The home console market is no longer supporting alternative products for big publishers, leaving only blockbuster titles to break the top ten and become profitable.
That’s according to Ubisoft Euro MD Alain Corre, who told GamesIndustry.biz that it’s safer to invest in one AAA title rather than hedge bets on a handful of smaller productions.
"The games that are not triple-A are not profitable anymore," said Corre in an interview published today. "And that’s changed in the last 18 months.
"When you have a triple-A blockbuster it costs more money to develop, but at the end of the day there’s also the chance of a good return on it because there’s a concentration at the top of the charts. To a certain extent it becomes less risky to invest more in a single game or franchise than spreading your investment between three or four games. Because if those three or four games are not at the right quality level, you are sure to lose money," said Corre.
"So the business model has changed and we’re changing our way of making hardcore games. With hardcore games that we’re not sure are reaching the right level, we stop work on them. And that’s why we concentrate more on key franchises, because that’s what the market wants - something new with huge quality production behind it. The market is not supporting the full range of product that it used to anymore."
Although the French publisher has brought new IP to market successfully this generation with Assassin’s Creed, Corre said that upcoming strategy game RUSE might be the last new franchise from Ubisoft until a new generation of home consoles, as establishing new brands is proving too expensive.
"It is more difficult now. To launch a new IP you have to invest much, much more marketing to establish it, and if you add up the huge costs of development plus the investment in marketing you cannot be 100 per cent sure the target audience you’d expect, which is needed for the comeback on the investment.
There once was a time when "AAA" meant quality. Today, it stands for outrageously bloated budgets - $30 million or more - on the HD Twins. That business model was never sustainable, and calls for yet another round of next-generation games consoles would only make things worse. The solution to a $30 million game that doesn't sell is not to make a $60 million game. Executives who can't figure this out don't deserve to keep their jobs.
And where does Nintendo fit into all of this? This whole rant makes no sense. The existence of the Nintendo Wii debunks every one of Mr. Corre's claims. Rayman Raving Rabbids, fitness games, and the Just Dance phenom are all from Ubisoft, and they are all very successful and very profitable. And Just Dance has become the poster child for online viral marketing on Youtube, Facebook, and Twitter. Are the suits at Ubisoft even remotely aware of any of this?
If the "hardcore" video game market is no longer sustainable, then let it go, and pursue the newer - and more profitable - social game market. This shouldn't be rocket science. There's no excuse for this kind of infantile whining to come from Ubisoft. I have no idea what this is about, and I have no patience for it. My advice is to keep Mr. Corre away from the executive liquor cabinet.
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