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Will the recession be the saviour of innovation in games?

By on March 13, 2009

Patrick O’Luanaigh, CEO of nDreams made some very interesting points in his blog about the changing nature of publishing.

Major publishers such as Sega, EA, Eidos, Microsoft (and now THQ and Take Two) are all reducing the number of AAA titles they develop, putting their money behind fewer titles with bigger budgets and heavier marketing spend. This is seen by many as bad news for smaller independent developers who worked on smaller FPS clones or lower budget games.

But as Patrick says, “there is a very real silver lining from this trend”, as smaller developers focus on smaller budget (>£1 million) titles on new and innovative platforms like iPhone, Android, PSN, XBLA, browser-based and PC downloadable.

The argument is echoed in a piece by GamaSutra’s Editor in Chief Brandon Sheffield entitled Recession, The Beginning Of An Era. He argues that “smaller, less expensive games made by smaller, more agile teams seem like a very logical step” and proceeds to give advice on PR and marketing to independent developers.

Rob Fahey at is less sanguine, concerned that major publishers might throw out “a whole creche full of babies along with the bathwater.” His main point: the bloated fat at a publisher usually derives from the layers of management and asset creators on big-name titles, “the legacy of years of ill-advised ‘throw more people at the problem’ solutions to problematic deadlines”.

My feeling is that all these commentators are right. Major publishers will retrench away from creating new IP to tried-and-tested AAA titles (only John Riccitiello at EA is making meaningful noises about investing in the AAA titles of the future). Independent developers will find major publishing contracts harder to come by, putting some out of business and forcing the others to adapt their business practices and routes to market.

And that is the exciting bit. As Patrick of nDreams says “As long as you can find a growing niche, an innovative new concept or leap quickly onto new technology, there is real opportunity out there. And digital distribution means that you don’t need a big publisher to make money”

Like Patrick, I believe that this recession, through forcing studios to rethink business models and games development, could be the saviour of innovation in the games industry.

Who’d have thought it.


Disclosure: Nicholas is non-executive director at nDreams.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: