AAA games, in their quest to appeal to the broadest audience possible, are increasingly becoming simplistic, diluted, and devoid of a unique authorial vision, catering instead to players who demand less complexity. It is now evident that the AAA industry is facing a decline, both creatively and financially, with many high-profile and critically acclaimed games failing to turn a profit.
This trend is linked to the ever-increasing budgets, which inevitably lead to a point where the business model is no longer sustainable. Despite this, publishers had reasons for their ambitious plans, as the gaming demographic has expanded over the years | seasoned gamers often continue their hobby into their 40s and 50s, and for the younger generation, gaming is a mainstream activity.
The real question remains | what types of games are we referring to?
Jacob Navok, formerly a director at Square Enix, noted that a decade ago, the norm in gaming was to purchase a game, often upon release, play it, and then move on to the next. This cycle of consuming games has since changed.
Today’s market is ruled by service games. A whole generation has matured playing Minecraft and Fortnite, seeing little reason to invest $70 in a game that requires acclimatization, effort, and may be short-lived when they can continue enjoying familiar titles for free, particularly with friends.
While standout games still emerge, they demand greater effort to capture public interest and must become viral. Disco Elysium offers conversations with a tie, the licking of spilled liquor, and degenerate behavior. Baldur’s Gate III features a controversial bear scene. Horror games with jump scares elicit comical reactions from popular YouTubers. And there’s the ubiquitous ‘Sus amogus.’
Regarding the rest of the games, particularly those that are more serious and not “memetic,” they seem to be fading away. In the current AAA industry, a title must become a viral sensation or it risks being seen as a letdown by investors.
Previously, platform holders would release exclusives to encourage the purchase of other games on their platforms. Now, Microsoft is poised to offer an entire library for free with a subscription to draw people into its ecosystem, fostering loyalty to Xbox so they utilize their preferred services on this platform, with Microsoft earning a share of all transactions. However, they face competition from smartphones, where service games are thriving without the need for a separate purchase. Game Pass appears to be reaching a saturation point in user numbers, leading to the evident outcome | Microsoft has decided to shut down Tango Gameworks and Arkane Austin studios.
Sony takes pride in the current generation being its most profitable yet, but there’s a catch | game sales have declined compared to the PS4 era, with increased profits now stemming from DLC, microtransactions, and services.
The graph illustrates the revenue percentages from peripherals (represented by a black bar), services (yellow bar), add-on content for games (top blue bar), and games themselves (bottom blue bar) for the PS4 and PS5. It covers the initial four years of each console’s lifecycle, including content from independent publishers available both digitally and in physical formats.
As development complexity has risen, so too has the time required for production. Two decades ago, major releases might emerge after just eighteen months of development; a decade later, this period extended to three years. Today, a six-year development cycle is becoming standard. However, budgets are only part of the challenge | without simultaneous production of multiple series entries, brand awareness may decline. Franchises like Call of Duty, Assassin’s Creed, and Resident Evil remain memorable, but what of Final Fantasy? Nearly seven years elapsed between the fifteenth and sixteenth installments, leaving an entire generation of gamers unfamiliar with FF by the time of the latter’s release.
For the contemporary console audience, sequels to last-generation hits seem less appealing. Despite winning Game of the Year, Alan Wake 2 failed to break even. This raises questions about the prospects for Dragon Age, which lags a decade behind its third installment, to generate sufficient returns to meet EA’s expectations.
Classic remakes may not always capture interest, even if they are highly rated on Metacritic. The relevance of a JRPG that was a hit 27 years ago is questionable, as people often forget even more recent games. Dead Space, considered a modern game, is already 15 years old, with the last installment over a decade old. Rumors suggest the Dead Space remake didn’t live up to EA’s expectations, casting doubt on the series’ continuation. The Alone in the Dark reboot failed to make an impact, and Silent Hill 2 is unlikely to achieve significant success, possibly falling short of Konami’s hopes for blockbuster sales.
New intellectual properties face challenges too; without viral appeal, they struggle for attention. Titles like Immortals of Aveum, Hi-Fi Rush, and Starfield may prompt questions, but it’s Fallout 4, perceived as tied to a popular TV series, that resonates with the public.
Some argue that companies should simply curb their appetites and gaming budgets. However, nearly all major publishers are unlikely to shift towards creating smaller, more modest games. Each AAA release is a bid to win big, make a global statement, and achieve tremendous success. No company accountable to investors would willingly relinquish such aspirations, fade into obscurity, or blend in with the competition among the elite. This scenario is improbable.
Contrarily, large companies will likely produce even fewer experimental titles. For instance, Square Enix has openly declared its intention to largely forsake ‘middle class’ games; Take-Two is rumored to be phasing out its Private Division publishing arm. The number of AAA releases may dwindle, but the stakes will be higher, leading to more vetted and potentially more homogenous games to ensure mass appeal. Yet, even then, success is not assured.
This trend could make the games we’ve grown accustomed to increasingly scarce. Those that persist may see a price hike to offset rising development costs and plateauing sales. The remaining glimmer of hope lies with smaller companies that remain independent from industry titans, as they may still be willing to gamble on innovation.
