The Seventh Gen Part 2: And So It Begins…

So in my last piece, I introduced this series and went over the depressingly lacking preservation efforts of the seventh generation. I strongly recommend that you at least read the start of that, to get into the kind of headspace that I’m doing for this series.

One of the other reasons I’m writing this is to try and get ahead of the Nostalgia, because I’m already seeing people cast the Xbox 360 Era or the Wii Era or the Indie Era as being the lost peak, the last good time for games, something better than what we have now. I’m guilty of looking at this era of games through rose tinted glasses myself. But let’s be honest. Nostalgia is a bit of bullshit because we always look at past times to be better than the cold now. And I don’t want to write more bullshit about video games.

So let’s go back to the year of 2003, where in gaming it was clear that the next generation was on the way. New engines and new hardware was on its way, and we were on the verge of the transition to HD. The hard technical boundaries that had restricted what games could do, what they could show, what people could feel, were about to lift. So what was the mood of the game industry? Or really, how did people working in the industry feel? The code monkeys, the artists, the designers?

Fear. Despair. The Seventh Generation was on the horizon, and the industry was doomed.

It seems quaint now, with video games becoming the dominant cultural force on this planet. But it was a very real fear at the time, and in a sense, it was validated.

In 2003, the Video Game Industry was not in a good place. The number of publishers that developers could pitch games to was decreasing, and it seemed that good devs that were proven hitmakers were being chewed up every day. Westwood Studios, the inventors of the RTS as we know it, were just liquidated by EA after the failures of Command And Conquer: Renegade and Earth And Beyond. Both of these were more experimental titles, outside of Westwood’s usual wheelhouse, and after losing money, that was it. Most of the employees were laid off, and the rest shuffled into other EA divisions. The people who created Real Time Strategy as a genre. This is just one example, but it illustrates the wider trend: More experimental games were failing, devs were being axed by publishers, and through consolidation the number of publishers was decreasing, meaning less places to pitch to, less places to get funding, less ideas being turned into games. Licensed games were reigning king, with everything getting a tie-in or some kind of game series. A decade before, video games were a cultural power, with titles like Doom selling on their own strengths and starting franchises on their own power. Now? Games didn’t have their own hits, Tony Hawk and Madden were the hits.

And on top of this, you have new hardware to develop for? HD? The costs of making games were going to go up. Again. And more developers would close, the publishers would decrease again, and it gets worse. 

The most optimistic case was made by Warren Spector, director of Deus Ex and Epic Mickey, who put it that while it may be impossible to get original game ideas to publishers, you can still do original work on a brand you don’t own. In response, Greg Costikyan, a game designer, said: “The industry is fucked. It’s less imaginative, more risk averse, than the fucking music business.”(source). 

A major cause of this fear was the changing PC gaming market. As we left the 90’s, Console and PC games, especially that upper tier of AAA games, started to converge. While the markets had been mostly separate, now games were made for both – which really means mostly for Console, with a handful of PC ports. Retailers didn’t like stocking PC games, which were bigger, bulkier, and sold worse, and publishers likewise didn’t like making PC versions – unless it was Xbox, where making a port was relatively easy and cheap, the money was to be found with the consoles. More niche, and PC specific genres, such as Wargames, 4X, Adventure Games, were dropped by retailers. It used to be that even if you didn’t have the resources or money to make a console game, or if you specialized in a genre that is generally easier to do on PC (think your strategy games), you could still pitch something that would likely sell. Now, publishers didn’t even want to hear you out if it wasn’t a console game that could crack a million units to recoup costs. Through these trends, along with successive iterations of consoles using more familiar hardware to the PC, Console and PC AAA games converged. 

A part of this trend as well was the rise of middleware. With gamedev costs increasing due to the increasing number of art assets, anything that could offset the cost and time working on a game was welcome, including buying tools from other devs or middleware devs. This had always been something that game devs did, but it started to really accelerate as a trend in the 7th Generation. 

And along with the fear, there was the desperation.

