Home > Scenario planning > What are the key issues, challenges and drivers affecting workers now and in the near future?

What are the key issues, challenges and drivers affecting workers now and in the near future?

Categories: Scenario planning
  1. December 14, 2009 at 4:14 am

    Hi everyone. I went to the Games Connect Asia Pacific Conference in early December. I was particularly interested in finding out what are the current and future challenges facing the industry. I am still going through my 30 pages of notes so the below list of challenges probably isn’t quite finished:

    1) Uncertainty about when the industry will fully recover from the GFC and to what extent

    2) Pressure on developers to rethink business models

    3) Increasing industry focus on digital distribution to get games quicker to consumers

    4) Pressure on developers to constantly consider changing demographics of consumers

    5) Need for more R&D to identify new games features and concepts, investigate new markets and player groups, and produce and evaluate prototypes.

    6) Engaging in the expanding market for serious games i.e. health, education, defence, construction

    7) Publishers demanding services at a lower cost but with the same quality and delivered on-time

    8) Attracting staff with the right skills, ability to work in teams, and who are able to commit for the duration of the project

    9) Lack of Government incentives to support the development of the industry in Australia

    10) Publishers are increasingly outsourcing work to countries with cheaper labour e.g. China

    11) Maintaining cash flow over the extended period of a project

    12) Education system is producing too many graduates

    13) Education system is not producing industry-ready graduates

  2. December 14, 2009 at 10:19 pm

    I asked members of GamesDev on LinkedIn to comment on the posts in this site. An Operations Manager – Digital at MTV Networks International from New York, and a Total Developer at Infusible Brain Soft., Brescia Area in Italy responded to this post as follows:

    1) Retaining Talent
    2) Remaining IP Competitive in the changing market while still keeping your shareholders/investors happy.
    3) Flying to foreign nations.

    Factors driving changes in the industry:
    1) Game Dev Technology is more accessible.
    2) Fewer barriers to enter the game markets (iTunes, Xbox Live, etc.)
    3) Larger Talent Pools (International Talent, not just domestic pools)

  3. December 15, 2009 at 1:59 am

    Another comment from a LinkedIn member who is a Business Development Manager of Tantalus Interactive:

    That depends on territory. In Australia the problem is that our industry is basically just a spill capacity outsourcing industry for the major American and European publishers. So when we have a financial crisis, the cost of capital increases, publishers contract and there’s not enough work for studios actually in their home countries let alone outsourcing to Australia.

    So the issue here is finding a way that Australia can drive the development agenda rather than being a slave to market forces via a purely work-for-hire development model. People like Firemint are a shining example.

    Factors driving the industry:

    That’s a big subject. Games getting more expensive to produce but consumers tend to really only turn out in big numbers to buy franchises they know. So Big Game Dev is getting bigger, studios with tens of millions of dollars for budgets with several hundred staff. Smaller projects have been hit very hard by the major publishers trying to stem their costs (and losses).

    There’s a lot of emerging activity in digital distribution and social, but it’s not really the sort of thing that can employ the number of people that were formerly engaged in the mid-tier of game development as it was.

    Very turbulent times.

  4. December 15, 2009 at 4:17 am

    We are currently running a worker survey as part of this project. As at 15 December 2009 this is what 11 respondents had to say about this post:

    1) Digital distribution is a huge factor. This is changing how people are viewing the traditional bricks and mortar enterprises. As games becomes more and more mainstream, the larger retailers will begin (and continue) to attract market share by using loss-leaders to get people in store for the big release events.

    2) Digital distribution will be the biggest change in the industry. Developers will have direct access to the market place which is something they have never had before. The ones who will become successful are the ones who can make compelling, fun and original IP. Studios success will be more based on the quality of their games rather than “who they know” or whether they can produce games on time. This is going to be the biggest shift and it should see more good games coming out of Australia, even if it means some of the bigger, older companies may go through difficult times.

    3) Scope of projects. Next generation consoles after PS3, XBOX360. Visual quality of titles and game engine technology.

    4) Technology, markets and economy. Unless your game is the best for it’s price point and platform, it won’t sell.

    5) Internet

    6) The change in how people consume games. There is now a massive rift between AAA and budget (or Indie) games and that I think is just widening.

    7) Ease of access to the internet and Electronic media as welkl as portable handsets able to download digital games.

    8) Technology shift to motion control. A need for a greater audience and so a shift to casual games. A need to recognise that gameplay is too bogged down and no longer fun for an average player. economy and peoples willingness to pay big bucks for games is driving the major shift in production. Despite the fact that consoles can handle games that take years to develop punters dont wish to pay the price tag that these games incur AND the possibility of massive studio failure if the game audience has been misjudged is also effecting the choice to make games more fun and shift the focus from beautiful to entertaining (not that beautiful isn’t good). If these shifts cant be achieved then the larger organisations will find they are overtaken by indie games makers such as those found on Steam who can and have made the shift and at a much smaller price tag.

