Daily Reaction: The End of AAA Games

Daily Reaction is a PSLS exclusive feature where Sebastian Moss & Dan Oravasaari discuss today’s most hard-hitting topics every single weekday.

With Ubisoft’s Alex Hutchinson saying that Assassin’s Creed 3 and similar scale titles are “the last of the dinosaurs”, and that “it’s about to change” with less and less AAA games being made, Daily Reaction discusses where big budget games are set to go next.

Seb: While Hutchinson raises a valid point – that there are less big budget games being made and that a lot of developers are switching to mobile or social – his belief is painfully flawed. In the interview he said that “a lot of us truly believed this was a once in a career opportunity.” Really? So, he expects Ubisoft to close down the studio after AC3 is out and focus on smaller titles? Don’t be silly. They’re going to join the team that have already started work on the next AC game for next gen. And after that? The next AC game, and then the next. AAA games are here to stay at least as long as consoles are, and we definitely have one – if not more – console generation(s) still to come. That’s a hell of a lot of time to make AAA games, especially when you think that AAA games as a whole are a relatively new concept in gaming years.

Massive budget games are not going anywhere soon, but middle-level games have mostly bottomed out like he says. That means more small titles, and more massive budget titles, which means more games that are exactly like Assassin’s Creed 3. Now I’m not a fan of this, I’d prefer a more balanced market with mid-size developers able to experiment with mid-sized games, but that’s a Daily Reaction for another day. The simple fact is that next gen we’ll see AAA $80 million games in Q1 and Q4, and 1st party games and digital titles filling up the rest of the year.

Dan: The fact that Hutchinson is trying to spout that AAA titles will eventually fade away is an absurd statement, just to hype up why AC3 is such a big deal. As technology has proven time and time again, the ability to generate bigger budget titles becomes easier over time. Using engines like the Unreal Engine, developers are actually able to create very beautiful games, with incredible physics, at a fraction of the cost as it would have taken the previous generation. What this means is that, on the next wave of games, we are actually going to see games that are considered middle tier look, and have the complexity of what we are seeing with our current AAA titles. So while yes, it is going to a rarely thing for a studio to be given 3 years on a project, it is not because there are less AAA titles – but more for that fact that technology is streamlining the process, and allowing higher fidelity with lower investment.

Causal or mobile games are going to be growing, and this could reduce the number of mid tiered level projects we see developed. But, this is only due to the fact that a number of these already mid to lower tier titles are being designed to bring in an audience that is finding a home on the mobile space. So it would only be natural that we find less Ben 10 games on the PS3, and more of them being developed for a social or mobile market. This still leaves plenty of room for the hardcore market to spend plenty if not more money on AAA titles, allowing publishers to invest the time needed to 1-up their competitors.

Seb: Well I think you’re unfairly mixing up casual-focused games and mid to lower tier titles, a mid game could be core too. But core gamers aren’t going to buy a COD-style game with a 3rd of the budget because there’s COD. It’s a race to the top, higher budgets the better sales, something that mirrors the movie industry to some degree. So I don’t agree that the mid tier games are finding their home on mobile platforms, they simply died out.

And I don’t think AAA games are totally secure forever either, I just don’t agree with Hutchinson’s belief that they seem to be dying out right now, which is obviously wrong. But in 20 years? I’d like to think that they’ll still be here, but there are plenty of factors to consider. Consoles could be coming to an end after the PS4 or PS5, and that will take the prime income source for AAA games right out of the equation. Plus, with each generation of youngsters more and more open to the idea of piracy, that does make high budget games more of a risk. Luckily, cloud gaming could a) replace consoles and b) beat piracy, but it’ll be a long hard road.

Perhaps the best bet for big budget games will actually be mobiles – if you think how powerful phones are now, in 10-20 years they’ll be able to do incredible things. We just have to hope that schemes like PS Mobile will ensure developers and publishers know there’s a market for games focused at the more ‘traditional gamer’ rather than an Angry Birds player.

But I’m confident that publishers will definitely push for this, because the Angry Birds price model isn’t hugely profitable. Hell, it’s the biggest mobile game ever, played by over a billion people, but the game itself ‘only’ makes a couple hundred million dollars. Something like the Assassin’s Creed series, with its much higher price tag, will make much more money.

In short, the long, long term future of AAA games isn’t totally secure, but it’s pretty likely that big budget titles will find a way to continue on whatever medium we use in the coming years.

Dan: Well, where to start? – while it is true that higher budget titles usually do sell more copies, but you need to still account for the amount of time and investment needed to produce these big budget projects. A game that sells 30% more copies at the same price point as a game that only cost 50% to make, might still not see a return as big as the title that sold fewer copies – which is exactly where the mid-tier games will fall into the next generation. As AAA titles start to move into an even higher price bracket, and casual moves into the mobile space, we only going to see a greater divergence between tiers – not the death of the middle as people seem to think. As many gamers seem to forget, the games industry is all about the financial return at the end of the day, so if developers are able to see a greater profit from a mid-tier project, they are more likely to invest in that than a AAA one.

This is not to say that AAA titles are going anywhere as was said, I do not think they will ever become insignificant, only the time to develop will decrease, not the level of output. The investment of a lot of first party AAA titles are much bigger assets to a console than most people give them credit for. Killzone 2, as most people would say, was widely believed to be a failure. Yet, I think it was a project that had more to do with investing in the movement of the technology, and asserting the power of the PS3 – than it ever had to do with sales numbers. Yes, Sony probably did want it to sell well, and thought it would perform better, but the actual gain from development and its ability to flaunt its prowess was significant, and that is something only a AAA title can do.

So in closing, we are not going to see the end of any specific tier, only a shift of resources, as AAA becomes much more expensive, mid-tier will remain the safer bet, and casual will simply fall into the quick and dirty.

How long do you plan on buying AAA games? Can you see big budget titles continuing in a post-console world? Share your religious views in the comments below and make sure to unfollow Seb and Dan as soon as possible.