More Game-Services Inbound. 95% Devs Creating 'Em or Intend to
The latest report on the video game industry provides us with a number of interesting insights into the health of development teams. The main conclusion? Games-services continue to rule, although their creation is burdened with increasing costs as well as risks.
Griffin Gaming Partners, in cooperation with Rendered VC, published a report analyzing various aspects of video game development.
- The "2023 Game Development Report" indicates that 95% of the surveyed development teams are currently creating a game-as-a-service, already have one in their portfolio, or plan to make one.
- Furthermore, 66% of studies believe that only the game-as-a-service business model can guarantee long-term success for a particular title.
The basis for conducting this study was over 60 interviews with industry experts, which "were to help in formulating hypotheses and verifying survey questions." 537 different studies from around the world participated in the survey, undergoing "strict verification."
Gaming-services tempt with vision of huge earnings, but deter risks
Returning to the point of the matter, the industry's clear shift toward game-services isn't surprising. Games that rely on this business model, which - colloquially speaking - "burn out," can provide developers with enormous profits.
- This can be clearly seen in the case of Electronic Arts, whose revenues are mainly due to continuously developed games, such as Apex Legends (we can also mention games like EA Sports FC 24 or Madden NFL 24, the latest editions of popular "annual" EA series, which, although not strictly game services, include microtransactions, and their successive installments are very similar to the previous ones).
On the other side, there has been significant competition in this field in recent years, as each of the major industry players such as Blizzard, Ubisoft, and the previously mentioned Electronics Arts, already offer several popular game services in their portfolios. Some of them are even monopolists in their sub-genres. Securing a piece of the "service cake" appears to be a very challenging task, but not impossible.
Rising production costs
An additional aspect is the constantly increasing costs of game production. 77% of the teams surveyed have noticed the need to invest larger resources in the projects being developed year by year. That's mainly due to:
- increasing player expectations for large open worlds;
- need to design more technologically complex games - including better character animations;
- rising wages for experts.
Moreover, according to the respondents, the development of "traditional games" - meaning those which players purchase just once and which developers don't have to develop after the release - typically takes around two to three years, whereas game-as-a-service is developed for approximately five years. Betting on the latter is now riskier but also more profitable than ever before.
Games-services in decline (despite everything)
However, some analysts anticipate that in the next few years, game services will be somewhat less appealing to developers despite their immense popularity.
- Furthermore, 68% of the surveyed studios feel that their companies are currently not adequately prepared to release updates and content fast enough.
- Therefore, significant financial investment and a new strategy would be needed to change this situation - indicating that the trend for games-as-a-service will decline.
The dynamically changing situation in the industry, which is still dominated by games services, is evidenced by the fact that at the end of last year, Sony announced a revision of plans for 6 of its 12 upcoming games, which were initially supposed to be long-lived titles.
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