The Video Games Industry Crash of 80's Coming Again?

I don't think we'll see a market crash like the 80's. I would relate the prior industry problems to a bunch of crappy games coming off the advent of in-home gaming. I think more people were excited to have games in their homes at the beginning of the decade, but when they found only crap to buy, the market started to bottom. I think the current situation is more likely due to economic issues. There are indeed a lot of good games out there on all platforms but the average consumer (not video game nerds) can't spend the money on all the good games by themselves. Factor in the abundance of indie games, crappy big production games, and everything in the middle and people just can't spend the money. 

One of the issues with the 80's crash was that even low quality games had high production costs, what with the medium being cartridges and all.  Nowadays games are made on discs or even purely digital, and about 95% of production cost is spent on development and design, which naturally means that cheaply designed video games have very little production cost, and well designed video games will have appropriately high production costs.

The two extreme sides of this situation would be "Shovelware," really crappy cookie-cutter games which are only made because companies know that children will make their parents buy them (you see this on Wii and DS all the time), and Indie games, which have resulted in high popularity games with very little monetary backing.

The issues with games during the crash seemed to be that alot of high production cost "Shovelware" was being produced and when the consumers realized the low quality of the game products they stopped buying, and the game industries were caught off guard.  I think that as long as there are high quality games being released we won't see another crash, especially with Indie developers creating the occasional high-quality game and selling it for very little.

The console market is definitely at an interesting crossroads at this point. All three are reaching end of life now that PC gaming has made a full generational leap ahead, so we're going to see fewer titles released over the next year+ as a result. From there, it will really depend on a few things:

Given the entry price point for the current generation back when a PS3 was $500 and a 360 was $400, if prices for the next console cycle go higher you might as well just buy a new PC. Then again, look at the insane price people pay for iPads so that they can play Angry Birds or whatever.

For the next cycle, we're going to see a LOT more downloadable titles, with physical copies beginning to phase out similar to the PC market. What that's going to do is mess with the business model of any retailers dependent on physical sales that haven't planned far enough ahead. For example, as much as I despise GameStop, at least someone was smart enough to realize they needed a much better digital distribution platform and have been buying up companies / tech as a result. Otherwise, that company would be totally screwed once you consider that Sony's new console won't support used games.

Finally, the greed of board room execs behind the major consoles will ultimately determine the health of the industry. Back in the 80s it was a case where the consoles held all of the keys -- meet their demands, pricing structure, and distribution agreements or get a new job in another industry. Thankfully, digital distribution services have helped provide a system of checks and balances there at least, as well as the ability to release games on multiple platforms.

The one part of history that will repeat itself:

Back in the 80s Nintendo became popular, followed by a flood of junk games. Last decade the Wii became popular, followed by a flood of junk games. I'm betting you can guess what comes next in that pattern...

Do you think consumers have learned from the last two Nintendo console iterations? I mean you will always have the die hard fans buy them, but it appears to me that there is less hype about the Wii U. Especially considering few media reports that the Wii U has less graphical horsepower than the 360 and PS3. I think it past time that novel controller schemes sell consoles. And as was said before, Nintendo is just full of shovelware nowadays.

I'm interested to see what happens as the industry moves to strictly downloadable games. Do you think game prices will come down since you're cutting out all the physical productions costs of discs plus distribution? Or do you think companies will take advantage of the fact that consumers are used to paying ~$60/game and they won't have to change it?

I think pricing will always partially depend on how much control the developer has over it. Runic is a great example; they sold the first Torchlight at $20 because that's the price they wanted. There wasn't a publisher or third party dictating the business end of things, so it ultimately helped the game reach a much larger audience.

With larger publishers, I have no doubts that they'll continue to break things down into brackets. Lesser known titles with little to no marketing budget will continue to be sold at a lower price point, but even if you remove packaging + physical distribution from the equation, AAA titles will still sell at their current price point.

As for the controller gimmicks, I'm bracing myself for how much the Wiimote, Move, and Kinect junk influences the next console cycle. Seeing how few people develop for move / kinect currently, and how few people purchase those titles, hopefully that at least gives Sony and MS a good indication that core gamers really aren't interested unless there is a genuine purpose to the interface. Rather than trying to gank part of the Wii's market share, they should be deeply analyzing why games like Rock Band / Guitar Hero were so successful. In both cases, the games were successful partially because the interface was a perfect fit. But once you try to shoehorn core games into a new control scheme where it makes no sense, you get all the junk games for the Wii, and a few dozen Move/Kinect games sitting on store shelves collecting dust.

The crash will come once EA makes the ET MMO.

If you think SSBB is the only reason to own a Wii then you have got to check out Monster Hunter Tri.  That game is so awesome :Q____

But I agree about the Wii having few good games... really just those two...

The DS suffers from this same issue of few appreciable titles. Nintendo, what's wrong with you?

There's more to the Wii library than just Super Smash Bros Brawl and Monster Hunter Tri.

It's just that the ratio of good-games-to-shovelware on the Wii is significantly low compared to PS3/360.

If you like the Monster Hunter games you should keep an eye on RaiderZ. Goofy name for an MMO, but Perfect World is really trying to make the game appeal to the people who like Monster Hunter. It's also one of the newer in-development titles that's attempting to "borrow" the weapon / skill system from GW2. Not that they've quite pulled it off, but it's interesting to see GW2 influencing other titles even before it's launch...

As for Rock Band / GH, market saturation is indeed what killed both franchises. They trickeled out new tracks as DLC too slowly, and bundled large packs that should have been expansions into stand-alone releases. Heading into the 3rd season for RB, retailers like Best Buy got fed up with sacrificing so much shelf space for the massive boxes during the holiday season. And by that point, people began to lose interest due to the "let's beat a dead gameplay horse" syndrome.

That whole thing closely mirrors the huge Trivial Pursuit craze. It was interesting enough to catch on, but then once it did you suddenly had 1,000 different editions flooding store shelves. Within a couple of years the interest waned in a huge way, and retailers were stuck with mountains of TP boxes nobody wanted. Such is the way of fad gaming.

BTW I still have my original copy of the Atari ET game. :P

Nintendo also relies too heavily on the same franchises over and over again. There are some fun games on the Wii (Smash bros, RE4 when it first came out, etc.) but it seems like Nintendo is past the point of fun and innovating games that aren't gimicky controller schemes. I'm not sure what Nintendo would do if they didn't have all their classic hits on the Wii store. Right now I'd honestly rather have an N64 or SNES with all of those great games instead of what Nintendo does now.

Funny you should bring up Torchlight, that game did a lot to assuage my fears of having guns in GW2 and whether they had a place in a fantasy setting *of course it also had one of the campest automatons in recent gaming history*

The gaming industry today is quickly heading toward a brick wall. They only thing keeping them running is sheepy fans who accept the bare minimum of what they give us. *And they get away with it too.*

If things continue in this direction, guild wars 2 will likely be the last game I ever buy. *I doubt this, but I'm on a serious note here.*