Why is triple-A game development unsustainable?

Raka Mahesa

June 13th, 2017

The video game industry is a huge corporation that has brought in over $91 billion in revenue during 2016 alone. Not only big, it's also a growing industry with a projected yearly growth rate of 3.6%. So it's quite surprising when Cliff Bleszinski, a prominent figure in the game industry, made a remark that the business of modern triple-A games is unsustainable

While the statement may sound "click-bait-y", he's not the only person from the industry to voice concern about the business model. Back in 2012, a game director from Ubisoft; one of the biggest game publishers in the world, made a similar remark about how the development of triple-A games could be harmful. Seeing how there is another person voicing a similar concern, maybe there's some truth to what they are saying. And if it is true, what makes triple-A game development unsustainable? Let's take a look.

So, before we go further, let's first clear up one thing: what are triple-A games? 

Triple-A games (or AAA games) are a tier of video games with the highest development budget. It's not a formal classification, so there isn't an exact budget limit that must be passed for a game to be categorized as triple-A. Additionally, even though this classification makes it seems like triple-A games are these super premium games of the highest quality; in reality, most games you find in a video game store are triple-A games, being sold at $60. 

So that's the triple-A tier, but what other tiers of video games are there, and where are they sold? Well, there are indie games and double-A (AA) games. Indie games are made by a small team with a small budget and are sold at a price of $20 and lower. The double-A games are made with bigger budgets than indie games and sold at a higher price of $40. Both tiers of video games are sold digitally at a digital storefront like Steam and usually are not sold on a physical media like DVD. 

Do keep in mind that this classification is for PC or console video games and isn't really applicable to mobile games. 

Also, it is important to note that this classification of video games doesn't determine which game has the better quality or which one has the better sales. After all, Minecraft is an indie game with a really small initial development team that has sold over 100 million copies. In comparison, Grand Theft Auto V, a triple-A game with a $250 million development budget, has "only" sold 75 million copies. 

And yes, you read that right. Grand Theft Auto V has a development cost of $250 million, with half of that cost being marketing. Most triple-A games don't have as much development budget, but they're still pretty expensive. Call of Duty: Modern Warfare 2 has a development cost of $200 million, The Witcher 3 has a development cost of $80 million, and the production cost (which means marketing cost is excluded) of Final Fantasy XIII is $65 million. 

So, with that kind of budget, how do those games fare? Well, fortunately for Grand Theft Auto V, it made $1 billion in sales in just three days after it was released, making it the fastest-selling entertainment product of all time. Final Fantasy XIII has a different story though. Unlike Grand Theft Auto V with its 75 million sales number, the lifetime sales number of Final Fantasy XIII is only 6.6 million, which means it made roughly $350 million in sales, not much when compared to its production cost of $65 million. 

And this is why triple-A game development is unsustainable. The development cost of those games is getting so high that the only way for the developer to gain profitability is to sell millions and millions of copies of those games. Meanwhile, each day there are more video games being released, making it harder for each game to gain sales. Grand Theft Auto V is the exception and not the rule here, since there aren't a lot of video games that can even reach 10 million in sales. 

With that kind budget, the development of every triple-A game has become very risky. After all, if a game doesn't sell well, the developer could lose tens of millions of dollars, enough to bankrupt a small company that doesn't have much funding. And even for a big company with plenty of funding, how many projects could they fail on before they're forced to shut down? 

And with risky projects comes risk mitigation. With so much money at stake, developers are forced to play safe and only work on games with mainstream appeal. Oh, the science fiction theme doesn’t have the audience as big as a military theme? Let’s only make games with a military theme then. But if all game developers think the same way, the video game market could end up with only a handful of genres, with all those developers competing for the same audience. 

It’s a vicious cycle, really. High budget games need to have a high amount of sales to recoup its production cost. But for a game to get a high amount of sales, it needs to have high development budgets to compete with other games on the market. 

So, if triple-A game development is truly unsustainable, would that mean those high budget games will disappear from the market in the future? Well, it's possible. But as we've seen with Minecraft, you don't need hundreds of millions in development budget to create a good game that will sell well. So even though the number of video games with high budgets may diminish, high quality video games will still exist. 

About the Author 

RakaMahesa is a game developer at Chocoarts: http://chocoarts.com/, who is interested in digital technology in general. Outside of work hours, he likes to work on his own projects, with Corridoom VR being his latest released game. Raka also regularly tweets as @legacy99.