Synopsis: It’s possible to get the impression from reading this web site that I detest publishers and corporations that pour billions of dollars into the development of video games. I do not. No reasonable fan of video games would be opposed to a blank check for game development. Today’s corporate publishing model isn’t a problem because it’s corporate, it’s a problem because it threatens itself. The traditional models for publication in all fields are under assault. That doesn’t mean the video game publishing model is dying, but if these companies continue on their current route, they threaten the ability to invest hundreds of millions of dollars into a single project, to follow classic games with worthy successors. And if they go under, it could be a decade before that void is filled.

I expect this will be the first in a series of entries casting aside the notion that I dislike the medium I spend so much time with.  Let’s start by correcting the record on the video game publishing model and “teh corporationz” that comprise the publishing model.  I figured my disdain for today’s independent game development would have been enough to kill the confusion.  I’m also a huge fan of the complex and technologically-groundbreaking computer video games of the mid-to-late nineties, a number of which never would have been made without the deep pockets of a large publisher.  I’ve also spoken praise for Nintendo and their ethically-questionable business practices of the eighties, spoken praise for the height of publisher dominance as it manifested during the PlayStation 2 era, and spoken praise for Valve’s digital distribution service, which is just digital rights management with a pretty bowtie.  Then again, I’m a cynical motherfuck, and the tone of my writing probably hasn’t helped.  Let’s clarify.

Large companies have been good for video games.  This is not debatable.  Nolan Bushnell gets nowhere with “video games as a lucrative business” without the larger, established arcade amusement companies on-board as distributors.  Studio Pixel of Cave Story fame gets nowhere without a global communications network that can transmit his game to millions of personal computers, most of these machines running on standardized hardware and operating systems as manufactured by large tech companies.  Rovio Entertainment gets nowhere without companies to manufacture and popularize the mobile phones which have become ubiquitous with their awful, awful game.  It’s the classic battle of manufacturing, marketing, and artistry.  And in this case, it seems the scope of manufacturing has been lost on most people.  (Then again, for most people, it’s easier to ignore manufacturing than acknowledge that your Xbox or iPhone is being made by underpaid Chinese labor, often created with rare minerals that are their own horrifying nest of trouble.  It’s easier to turn “creator” Steve Jobs into a cult of personality and market the phone in a fancy box.)

From there, extended praise is pretty elementary.  Whatever you want to call large game publishers—the video game publishing model, large-budget game development, megapublishers, “the corporations”—these companies have been critical for making progress within the medium.  They inject enormous amounts of capital into the production of game hardware, distribution models, and the games themselves.  They provide networking and accomodations for hundreds of employees as they work on a single project.  They provide a safety net for developers that would typically live and die from the creation of game to game.  (At least, that’s how it works in theory.)  And by asserting leverage over distribution, publishers act as a check and balance against market saturation, where a developer has to meet certain standards of quality.  It should be no surprise that, in a console video game market where games now cost upward of twenty million dollars to develop, the “average video game” is easily as good as it has ever been.  If you want a medium without large publishers, then crown your Angry Birds, crown your Super Meat Boy, crown your Limbo.  Let those games become the figurehead for video games and let video games suffer.

(I’ll double-down on the assertion that I like the publishing model.  There’s only one funding model I like more: It’s called the government publishing model, where an entity uses the effort and resources of all citizens, rather than one business and those who support the company’s goods.  That government uses those resources to provide public education, highway systems, national infrastructure, put men on the moon, and do things that large companies do not have the resources to create.  And occasionally, those governments create Pyramids, Coliseums, the Burj Khalifa, and so forth.  Debate whether they’re art if you’d like.  All I know is that people come from around the planet to get a glimpse of them.  And if the day ever comes where a government spends tens of billions of dollars to compete with commercial game designers, that would be fucking awesome.  Until then, we settle for the occasional America’s Army, the occasional tax breaks for game companies, and the occasional, messy collapse of a government-backed game developer and their underwhelming Action-RPG.*)

My disdain for today’s publishing model has nothing to do with theory.  In theory, companies continue to make bigger, better, louder, meaner, more expensive games indefinitely.  Without interruption, the industry continues onward towards the goal of “progress”, whatever you may define that as.  And that assumption is a mistake, one made because it currently has no precedent within the history of commercial game development.  It has precedent in Western animation as it played out in the late fifties, where the six-minute, high-quality animated shorts yielded way to the Hanna-Barbera sweatshops that dominated Saturday mornings for two decades.  It has precedent in journalism, where salaried writers now have to compete with some whackjob who suddenly decided his opinion is important.  (Why helo thar.)  And the last two times the video game market fell out from under Americans (1977 and 1983), it occurred in the infancy of commercial game development, where the cost of getting into the market was far, far lower than it is today.  But since those two incidents were followed by two of the most beloved game consoles in the history of the business, the lessons have been forgotten by the public and most of those writing about the topic.

