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Games industry still in "Dark Ages" says Dyack

Denis Dyack sees a Renaissance ahead, one where hardware becomes irrelevant; console makers "are all under siege" now he says

In a talk he presented today at The Games Institute at University at Waterloo, former Silicon Knights boss Denis Dyack outlined his views on the past, present and future of the games industry. He said there have been three major eras, and while right now the business is in the "Dark Ages," the "Renaissance" is ahead.

He began by noting that the early business of video games was largely based off the toy industry, and there was a very low cost of developing games at first. His first game cost well below $100,000. The next era was a "Golden Era" of sorts where consoles dominated, and there were very high profits with low-medium development costs.

As costs and team sizes grew, however, the business entered its next phase, or the current "Dark Ages" in which extreme development costs can reach hundreds of millions, and profits are quite low for most. Dyack used GTA V as an example - over 1000 people worked on GTA V for five years, he claimed. "It is so risky right now and the chance of failure is so high you have to wonder what's going to happen if something like a GTA fails," he said.

"I went from being crucified [about my one-console future idea] to 'Hey do you want to do an interview on this?' when Xbox One and PS4 were announced with nearly same specs"

So what's at the heart of all of this? Well, Dyack went back to his idea about commoditization - something he's been discussing for years and years at this point. The value of the different platforms diminishes over time as it becomes a commodity. It's all about faster, better, smaller, cheaper, and then performance oversupply sets in. Manufacturers are putting more into these technologies than consumers actually want, he said. Dyack is certain it's what's happening right now in the games industry. It happened in other electronics businesses, and with music, and now it's video games' turn.

"I went from being crucified [about my one-console future idea] to 'Hey do you want to do an interview on this?' when Xbox One and PS4 were announced with nearly same specs," Dyack commented.

Ultimately, commoditization creates a highly competitive and highly risky environment. The industry landscape looks a lot like Westeros and winter is coming, he said, making a reference to Game of Thrones. It's a dangerous time and there's not much guidance on what to do.

For developers, though, the good news is that it's becoming more and more about software. Pointing to research from Deloitte, Dyack said that the last decade was the decade of devices, but manufacturers are tapped out, things are getting commoditized and now it's becoming about the software. He reiterated that this current console generation will be the last. The cloud will be the platform of the future, he said.

"Console manufacturers are all under siege right now. There's not as much proprietary hardware anymore. Now if you look at Xbox One and PS4 they are almost identical except for interface," he said, noting that the interfaces were the "last gasp to separate their brand" and make it stand out from the rest. "But they can't fight commoditization. We'll move away from devices."

So if you're a games developer today, what do you do? How do you prepare for the future? It's all about psychology, Dyack said. Games aren't driven by gameplay, or narrative or high-fidelity visuals or music. It's a combination of everything to engage the player. Engagement is the most important thing for developers to consider. You can be immersed in an experience but not engaged, Dyack noted.

Ultimately, "We have to understand what games are, what makes them special, to know where we're going," he said. Dyack stressed that without cross-disciplinary approaches, the industry won't survive. He'd love to see more collaboration with the film industry and with people in humanities - it's not all about computer science. He talked about theories from samurai Miyamoto Musashi, and how important it is to know about all arts.

Another important change the industry will undergo, he said, is a reduction in team sizes. He compared it to the early days of film when thousands got involved on a project, but it wasn't sustainable. He then showed an old trailer for his Shadow of the Eternals project, holding it up as an example of what a small team (7-10 people) can achieve.

When questioned by the audience afterwards about the state of the project and Precursor Games, he was elusive. "The team's taking a break. There's no release date. The team itself needs a rest, so we're resting," he said.

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Latest comments (11)

Patrick Frost QA Project Monitor 7 years ago
Glad to see the Dyack publicity cart is out again.

If I was in the audience I think I would have some challenging questions for him including: "Did you learn all this by betting the farm on Too Human?" and "Why did you not adapt your business model when you saw what was happening to every other similar sized developer in the industry at that time?" I'm surprised he didn't just go for a full sales pitch and claim that he was going to be leading the Renaissance.
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Axel Cushing Freelance Writer 7 years ago
Yeah, Denny, I'm just gonna stop you right there. I wanted to stop you when I heard you say "The cloud is the future," but I just had to watch the last train car jump the tracks. Until the time comes when we have a "gaming wire" running through our brains to play games in the ether, we are still going to need devices. It might not look like our current situation, it might not look like the proliferation of Steam Machines, but we are going to need devices, physical controls and displays, if we are going to interact with games. Doesn't matter if it's solitaire or The Elder Scrolls IX: Akavir.

