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One to Rule Them All: How Consolidation is Harming the Videogame Industry

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By Nelson Schneider - 04/12/13 at 03:48 PM CT

Gazing out upon the game publishing landscape, where once there existed a scenic vista dotted with dozens of small developer/publishers that stood along the skyline like a forest of exotic alien trees, there now stand instead a few hulking, farraginous monoliths, spewing toxicity and death into the air. On the Western horizon of this landscape stand behemoths like EA, Activision, Atari (delenda est), Disney, Hasbro, and Warner Bros. (the latter three aren’t even primarily game makers), while on the Easter horizon stand Square-Enix, Namco-Bandai, Sega-Sammy, Tecmo-Koei, Takara-Tomy, and Konami. While most Eastern companies have the decency to memorialize the victims of their cannibalism via hyphenated naming, in the West the many consumed to fuel the growth of the few are forgotten by all but dedicated historians.

Surely the growth of a few companies must be a good thing, at least to capitalist thinking? These dominant companies must be doing everything right while the devoured-and-digested victim companies must have done everything wrong? Perhaps that is why the largest of the large, the great and all-consuming Electronic Arts, is considered the greatest videogame company in the world? Oh, no, wait, EA just earned the dubious honor of being elected the WORST company in America (not just the worst videogame company, but the worst company, period) for the second year in a row via a tournament run by The Consumerist.

For anyone who isn’t fooled by blind capitalist loyalty, this should come as no surprise. As companies grow by consuming others, they set themselves up in a position where their entire structure becomes unstable. A huge conglomerate game publisher can’t maintain its operating budget and the legions of redundant staff members that come with each acquisition by continuing to operate as a small-to-medium developer/publisher, creating good games that appeal to maybe 100,000 gamers at most. In order to sustain itself, such a company needs ever-more, continual growth, and must fuel the growth either by consuming a popular small developer/publisher and attempting to cash-in on that popularity, or by releasing a stream of homogenous gruel, also known as “AAA” games, that appeal to the largest possible market segment, and writing off any product that sells less than 1 million units as a failure. With such enormous demands placed on the recently-consumed small developer/publishers still floating in the leviathan’s stomach, their digestion and excretion is almost assured. While, in the case of EA specifically, the former head of consumed-developer/publisher BioWare insists that EA never placed any specific, evil demands on the team, but instead “gave them enough rope to hang themselves,” it seems to me that a small development team within such a massive body would feel a subconscious demand to produce only products that sell 1 million units and appeal to the widest swath of customers possible, knowing that failure to meet such unspoken, unwritten demands would result in the shuttering of their studio, as happened to so many before them.

This endless cycle of consume-grow-destroy has an analog in the biological world: Cancer. When cells (companies) within an organism (the gaming industry) go haywire and begin consuming their neighbors in a process of uncontrolled growth with no real goal besides growth for its own sake, the organism becomes sick. In the world of biology, cancer is never considered to be a good thing. Yet in the world of business, this process is the favored model. Dozens to hundreds of small startup companies pop in-and-out of existence constantly, hoping to be gobbled up by a corporate tumor with the reward of a high-dollar buyout, either not realizing or not caring that their product will be transformed into something without heart and soul – something that someone truly invested in their startup or independent team would never produce.

Just a few of the negative long-term results of this process happening within the videogame industry are thus:

-EA no longer develops any games itself outside of annual sports releases, a handful of sequels, and terrible licensed drek. In an attempt to further maximize profits, the company wants to move away from making offline, single-player games altogether, instead focusing on nickel-and-dime tactics like online passes and egregious DLC practices.

-Activision has squandered the goodwill PC gamers once held toward Blizzard, while simultaneously destroying the James Bond videogame franchise (okay, Daniel Craig helped with that last part).

-Square-Enix produces endless remakes of their classic RPGs, fumbles every sequel or scant new IP they try, and builds fan expectations to a fevered pitch with cryptic announcements-of-announcements, only to have the announcement turn out to be for an Eidos game that traditional fans of Squaresoft and/or Enix would only acknowledge in passing (or even worse, a browser game).

This loss of identity and the change of focus from ‘making videogames’ to ‘making boatloads of money’ are inextricably linked. It’s impossible to treat games like art – or indeed to treat them like anything other than a commodity – when the focus is on keeping the cashflow strong enough to support the weight of a colossally-overburdened corporate mass. Indeed, this same narrow-minded bean-counter approach to publishing is what has kept the console digital distribution services on Xbox Live, PSN, and WiiWare (now WiiUWare) from successfully competing with Steam or the new upstart App Stores from Google and Apple (not to mention the backward compatibility issues that are just beginning to come to light). The console digital distribution services act like big corporate publishers, insisting on a large up-front investment from a development team (in lieu of consuming that team in its entirety) and demanding obscenely-high sales numbers before providing the developer any return on their investment. In the old industry landscape where every small developer was also their own publisher, modest rates of return were considered successful as long as some amount of profit came in. Yes, small developer/publishers failed frequently, just as they continue to fail frequently as parts of conglomerations. But accretion of assets into too few concentrations only results in those assets being squandered or misused. When the worst company in America also controls the publishing rights for the lion’s share of videogames in the West, how can anything good come of it?

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