I expect a Video Game crash, and soon | DestroyRepeat

Players Playing Video Games
Feb
17

I expect a Video Game crash, and soon

Video Games as a medium has been around for decades. It was invented during the Cold War, which spanned from 1947 to the dissolution of Soviet Union in 1991. In 1971, the first consumer arcade title was released. In 1972, Pong was introduced to the masses, and became one of the most recognizable, one of the most iconic games ever released. In 1972, the first console was released; Magnavox Odyssey. In 1983, Nintendo Entertainment System was released in Japan. Nintendo revitalized the Video Game industry we know today. But it wasn’t without any challenges. You see, there was a crash in 1983. Video Games were boring, cheap, and unregulated. Atari flooded the game industry with crappy games. The world’s first game publisher was formed during this time, you are familiar with the name: Activision. To learn how you can prevent a Video Game crash, you need only look at history.

I see a lot of problems in the Video Game industry today, but before I get to the core problem statements, and solutions. I must first recap what happened in 1983 and the years prior.

  • Atari released Atari 2600, Atari 5200, and Atari 7800 in the years surrounding 1983.
  • Though I’m familiar with Atari 2600, and Atari 5200, this article will cover early consoles to reflect the 1983 crash.

There was an oversaturation of game consoles at the time, much like the Pong clones of the early 70’s. Not only that, there was a wave of unregulated published titles, starting with Atari consoles. Because, at this point, there was no “third party developers” or “third party publishers” at the time, so most of the time, it was Atari self-publishing the games for Atari console(s). When Activision was formed, they began publishing third party games for Atari. Venture capitalists saw the success of Activision, and began to flood the market with poorly designed, poorly distributed games. You have a oversaturation of new games by unknown companies. A wikipedia entry said it best:

Prior to 1982, Atari was considered the dominant company in the home video game industry, but as described above, new players in the hardware market and the loss of publishing control caused the company to slip from its dominant position. During 1982, Atari took several missteps in trying to regain its dominance that caused the market and consumers to lose confidence in the company and in turn the video game industry as a whole.

This oversaturation continued with Nintendo’s own console and games, so they were collateral damage. Nintendo took Atari to court over the whole thing, because once Atari consoles were failing, their games were failing, they turned Nintendo Entertainment System to sell their own games to the growing console. Nintendo refused Atari while negotiating the removal of licensing restrictions.

At this point, Atari created Tengen, bypassed Nintendo’s licensing system, bypassed Nintendo’s NES lock-out mechanism. I will cite Wikipedia, again:

At the time, Nintendo restricted their licensees to releasing only five games per year, mandated that Nintendo handle cartridge manufacturing, and required their games to be NES-exclusive for two years. Atari Games tried to negotiate for a less restrictive license to produce games for the Nintendo Entertainment System; Nintendo refused, so in December 1987, Atari Games agreed to Nintendo’s standard licensing terms. Tengen was incorporated on December 21 of that year. In 1988, Tengen released its first and only three games licensed by Nintendo: R.B.I. Baseball, Pac-Man, and Gauntlet. Meanwhile, Tengen secretly worked to bypass Nintendo’s lock-out chip called 10NES that gave it control over which games were published for the NES. They started development on a chip they called Rabbit. While numerous manufacturers managed to override this chip by zapping it with a voltage spike, Tengen engineers feared this could potentially damage NES consoles and expose them to unnecessary liability. The other problem was that Nintendo made frequent modifications to the NES to prevent this technique from working. Instead the company chose to reverse engineer the chip and decipher the code required to unlock it. However, the engineers were unable to do so, and the launch date for its first batch of games was rapidly approaching.

They were brazen, weren’t they? That’s not all…

With time running short, Tengen turned to the United States Copyright Office. Its lawyers contacted the government office to request a copy of the Nintendo lock-out program, claiming that the company needed it for potential litigation against Nintendo. Once obtained, it used the program to create its own chip that would unlock the NES. Tengen announced that they were going to release their own cartridges in December 1988. When Tengen launched the unlicensed versions of its games, Nintendo immediately sued Tengen for copyright and patent infringement. This began a series of lawsuits between the companies which would not be settled until 1994. Tengen faced another court challenge with Nintendo in 1989 in copyright controversy over the two companies’ NES versions of Tetris. Tengen lost this suit as well, and was forced to recall what was estimated to be hundreds of thousands of unsold cartridges of its version of Tetris (having sold only about 50,000 copies).

Nintendo came out of the whole crash as one of the top 2 dominant Video Game manufacturers of the time. It was not an easy time for Nintendo, or the industry as a whole. Let’s turn our focus to the current spate of gaming. In 2001, the top 2 console manufacturers were Nintendo and Sony. Microsoft sought to enter the game industry in a big way. The entire industry laughed.

