How do video games make any money at all?

[G.Silver]

This is related to the off-topic discussion going on in the Sonic & Mario Olympics (oops edited) Rocket Knight thread. I was typing something up about how "graphics don't matter" but really I just wanted to write this tl;dr thing here.

It's been bugging me for a while. I watched Kung Fu Panda's bonus features and someone said some BS about how Kung Fu Panda was so "cutting edge" and how this movie "could never have existed" until now, because the technology powering it wasn't available. He was referring to the cloth-on-fur (the fur in Monsters Inc was impressive, but only the furless wore clothes!) and other computer effects. My thinking was that technology certainly didn't stop them from making a 360 game based on it, and even on lesser hardware, no game developer would have batted an eye--it wouldn't even be a challenge--they'd just texture that shit right on there. They would not have let "technology" hold back their creativity. And I wondered why is the mindset between these two cultures so different?

Partly it's because the movie-going audience wouldn't accept something that didn't look perfect, and partly it's because once it looks perfect, it can't be dated, and that's the critical thing. Pixar made Toy Story in 1995 because that was what the technology would let them get away with, and Toy Story today would probably look just like Toy Story in 1995 (except maybe without those ugly humans), certainly no one looks at it and goes "my, what old technology this is!" And this allowed Pixar to continue to sell Toy Story DVDs at $20 a pop to this day--almost 15 years! There's no video game with a shelf life like that, and yet it is Pixar's standards, or Hollywood's standards, that video games are grasping ever-closer towards.

Why would ANYONE do that? Games can still be profitable, even when they cost as much as a Hollywood blockbuster to produce, but they will not be AS profitable, because they expire. Even PC games, where the hardware (generally) stays compatible, don't have the shelf potential that movies do. If I were an investor, what would look better, a movie that could potentially continue to sell for 15 years or more, or a video game that will cost just as much to produce, but will drop in price after 6 months and be completely gone from the marketplace once the hardware is replaced? (Surely the real drive for backwards compatibility, or the reason why developers ought to be excited about a thing like the PS3's intended 10-year life expectancy) Sure, I see the appeal, I see why developers might want to make those games, and I see why consumers want them, but I don't see where the money is coming from. Why would anyone invest in games when they could invest in movies? Is it simply that the movie market is saturated and video games are just one more revenue source, or is there more to it that I just don't see? They always say the games industry is somehow "rivaling" the movie industry, but I just don't see how that's possible, at least not in terms of money generated. (perhaps in money spent?)

[Malchik]

The only reason video games can't and don't look as good as cg movies is simple. Developers have no choice but to optimize their works heavily to work on the average mans computers. No media really dates it's self. It's people's changing perspective of what should be a quality product. Luckily nostalgia runs deep in the gaming world so old games still get purchased now more then ever via virtual consoles or compilation disks.

[Crowbar]

Because:
1. Wii shovelware.
2. Formulaic FPSes that sell lots.

Well, that's just my super-biased guess, anyway.

As a more serious guess, that probably applies more to the past than it does the present, games have had mascot characters like Mario and Sonic. One game may date quickly, but the character won't (I realise the relative irony of this statement given the board I'm stating it on).

Also, Malchik, that's not really what G. Silver was getting at.

[Kogen]

I do not understand the post.

Video games are a different market, right?

I do not buy movies ever, and I rarely see them, yet I have hundreds of video games. I assume there are millions of people like me.

[ShinjukuNeedlemouse]

It's fairly obvious. Movies require less effort from the participants (the audience) than a game. You don't have to be good at movies to like movies. Imagine if you had to play Saving Private Ryan just to complete the story. Movies are also far cheaper to see in theaters (on average $6.50 vs. $59.99, what do you think is more reasonable?), and require less time invested than a video game.

Another point to consider is that even though it has increased thousand-folds in the department of storytelling, video games are still behind the shadow of film. Arguably, that's more opinion than actual fact, but if you stopped to compare games to movies, I don't think you'd find a video game that tells a better story than a comparative movie. There's no clique to movies, everyone likes them. Of course there's action fans, comedy fans, but you'll never hear of "movier" like you hear "gamer". Movies are universal.

Being a movie director also offers more creative freedom than making video games allows. Movie directors never have to worry about compatibility with different theaters, and since they are shooting the film exactly as they see it, they can get everything perfect, no need to think "OK, but what if the player does this?" and work out solutions. It's 100% designer. Sure you can get away with some stuff in video games that you can't in film, but as you've said, CGI is an amazing thing, and sooner or later, we might not even need real actors/actresses anymore.

I'm sure there's more, but this is what I can think of at the moment. Personally, I believe we're going to have another video game crash similar to the 80s, but this time I don't think we'll recover as fast, if at all. Movies, however, will be going strong until the end of the Earth.

