THQ Defunct: Is This the Beginning of the End?

Every year, more and more video game developers are becoming bankrupt, falling into administration and being wiped off the face of the earth. The most recent of these, and arguably one of the largest, is the announcement of THQ’s bankruptcy. Until now it had only really been small, plucky developers but THQ is the first big dog to fall. Some remnants of THQ have been saved by other companies but some like Vigil, developers of Darksiders, weren’t as lucky. Thus many people have unfortunately lost jobs, something that seems almost too common in the industry. Don’t be mistaken, for the winners the industry is profitable and lucrative bringing in billions for some, but if this is the case why are there so many unfortunates in the world of video games?

Average day in the life of a video game developer

At the moment the video game industry is largely top heavy, meaning it is a few companies who hold most of the wealth. Though there may be many different developers, many of these developers are owned by large conglomerates and even the ones that aren’t have their games published by huge companies like EA or Take-Two. With so many layers in the business model the profits of a successful game don’t always filter totally down to the actual developers who created it all and hence although a game may be hugely popular, the developer may not get as much as you’d expect.

Often, a game with a big publisher won’t have just one developer. One developer will get the lion’s share of the work, but much of the work will be outsourced to other teams within the parent company that have no other ties to the developer itself. For example, LA Noire was mostly developed by Team Bondi (who are now defunct), but Rockstar (who are in turn owned by Take-Two, see what I mean when I say business layers) dealt out a lot of the work. The MotionScan system which records actor’s faces, which LA Noire is most famous for, was created by Depth Analysis. 1940s LA was recreated with a huge input from Rockstar North (GTA) and the PC port was made by Rockstar Leeds. Rockstar San Diego (Red Dead) also played a part. LA Noire was a huge commercial success, but remember this profit goes to Take-Two, Rockstar, Rockstar North, Rockstar San Diego, Rockstar Leeds, Depth Analysis, amongst others. This is a huge ‘sharing’ of the wealth and this is from a game that was a success and made money, just imagine what happens when a game doesn’t do well.

Not every developer gets this Life line

Making a game is a long and expensive process. It requires a whole development team to be dedicated for at shortest a year. Games rarely take less than a year to be developed and even hitting the one year mark is difficult and only usually reached by larger developers with huge resources. Hence, a developer can go a long time without any income, particularly if it is a start-up. So when the game is completed and released, the all the developers hopes are pinned onto that game. If the game flops, it can spell disaster. During the process, developers can invest thousands if not millions into a game and if that is not recouped by the game that required that investment, then the company has lost money. Sometimes this can be such a great loss that the company gets such little income that they can’t pay their debts, so go bankrupt, into administration and just hope that someone saves them. There is little room for error in the gaming industry, developers put all their eggs into one basket and if nothing hatches, it’s curtains. This is often the way many developers find themselves at the mercy of big publishers. The developer has a reputation due to good games they made in their past, but their current project has ended in failure. Thus a big publisher swoops in saves the company and now owns them. The advantage of this is that when you have a big company looking over you, you get some of their money for development, you get help from them both business wise and creatively and if anything does go wrong, they can help thanks to their huge cash flow. On the other hand, if the parent company doesn’t believe the developer is going anywhere it can choose to sell or just close the company, and you’re back to square one.

This idea of big companies owning smaller ones happens everywhere in the world. The film industry is also a largely top-heavy industry with a handful of Hollywood companies owning pretty much everything else in existence. Arguably, the film industry is more top heavy than the video game industry and the often have much larger budgets than video games, so why are there not the same level of redundancies there?

This comes back to the development cycle of a game being longer than a year, whereas a film can be all completed in roughly five months with three of those being for filming. In some cases a film can be all done and wrapped up in one or two months! Although a film studio will pin all its hopes on one film like a developer will, the fact that it doesn’t take as long to make a film means, that you go less time without income if the film flops, thus you can keep the bailiffs at bay for a little longer if all goes pear-shaped. 

Films also often have larger budgets than games, so surely there is less room for failure. But turn to the other side of the spectrum, films with small budgets. Simply due to the nature of games, producing a game that is polished and of high technical quality is expensive. It is much easier to produce a film on a low budget. Aside from huge CGI effects and planes exploding most of the best technical qualities of a film can be made with most cameras and a creative director. Also, commercially available editing software is often sufficient in editing a film. Often also, artistic creativity is less dependent on technology in films than in games. Hence, you can make an amazing film on a low budget and though it might not have the blockbuster effect of a big budget Hollywood film, but the artistic merit can still shine through. With a game this is more difficult, as a community we focus so much on graphics and how visually stunning a game is that this makes up a huge portion of our opinion of a game. Creating a Crysis like environment takes time and is expensive and so if a game really wants to be one of the best, it has to invest huge amounts into technical achievements like LA Noire’s MotionScan. Therefore, it is harder for a game to stand solely on its artistic and creative merits, these are often upheld by the underlying technology upon which the game has been created. Also, due to video games’ largely computing based roots, developers cannot keep the same technology. Technology is constantly evolving and hence part of the budget needs to go into Research and Development of new technologies, which is very expensive.