In reality, the industry which creates video games is one small slice of an incredibly complex global market.  And based on what we’ve already talked about, that should be obvious.  Just like any other industry, video game creation is subject to market forces.  In reality, video game publishers have to manage “progress” with “paying bills”.  In reality, the development of better graphics, more powerful game engines, and larger development teams (all leading to increased quality of finished games) has to be matched by an increase in consumer investment.  You want larger, better, more entertaining games?  You need more people paying sixty dollars for the games, buying overpriced content updates, paying for monthly subscriptions, and adopting hardware when it hits the market at a high price point.

That’s how it’s always worked.  When large numbers of individuals in a technologically-savvy consumer base invest thousands of dollars in hardware for the sole purpose of playing games, you end up with a golden age of computer game development as it played out through the mid-to-late nineties.  To this day, many of those games have no rivals in ambition and scope.  (In-fact, outside of cutting-edge graphics and better game engines, that scope was often scaled back through most of the following decade.  This way, it could accomodate the larger audiences playing games on consoles.)  On the other end, what happens when people don’t pay for software and see games as secondary on a device that takes calls and provides internet access?  You end up with cheap, disposable games as created by companies that not only lack the capital to make complex games, but would do themselves a disservice by putting complex games to market.  To put it succinctly, you get what you pay for, you get what you’ll support.

In reality, that’s where the publishers fucked up.  No, not all of these problems can be pinned on the suits working in vidya game land.  After all, video game companies weren’t in the business of gobbling up risky subprime mortgages.  And no, there should not have been any expectation that Nintendo Wii adopters would stick around and subsidize the next generation of game development.  They came for the lowest common denominator in gaming, and when they found out they could get it for free on their phones, they left, never to return.  If Ubisoft and Activision thought the Imagine series and Guitar Hero could indefinitely subsidize the development of Assassin’s Creed and Call of Duty, then that’s their misfire.  Otherwise, the publishers have been dealt a very tough hand.  By the mere emergence of the internet, a decentralized marketplace for goods and ideas, a market where entertainment can be offered for cheap, tightly-controlled publishing models go into decline.  And just as happened in ’77 and ’83, saturation of the video game market has come into play.  Partially because of it, the console game market is in decline.  The price point for dedicated portable video games is in decline, and it will probably take a wonderful piece of hardware like the PlayStation Vita to the grave.  The mandatory subscription game model is, for the time being, on its way out.  If you’ve been following this industry, which suddenly decided they hate used games, which suddenly decided they need to gain a vertical monopoly over distribution of their games, which wants to turn their video game consoles into “media centers”, it should be apparent that they’re trying to find replacement revenue streams and are having trouble securing them.

But I’m not, for instance, John Riccitiello of Electronic Arts.  I didn’t double my company’s liabilities during the course of the last four fiscal years (FY2007: 1.54 billion*; FY2011: 3.03 billion*) in order to chase a declining market.  I didn’t cause my company’s stock to fall nearly fifty percent in nine months.*  I didn’t take softball questions at the company’s 2012 Shareholder Presentation, questions such as “The stock price continues to plummet, why should we remain shareholders?”*  I didn’t spend an estimated 350 million dollars to market and develop Star Wars: The Old Republic, and somehow end up with Orcs in Space: MMORPG Edition.*  Nor am I Sony head Kaz Hirai, who just took over the job from an incapable Howard Stringer.  I’m not trying to fix a company that has coughed up five billion dollars in each of the last two years,* head of a company that has suffered calamity for over half-a-decade, head of a company that hit its lowest stock price in three decades,* head of a sinking ship with a whopping 135 billion dollars in liabilities.*  Nor am I Yves Guillemot of Ubisoft, whose company has coughed up nine-figures the last two years.*  And I didn’t authorize a system of digital rights management which helped Ubisoft become a toxic name within the computer video game market,* the market that appears to be the future for many of these companies.  Nor am I Brian Farrell of THQ, head of a company that generated a billion dollars in 2007, head of a company that will probably be dead by 2014.

