Thomas Mahler, co-founder and CEO of Moon Studios, shared his thoughts on the AAA segment of the gaming industry. He believes that large companies such as Microsoft and Sony should abandon exclusivity. Otherwise, their business risks losing stability.
No Rest for the Wicked
Mahler shared his thoughts on the state of the industry in response to a question from Jez Corden, a Windows Central journalist. The question was, "Are you still with Xbox?" Instead of making do with a monosyllabic comment, Mahler published a long post in which he explained why such a question makes no sense in modern realities.
Thomas Mahler
"I believe that the model that the AAA industry has relied on for the last 20 years has exhausted itself," the developer said. His position boils down to the following theses:
- During the pandemic, which Mahler called "something of a trap for platform owners and publishers," companies witnessed a rapid increase in the number of users and the time they spent playing games;
- they mistakenly took the new indicators for granted, for a new initial state of the market, and not a temporary and unjustified success on their part;
- along with the end of the lockdown, the indicators returned to the pre-epidemic level, forcing gaming companies to adjust their plans and reduce spending that increased against the background of record earnings, which led to an ongoing wave of layoffs and closures;
- "many corporations that received investments due to HYPE, rather than real merit, were suddenly devastated because they were too greedy," Mahler emphasizes.
As a result, we faced the consequences of unjustified financing and unfulfilled forecasts, which overlapped with another key problem — inflated budgets. The development of new AAA titles costs $100-300 million, which is extremely difficult to recoup.
For example, the production of The Last of Us II cost $ 220 million, and the total budget of Marvel's Spider-Man 2 was $ 315 million. And the budgets of such titles continue to grow.
"When such sums are at stake, how can you guarantee that you will be able to return them," the developer asks, and then answers himself: "You will have to attract as many users as possible."
Mahler is sure that such large companies as Microsoft no longer make sense to limit themselves to one platform. So there is nothing surprising in the recent transfer of Xbox games to PlayStation or the appearance of new products from Sony on the PC.
At the same time, Sony games are unlikely to appear on the Microsoft platform. The Xbox installation base is small today. But this cannot be completely ruled out, because the risks are greater than ever today and every copy sold matters.
"We are at a crossroads. Here, the heads of corporations and AAA studios must decide whether, with a further increase in production budgets, they are ready to increase the risk of bankruptcy in case of insufficient sales, or they will reduce the risks by selling games to the largest possible audience," Mahler concludes.
Also, according to him, in the future it won't matter which console you have. Everything will go back to the days when people had DVD players from different manufacturers. "To some extent, hardware still matters, but you will have access to the same content from all devices."
But Mahler immediately notes that perhaps the only company that will not need to change the existing distribution model is Nintendo.
The developer believes that Microsoft Gaming CEO Phil Spencer was thinking along the same lines when, amid falling Xbox sales, he decided to launch his games on a competitive platform.
At the end of his post, Mahler asks to treat his words with a healthy degree of skepticism: "I can be absolutely wrong and it has happened more than once before that I was wrong."
Moon Studios itself recently released the No Rest for the Wicked role-playing game for early access on Steam. The game debuted from the fifth place in the sales chart and at its peak attracted up to 36 thousand online users.