A real danger if you're a "Video Game Nerd"

But then returning to the Big Budget films, Hollywood consistently makes films with huge budgets and consistently makes a profit on them. This is largely because their target audience is much bigger than that of the video game industry. Watching a film is a mainstream activity, there is no social stigma to it. It can be social if you go to the cinema, or relaxing if you stay in and watch something at home. When you say you are going to watch a film, no one thinks “so he’s going to waste 2-3 hours and not do anything productive”. Video games on the other hand have a very different image to the general public (some people still believing they are the work of the devil). Telling someone who does not play games that you are going to stay in and have a few hours on Xbox can have a negative effect. Gaming still to many sounds antisocial, lazy and a damaging way to spend your time. People who watch a lot of films can be considered to be cultural or arty or that they have a hobby. Someone who plays a lot of games can be considered a lazy, nerdy loner with nothing better to do with his time. Video games, though rapidly gaining popularity, are not a mainstream past time and still have a large social stigma that other forms of media do not have.

The entire video game industry is structured so that is cruel and punishes mistakes. Though the victors gain hugely, the losers can often face fatal blows. Large companies still make large profits but small developers can have a hard time surviving. The industry will either become more top heavy with fewer companies gaining more power, or developers must find a different way of structuring business models to survive. On the other hand, we could help as a community and praise artistic achievement on the same level as technical achievement allowing for smaller developers to make a name on a smaller budget. This will also help the indie market grow. The Video Game industry is still young in comparison to other media industries, it is still developing and learning how to work in some cases. There is still maturing that needs to occur with those making games and those consuming it. Video games are not a mainstream industry yet and until it is, it’s difficult to predict where it’s headed. Films are a mainstream industry and have been for a long time, they are a top heavy industry, so there’s a good chance a Hollywood of gaming may emerge, but then again, they are two very different industries.

Is it over for Child Friendly Content in Games?

Video games have long been a gold mine for purists trying to demean new media. Violence, sex and sometimes violent sex are all bullets right wing politicians and adults left in the dark all keep shooting. This has led Obama to pump $10million into a study which will examine the effects of violent video games. To this date there has not been a single reliable study which has concluded that violent video games have an adverse effect on the audience, those that have concluded such have often been heavily criticised for flaws in their study. Nevertheless, the vast majority of big name titles offer some kind of content that is not for the eyes of little children. As a child I was a huge Crash Bandicoot fan, but he has since disappeared along with other ‘child friendly’ games. Are the days of 3+ games (or ‘E’ in America) gone?

A nice addition to FIFA?

First of all, the answer to that question is no. 3+ games will always exist, especially with the boom of the casual market and you’ll never see a FIFA game where John Terry shags Wayne Bridge’s girlfriend, or where Wayne Rooney shags a granny or where Ryan Giggs…you get the picture, footballers don’t play very much football. Nevertheless, a FIFA mode called ‘Balotelli’ would be very interesting. The real question is will there be a great deal of amazing 3+ games in the near future and will they attract the mega bucks of big publishers and developers.

So let’s look back at some of the games of 2012, at the moment I’m only going to look at proper games for PC or console that are sold at retail with an actual box i.e. proper games. On metacritic if you look at all the games this year in score order, the first proper 3+ game is FIFA. After that, it just took too long to find one and I got bored, this was at a metascore of about 89. If you go to other sites you may find others, for example IGN has Pokémon up there, but generally there are next to none with 90+ ratings, so what’s the problem?

Some say that video games are at fault because they require the audience to be active, the fact that the audience is controlling what is going on, hence they are more immersed. Thus, games need to be more exciting, more fast paced and hence ‘need’ violence in them to make them interesting. But film is not necessarily passive, people who watched Inception were very active (and unsuccessful) when trying to understand the plot, just because your fingers aren’t active, doesn’t mean your mind isn’t.