Microsoft is known for software, software coding, and Windows. That’s their entire business. In 1999, Sony announced PlayStation 2, while PlayStation was on track to selling 100 Million units worldwide. Makes perfect business sense to enter video games. Fair enough.

Problem is, Microsoft is entering a new market with less understanding of the business model of Video Games, and it was apparent as years weared on. It’s getting uglier and uglier every day Microsoft continues staying in the industry.

Microsoft launched Xbox in 2001 with a new fanbase ready to open their arms to Microsoft entering the industry. It was a very powerful console, with an internet-ready infrastructure. Xbox Live was released a year following the release of Xbox. The idea of online gaming was in its infancy at the time.

Microsoft revolutionized online gaming with the release of Xbox 360, though. At this point, people understood why online gaming was the next frontier. Fair enough. Sony followed suit with the release of PS3.

However, in THIS iteration of Xbox Live came a new innovation. One that they were, and are currently revolutionizing. Now, to be fair, Microsoft isn’t the first company to bring online gaming to the forefront, or Microsoft isn’t the first company to bring digital storefronts to the forefront, it revolutionized console online gaming, and digital storefronts. The problem is, Microsoft is pushing this discreetly, subtly, like a sly little kid getting what they want.

This is my overarching Problem Statement: Microsoft is slowly killing the Video Game industry, and you don’t realize it. I don’t exactly know how to solve this issue, but that’s what’s happening. And established game publishers are standing by, and letting them win.

Problem Statement: Digital Storefronts

Now, this isn’t so much a big problem by itself, but if you just consider that today’s game consoles are offering two different models of each consoles. It’s the long term effects of this “All Digital” future of gaming, that I am worried about. This trend started all the way back in the Xbox 360 days, where Microsoft would test models where there is no hard drives, or no Kinect models. Microsoft took this another step further with Xbox One’s refreshes. One of those models is the Xbox One S All Digital (Xbox One SAD). This model was a test for Microsoft, and are now getting brazen with this idea, because alongside the release of Xbox Series X, they also released a cheaper Xbox Series S which does NOT have a disc drive. Sony is not innocent in this, either. They released two models – the main PlayStation 5 console with the disc drive, and the Digital Edition. Sony wanted to release the Digital Edition as the only console on the PlayStation 5 line.

Let’s play this game: Let’s say Microsoft’s or Sony’s lead console is ALL digital. Let’s just say that. This console allows for convenient downloads of your games. Sounds good, right? Except when the game is removed from storefronts, you CAN re-download your game, no problem. But there are some special cases where you cannot download your game. Marvel Vs Capcom 2 and Konami’s P.T. are such cases.

You don’t legally own the games you buy from these storefronts. Which is why I make it a habit to buy them when they are at least $20 or lower. Game discs are tangible items I can have in my hands, and play them infinitely. However, Microsoft, Sony, and Nintendo wants to cut out the middle man, and so does the publishers. Because these companies want a cut of the revenue wherever possible. Microsoft doesn’t want to pay for Blu-Ray fees. Nintendo doesn’t want to pay for cartridges, because they are expensive to produce. Yes, even flash memory. Sony doesn’t mind selling Blu-Ray discs, because they are part of the consortium group that makes it.

So, they looked at what Microsoft is doing: Digital Storefront!

The other middle man they want to remove is the retail stores that carry your games. These retailers buy games wholesale. They order the games, they pay the retail price, and each company taxes each other. If you want a better way to understand it, here’s a video for you:

To further exacerbate the problem: Sony was about to shut down the PS3, and PSVita stores, so you wasn’t going be able to purchase games online anymore from PS3 and PSVita. But after fan backlash, Sony posted an update to the story to say they aren’t shutting down those stores. Nintendo recently announced that they’d be shutting down the Wii U and Nintendo 3DS eShop stores soon.

Solution: Leave the consoles alone the way it was. Offer these storefronts as an optional way to purchase games. Online gaming is great, but please keep it there. It does not have to be anything bigger than a place to congregate. I’ll explain this under a different subject, so I’ll be coming back to this later.

Problem Statement: Cloud Gaming

(This is a story I touched on in 2015.)

At first, this “Cloud Gaming” idea was designed to bring console gaming to the masses, as in, a small startup company creates a cheap game console, and companies put games on the storefront. OnLive had this idea. It was launched in 2010, to only be purchased and subsequently be shut down. Sony purchased some patents from OnLive, and also acquired its competitor, Gaikai. The reason for the shutdown isn’t because the product wasn’t good, it’s just that it couldn’t operate at scale. Back in 2010, I tested OnLive on a well-built computer, with good internet. It was playing Borderlands fine, but with frequent frame drops here and there.

