Nintendo, Microsoft, Square welcome us to the era of fewer big video games
Data shows that Nintendo was ahead of the curve on this one.
Like big-budget video games? Hope you like waiting for them. (And hope there are enough developers left in this industry to make them.)
There are abundant signs that we have entered an era that will see fewer major new video games from big game publishers.
That transition has been especially clear in the past week, as one gaming giant after another is sounding the alarm about the increasing challenges of making the kind of mega-games they’re most famous for.
“The cost associated with making these beautiful AAA blockbuster games is going up, and the time it takes to make them is going up,” Xbox president Sarah Bond said in an interview with Bloomberg last week, setting up a partial justification for the company’s deeply unpopular closure of several studio in its ZeniMax group.
Whether shutting down acclaimed studios—especially one that just released an award-winning game—is a wise response to the problem is debatable, but Bond wasn’t alone in articulating the trend.
Consider this note from last week issued by Sonic-maker Sega Sammy as part of its financial results (emphasis added by me):
Regarding the environment of the entertainment contents business, in the consumer area, the growth has plateaued due to ongoing inflation in various countries and regions, and other factors. In addition, partly because of rising labor costs and longer development periods, there is urgent need to respond to these changes in the business environment.
There’s also Final Fantasy giant Square Enix, just this morning, reiterating the news that it recently canceled multiple projects. The company “will pursue a shift from quantity to quality,” it said.
And there’s Nintendo president Shuntaro Furukawa telling investors last week that “the process of game development will inevitably become longer, more complex, and more advanced.”
If Furukawa doesn’t sound quite as alarmed by this situation, it’s possibly because:
a) Nintendo is still making voluminous profits
b) Nintendo appears to have downshifted its output of games quite some time ago.
On that second point, note that Nintendo has reduced its game output over the last five years, since it combined the development teams it had on handheld (DS, 3DS) games and console (Wii, Wii U) games into one group servicing the hybrid Switch. That combination has not resulted in the count of games made at Nintendo even holding steady, as the new Game File chart below shows:
If you’ve played Nintendo’s games for the last two or three decades, the reduction in software output tracks with the commensurate increase in graphical complexity and overall game scale of many of the company’s Switch releases.
The Legend of Zelda: Tears of the Kingdom is far bigger than the Wii’s The Legend of Zelda: Skyward Sword; the Switch’s Pikmin 4 dwarfs the Wii U’s Pikmin 3; etc.
Nintendo hasn’t outright said it, but, without any visible decline in its development resources, it appears to be putting more of its people onto fewer games.
Note: Regarding the data from the chart above, that’s all Nintendo will be offering on the topic. After tallying its total games released for over a decade, Nintendo said last week that it will no longer report those stats. No reason given.
And another company: Earlier this year, Electronic Arts signaled a slower year of big releases as its once-prolific output comes closer and closer to the mono-franchise approach that its longtime rival Activision adopted when it bailed on even big secondary franchises such as Destiny and Skylanders in order to go all-in on Call of Duty. (EA, which at least is unlikely to abandon its sports and Sims lines, now boasts of having more developers than ever on its Battlefield franchise.)
None of this means there will be fewer games overall. To the contrary, there are more now than ever.
On PC marketplace Steam, the amount of games releases has risen each year of the past decade, save one, as tracked by Steam DB. Most come from small indie studios.
What’s dropping are games released from the biggest publishers and teams.
They can’t make them fast enough.
Last June, Xbox game studios chief Matt Booty told me that the days of two- or three-year development cycles for big-budget games are over. “They're four and five and six years,” he said. Booty pinned that on the challenges of generating the advanced graphics associated with modern platforms. “There are higher expectations. The level of fidelity that we're able to deliver just goes up.”
Amid this, the success of any one big game from a major publisher is all the more paramount, and the risk of failure looms.
“New releases tend to be met with either marked success or marked failure as players throng to a handful of major titles,” Square Enix stated this morning in an assessment of the gaming industry landscape. It’s been widely noted that many older games, such as Fortnite and League of Legends, just can’t be dislodged these days by new contenders.