Greg Costikyan, in his blog posts at the time, notes that anything presented at GDC, no matter how left-field or odd, was crowded. A presentation from companies like Pop-cap and The Groove Alliance about selling games online was packed. People even crowded the Nokia N-Gage presentations. The N-Gage! There was a real desperation for any alternatives to the big publishers, the big consoles, anything that had a chance of being something different. The retail market, with it’s brutal 2 week selling periods for games, were choking any way out that wasn’t through an established publisher. Everyone was desperate for the new alternative. Anyway, another thing that happened in 2003 was that Valve created a neat little auto-patching service for their games, Steam. That patching a game and directly selling and downloading a game are very close together is just mere coincidence.

And so, starting in 2004, the Seventh Generation started rolling in.

Like all videogame generations, it didn’t really go off with a huge bang, but slowly shifted into gear. Half Life 2 and Doom 3 arrived, showing off the power of new engine tech to those who had good enough computers to play them on ultra. Half-Life 2 was also the first game to require use of that aforementioned patching service, Steam. Epic Games showed off Unreal Engine 3, which we would first see a few years later in Gears. Nintendo announced it’s forthcoming console, the Revolution. Bold words for the company that barely lost the previous generation. Coming back to Greg Costikyan, the atmosphere at GDC 2004 was a bit more muted. Greg offers some of his explanations, employment being up, mobile and handheld games picking up some slack. I wasn’t working in the Games Industry at the time, so I’m inclined to believe him. As we start to close in on console reveals in 2005, the atmosphere of fear didn’t die down, but gave energy to quite a few people looking to create alternatives to the current system. I’ll be citing Greg Costikyan again, because he is a very prolific voice in this era. The way he saw it, the Games Industry was on a course to a crash – the fabled Next Videogame Crash. His reasoning, in a 2-part series in The Escapist, is pretty simple – games are becoming more system intensive, but technological systems are advancing even further. Costs are rising more exponentially due to that, but sales aren’t. The books don’t balance, and games are going towards a bad place. the unhealthy environment for pitching games, with a concentration of publishers, certainly didn’t help.

Well, Nintendo’s Revolution – aka the Wii – the Xbox 360, and the PS3 came. But games didn’t crash. What happened? Were these fears founded on shaky ground?

Well, kinda. but not really. Games didn’t crash, but the result people were expecting – job losses, further consolidation under a few publishers, Things Getting Worse – that all did happen. It’s hard to find numbers on the game studios who shut down over this period, but it’s a lot, not to mention the studios acquired by publishers, studios dissolved into larger ones, teams dissolved, and all the other fugue states of corporate destruction. but let it be said: there was a massive shakeout, one that continues. things also generally got worse for the studios that survived – royalties decreased or disappeared, working conditions stayed miserable as short term contract work, and publishers got even more increasing amounts of power. Turns out that when games become more expensive to make, it results in the people with the least power feeling the brunt of it. 

The flipside of all this was that a large part of the industry started shifting to gaming for lower spec machines – handhelds, online games, the Wii, and later on, mobile phones with the Iphone OS 2. Lower spec devices were cheaper to develop for, and had tantalizingly large install-bases. Especially in Japan, where game costs tended to be higher because less middleware was used, there was a large shift towards further low spec development, something that is going to be very important to remember going forwards. 

At the same time that all of this was happening in the AAA sphere, there was a shift in the non-AAA sphere as well. Independently publishing your own games has always been a thing, and really, they were the first video games (that weren’t training simulations made for the military). Some genres, such as roguelikes, were almost exclusively independent. But it was the consolidation of publishers that started to create a push towards seriously creating an alternative to the system. Going back to GDC 2003, the focus the whole time had been on alternatives. Literally anything else. With the beginnings of online game stores, one could finally get past retail game stores and sell directly. This is the stage that was set when the new Gamer Boxes were revealed. The old farts who had been working on games for years were sick of it. The publishers were reaching hitherto unknown levels of power. And most importantly, games could have more polygons.

Welcome to the Years of Gears. Welcome to The Age-lo of Halo. Welcome to the uhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh Call Of Duty Time Related Pun.

It’s the Seventh Gen, baby.

And this is the end of part 2! Now that we have the proper mood and context, next I will be going through the generation, year by year, marking every milestone and what it means. See you next month! and read this similar article by Skeith on superhero games!