Published as part of our sister-site GamesIndustry.biz' widely-read weekly newsletter, the GamesIndustry.biz Editorial is a weekly dissection of one of the issues weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.
On the face of it, you wouldn't expect the next couple of years to be very good for innovation and creativity in videogames. Admittedly, widespread fears over the effects of recession are somewhat overblown - right now, there's simply no evidence that economic woes are impacting on videogame sales and 2009 still looks set to be a growth year for the market.
However, the recession - and perhaps more importantly, the slow-down of commercial lending from banks - creates a certain mindset among businesspeople, even those whose sectors are still in rude health. EA's John Riccitiello summed up the mood at the DICE Summit earlier this month, where he told the audience that EA - which has recently cut 1,100 jobs in its worldwide operations - had become "too fat, too reliant on where things were."
Of course, that would have been true even if the recession had never happened - in fact, people including some of EA's own executives have been suggesting that the company is bloated and inefficient for years, a fact underlined by years of rising costs and relatively stagnant revenues.
As Riccitiello admitted, however, to firms in this position (and it's certainly not just EA that finds itself staring at the consequences of uncontrolled cost rises), the recession has been a "blessing in disguise". Suddenly, macro-economic conditions allow them to slash their costs without anyone batting an eyelid, while the same moves twelve months ago would have caused serious concerns about the company's status.
So even for those companies whose products will continue to see sales growth for the next couple of years, the atmosphere is one of frugality. Drought in the credit markets doesn't help, naturally, but for the most part this sense of belt-tightening is more to do with companies taking the opportunity to scale back costs than it is to do with any real financial necessity.
Sadly, when companies scale back costs, they often do so at the expense of throwing out a whole creche full of babies along with the bathwater. If you look at the operations of a big first-party studio, for instance, much of the wasted resource comes from big-name titles, especially those on 12 or 18 month franchise schedules. Money and man-hours are thrown away on bloated, mismanaged teams, the legacy of years of ill-advised "throw more people at the problem" solutions to problematic deadlines.
However, trimming the fat from those teams is hard work. Everyone on the team will fight their corner, claiming their intrinsic worth to the profitable project. Each middle-manager will act like a minor feudal lord, jealously guarding his painstakingly accumulated collection of vassals and subjects. Team sizes, all too often, end up being more to do with office politics and power-grabs than to do with the actual requirements of making a game, and extricating a small, lean, efficient team from this quagmire requires a huge amount of work and some very tough decisions.
Meanwhile, most studios also boast a handful of nascent projects - ideas which are floating around in the pre-production stages, championed by a handful of developers and designers who are working on the concept. On a slightly larger scale are the original game projects, games in production but lacking a big franchise or IP license behind them.
These projects are risky. They're not guaranteed any level of commercial success, and while critics all profess to love original IP, that doesn't mean that original projects are guaranteed a high Metacritic rating either. Compared with the risks associated with trying to trim back costs on high-profile franchise projects, the decision to instead cut back on new ideas and teams working on unproven IP will look extremely tempting to many studios. The same logic, too, will apply at the publishing level, with risky ideas likely to find far less warm receptions at publishers in the coming years.
Both from a creative perspective and from a more long-term business perspective, this is bad news. Creativity has always demanded some risk taking behaviour from publishers - more specifically, a willingness to balance out the risk of some original projects against the guaranteed returns of some blockbuster franchises. The industry's business model, meanwhile, demands that creativity to survive. Without the risk-taking that allows original IP to emerge, the games industry would soon find itself feeding off scraps from the table of the movie, TV and sports licensing industries.
However, not all publishers are quite as willing to clamp down on risk as they used to be. EA is a perfect example; since Riccitiello returned to the company, the firm has been making increasingly encouraging noises and now seems to understand that risk is an essential part of the business of making entertainment, rather than being an unfortunate side-effect which must be controlled and reduced. Some other publishers are slowly but surely getting the message; the platform holders, too, are learning. Whatever else it may have done wrong of late, Sony deserves special praise for its recent willingness to try out new ideas and champion creativity through its first-party releases.
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