Heading For Another Video Game Crash?

Posted by Rampant Coyote on November 13, 2013

Sounds like some folks are predicting it over at GamesIndustry.biz.

I dunno. If I was a console manufacturer, I might be nervous. If I was primarily a publisher of high-end console games, I might be nervous. While I was too young to really understand the North American 1983 video game crash, I can probably draw parallels with the “Dot Com” crash circa 2001. Yeah, that one sucked.

But hey, I’m an indie, what do I care? This is just the triple-A publishers and studios and console-makers, right?

Oh. Maybe it’ll be indies too. IndieStatik has an article called “Everything Indie Is About to Burst: Indie Bubbles, Cliques, and the Future.” In part, it’s a response to Jeff Vogel’s article last week (much like my own response). Heck, even Vogel himself can’t help but respond to his own post.

Yeah. Okay. Back in the late 90s, I was able to see hundreds of gallons of business being poured into the 50-gallon drum that was the current state of online commerce at the time. Likewise, on the indie front, indie has exploded — and supply is exceeding demand. That leads to a collapse. But like I said last week – we’re not talking a total collapse here.

Look at the “Dot Com” collapse a half-dozen years ago. Lots of businesses folded, and lots of people lost their jobs. Me, too, and I wasn’t even in a “Dot Com” company. But they represented a chunk of my company’s clients. In the meantime, there’d been a ton of programmers – many with little 2-year associates degrees – rushing into the marketplace because that was where the money was. Suddenly, with the collapse of that bubble, there were a ton of unemployed programmers out there, and we all had to compete for a lot fewer jobs.

Obviously, that sucked. Those were tough times to weather.

And look at the fallout! Thanks to the dot-com collapse, there are no more online businesses. It was all just a fad. Amazon is gone, Google never made it out of infancy, nobody shops online anymore…

Yeah. Just like 1983 was hardly the death knell for the video game industry (although many experts claimed as much), the dot-com bubble bursting wasn’t even close to the end of the online commerce era. I don’t know the numbers, but it’s clearly far bigger and better today than it was in the heyday of the pre-collapse, circa 2000.  Likewise, at its highest point at the “boom” of the video game era pre-crash, the entire video game industry was a fly spec compared to what we have today.

All it is, is a gold rush. Things go a little crazy for a bit, and the growth rate on the supply side goes into an unsustainably steep climb for a while. Eventually, gravity prevails, and things are brought back down to a more gradual growth cycle.

Do we have an indie bubble right now? I think so. Is it due for a popping? I hope so. The sooner, the better – there’s less damage that way. Because while an economic bubble popping clears out the riff-raff, it also damages (or destroys) some really good businesses, too. They just happen to be at the wrong place at the wrong time, finally got their long-sought expansion plans in gear just before things hit the fan, or whatever.  A lot of people will get discouraged and quit, and while the ratio of cool games to crap might even improve, the total quantity of both will shrink way, way down for a while.

Maybe then I’ll be able to actually finish some of these games before finding myself shelling out for yet another steeply discounted bundle that I “might” like.

I think the AAA, console market is already in mid-“crash.” Maybe a slow-mo crash. If the new consoles tank, it’ll turn into a crash. And we could get surprised. It could turn into yet another era of massive growth as Sony and Microsoft sell record numbers of consoles. It could happen.

I think the indies are already feeling the pains of a saturated market. Android and IOS are becoming extremely difficult to make money in, and getting on Steam is no longer the guaranteed money-maker it once was (not that there were ever guarantees).

There may be some new avenue of “easy money” (well, the illusion of such) that starts things or prolongs things all over again. But… for the most part… I think that we’re due for a little bit of a forest fire to clear things out. And then things will get back to some variant of new normal.

All that being said – are you an aspiring indie? A beginner? Does the threat of a looming crash scare you? It shouldn’t. Not if you are doing it for the right reasons. As a get-rich-quick scheme, making video games has always sucked. Always. Even back in 1981. But if you truly love it, l0ve what you are doing, love games, and aren’t afraid of getting your hands dirty with not only making a game, but all the marketing and business crap, even though it’s going to be a pain in the butt to get noticed in the least in today’s environment… then I’d recommend sticking with it. Maybe not quitting the day job to do it, but when the dust settles, people will still be playing games. They may as well be playing yours.

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