Tales of the Rampant Coyote

Adventures in Indie Gaming!

The Collapse of Complex Video Game Development?

Posted by Rampant Coyote on April 8, 2010

A few days ago, a friend of mine sent me this link to an an article entitled, “The Collapse of Complex Business Models.” Deep stuff. I’m not sure I entirely comprehend it. But it made me think about the videogame business.

The article was inspired / based upon the 1988 book by Joseph Tainter, The Collapse of Complex Societies. I’ve never read the book, but it explains the downfall of highly sophisticated civilizations – Roman, Lowlands Maya, etc. – as being inevitable when a society becomes too complex. The levels of specialization – which for a time add value to all processes – eventually become a hindrance to the society’s ability to adapt and grow, or ends up extracting “one tribute too many” and the only real recourse is to hit the reset button – let it all collapse and start over.

The article’s author, Clay Shirky, posits that a similar thing happens to businesses. In general, the added complexity adds value to the process / end product of a business – just as adding an index to a non-fiction book adds value to the book. Or, as he provides in his example, making sure the land-line telephone network runs on its own power grid.

But as things change, it is hard for these layers of complexity to change as a group, simplify, and adapt. Shirky is principally speaking of traditional media industries making the transition to the Internet. The complexities they accrued that served them well in the pre-Internet age impede their ability to make inroads in the modern era. It is true that a new complexity may take over, but it won’t be the same as the old complexity. In other words, a whole new process with new complexities may be what is required.  And if that doesn’t make sense, read the article.

So what it boils down to is that, for example, a television network well adapted to producing competitive television in 1970s-era technology will have a very tough time making video for Internet consumption. Because in order to do so in a cost-effective manner, they basically have to give up the competitive advantage that has allowed them to survive and thrive over the decades and effectively start over from scratch. It requires a fundamental change that they, culturally, may not be able to make.

It was with this idea in mind that I saw this Buzz by Jeff Tunnell, commenting on the estimated value of the young “Social Gaming” emperor, Zynga, at $5 Billion. Is that actually possible? No wonder there’s such a gold rush fever about Social Gaming. (Personally, I believe that’s a massively over-valuation based on hype, but that’s not to say they aren’t phenomenally profitable and successful). This same principle applies to the video game business model.

Times have changed a lot in the last five years, since EA VP for Corporate Communications Jeff Brown bragged that the era of the small developers was officially over, and that “it is now impossible to ‘Blair Witch’ this business.” That’s gotta go down with classic misstatements like Bill Gates “640K ought to be enough for anybody” and IBM President Tom Watson’s 1943 comment, “I think there is a world market for maybe five computers.” Except that those latter two statements are apocryphal, and Jeff Brown’s was quoted for posterity in the New York Times.

While the new market may peacefully coexist with the old one for a while, there’s no doubt that times are a-changin’. The video game business had to adapt quickly, borrowing from legacy media business models just in time for the rules of the entire game to change underneath it. I almost feel sorry for it. It had maybe a decade and a half  to enjoy its hard-learned business model.

So the question is – how to adapt? Zynga isn’t the model I would like to use for being a young turk kicking butt in the new world – they’ve admitted to doing some pretty unethical things to get their company started. Sorry, but I place a higher value on my soul. But even being a small indie game company doesn’t mean you’ll survive the changes. It just means that there’s enough of us that are nimble enough to form an interesting experiment in Darwinism.

Right now, the “social gaming” phenomenon has everyone rushing to it. But I tend to side with the belief that social gaming is merely one aspect of a broader evolution in the business. It’s frustrating to me in some ways because I really like my big, deep games  full of value-added complexity – whether they are “big” indie games like Din’s Curse or Eschalon: Book 1, or big AAA games like, uh, well, all of ’em). I think there’s still a market for them. Maybe only a market of one, but it’s there.

The market may be there, and these kinds of games probably will continue to be made. But I think the current business model that has evolved to support the production and distribution of these games – the old mainstream studio / publisher / distributor model – is seriously going to go the way of the dodo. It’s going to collapse – the complexity built into the system supports an old way of doing things, and may not survive the transition. Things like Steam and the new Indie Fund and small third-party marketers may very well be aspects of the new complexity that goes into the process.

I think even how indies traditionally do things may have to change. But at least for these tiny development shops, there are not a lot of layers of complexity gumming up the works. Collapse may not be necessary.

Filed Under: Biz - Comments: 5 Comments to Read

  • Badger said,

    Actually The whole thing could be summed up as ‘crap expands to fill all available space’ This applies to the complex societies book as well as complex business models.

  • Arowx said,

    Just like the concept of bubbles in the marketplace, everyone jumps on the bandwagon and makes hay while the sun shines, then the wheels drop off the wagon!

    Darn it just when I was starting out the wheels drop off!

    Although the social media/micropayment movement might be a good way to circumvent conventional software piracy!

    But will that mean a move to virtual burglary and virtual identity theft hopefully it’s not worth the effort for a few cents?

  • Nicholas Lovell said,

    Great post. I think we are just at the start of the new “complex business models”. I recently posted about how traditional AAA games are like movies, but Farmville and other social games are the first baby steps into the world of “games as television”.

    It’s baby steps, and we’re still in the worst of day time TV, not primetime dramas. But those days will come.

    And it will be a great time for indies.


  • WCG said,

    Think of how rapidly the whole computer industry has developed and is still developing. We really have no idea how this is going to end up. Change is ongoing and dramatic. So I wouldn’t believe ANY predictions right now.

    And regarding “The Collapse of Complex Societies,” I have to laugh. Rome lasted for a thousand years. And it’s hard to compare Rome or the ancient Mayans with modern society anyway, unless you’re trying to sell a book.

    I’d say that modern societies are more stable than ever (though, if they do collapse, it would be a doozy!). Our biggest dangers right now are overpopulation, resource depletion, and pollution. I wouldn’t lose any sleep worrying about “complexity.”

    Looking at computer games RIGHT THIS MINUTE, I’m really optimistic. The variety is incredible and the Internet lets every game developer – and every possible niche product – find support and fans. But who knows what the future will hold?

    Ten years ago, Facebook didn’t exist. Neither did X-box, iTunes, YouTube, Hulu, iPod, or Twitter. That’s in just TEN YEARS. What will we see in the next ten years? Probably stuff just as transforming, don’t you think?

  • Wavinator said,

    If devoting upwards of 60% of effort on graphics is unsustainable I say huzzah! Maybe it will finally mean that, as Chris Crawford posited ages ago, we get games where the visuals change little but the gameplay varies enormously.

    Personally I think there will always be a market for complexity. I can only play so many flixel games before I run screaming to a game of Civilization and I know I’m not alone. If the game industry drops complex games indies and hardcore geeks will pick them up just as they’ve picked up the nearly dead space game genre. It may mean, similar to the article’s web hosting example, that quality suffers but that’s not exactly a given. For instance in the space game genre products like Evochron, Flat Space or Star Shatter stand out as great counter-examples to the contention that what you get must be crap.

    And to echo WCG a bit, I always say be ye wary of the social sciences. Not too long ago I heard multiculturalism being blamed as the cause of the fall of societies– the argument being that empires like Rome settled too many barbarians, tolerated too much linguistic, political and religious diversity and thus failed to inspire a united spirit among its people. Although I can’t judge the book, having not read it, I’m always intrigued by how *compelling* apocalyptic predictions can be. Tell people their world will end and your books will fly off the shelves; tell them things will simply, like the past, be different and I don’t think you’ll sell as much.