With the rise of social and online gaming the triple-A blockbuster isn’t the only means to earn big anymore he notes. Games are also ”better suited” for ad revenue.
”The $50m game is not dead, but perhaps it is taking a nap. Roll on online,” said the Frontier boss. ”With a typical $50m shrink-wrapped ‘core gamer’ title, perhaps $20m is spent on development, $15m on marketing and $15m on cost goods, and this doesn’t include the large overhead of many publishers,” he added.
Park Associates believes that by 2015 the social gaming market will be worth around $5 billion, and triple-A projects are likely to become less and less. Publishers sink vast sums of money into these projects, and ”all this before a single penny is earned back.”
Alternative methods of revenue need to be seriously explored like product placements, which would suit the dynamic nature of a videogame far more than TV or film.
”Games are better suited for product placement and advertising than film,” said Braben. “In games it can be done regionally and contemporaneously as the graphics are rendered on-the-fly.”
”We have an opportunity to shape expectations for big budget games online. Yes, retailers are prematurely killing off shrink-wrapped games by gouging most of the revenue, but ‘shelf space’ is much less of an issue online, so the long tail becomes more viable,” he said.
How do you feel about product placements in games? Huge budgeted projects like Call of Duty, Halo and Grand Theft Auto still pull in stellar sales and profits.
