Epic Games On The Future Of Triple-A Game Development Marketing And Pricing

from the the-future-is-inevitable dept

In a pair of interviews with Develop, Epic Games' Mike Capps shares his thoughts on some of the problems the industry faces by having focused on AAA game development for so long. According to Capps, this focus on AAA games, or games with large budgets and high production values, has led to the death of lower quality but still good AA games.

In the first interview, Capps was asked if the death of AA game development and the rising costs of AAA game development is good for the gamer.
No, no I don't think so at all. Certainly as a gamer I don't think what's going on is a good thing. Triple-A is as much about marketing these days as it is about production values.

Take a game like BulletStorm, for example. That game was supported and well reviewed but just didn't break out. It wasn't a failure, but it wasn't a success that could fund a series of projects either. That's a game that I think people loved but it's not one that gets the $100 million marketing budget, because that amount of money is only spent on a few sure-fire hits and annualised sequels.

There's a lot of great games out there that don't take off. How many games have you loved that sell less than three million units? There's probably dozens. Those games can't get made in today's games economy. So no, I don't think it's a good thing that the middle-class of games have gone away.
Here he lays out some of the concerns over marketing allocation for games. While publishers will release a number of games during the year, the vast majority of the marketing budget is spent on only one or two hits. However, he feels that this is changing in gaming. Capps feels that there is a marketing shift from direct marketing to building a community behind games.
I'm not an expert here, but there is a huge impact from non-commercial marketing these days with things like Facebook and Twitter. If you don't spam people then you can be very useful to your customers. We were not forward-thinking in that area, but we're really driving in this space now and have more than one million Facebook fans.

But other forms of marketing and PR are starting to change things. The focus is changing from shoving TV ads in people's faces to actually building a community.

I don't know if there will be the same amount of TV adverts in five years' time. No one gets fired for buying TV ads, because they make sense, but soon they will start to make less and less sense. I think what could happen is a lot of money can be saved with less TV adverts and that itself, perhaps, could free up more money to take more risks and be more creative.
Such a move can certainly help the viability of AA games in the market. Many game developers, specifically in the indie scene, have learned that building a community behind a game increases the word of mouth exposure of the game and the developer. As AAA publishers shift to a community focused marketing strategy, they will be able to focus more on the games themselves.

Moving on to the second interview, Capps feels that pricing restrictions on consoles are also part of the problem of less viable AA games.
I think another thing that's changed is the way people are willing to spend their money. Consoles need to adapt to this. Game revenue has moved to the service model and the microtransactions model. Consoles need to start being comfortable with that. They need to be able to do something where small virtual items can be sold and bought for 20¢ without a long certification process and a price approval process.

Right now we're not even allowed to change the prices of virtual content. We're not even allowed to set the prices. I just don't think this protectionist approach is going to be successful in a world where the price of virtual items changes on a day-today basis.

Double-A games will never come back unless we get rid of this notion of a game being $60 or not released. The console manufacturers need to let this happen. The best way of driving developers to PC is telling them they have no freedom in what prices they can set for virtual items. It would be great to have the level of freedom that, say, Steam gives you.
On the surface, this may seem contridictory to comments Capps made earlier in the year about how $1 games are destroying the games industry. Hopefully, Capps is just seeing the folly of that view point and instead feels as he is expressing now, that console manufacturers need too allow more price flexibility. While they probably don't need to let prices drop to $1, having more available pricing options will only help some games.

As game development further moves into the realities brought by the digital age, there will be companies lost as they try to hold onto old business models that may have worked in the past but do not work today or will not work tomorrow. As Capps has shared, marketing and pricing are two aspects that will change the fastest. As gamers rely less and less on television and print media for gaming announcements and move more toward social media for that information, game publishers will need to adapt or they will be left behind. As console manufacturers continue to insist on complete control over game pricing, gamers will move toward platforms that allow for less expensive fare that provides just as much enjoyment. Times change and so do markets. Epic Games seems to be on a path toward success in this new age, how many other developers and publishers will join them?


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    A Guy (profile), Nov 9th, 2011 @ 11:05pm

    Have you ever noticed that talk of "the death of an industry" often comes when that industry has never been doing better?

    I think the reason that so much attention is focused on the content industries is because they are experiencing a golden age, not because they are dying.

    If the video/music/gaming industries truly were dying, no one would care because they would already be irrelevant.

     

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    DataShade (profile), Nov 10th, 2011 @ 12:31am

    "On the surface, this may seem contridictory to comments Capps made earlier in the year about how $1 games are destroying the games industry. Hopefully, Capps is just seeing the folly of that view point and instead feels as he is expressing now, that console manufacturers need too allow more price flexibility. While they probably don't need to let prices drop to $1, having more available pricing options will only help some games."

    Well, it seems that way on the surface, but I agree with him, not you: there are lots of games out there that I'd buy for $30 or $40, but not $60 or $70, and I end up buying a lot of games for PC because they're $10-15 cheaper at launch. I'd rather see the console market be able to support more studios like Goldhawk, who took $30 pre-orders to fund development, and never would have been able to do it if they'd needed $60 a pop, and I'd love to see the world generate fewer companies like Zynga, who - by their founder's own admission - used whatever dirty tricks they needed to get a big enough install base to fund development at $.99 a pop.

    In the end, you have a big company like Apple who pushes the $.99 mark and a different big company like Microsoft who pushes a different pricepoint for its library, and, in the end, it's probably the creators and customers who suffer for it.

