Chris Deering, chairman of the Edinburgh Interactive Festival has voiced a warning to the videogames industry that we must look to other sources of revenue.
He points to rising development costs and predicted falls in the software market. Micro transactions and advertising - ”these business models must be explored.”
”Traditional revenue sources will not be sufficient to fund games development. If you look at the very narrow definition of the gaming market, people are saying the software business will be down 20 per cent by 2011 versus this year,” cautioned Deering, opening this year’s EIF event.
”Something is going to have to be there to make up the difference and take us beyond that threshold,” he continued. The average ‘major’ title in the industry can now easily eat up $10 million, with true heavyweight titles like Rockstar Game’s Grand Theft Auto IV gobbling upwards of a whooping $100 million.
”My guess and analysis shows that less than 3 out of 10 games recover their development and marketing costs with boxed goods sales,” said Deering.
”So what’s going to have to happen? Creative use of hybrid online and offline advertising revenues, online offline transactions with consumers - these business models must be explored.”
Do we gamers have nothing but swords or guns at ‘discount prices’ and healing potions from the Coca-Cola corporation to look forward too? With 70% of videogames not recovering costs at retail something must be done - think of the starving programmers and artists!
Source: GamesIndustry.biz
