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Avalanche founder: AAA business is unhealthy

Christofer Sundberg thinks games are stuck in a rut

Avalanche Studios founder and creative director Christofer Sundberg has questioned the state of the AAA development business, suggesting that only a few of the games released will actually be profitable.

"It's really not healthy at the moment. Games have evolved, technology has evolved but as businesses we're still stuck where we were 15 years ago. As budgets grow, risks increase," Sundberg told Gamespot.

"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. It's impossible to make everyone happy in the current equation."

Sundberg's team is currently at work on a Mad Max title for Warner Bros. In the past it's created The Just Cause series, The Hunter and most recently Renegade Ops. It also has a number of unannounced projects in production, including one for Square Enix.

"Very few traditional $60 games make any money, and what used to make sense doesn't any more. Publishers and developers very rarely see a return of investment from a five-eight hour long game."

In June last year Sundberg dealt with another part of the AAA business, pre-owned games, when he suggested that gamers trade-in titles they feel are too short.

"I'm sure it's been an issue but that's because games have been too short. I mean when you can play a game through from eight to ten hours, I would return the game too, because there's no reason for players to play it again."

"If you're offering little variation, then there's no motivation for the player to keep that game - unless they want to have a nice bookshelf. That's why we answered that with Just Cause. I go into game stores each week and I always go to the used game boxes - I usually don't find that many [copies of Just Cause]."

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Latest comments (14)

Well, maybe the AAA model needs to slim down and go AA lite + additional enhanced content (through scripting rather than having to building everything from scratch...somehow)
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Morville O'Driscoll Blogger & Critic 2 years ago
From the Gamespot article:
Game budgets are famously secret,
And I would argue they shouldn't be. External financial views of our industry would be sobering for those in charge, I think. If a Hollywood executive looked at the budget for a AAA game, and was told that there was no "second-life" for it through DVD rental and sales; no foreign markets to sell to in order to off-set budget over-runs; no long-tail except through DLC and sales (the value of both of which are dependent on the quality of the game); a lack of merchandising nous; and there was still the issue of second-hand sales...

I would pay good money to see that executive's reaction. I think it would do the industry a world of good.

Edited 1 times. Last edit by Morville O'Driscoll on 5th February 2014 12:34pm

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And we are not even delving into the increassed manpower requirements involved in creative content creation for next gen platforms. Off the top of my head I imagine this requires 6-8x more effort if it involves more photo real type content
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Show all comments (14)
Tom Keresztes Programmer 2 years ago
I would pay good money to see that executive's reaction. I think it would do the industry a world of good.
Reminds me of the movie ID4 - when the president was questioning how Area 51 was foundend without him knowing, the old guy said "did you really believe toilet seats costs 20K each ?"
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Christopher Bowen Editor in Chief, Gaming Bus2 years ago
@Morville - here's the golden question, though: what would a company benefit by releasing their budget, other than to use it in some kind of prick-waving contest (like an Avatar, or other AAA movie)? If someone has an answer for that, we might get the information we need.
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Tim Carter Designer - Writer - Producer 2 years ago
It's called project-based business.

It's how the rest of the art and entertainment world works.

The movies abandoned the factory model decades ago. Maybe the game industry should wake up, take a look at the rest of the world and learn.
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Tim Carter Designer - Writer - Producer 2 years ago
Christopher, if you want to know the answer to that, why don't you do some research? The film biz has had open sales figures for years, and it uses that data to help fund core creative.... It's to the point that NO movies fail once they are begun, in terms of production failure (the failure rate is less than 1% or so). So that's what that data can do.

I'm tired of people having opinions on business but NEVER looking outside of the game industry to learn.

Edited 1 times. Last edit by Tim Carter on 5th February 2014 5:01pm

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Morville O'Driscoll Blogger & Critic 2 years ago
The film biz has had open sales figures for years, and it uses that data to help fund core creative...
Much what I was thinking. Various companies set and manage budgets internally. But how do they know that those budgets are financially viable? Internal sales data and projections? Look at how many companies over-estimate. Previous franchise sales? Only useful if there's a previous entry in the series (and not useful if the sequel departs massively from the previous entries).

In a data-sharing industry, financial development data can be used by all companies (yes, even your competitors) to ascertain if a product or genre is financially worthwhile once dev costs are accounted for, without relying on old, theoretical or purely internal numbers. For the same reasons, open and independently verified sales-numbers would be a god-send for this industry.
I'm tired of people having opinions on business but NEVER looking outside of the game industry to learn.
Amen to that.

Edited 3 times. Last edit by Morville O'Driscoll on 5th February 2014 5:19pm

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James Ingrams Writer 2 years ago
I feel there is already is an AAA Lite, and we see it in the form of EYE: Divine Cybermancy, or Mars War Logo's or Zeno Clash.. If not AAA Lite, certainly AA rather than Indie.
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Petter Solberg Freelance Writer & Artist, 2 years ago
There are so many companies spending years developing different tech solutions to reach the same goals. In a lot of ways the industry is more open source, but there seem to be a lot of time and money going to waste on cloning. When it comes down to visuals (or gameplay for that matter), if you want to achieve something different, then fine, do it your own way. Photorealism and more stylised graphics require different things. But sometimes it sounds like some people are determined to do their own tech out of fear of having the industry turn into a giant level modding community. Of course, unique content doesn't exactly come cheap regardless of the tech (or industry).

I am also for opening the sales figures. Who knows, maybe it would diversify the market and cut costs long term?

Edited 3 times. Last edit by Petter Solberg on 5th February 2014 8:42pm

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Paul Johnson Managing Director / Lead code monkey, Rubicon Development2 years ago
In other news.... The sky is blue.
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Greg Wilcox Creator, Destroy All Fanboys! 2 years ago
@Paul: Unless you live in Shanghai, in which case it's kind of gray-ish and other gray colors (about fifty shades, I think), har ho...

Anyway, I'm keeping an eyeball on Avalanche's Mad Max game because I have the feeling it'll be one of those sandboxes that's a keeper if they get it working like I think they're going to...
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development2 years ago
I think publishers just need to start making A titles.

"A" is the gold standard for marking stuff. AAA came along for those special rare cases that pushed the line in the sand way, way out there. Like the first Gran Turismo compared to other car games of the time. But when everyone is on the new line, they're all back to A again.

Only now, you get A games (ie they're all the same level) but with AAA budgets - lose, lose. Just step back people, every tree doesn't have to look different to make a game fun, or look good.

Nor does a game require a 10 minute cut scene per level. They are only there to justify the pricetag, and few people want to spend extra money so they can keep pressing X until the action starts.
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Greg Wilcox Creator, Destroy All Fanboys! 2 years ago
I think this stuff: http://iwantaclone.tumblr.com/ is more "unhealthy" than AAA at the end of the day...
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