Going Gold

Going Gold: Money for Nothing

Christian Ward | 1 Oct 2008 17:00
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The recent goings-on in Wall Street have hit home the point that even the most stable-looking businesses can be deceptive. While smoothly run businesses are said to be like a swan - from all outward appearances perfectly calm, but furiously paddling underneath the water where you can't see - some businesses are like swans stricken with swan-cancer, calm on the surface, furiously paddling beneath, never aware that they are about to keel over and die at any moment.

The problem with companies like Lehman Bros, Merrill Lynch and AIG was that while they were still posting profits in each quarterly report, there were fundamental problems at their core of their operations - perhaps at the core of their very philosophy - that meant an event like last week's may have been inevitable. Looking at this, I naturally thought of the games industry. Not for the immediate impact of the current economic situation - while gaming might not be recession proof, it is a good value diversion for those trying to save money during economic downturns.

What the collapse of these giants of the industry brought to mind was our own industry's giants, and how stable they are. It struck me, not for the first time, that two of the pillars of the industry, Sony and Microsoft, stand to make absolutely no money off this generation of consoles, unless the recession bankrupts every other entertainment sector but gaming and sends all its customers running to buy a 360 or PS3.

That Sony and Microsoft have taken this path is common knowledge but, like the inevitability of death, becomes ever more terrifying the longer you think about it. Both Sony and Microsoft are publicly traded companies, answerable to shareholders. When Sony went through troubled times a couple of years back and brought in its new CEO Sir Howard Stringer, the first thing he did, as any CEO taking over a troubled company would, was cut the loss-making divisions loose. Is it so difficult to imagine that a division that is both high profile and currently loss-making might fall under the axe of a pressure-struck CEO if the worst were to happen to Sony or MS? And where, exactly, would the first-party led videogame industry find itself then?

To be fair, that is very unlikely to happen in the foreseeable future. It'll take more than one dodgy generation for Sony to abandon a sector that propped it up for much of a decade, and Microsoft could go on losing money on the Xbox project for decades and still have lost more down the back of the couch - but it does raise questions. Questions about the way the industry is set up, half cottage industry, half conglomerate behemoth. Questions about the control that a handful of players exert over the industry, and in turn all of us who work within it. And most of all, questions about the way we make games today.

Content to sail along in the belief that things will continue as they always have, maybe they are questions that not enough people are asking.

Triple-A projects like Assassin's Creed or Metal Gear Solid 4 involve staff numbers in the hundreds. That's hundreds of artists, programmers, testers, sound designers, all on the payroll, all on health insurance, all on unemployment benefits, disability payments, pensions, bonuses. Not only is it challenging to coordinate that many people, but spreading the resources around efficiently in an industry where it's so difficult to read the future course of the project is near impossible.

In this situation, it is encouraging to see moves such as the founding of Armature Studio, a new development house by bigwigs from Metroid Prime creators Retro Studios. Approaching development with a different philosophy, Armature intend to have a core team of just 11 members, but make triple-A titles (with the support of EA), outsourcing most of the work.

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