     

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    That Anonymous Coward (profile), Nov 10th, 2011 @ 3:20am

    I think something left out of his thinking is the idea that gamers are really fed up with crap shoveled out the door meant to be patched several times before it is playable.
    So many studios seem to think that meeting the launch date is more important than a working game, that die hard customers will always pony up $60 to wait another 2 months for a playable game.

    I've seen stories about horrible ports between pc and console, and then seen the "real" screen shots of how the game actually looks instead of the hyper polished perfect world in the commercials.

    There is a middle ground between the 99 cent and the $60 and it is ripe for the picking. It doesn't need to be a super franchise, just well coded and working out of the box day one. Games are meant to be fun...

     

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    Liam (profile), Nov 10th, 2011 @ 3:49am

    Being in the UK, our AAA games cost the same as yours, in number only, 60 for a new game, works out at about $95 for these games. It's ridiculous.

     

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      Anonymous Coward, Nov 10th, 2011 @ 5:22am

      Response to: Liam on Nov 10th, 2011 @ 3:49am

      Uhh, you must be in Jersey then, 'cause the only game that's cost that in the past few years is Starcraft 2. Most of the others are 50 for the PS3 and the 360. Still, I get your point.

       

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        athe, Nov 10th, 2011 @ 6:35pm

        Re: Response to: Liam on Nov 10th, 2011 @ 3:49am

        Are you buying in B&M stores? I'm in Australia, and regularly buy from UK, and never pay more than around 35 pounds (sorry, don't have the pound symbol on my keyboard) delivered for a brand new release. dvd.co.uk and thehut.com are a couple of the best places in the UK to purchase games from.

         

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    AJ (profile), Nov 10th, 2011 @ 4:14am

    "As AAA publishers shift to a community focused marketing strategy, they will be able to focus more on the games themselves."

    Very true. Look at Valve's Counterstrike product. Originally released 1999, and still carries an almost cult like following 12 years later. Hell, Counter Strike source is still in the top 20 bought games on steam. Hell, they are about to release a new counterstrike in 2012.

    http://store.steampowered.com/app/1800

    When you buy these games, you buy so much more than just a game. You buy an entire community/mini culture. Clans, leagues, guilds, pubs, dedicated servers.. you have all these people wrapped around giving your product more value, and they are paying you to do it. People are willing to part with their cash for that type of experience.

    You want to make a great game? Figure out what the people that make great games are doing, and do that.... If you make a great game, you won't need a whole lot of marketing, people will take care of that for you!

     

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      That Anonymous Coward (profile), Nov 10th, 2011 @ 5:36am

      Re:

      Minecraft pops right to mind.
      There is a huge fanbase, and multiple ways to use/play with it and people are always looking for new ways to play with it.

       

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    Anonymous Coward, Nov 10th, 2011 @ 5:33am

    This is good point If you cant give me what I want for free then that is your problem. you're business model is messed up.

     

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      ltlw0lf (profile), Nov 10th, 2011 @ 8:05am

      Re:

      This is good point If you cant give me what I want for free then that is your problem. you're business model is messed up.

      I don't think most of the gamers think this way. I certainly don't. Give me a game that I can play right now (in other words, it runs correctly on my hardware and the DRM doesn't keep me from playing it the way I want, on the OS I want,) and one that I will enjoy, and I'll spend $60 on it. The last game I purchased in the store (for $40,) was Portal 2, and I loved that game and played it over and over again. Steam's DRM is less than desirable, but it wasn't bad enough to piss me off (and the game ran under virtualization fine.) Most of the games out now, though, use DRM which just doesn't work on my OS (Linux with Windows Virtualization,) or craps out during game play, so I don't buy them (I don't use them illegally either.) Instead, I spend the money I would have spent on the game on GoG or other sites where I can buy awesome 12 year old games without DRM.

       

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    Anonymous Coward, Nov 10th, 2011 @ 6:26am

    Marketing is always going to be an issue. With increases in the number of offerings out there, you end up with an incredible problem of signal to noise. As that anonymous coward points out, there is plenty of stuff sent out the door without being really ready or tested, and that just adds to the noise factor.

    The issue of AA games is that so many suck because of issues, problems, whatever that games learn not to trust them, and as a result, they don't tend to pick them up.

    It's perhaps the best way to explain how an increase in product (what Mike would call innovation) isn't always good for the consumer or the marketplace in general.

     

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    A Dan (profile), Nov 10th, 2011 @ 6:57am

    Bad example of a game

    They used Bulletstorm as their example of a great game that didn't sell? I tried the demo for that game and hated it. I won't buy it even if it hits $10. If they want people to spend money on games, they need to make good games.

    They can't just spend a lot of money on development and marketing and assume that means people should pay a lot for it.

     

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    Anonymous Coward, Nov 11th, 2011 @ 7:10am

    My Friend beat Bulletstorm in less then a hour. Why the hell sould I pay over an 1$ an minute for a shitty game?

     

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    Richard (profile), Nov 13th, 2011 @ 2:52pm

    Social Media is killing the advertising industy

    I wonder, given that virtually every industry is saying "social media is the advertising of the future", when the advertising industry will start to complain that things like Facebook are killing their business? Obviously, there is advertising on Facebook, but if they're losing those lucrative TV dollars because companies start thinking they're better served putting their money into social media, which might not even be handled by the advertising company!

     

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