Another issue is that the video game industry is trying incredibly hard to shake the stereotype of a gamer being a nerdy teenager in his bedroom, even though the average age of a US gamer is now roughly in his thirties (though this does include casual games on handheld devices too). In doing so, the market is trying to be more grown up and in doing so is trying to rival the film company. When adults can play video games without any stigma, only then will video games have truly hit mainstream, publishers may be making millions, but in terms of society, television and film are still way out ahead. So then maybe this issue stretches beyond the world of gaming?

Let’s look at the Oscar nominations for best picture, there is not a single U certificated film there, only Life of Pi with a PG and in fairness Amour is probably not that inappropriate (unless you’re disgusted by old people [shame on you]). BAFTAs, again Life of Pi is the only PG. So, the problem lies in the film industry, what about TV? Golden Globes, all the TV nominations (I’m not talking about winners because Homeland won pretty much everything) are littered with post watershed programmes. The only shred of hope is that animation has its own category where the films are U/PG and even then, this isn’t always considered a major category.

The Fallen Kings, now reduced to this

So the problems is more with society and not just games. In our eyes, a TV show or film isn’t great if its ‘safe’ and ‘child friendly’, it makes it seem as though what we are watching or playing is childish or not exciting. From teenagers up we all like to feel as though we are adults, with adult lives and watching childish things somehow makes us less able to be part of this adult life. In the early 90s Mario and Sonic were kings of the gaming industry and now they are seen as ‘kids games’ by many.

A lot of these media are based on escapism and the fact that we want to see a different life. We however want a balance, we want a different life, but one that seems real enough that we can imagine it. In our minds the real world is a dangerous place where people get killed and where people only have relationships within a group of 10-20 people. We have this perception of the world where everything is out to get us, so something that doesn’t show as such isn’t realistic and thus we can’t escape into it. There is a theory in media known as cultivation theory that suggests that it is because of the media we think the world is a more dangerous place, so maybe it’s a vicious cycle.

Even go to literature and in 2012, 50 Shades of Grey is the biggest seller. This idea of content that is not ‘child friendly’ is everywhere, it is in everything we consume, even advertisements are hugely sexualised, there is no escape and we’ve gone from a world where Video Games were the bad boys to a world where everything is, so is it possible that Video Games are actually the best at offering great experiences with child friendly content?

Earlier I looked at the metacritic list but ignored a lot of games, I can’t speak for iOS/Android games as these don’t have strict content certificates, but handheld a console digital download games (Xbox Live Arcade and Playstation Network) do exist on the list of great games in 2012. Bastion and Cave story both are up there and though they may contain violence, it is very cartoony so isn’t a problem (you wouldn’t condemn Tom & Jerry would you?). They are both right at the top, with great reviews. Slightly further down is Journey, which is not violent at all, you don’t kill anything in the game and nevertheless Journey has been the recipient of countless game of the year awards, it is peaceful and calm, it is slow and focuses on storytelling. The game achieves great heights without hurting a fly. This is regarded by many as the best game of 2012 and it can be played by anyone. Previous games of the year however do not spare any blushes. The same is true for the Oscars and BAFTAs, most of the Best Film awards go to films with age certificates of 12 or over, often 15s, with the exception of the Artist. So like the Artist, is Journey a one off or an avenue the industry may explore further?

Didn't it just?

It could be then that it is with blockbusters that the problem lies, in films, TV and video games. The majority of successful 3+ games are not retail copy games in the same way most successful U films are animations. Maybe each industry can only have one channel in which to distribute these kinds of products. Or maybe it’s just that only indie developers are willing to take the risk and that big-name publishers want to stick to the tried and tested method, is money the root of all evil?

Though the days of 3+ dominance may be long gone like with Sonic and Mario, it is not entirely over for 3+ games. As a society however, we are going to have to want games without sex, without fear, without violence. Developers make games that consumers want and if there is only demand for killing then that is what they will give us. On the flipside however developers need to inspire the community and show people that games can be successful without violence, without being fast paced. Though full of zombies, The Walking Dead showed that you don’t have to hack away at zombies but that you can actually avoid them (maybe even love them [not really]) and Journey showed how centralising an incredible story can make an incredible game. Even Limbo, thought it is largely based on killing little children (sounds fun, I know), the story is deep and ambiguous and with a great use of devices only usually found in Literature (metaphors, pathetic fallacy) it is truly something different. The rise of storytelling type games is hope, but it will likely be a while before that metacritic list has a significant number of 3+ mainstream titles.

Can you Topple the Console Giants?