[ShinjukuNeedlemouse]

Also, I forgot to mention the fact that even today fur rendering in most console games is still the wispy blotches we've seen in Star Fox Adventures, as opposed to full-fiber rendering (which requires more computational power) that we see in most CGI movies. The SFA-style faux fur isn't really much more than another texture layer, so yes, it's easier to add clothes, especially when they're just textured parts of the model, as opposed to real cloth simulation physics.

[Neo]

Of course there's action fans, comedy fans, but you'll never hear of "movier" like you hear "gamer".

That's because the term is movie buff, not something you made up to try and sell an invalid point.

[Isuka]

I guess they're both pretty similar industries, only that video games haven't yet catched to the movies' "maturity" (not in terms of excellence in mechanics on some specific titles, but more like in a better quality per title ratio or something) since they appeared later.

And yeah, Malchik does have a point about collections, ports, remakes and whatnot. Some good games do still sell well after their limelight, in the same way some good movies do. You can also think of a game's remake as an equivalent to a VHS-to-DVD-to-Blu-ray rerelease job.

Also, kinda topical: http://www.segabastard.com/rub/kane.html

[Wombatwarlord777]

This is just an assumption I'm pulling out of my ass, but isn't your average videogame far cheaper to produce than your average theatrical movie? If that's right, then even if videogames never reach the sales figures of movies, they should still have a good chance to make a relatively high gross profit, right?

[Arcade]

8 bit games are sold as videogames for cell phones, old videogames that look too crappy for modern standars get updated, 2D games that look like cartoons, the same point and click ones from ten years ago, get ported to the Wii.

The industry is doing a whole recycling of old games... and even made new games that look and play like old games, see Megaman 9...

So, I dont get whats your _____ problem is, old games still sell... in a way or another...

[G.Silver]

Movies are also far cheaper to see in theaters (on average $6.50 vs. $59.99, what do you think is more reasonable?)

Not asking about why games and movies are different in the area of content, thanks, but where are you seeing movies for $6.50 these days? Matinees maybe, but evening showtimes are more popular (and more expensive). Movie prices are an entirely different rant, though.

And yeah, Malchik does have a point about collections, ports, remakes and whatnot. Some good games do still sell well after their limelight, in the same way some good movies do. You can also think of a game's remake as an equivalent to a VHS-to-DVD-to-Blu-ray rerelease job.

It is a point, but those games still need to be emulated (preferably) or reprogrammed (Sonic Genesis), which, I'm thinkin', is a much larger cost than simply burning a new version on a new format. Blu-Ray might require fancier menus and give a higher quality picture (and in some cases some sort of "work" is required to allow that quality--I don't have any idea how they do it), but they don't have to reshoot the movie, which is especially what needs to be done in the case of a remake. Another big difference is that each media that a movie goes onto is a chance for the publisher to raise the price--DVDs cost more than VHS, and Blu-Ray costs more than DVDs. With video games, the price just goes down, down, down.

This is just an assumption I'm pulling out of my ass, but isn't your average videogame far cheaper to produce than your average theatrical movie? If that's right, then even if videogames never reach the sales figures of movies, they should still have a good chance to make a relatively high gross profit, right?

That's the assumption I would have made, but it seems like I'm always reading about how the big-budget titles are getting to a point where they ARE costing as much as a theatrical movie. I could be completely wrong here (or backwards, like maybe they are earning that much?) and was kind of hoping someone could correct me with some figures. They'd still make money, but it seems like the risk is just as high and the potential returns (due to technology going out of date) are not as good.

The point of this was that I was looking (completely with nothing to base this on but a dumb quote from someone at Dreamworks) at this movie-model and realizing it was closer to what Nintendo is doing, in that they make sure their games for less and they still look really good (in standard def anyway) and then never ever drop the price, while other developers are pushing to spend as much money as they can so that they can actually earn less. (And any third party shovelware manufacturer who is "following Nintendo's example" is, in fact, not following Nintendo's example at all because Nintendo makes games that people actually want to play.) But I didn't want to make it a "Nintendo is so smart and I love humping my Wii" post, so I figured I'd just leave it unconcluded.

[ShinjukuNeedlemouse]

Of course there's action fans, comedy fans, but you'll never hear of "movier" like you hear "gamer".

That's because the term is movie buff, not something you made up to try and sell an invalid point.

Actually, most understand the term "movie buff" to be akin to the term "diehard gamer". Seems you're the one who had an invalid point (before you grasp for straws because you hate me and want to argue with me whenever possible, at least make sure those straws are tangible).

Movies are also far cheaper to see in theaters (on average $6.50 vs. $59.99, what do you think is more reasonable?)

Not asking about why games and movies are different in the area of content, thanks, but where are you seeing movies for $6.50 these days? Matinees maybe, but evening showtimes are more popular (and more expensive). Movie prices are an entirely different rant, though.

I have no idea where you live, but in my rundown little town, the cinema is cheap (if you don't buy things at the concession counter).