Sony must have seen something coming from a mile away, otherwise it wouldn’t have acquired Gaikai. Microsoft saw this coming, too. And only recently, they’ve gotten an itch to launch a cloud service. They recently launched Game Pass (codenamed “xCloud”) and the business model of a software being served as a buffet is working for them so much, that they accumulated 25 Million subscribers worldwide. Microsoft wants to put Xbox Game Pass in every device possible. So, the original OnLive vision? Just blew up.

Problem is, this is going to eat away at the middle-man again. This is going to silo off all the competitors out of opportunities. Microsoft just acquired Bethesda. This whole idea goes in the same subject as “All Digital.”

Solution: Don’t add this to consoles. Just use it for off-console devices, like PC’s, Mobile Phones, Tablets, or TV. That was Google Stadia’s vision. Microsoft’s is similar, but they want to slowly kill gaming. In my opinion, this is for casuals.

Problem Statement: Lootboxes

Sigh. This is a controversial subject, but I’ll just recap for those who haven’t understood what the hoopla is about. In 2017, Electronic Arts released Star Wars: Battlefront II beta with lootboxes. Yes, in beta form. Once it was released, it was littered with lootboxes every single time you finished the match. Your “credits” would unlock the loot in random order. These “credits” can be purchased in real-world dollars. So, you pay for these credits with real world money, once you get these credits, you then purchase the lootbox or lootboxes. This idea spread into their other big franchises, such as FIFA games. I’ll let AngryJoeShow explain it for you…

Solution: Keep to a storefront, please. Just… let me buy what I want. And I can just chill… Can we please do that!? If the damn weapon is on the disc… Let me earn it! If it’s NOT on the disc, then I’ll decide if I want to buy it or not.

Problem Statement: DLC (Downloadable Content)

Okay, I don’t think this in itself is a bad thing. The problem is, companies are still experimenting with this. We are about 10 years in, and we still haven’t figured out the business model for it. Actually, Capcom has the right idea. Most companies charge the DLC. Some are releasing DLC as patches. Some are doing a mixture of both. Actually, let‘s use the Capcom business model of 20 years ago. And they’re actually still doing the business model with Street Fighter 4, and 5. Sometimes, they will release chargeable DLC. Sometimes they will release free DLC. And once that DLC is finished, that DLC is included in the next version of their release, like so: Street Fighter 5 > DLC > Street Fighter 5 Champion Edition. Everyone is happy. And, some companies are doing the same. Horizon Zero Dawn was released, then DLC’s. Horizon Zero Dawn Complete Edition contains the DLC. Simple. You make your money back. However, you gotta let people know about this complete edition! Market it!

Solution: You heard what I said! Now, get to it. Shoo. Get out of here.

Problem Statement: Cryptocurrency/Bitcoin/NFT

This is more-or-less controversial. There are two camps on this: Those who love Crypto, and those who don’t. Those who love NFT’s, and those who don’t. In my opinion, Crypto, and NFT’s are SCAMS. Most of the cryptocurrencies are LEDGERS. A list of names; people, corporations, and hierarchy minded individuals. Those on the top of the ledger is the person holding the keys to the line. You are a position IN the line. You buy crypto, you sell crypto, the person that buys the crypto from you then sells it to the next person, therefore increasing the value of the position. There is no fluctuation. If the fluctuation happens, it’s because of the reputation of the person with the crypto. So, let’s say I cut into this line with no previous experience, I could damage the value of the crypto. NFT is the visualization of this ledger.

Solution: The Video Games industry NEEDS to stay away from Crypto and NFT’s. Simple as that.

Problem Statement: Metaverse

Honestly? We are about 10-20 years ahead of everyone else about the idea of “Metaverse.” Facebook wants to create a “metaverse,” where we can log into the “Matrix.” I just named one film that relates to Metaverse, I’ll throw another one at you: Ready Player One. It’s a novel that became a film. The film is about you playing an open world video game that is explored, experienced, and expansive. Matrix is about you logging into a computer, mobile device, VR headset, or get hooked into a neurolink. The difference between both films is that one is about converting the human race into a replaceable species. If you die in the Matrix, your biological autonomy dies with it. In Ready Player One, you’re basically on a VR headset playing an open world game.