The cloud is no more a panacea for games than it is for business. The fact we can virtualize systems doesn't mean that we should or will.. More importantly, we cannot virtualize the infrastructure needed to actually connect games to the cloud. At some point, there's going to be a wire or a strand of fiber that physically connects point A to point B. And right now, least in the States, that infrastructure is unavailable, either because it doesn't exist or because nobody wants to put it to uses which we as gamers can or will utilize.

I can agree that games are becoming more cross-disciplinary, and still have a way to go in that regard. But team sizes can only come down when there is enough efficiency in the tools that one person is capable of producing the work output of several people. Film is nice, and I'm a movie buff myself, but watch the credits of an indie feature. There's dozens of people listed, even for small productions. I'd love to see a project like Skyrim or Battlefield 4 come out with a team of less than a dozen. But right now, and for the foreseeable future, the tools available do not make that possibility very likely.
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Rick Lopez Illustrator, Graphic Designer 7 years ago
If software were truly the thing that matters it doesnt matter what platform its on. As far as gaming being in the dark ages, I dont see that as true. Plenty im really enjoying my time playing games right now and now there are so many more ways to enjoy them than before. In fact games are all over the place even in our phones. What the heck is this guy talking about? And honestly when someone makes these statements of one platform will rule all other platforms, I hardly find any substance in there arguments worth listening too. I understand that cloud gaming will be integrated into the gaming industry, but I dont belive it will be the best or the only way games should be played.

Edited 1 times. Last edit by Rick Lopez on 17th January 2014 3:40pm

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Show all comments (11)
Jakub Mikyska CEO, Grip Digital7 years ago
I don't want to sound too rude, but I would expect the guy who is responsible for Too Human and the whole Silicon Knights vs. Epic disgrace to be selling gardening tools, not giving lectures at a university. Dark ages indeed.
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Rick Lopez Illustrator, Graphic Designer 7 years ago
@Jakub Mikyska... You hit the spot with your comment... just saying... :)
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Axel Cushing Freelance Writer 7 years ago

Nobody is ever completely useless. They can always serve as a bad example.
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Ralph Tricoche Studying MA, CUNY7 years ago
Agreed about the dark ages Denis, but coming from you the message gets muddled and lost. Unfortunately. However, it is true.
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When questioned by the audience afterwards about the state of the project and Precursor Games, he was elusive. "The team's taking a break. There's no release date. The team itself needs a rest, so we're resting," he said. I dont agree about the Dark ages comment at all, and the above quote has to be either the best or worst spin I have ever heard. Im not sure. Im leaning towards the worst.
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Renaud Charpentier Game Director, The Creative Assembly7 years ago
"The cloud will be the platform of the future, he said." Could we stop with this technical idiocy please??
With any smartphone a monster of computational power there is no need to centralize rendering!
It introduces a lot of input lag, demands steady high bandwidth, kills any usage cap, imply a blurry image (video compression), can't work with any 3D display (3D screen or Oculus type) and, before all, demands monster calculation hubs that cost a fortune and get quickly deprecated with the advance of hardware. On Live tried and died, Gakai would have followed if not bought by Sony... to stream a few old games and not PS4 anything.

For these technical reasons that come for physical realities, mass game streaming won't happen any soon! It will remain a possibility that will find a few niche business (like instant demos for example) but it will not replace gaming PCs, high en Tablets or PS5 or Xbox Two whatever their name.

Please, journalists, next time someone brings that fad again, ask him how science will break the current limitation of that tech. And a "tech evolves fast" answer is not good enough, look at internet: same protocal as 1970 and most of us still can't dowload faster than 1Meg per second. Ha, yes, and the average ping between Europe and the US has not gone down for more that 20 years.
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Alfonso Sexto Lead Tester, Ubisoft Germany7 years ago
Well, we could discuse this a lot from the basis of "he is the one responsible of the Too Human fiasco" but I'll place here what my grandmother used to say: "There are things that are true, regardless of who said them"

Right now I see the F2P model oversaturating the market like a virus with all those cheap quick cash-ins leaving no room for talented projects. Same goes with mobile phones and their 30 clones for each good idea released there and 60 for each idea created on consoles/PC, again without room for talented studios without capacity for an extended marketing campaign... all of them crafting the same bubble that caused the game crash in 83.

Then new consoles are released, they sell around7 million convined worldwhide and the "masterminds" of mobile phones still insist that they are a market without future, completely ignoring that what they don't want to see.

Dark times indeed.
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Thomas Dolby Project Manager / Lead Programmer, Ai Solve7 years ago
It's only anecdotal evidence but personally for me, I'm in a situation where I have far more great games than I could ever find the time for so this certainly isn't a dark age for me as a gamer. As a developer I've found the tools are getting better and better allowing for less team members to create more content.
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