6 ms·

There is a fundamental business challenge at work -- games these days are "worth less". Not having no value, but being of less worth to investors and companies

There is a fundamental business challenge at work -- games these days are "worth less". Not having no value, but being of less worth to investors and companies to invest in. This is simple fundamental economics, since game prices are not growing as fast as their input costs. For example, I spent $30 for Atari video games in the 1980s and it was a lot less expensive to produce. That game would cost $90 today with inflation. For a comprehensive breakdown, see https://www.gamesindustry.biz/are-video-games-really-more-expensive#:~:text=Even%20the%20%2469.99%20games%20that,the%20years%20in%20relative%20terms https://www.gamesindustry.biz/are-video-games-really-more-ex... If your costs are increasing and you can't raise your price then your industry is being commoditized, or at least in a real quandary about how to move forward. AI could be a way to slow the huge, up-front costs that go into AAA games and help limit the risk to making new ones. If this subject interests you, there is a great long-form interview with Matthew Ball on Stratechery: https://stratechery.com/2025/an-interview-with-matthew-ball-about-the-gaming-slump/ https://stratechery.com/2025/an-interview-with-matthew-ball-... Anyway, Carmack is right on the money on this one.

vinkelhake 1y ago
> That game would cost $90 today with inflation. Speaking of $90 - Nintendo recently announced the Switch 2 and physical copies of the games will be just that, $90.
manmal 1y ago
> For example, I spent $30 for Atari video games in the 1980s and it was a lot less expensive to produce. That game would cost $90 today with inflation. And the Nintendo Switch has sold 5x as many consoles as did Atari. Likely a similar scale for games sold. Nintendo very likely makes more in total than Atari did, even with lower prices.
- johnnyanmac 1y ago
  I don't know, maybe. The economies of scale and 40 years of iteration make it hard to compare apples to apples like that. As well as the fact that Nintendo's game team went from maybe 5-10 Japanese designers that can fit in a garage (well, not a Japanese garage) to multiple thousands of employees focusing on different sectors of the business. The main surprise is that they can bs surprisingly lean with their core development teams to this day. Apparently Super Mario Wonder had a core team of around 20 devs.
sysrestartusr 1y ago
> Not having no value, but being of less worth to investors and companies to invest in. This is simple fundamental economics, since game prices are not growing as fast as their input costs. Economics that are not that old and that have been reinforced via a 'tailor made' customer culture. Marketing and business culture fucked up consumers beyond any recognition, then quantified them and keep optimizing via peer-flagellation and sociopathic feedback loops. Economists and leadership's ways are ugly.
philipov 1y ago
Anything that can be copied infinitely for free has a market value of 0, and is in a bubble whenever its price is above 0. This doesn't mean that video games have no value, but that markets aren't suited for finding it.
jayd16 1y ago
This fundamentally misunderstands why modern AAA games are expensive. A single person can make an game. In fact, there's a chance a single person can make a good game. The problem is that the correlation between good and successful is very weak. You basically need a massive marketing machine to break a new IP. Games cost a lot to make but that's by design. The strategy that AAA studios apply is to go as big as possible and cast a wide net because you can't put a dozen smaller games on every Mountain Dew can. AI is not going to change that. Making games a bit cheaper is always a plus but the game will grow to fill the budget. It will not mean more games at the top and it will probably not even mean less cost to the studio. AI tooling will be used but I doubt it will change the way blockbuster games (or movies)_operate beyond the usual progression of industry tech.
- EA-3167 1y ago
  In fact we have modern examples of a single person making a game that's not just much better from a technical standpoint, but actually sells more units, generates more buzz, and moves game design forward. What those games, games like Stardew Valley, Undertale, or Animal Well can't do is create an endless income stream in the billions, and right now that's the goal of some big "AAA" publishers. They don't want to make good games, they don't want to make any sort of game really, they want to create an addictive platform for further transactions. They want GTA Online, F2P Gachas, and E-Sports. They don't want to make Stardew Valley no matter how many units it sells, they want to make the next Fortnite. As a result they keep dumping absurd amounts of money into really sketchy projects (Concorde, Anthem, etc) and they can't seem to figure out why people aren't biting. When in doubt if you're an MBA and you see money flying out of the door and the expected return isn't being generated, it must be almost instinctive to raise prices and lay people off.
  - johnnyanmac 1y ago
    It's a real shame, and figuring out a solution to this is as simple as looking at the pioneers who are still top dog today. Ninteno does a mix of experiments and iteration on their titles. They make sure things are polished to a T. They focus on fostering IPs that show hope, even if they didn't make a billion dollars at launch. They focused on building a reputation for quality and not simply trying to make number go up. you don't get that kind of seal of quality overnight. Capcom and Bandai Namco had their struggles, but overall had a similar trajectory. But many american companies don't want to think long-term portfolio anymore. They want pump and dumps. The only potential solace of such crashes is that those pump and dumps might stagnate as well.