With the cards they’ve been dealt, this is the landscape that these publishers have created.  And now you should understand why I have been negative about this publishing model.  Not the concept of the publishing model, but the publishing model as occupied by three hardware manufacturers and about half-a-dozen major third-party publishers.  I started authoring long-form criticism (as published through The Ghetto) in May of 2010.  The model which these companies use to make ends meet (retail video game sales) has been crashing downward since around 2009.  Do the math.  2012 will culminate in the largest retail declines since the Crash of ’83.  And despite what is suggested every month that NPD provides a new, depressing account of industry sales, this is not the end-of-cycle stagnation that occured in 1995, 2000, or 2005.  This is not a consumer base that is simply waiting around to see what game console they’re going to purchase.  This is a systemic contraction of the market, one that they have helped to create.

If these publishers were continuing to make more money and were growing at a rate that could be supported by consumer spending, I suppose you could make the argument that seventy-hour work weeks, lousy pay, endless attempts to deny compensation (and credit*) to the creators of the games,** and horrid working conditions that define game industry employment are validated by the games.  As it concerns these companies, the ends ain’t justifying shit right now.  Yes, there have been some awesome, awesome games created in the last half-decade.  Vanquish, Bayonetta, Supreme Commander, Uncharted 2: Among Thieves, Serious Sam 3: BFE, Gears of War, and Dead Rising simply could not have been done with the previous generation of game hardware.  Those games do not excuse the mismanagement by publishers in adapting their model for a world where nobody believes they need a publisher to get their name on the map.

Unless something changes, unless someone finds the solution to the problem, a couple of these companies will probably keel over and die sometime during the next decade.  (My suggested solution has been to use the next generation of game consoles and game engines to make development more efficient, to fix the inefficiencies that lead to both resource mismanagement and the brutal crunch hours that define game industry employment.  But then again, I don’t run one of these publicly-traded companies, and I’m not under constant pressure to create short-term growth.)  And originally, I thought the idea of a second great video game crash would have been kind of cute.  Then I gave it some more thought, and took note of the current stock prices for companies like Activision, E.A., THQ, Ubisoft, and so forth.  While the stock market is now run by computers that are trying to skim cents off the top of a company’s stock, the market is still an indicator of how investors feel about the future of an industry.  Investors do not think large-scale game development is a good buy.  (Consider that Activision made a billion dollars last year and their stock price barely moved an inch.  Then again, investors don’t consider small-scale game development much of a buy either,* but that’s besides the point.)

Well, when the Crash of ’83 happened, it was strictly an American phenomenon.  Many American companies died a horrible death, most of the surviving companies scrambled to make games for the personal computer, and the Japanese quickly took their place in the console video game market.  Europeans continued to play games on their computers, and not much changed over there.  During the next three console cycles, the popular perception of video games was best defined by five companies: Nintendo, Sega, Sony, Capcom, and Squaresoft.  Then Microsoft got their first game console to market, Electronic Arts made sports titles a staple of the PlayStation, and Harmonix would steal the rhythm game market from Konami.  It took the American video game industry two decades to recover from the Crash.  And as it concerns console game hardware, they still haven’t recovered.  The market for video games is now globalized, as centered around an American consumer market.  And what do you think will happen if these companies go under and no companies of equal size can take their place?  What happens if Sony continues to lose billions every year and eventually leaves the game hardware market?  (The Japanese government will never ever let Sony go under, but it doesn’t rule out the possibility of “restructuring the company”.)  What happens if consumers look at the next generation of game consoles and say “no thanks”, opting for established entertainment on their desktop computers, mobile phones, and tablets?

I don’t intend to scare anyone by saying those things, but crazier shit has happened.  So as I’m sure you can figure out, my disdain for the publishing model has nothing to do with concept.  It’s all about application.  One day, there could be a chance that something akin to Kickstarter becomes a true development model for larger projects.  (Three million dollars on a sequel to Wasteland* and two million dollars on a spiritual successor to Supreme Commander* is chump change.)  One day, people could pour their own personal fortunes into video games as a matter of philanthropy, much in the way that billionaires buy sports teams and champion horses as part of an upper-class dick-wagging contest.  (Curt Schilling tried it with Kingdoms of Amalur, but his failure isn’t going to warm anyone else to the idea.*)  For now, the publishing model is the best outlet we have for making the best games.  Shitty business practices aside, they’re the most reliable road that we get to vidya gaem artz.  And wanting publishers to succeed and pointing out when they’re doing a shitty job does not mean I hate the publishing model.  It just means that publishing models are run by humans, and that publishers are as good or bad as the people running them.  In other words, “John Riccitiello done goofed”.  End of story.

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