The world is run by a few major corporations, companies with huge power and huge influence as a result of huge money and here’s us thinking the government has a say. Little companies have few words in the matter, this seems into every crack of the world, from big budget filmmakers like Disney to big income charities like Oxfam, (yes I know, I insulted a charity). Even when a small company looks as though they’re going to push forward, they get bought out, like Android did by Google. It is very difficult to reject a big bid from a big bidder, like when Disney bought LucasFilm or when Disney bought Marvel or when Disney bought…you get the picture (yes, I realise LucasFilm and Marvel are not small independent companies). This transcends into the world of games consoles this current generation is a pure three horse race between Microsoft, Nintendo and Sony. I’m only talking about home consoles here because the handheld story is completely different with the idea of a phone or tablet being considered a gaming device, as an occasional purist, it hurts me to say that (but it won’t in a couple of years). These three though have a monopoly, when you speak about games consoles, no one will ever think of anything other than the three above, many won’t even consider the Wii.

Who needs 101 Dalmations when you can buy 101 other companies

The last corporation to have a major foothold in the industry was probably SEGA with their Dreamcast. SEGA has since given up on consoles after a series of flops, the last hit being the Megadrive, released in 1990. So for 13 years we’ve had the big three we’ve known today (though Microsoft released late), SEGA decided the company had no future in consoles and thought to streamline their business by becoming a third party developer. That’s the trouble with console development, it requires serious cash. Research, marketing, distribution, they’re all expensive, and all harder to do when you’re new to the game.

Research is a big part. As a new console you want to provide something new and unique to the market, something competitors can’t. This can be through software, though more often hardware innovations. If you’ve already got people doing this, it is often easier. Research doesn’t end when a new console comes out, arguably, this is when it begins. Research is lengthy, especially when you’re pushing technology to the forefront of what it is at, so a company like Nintendo have been developing consoles since the late eighties. Those 25 odd years have been spent finding new ideas, learning what people like and don’t and what works. Nintendo would’ve started work on motion controls long before the Wii came out, they would’ve been doing it while getting an (kind of) income from the GameCube, hence the company was earning money (sort of) during the development. Thus, the company stays afloat and those profits can be pushed into research. That console researched then earns money while new research on a new console begins, it’s a cycle. That could be one of the reasons Sony tries to give their consoles a ten year life span, with a long life span, Sony can make sure their next console is the best it can be. For a new player, they may not necessarily get this time when the company is earning money to research, hence lots gets ploughed in without return for a long time and not every company has the financial income to do that, this is almost impossible for a start-up company.

Time also gives you experience in how to conduct research and what avenues to take, hence bigger companies may be more efficient in doing what they aim to do. In doing so, they can also attract better employees. If a person sees a company with a great reputation, where their careers have a future and where they’ll get a good pay, they’re going to go there, success breeds success.

That reputation also helps when you have to present your product to the general public. If you’re a well-established company then people will trust in what you will bring out. They can look at your previous successes and relate back and will assume that you know what you are doing. People trusted Microsoft because they had a past in the tech biz, even though it may not be in the video games industry, they’re reputation as the first ever software company meant people had a feeling that they might pull it off. People saw Sony as a company that had a history of great hardware, so they would be able to bring out a good home console. Maybe this is where Valve has an advantage. Valve have revealed some details about the Steambox, their new console, at CES. Valve has an incredible history in the industry with Half Life & co. They also know about games distribution with Steam. Steam’s big picture mode which makes using Steam with a controller much easier shows that they know how to work a console. Big Picture mode is innovative and easy. It is the best way to browse the web with a controller, and it has the best controller keyboard EVER! The keyboard is designed with a controller in mind and designed to fit the controller, the result is the easiest typing on a controller you’ll ever do. Sony and Microsoft were lazy and just forced a QWERTY keyboard into the controller, the result, very difficult typing.

Valve announced at CES that the Steambox will be able to stream different games to different displays in different rooms from one device, with all games running smoothly, so there is innovation with the Steambox too. Knowing Valve, there is more to come. Also Valve have made it easy to load Windows onto the Steambox and get rid of Linux. Of the developers out there, Valve appears to be different, more caring and unique than anyone, hence it is much easier to buy into their trust than it is to go with Evil Incarnated, who label themselves as EA.

The many calling cards of The Devil, EA servers are currently unavailable while Satan does his bidding

 So maybe there is hope for a new company to break into the current console market. Apple and Google invaded the handheld market and may become much stronger very soon. Truth is though, it will have to be a well established company to do it. A company with the knowledge and the funds to research. A company with the experience and reputation to be trusted. Most importantly though, a company who is willing and able to push the boundaries of technology and bring something new to the industry that our little minds have not even thought of. Chances are we won’t see an indie console anytime soon, and even if a little company produces a great piece of innovation, chances are Disney will just buy them.