vinkelhake 1y ago

> That game would cost $90 today with inflation. Speaking of $90 - Nintendo recently announced the Switch 2 and physical copies of the games will be just that, $90.

manmal 1y ago

> For example, I spent $30 for Atari video games in the 1980s and it was a lot less expensive to produce. That game would cost $90 today with inflation. And the Nintendo Switch has sold 5x as many consoles as did Atari. Likely a similar scale for games sold. Nintendo very likely makes more in total than Atari did, even with lower prices.

johnnyanmac 1y ago
I don't know, maybe. The economies of scale and 40 years of iteration make it hard to compare apples to apples like that. As well as the fact that Nintendo's game team went from maybe 5-10 Japanese designers that can fit in a garage (well, not a Japanese garage) to multiple thousands of employees focusing on different sectors of the business. The main surprise is that they can bs surprisingly lean with their core development teams to this day. Apparently Super Mario Wonder had a core team of around 20 devs.

sysrestartusr 1y ago

> Not having no value, but being of less worth to investors and companies to invest in. This is simple fundamental economics, since game prices are not growing as fast as their input costs. Economics that are not that old and that have been reinforced via a 'tailor made' customer culture. Marketing and business culture fucked up consumers beyond any recognition, then quantified them and keep optimizing via peer-flagellation and sociopathic feedback loops. Economists and leadership's ways are ugly.

philipov 1y ago

Anything that can be copied infinitely for free has a market value of 0, and is in a bubble whenever its price is above 0. This doesn't mean that video games have no value, but that markets aren't suited for finding it.

jayd16 1y ago

This fundamentally misunderstands why modern AAA games are expensive. A single person can make an game. In fact, there's a chance a single person can make a good game. The problem is that the correlation between good and successful is very weak. You basically need a massive marketing machine to break a new IP. Games cost a lot to make but that's by design. The strategy that AAA studios apply is to go as big as possible and cast a wide net because you can't put a dozen smaller games on every Mountain Dew can. AI is not going to change that. Making games a bit cheaper is always a plus but the game will grow to fill the budget. It will not mean more games at the top and it will probably not even mean less cost to the studio. AI tooling will be used but I doubt it will change the way blockbuster games (or movies)_operate beyond the usual progression of industry tech.

EA-3167 1y ago
In fact we have modern examples of a single person making a game that's not just much better from a technical standpoint, but actually sells more units, generates more buzz, and moves game design forward. What those games, games like Stardew Valley, Undertale, or Animal Well can't do is create an endless income stream in the billions, and right now that's the goal of some big "AAA" publishers. They don't want to make good games, they don't want to make any sort of game really, they want to create an addictive platform for further transactions. They want GTA Online, F2P Gachas, and E-Sports. They don't want to make Stardew Valley no matter how many units it sells, they want to make the next Fortnite. As a result they keep dumping absurd amounts of money into really sketchy projects (Concorde, Anthem, etc) and they can't seem to figure out why people aren't biting. When in doubt if you're an MBA and you see money flying out of the door and the expected return isn't being generated, it must be almost instinctive to raise prices and lay people off.
- johnnyanmac 1y ago
  It's a real shame, and figuring out a solution to this is as simple as looking at the pioneers who are still top dog today. Ninteno does a mix of experiments and iteration on their titles. They make sure things are polished to a T. They focus on fostering IPs that show hope, even if they didn't make a billion dollars at launch. They focused on building a reputation for quality and not simply trying to make number go up. you don't get that kind of seal of quality overnight. Capcom and Bandai Namco had their struggles, but overall had a similar trajectory. But many american companies don't want to think long-term portfolio anymore. They want pump and dumps. The only potential solace of such crashes is that those pump and dumps might stagnate as well.