having hundreds of people working on it, has skyrocketed way more than the asset creation problem. It created a lot of waste that are insanely hard to get rid of.
The other complexity is that there are more projects of 200M USD ongoing than teams able to handle this kind of challenge. Also, the size of the investment causes other problems: they became a high focus point that the corporate exec layer will keep under high scrutiny, messing with it everytime a new trend emerges (or seems to emerge to be forgotten 3 months later depending on whatever got successful) which will create even more wastes overall.
I may be wrong though, I don't have data to prove what I say, just experience of what i am seeing and hearing. That doesn't make it a very reliable truth.
Excellent article and very well founded conclusions.
Before I transitioned into the gaming industry, I was an economist for politic and government for many years. A few side notes to add in my own viewpoints.
1. change is ever present in all industries. One way or another. Triple a became too complacent in its own successes. Its often mentioned how large gaming has become as a industry. And for the most part, this is correct. But when speaking about the (real) decision makers in triple a gaming world wide, I would be very surprised if this numbered to more than a few dozen individuals in total.
This group became very comfortable to the point of blinding themselves to not only real politick but cultural and technological changes in how that could affect the production and continuations of their most successful IP's. Which all amount to many billions USD at this point in time.
2. digitization is assured easier times in the near future. But the danger here is seeing it as a bypass for the industry as a whole to continue business as it was. The kicker is that the parts manufacture of every sort of machine running video games of any stripe is going to be heavily affected as well. with 'counter tariffs' almost assured, this process will affect nearly every video game market imaginable.
3. difficulties do not mean the end of triple a. It will take stark different approaches and bold chances, however. and the likely current crop of leadership is too unused to this kind of behavior by their own successes and lack of need to adjust in the manners needed.
My view is that triple a is likely to go the way of the warring italian city states: bring in the mercenaries(outsource studios, in other words) when the needs require them to put out the next big release in whatever IP series its time for. Keep the core production teams and most experienced people in house, but the differing parts that can be broken up and arranged in separate studios will likely see this.
I am great fan of this newsletter entry into my emails when they arrive, its a rare thing to get discussions and topics examined in such a well-thought out way on a regular basis in the age of many 'phoning it in' with AI-generate creation content on many sites these days.
Go back and look at the bunny model from original 2004 WoW and marvel at what was considered acceptable asset quality for a game that brought in billions.
I really don’t think graphics arms races are the future; there’s a place for it, but creativity is constantly winning out.
Very interesting to read.
Here are a few things that came to my mind while reading:
"In a word: bytes. The relentless expansion of game file sizes correlates directly with budget inflation. Every additional gigabyte demands thousands of artist-hours creating higher-resolution textures, more elaborate environments, and increasingly photorealistic character models. Yet the efficiency gains from development tools have plateaued since the widespread adoption of engines like Unreal and Unity, leaving studios manually crafting ever-larger experiences without corresponding productivity improvements."
I do agree that AAA with no live strategy and related monetization have probably maxed out their audience and the revenue per user. The arms race of being bigger/shinier can't result in a victory for anyone.
But I am a bit doubtful here at making it the first argument parameter to explain the situation.
First, Unreal and Unity are rarely used for projects with budgets of that size. It's mainly engines developed internally. But it's true they are more used for large projects than before. Also, because when you invest 200M on a project, you don't want to leave 15% royalty to Epic or Unity. I would actually say that many of the internal engines have mainly evolved from a pipeline point of view (toolset) rather than a runtime point of view. Houdini becoming a core skill for many technical artists on this kind of pipeline would be an example. Same for Allegorithmic tools in the last decade.
But anyway, I don't think that's where the money goes. The complexity of the feature set (opposed to the content) has been growing exponentially for AAA and live service games. Finding the right direction and coordinating the efforts for its execution, being able to entangle the complexity of the dependencies, keeping the build stable and usable despite having hundreds of people working on it, has skyrocketed way more than the asset creation problem. It created a lot of waste that are insanely hard to get rid of.
The other complexity is that there are more projects of 200M USD ongoing than teams able to handle this kind of challenge. Also, the size of the investment causes other problems: they became a high focus point that the corporate exec layer will keep under high scrutiny, messing with it everytime a new trend emerges (or seems to emerge to be forgotten 3 months later depending on whatever got successful) which will create even more wastes overall.
I may be wrong though, I don't have data to prove what I say, just experience of what i am seeing and hearing. That doesn't make it a very reliable truth.
"AAA game development has entered a danger zone where content bloat, not innovation, drives costs to unprecedented heights."
Great point, especially the view on game sizes. Personally, I blame 4K assets. But that's just me.
Excellent article and very well founded conclusions.
Before I transitioned into the gaming industry, I was an economist for politic and government for many years. A few side notes to add in my own viewpoints.
1. change is ever present in all industries. One way or another. Triple a became too complacent in its own successes. Its often mentioned how large gaming has become as a industry. And for the most part, this is correct. But when speaking about the (real) decision makers in triple a gaming world wide, I would be very surprised if this numbered to more than a few dozen individuals in total.
This group became very comfortable to the point of blinding themselves to not only real politick but cultural and technological changes in how that could affect the production and continuations of their most successful IP's. Which all amount to many billions USD at this point in time.
2. digitization is assured easier times in the near future. But the danger here is seeing it as a bypass for the industry as a whole to continue business as it was. The kicker is that the parts manufacture of every sort of machine running video games of any stripe is going to be heavily affected as well. with 'counter tariffs' almost assured, this process will affect nearly every video game market imaginable.
3. difficulties do not mean the end of triple a. It will take stark different approaches and bold chances, however. and the likely current crop of leadership is too unused to this kind of behavior by their own successes and lack of need to adjust in the manners needed.
My view is that triple a is likely to go the way of the warring italian city states: bring in the mercenaries(outsource studios, in other words) when the needs require them to put out the next big release in whatever IP series its time for. Keep the core production teams and most experienced people in house, but the differing parts that can be broken up and arranged in separate studios will likely see this.
I am great fan of this newsletter entry into my emails when they arrive, its a rare thing to get discussions and topics examined in such a well-thought out way on a regular basis in the age of many 'phoning it in' with AI-generate creation content on many sites these days.
-r.
Thanks Raul. I appreciate it.
Go back and look at the bunny model from original 2004 WoW and marvel at what was considered acceptable asset quality for a game that brought in billions.
I really don’t think graphics arms races are the future; there’s a place for it, but creativity is constantly winning out.