What’s a big company to do?
Last year, at least, Sega said it believed releasing more games would help its chances. (Unclear if they still feel this way.)
But more companies are choosing to cut costs, while trying to get their smaller number of games out to more people.
Take Square Enix, which saw sales rise slightly but operating income plummet in the 12 months ending March 31, 2024, thanks to softer sales of console and PC games. It already jettisoned the studios behind Tomb Raider and Deus Ex two years ago and said today that it will “aggressively pursue a multi-platform strategy” for its big franchises, suggesting it’s done with, say, making recent Final Fantasy games PlayStation-exclusive on console.
Last week, when Microsoft’s Matt Booty emailed the company’s gaming team to explain why four ZeniMax/Bethesda studios were being shut down, he said the changes were “grounded in prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games and beloved worlds which you have nurtured over many decades.”
Then, during a company town hall reported by Bloomberg, Jill Braff, head of the Microsoft-owned ZeniMax studios, said the hope was the division would be able to focus on fewer projects.
A world of fewer bigger games is a world of more multiplatform games and a world where each game is an even higher-stakes gamble.
One wonders, given the mass layoffs of game developers at Microsoft, EA, Sony, Take Two and more, if the companies focusing on fewer big bets will find that they even have enough workers to make them.
But it’s also likely that another recent trend will become more prominent: Games made by the most agile studios will thrive. See the work of independent teams like Pocket Pair (Palworld) or the malleable design of Sony-published, Arrowhead-developed Helldivers II: work that the big companies can’t—or won’t—create themselves.
Item 2: In brief…
👀 Two lawsuits over so-called Nintendo Switch Joy-Con drift are nearing their resolution, as Nintendo and the parents who brought the suits on behalf of their children have called for the cases’ dismissal.
The class action complaints—Diaz vs. Nintendo and Carbajal vs. Nintendo—were filed in 2019 and 2020, respectively. They alleged that Nintendo knowingly sold defective controllers. A third, Sanchez vs. Nintendo, was dismissed in 2022.
Nintendo apologized for Joy-Con malfunctions in 2020 and had a policy of issuing free repairs but had fought the suits, saying that the players who brought them were bound by the Switch’s user agreement to settle things via private arbitration, not a class action lawsuit.
🤔 Sony’s latest PlayStation drama on PC: This week’s Ghost of Tsushima Director’s Cut won’t be available in nearly 200 countries that don’t have access to the PlayStation Network, even though only the game’s side multiplayer mode uses PSN, PC Gamer reports.
The Sony-published Helldivers II, out since February, was recently delisted from sale in those same countries. No comment on this so far from Sony.
😲 Representatives behind NetEase’s upcoming competitive superhero game Marvel Rivals are apologizing for ”the confusion, suspicion, and frustration caused by… excessively restrictive terms” of an agreement signed by players who got access to the game’s content creator program.
The agreement had included a non-disparagement clause that barred “subjective negative reviews of the game.”
The agreement’s terms will be revised “to be less restrictive and more Creator-friendly “, the game team said.
🎮 Ubisoft’s Assassin’s Creed Red is now officially called Assassin’s Creed Shadows, as its recently-struggling publisher plans a May 15 cinematic reveal for the game, alongside the release of its full-year earnings (Ubisoft’s multiplayer shooter XDefiant also launches this week).
📱 Gamma, a new program that emulates the original PlayStation, is rocketing up the free entertainment app rankings on iOS. It’s the fifth most-popular today, as of this writing, just behind Netflix, and ahead of Ticketmaster and Disney Plus. (Number two is Delta, an emulator for older Nintendo platforms).
Apple began allowing retro gaming emulators last month, after years of banning them.
⚡️ GameStop plans to begin buying customers’ graded Pokémon cards, Polygon reports, citing conversations with store workers about the planned program. Please don’t tell my kids.