Tuesday, November 14, 2017

Is the Video Game Business Stretched Too Far?

The most unpopular post in the history of Reddit was the one from EA explaining the pricing for Star Wars Battlefront II. It’s a game that isn’t really there when you first install it, consumers complain. You have to go through an initial phase, think of it as a quest, to add the two main characters before the real game can begin. It’s a quest that early players estimated yesterday would take a highly skilled player about 80 hours. That’s 80 hours of grueling and ultimately meaningless play just to get the game started. Would you wait in line 80 hours to see a Star Wars movie? Probably only a hundred Star Wars fanatics would be that dedicated. The rest of us would give up long before the 80 hours were up.

In response to complaints, EA now says it is reducing the level of effort required to start the game. If we can take them at their word, that still means you start the game with 20 hours of meaningless initial play before the real game starts. Even a 20-hour quest to start a game is sure to feel like a punishment or purgatory to most buyers. If you had to wait in line for 20 hours to see a Star Wars movie, would you say it was “just” 20 hours? EA’s pricing adjustment is probably enough to sidestep the consumer fraud litigation that could have followed, but it may not be nearly enough to save the product.

As an alternative to investing 20 hours to create the two essential characters to get the game started, you can buy the two characters, but that would mean paying twice for the same product. That doesn’t feel good either. When you buy a game, you want to play the game. You don’t want someone telling you, “Well, no, you have to pay extra if you want to actually play.”

How did the video game world come to this? The fundamental problem is that games cost too much to make, while at the same time, high prices have driven most of the potential customers away. Game designers face essentially the same conundrum that TV producers have to deal with. Do you make a large investment and deliver a highly impressive product that may draw in the general public, or do you play small, keep expenses down, and content yourself with selling the product to followers of the genre you are working in? Increasingly TV producers and game developers are saying it is hard to make a profit with either approach. The economically correct answer when an entire industry is stretched this way is to stop making so many video games and TV shows, but with the economy being the way it is, the needed adjustment tends not to happen until whole companies actually shut down. In the interim, the tendency is for managers to take greater and greater risks as they try to make ends meet.

The corporate way is to make every product show a profit and I expect that Star Wars Battlefront II will do so too, but at a steep cost to EA’s credibility. Enough players will pay the high purchase price that the sales pay for the cost to produce the game. Most buyers will be disappointed and some of them will then be more hesitant to buy future game releases from EA. Some, inevitably, will be frustrated enough that they give up video games entirely. The loss of credibility and audience makes EA’s challenge that much harder the next time around.

What one would hope is that a company’s managers would say, “We have to stop making this kind of product. The costs are too high, the rewards, too low.” Today, as it scrambles to get its new game out the door, EA is not giving the impression of a well-managed company, so for all we know, it may already be too late. For consumers, though, it’s not too late to avoid the problems of Star Wars Battlefront II. The game in its packaged form might look like a nice holiday gift item, but if you’re aware of the unique hassle and frustration such a gift would mean to the recipient, you can choose to pass over this product and give something else instead.