Currently, the idea is in its infancy. There are a few or a lot of VR devices on the market: HTC Vive Pro 2, Valve Index, Oculus Quest 2, HP Reverb G2, PlayStation VR/VR2, etc. Facebook’s (or shall I say, “Meta’s”) Oculus Quest and Sony’s PlayStation VR devices are growing in marketshare, but “Metaverse” depends on Oculus winning the VR wars. Because Meta only has the Social Media giant, Facebook to drive its profits. It doesn’t have a video game console, it doesn’t have a PC, tablet, phone, or handheld device to drive growth. It relies on future gains such as Oculus winning the VR wars. Mark Zuckerberg is betting on the future of Meta on Oculus. Mark Zuckerberg is betting on the future of Meta on Metaverse, but it requires Oculus to win. Elon Musk says he’s working on neurolink, but you’re going to have to make a hard sell on why you should use neurolink to create this ideal “Matrix.” But then again, you’ll need to create this “metaverse,” first!

Like I said, though, the Video Game industry has toyed with the idea of a “Metaverse,” already. Grand Theft Auto was released in 1997 as a 2D, open-ended, open world. Grand Theft Auto 3 was released in 2001, and revolutionized open-world games forever. Grand Theft Auto 5 was released in 2013, has been released for 3 generations of consoles. GTAV sold 160 Million units worldwide, raked in $6 Billion lifetime.

Fortnite is another great example of a “Metaverse” where stories are continually being told consistently. The closest I see of Metaverse is Fortnite. Call of Duty: Warzone is another great example of such idea of a “Metaverse.” Hell, Microsoft made the biggest acquisition yet, with the purchase of Activision Blizzard for $68.7 Billion. For what? The metaverse? Dude, you don’t need the metaverse! It’s already on your console!

Solution: Keep on doing what you’re doing, publishers. You don’t need to do a “Metaverse.” That includes Microsoft.

Problem Statement: Poor Games/Poor Quality Games

In the last few years, we’ve had many poor quality games being released. The most famous example of a poor game launch is Cyberpunk 2077. When Cyberpunk 2077 was released, it was a buggy mess. It got so bad, the stupid CD Projekt Red community manager told their followers to complain at Sony or Microsoft to get refunds. Sony made a decision that they’ve never made before: Refund PlayStation Network payments. Sony then booted Cyberpunk 2077 off the PlayStation Store. Bam, just like that.

Call of Duty’s quality has dwindled since Infinite Warfare was released. It’s such a shame because Call of Duty: Infinite Warfare was a good game. The problem is, Call of Duty games had an up and down syndrome in terms of quality and fun. Call of Duty: WWII seemed like a run-of-mill World War 2 game, but it had great controls, nice graphics, however it has glitches, bugs, and the community complained about how the loadout system works. Graphically, Black Ops 4 was not “all that” compared to the other games released that year, I do like the “setting,” but I don’t like the spawn system – it’s trash. You’ll be walking into your death frequently because the 3 lane model doesn’t work anymore. In CoD4, the map design has 3 lanes, but the style of 3 lanes have different sightlines, different routes, etc. Developers assume that when people say “I want 3 lanes design,” they assume they mean exactly that; 3 lanes. Not complex map design. CoD4’s vacant has 3 lanes, but is complicated to get from a to b. Call of Duty: Modern Warfare reboot (2019) was released in a buggy state, they fixed it within’ a month. Call of Duty: Black Ops Cold War was released in a mixed bag; glitchy, not “all that” good looking, a different setting (1984/late Cold War), and simple yet complex maps. Vanguard tanked because it’s yet another World War 2 game. I like the controls, but I don’t like the glitches. I skipped it.

I was interested in Battlefield 2042. I’m serious, I was ready to pay the $60 for the game. I was ready, but as soon as I hear about the glitches, the bugs, and issues? I passed. This is after the disaster releases of Battlefield 1 and Battlefield 5. For the same exact reason I passed on Vanguard: Low quality gaming.

Electronic Arts shifted the blame of Battlefield 2042’s failure onto Microsoft, because of the surprise release of Halo Infinite. Electronic Arts, stop doing this. You will continue to lose confidence from your market if you keep shifting blame onto others. Halo Infinite should inspire you to do better. People responded to Halo Infinite in strong praise, because developers actually gave players what they wanted: A high quality experience.

Solution: Man up, and start making high quality Video Games. Or someone else will come in and disrupt the biggest names in gaming. Make games fun again, or someone else will steal your market.

Conclusion

If game publishers, developers, manufacturers keep going down this road, filled with mines, bombs, and traps, I fully expect a Video Game crash. I repeat myself: I fully expect a Video Game crash that we experienced in 1983 through 1985.

About Carlos Morales

I've been writing about Video Games since 2001. I have become a well-known, recognizable name in the industry. I started CarlosX360.com in 2006, and has accumulated over 1 Million Users, and 4.5 Million Pageviews worldwide. I'll always be most passionate about this wonderful community.