[Neo]

Actually, most understand the term "movie buff" to be akin to the term "diehard gamer". Seems you're the one who had an invalid point (before you grasp for straws because you hate me and want to argue with me whenever possible, at least make sure those straws are tangible).

Idiot here (you knew this without me telling you)

By god, if you hate yourself, why on earth do you have a problem with other people hating you?

I've never heard anyone call themselves a "diehard gamer", and if I did, I'd probably whack them with a bat. There are fans for everything, and for each of those parties, there's names they call the others. Generally, people within a given party don't differentiate between monikers, outsiders do. I'm a gamer and I make no distiction between a "casual gamer" and a "hardcore gamer", even though it seems like everyone in the media is doing it.

tl;dr a movie buff is a fan of movies is a movieholic is an adept of cinema. But that is beyond the point.

[Delphine]

I've never heard anyone call themselves a "diehard gamer"

You've never gone into a game store or a comic book shop and encountered the mouthbreathers? Hell, I've found them in the electronics section of Walmart.

[ShinjukuNeedlemouse]

By god, if you hate yourself, why on earth do you have a problem with other people hating you?

Do you read invisible books? I only ask because you seem to like to read into things that aren't there.

I've never heard anyone call themselves a "diehard gamer"

You've never gone into a game store or a comic book shop and encountered the mouthbreathers? Hell, I've found them in the electronics section of Walmart.

The Walmart types are the funniest. "HHHHHHHEEEEEEEY YALL, BRUTAL LEGEND FTW!" (he actually said FTW out loud...

[cjmcray]

How do video games make any money at all?

I have no idea.

[j-man]

The toes look rubbish.

[ShinjukuNeedlemouse]

Not bad for an original Xbox.

[gr4yJ4Y]

For sake of argument, let's assume that video games and movies cost the same to make nowadays. Now remember that movies have a much larger audience than video games, but both video game makers and movie makers want to make money. So to have them make the same amount of money (in this case I'm presenting at least) to buy a video games might have to cost a lot more than a movie ticket or a DVD. That's why video games cost $60 new and movies and DVDs are much cheaper. That's how both video game makers and movie makers can make money.

So why would anyone invest in video games over movies? In finance, people often diversify their investments to lower overall risk of losing their money. That's why everyone doesn't just invest in one industry - because people spend their money on all kinds of things. Also, maybe you have a better understanding of how the video game industry works than you do with the movie industry. Maybe you just really like video games and believe in an idea.

If I were an investor, what would look better, a movie that could potentially continue to sell for 15 years or more, or a video game that will cost just as much to produce, but will drop in price after 6 months and be completely gone from the marketplace once the hardware is replaced?

With movies, there can be extra money made after the movie leave the box office because people can buy them on DVD's, it might be resold on other video formats, and then it's played on TV. The director and actors involved in a successful movie might now be recognized by the public who will go see another movie with their name attatched. Sequels might be made based off the success of the first one.

A lot of this applies to games too. Most of the money made is made from the initial release (usually). But if the game is successful it's easier to market an already established franchise or game maker. You may be interested in FFXIII because you played some of the first 12 games and liked them. Or you might be looking forward to Bayonetta because you know the quality that Platinum puts in their games. When a developer makes a game from an unknown developer as a new IP, they probably don't expect to retire off of that one game's profits. The game's reputation carries onward.


Also, I'd say I can see the decay in 1995's Toy Story. There's a lot less camera movement in that film than in recent CG movies. That's because it takes more power to move the camera around than to paint a background and let the character models act out on top of it. I don't mean that there isn't any camera movement in Toy Story, but there's a lot less.

[Arcade]

Videogames companies seem to be a bigger business than ten years ago, we are getting more videogame releases than ever before. There are three big companies only in the "console" market, when before there where only two big ones, things haven't been ever been better!. You have the same people that played with the Ness using the Wii, with the excuse they buy it for their kids, you have the Microsoft fanboys having a the third generation of a PC disguised as a console, and it seems Sony is finally starting to make money with the playstacion 3.

PS: Done, you have both point of views done by the same guy...

[ShinjukuNeedlemouse]

You have the same people that played with the Ness using the Wii

And where, my good sir, might I be able to purchase this fine Earthbound yaoi simulator for myself?

[Arcade]

Nintendo does not care about Earthbound, if they did, they would have already done a compilation for the Wii with the first 3 games for the guys that live outside Japan...

[ShinjukuNeedlemouse]

Nintendo does not care about Earthbound, if they did, they would have already done a compilation for the Wii with the first 3 games for the guys that live outside Japan...

I think you missed my (admittedly abysmal) joke... 0_o

[Malchik]

Yaoi is such a common thing here we just don't pick it up.

[ShinjukuNeedlemouse]

Yaoi is such a common thing here we just don't pick it up.

Hmmm.... I dunno if that's good or bad. .


OK, G. Silver, now for my question to you. Do you believe games SHOULDN'T be making money in their current state (in other words, are you dissatisfied with the gaming value to dollar value ratio)?