    9) New technology always drives this industry as every time something new comes out all companies strive to develop games using this new technology.

    10) New/intuitive control systems (motion control, stylus) – a shift from traditional gamers to casual/family gamers – traditional gamer expectations (better graphics, larger worlds, etc) – ever increasing traditional game development costs – digital distribution

    11) While the economy is clearly having an effect where big budget releases can make or break a company I think the real factors at play right now are the new markets/customers emerging from sources like Nintendo and social networking websites. Technology is not the driver it once was.

  5. December 15, 2009 at 12:37 pm

    The market has split; on the one hand, we have the “premium product” which sells at around $50 as boxed product and targets principally teenage to young adult males. This audience is absurdly narrow and overcompeted, and it becomes much harder for companies to operate in this space because of this.

    On the other hand, we have a range of new mass market approaches in what is often called “casual games”… Nintendo are making a fortune here, and a good earning is being made by smaller operators in the PC space. But the “goldrush” here is leading this to be overcompeted as well.

    Ultimately, we are left with a marketplace with either a narrow understanding of the audience as a whole, or no understanding, and instead of identifying lucrative niches companies are throwing themselves into the overcompeted spaces. This can only lead to financial problems.

  6. December 17, 2009 at 7:05 am

    Here is what a Senior Producer at Disney Interactive Studios – Fall Line Studio from the LinkedIn GamesDev group said about challenges, issues, and drivers:

    While I’m an American (and working here) I’ve been in the industry for 19 years and watched the cycles come and go …. I can tell you that the Aussie games industry doesn’t pay for squat. Lot’s of people make a concerted effort to come to the US to work in the industry as one could potentially increase their paycheck by a factor of 3. As a corallary, no company in Australia could afford to hire me in the role i’m in here, as the payscale is about 1/2 of what I get now (even though I’d love to come work there for a couple of years.)

    Drivers right now having a profound effect on our industry as a whole are 2 part: Technology and the people needed to meet user ‘expectation’ of a Next Gen title. What this equates to is MONEY. It’s gotten way, way more expensive to do just about any sort of game on any sort of console that’s expected to sell 400K units or more.

    A primary driver of this is CONTENT. Art and objects that used to take a world artist a day to make now take them about 5—with the addition of higher poly counts, shaders, normal maps, et al. So, to ship a game in that traditional 20 to 32 month time frame, you need to inflate your staff of artists, or outsource. For the last few years, there’s been a great hue and cry about outsourcing as a way to cut costs. For example, you may be paying around 9K per MM, but w/an outsource group you could get that cost down to 4K or even 2K. Problem is, you get what you pay for. There’s a TON of work on the front end to set up proxies, color palates, pipelines, etc. that the company needs to follow to a T. Most don’t. This results in your team having to dedicate members to fixing/cleaning up the art you get from an OS studio. Again, the savings diminish quite quickly.

    The other side is TECH—you need some pretty savvy coders to work some mojo to get things running on most consoles, ESPECIALLY the PSIII (it’s a beast!) And this stuff isn’t really outsourceable. You can pay up front to license some sort of middleware/engine, but you still need good people to bang it into the shape it needs to be for your unique title.

  7. December 18, 2009 at 9:50 am

    In February 2009, Patrick Stafford interviewed Infinite Interactive’s Steve Fawkner. His article titled, A better (video) game plan, highlights challenges faced by the industry. These include:

    1) Piracy – Fawkner called for developers to become more innovative at marketing their products, and putting anti-piracy measures on your software although “the guys out there are way better at cracking your software than you are at defending it”.

    2) The challenge of distance – There are a number of different challenges in starting a video game company thousands of miles from the industry’s biggest market – the US.“Proximity to business is our biggest problem. When publishers want to put money into something, it’s nice for them to just hop in a car and kick a few heads if the person is running a bit late. It’s very different for them if we’re in Australia. They don’t have the same control”

    3) Getting ahead of the downturn – at the time of the interview (Feb 2009), Fawkner said he is still bracing Infinite Interactive for the impact of the global downturn. “The sales last year were great. They call it a recession proof industry because it’s a real value for money industry, so when people don’t have much money they will play games. However, games get made because investors put money into them, and if they don’t have money those games aren’t going to get made. What is on the shelf will sell, but getting money to put your game on the shelf is going to be harder”.

  8. December 19, 2009 at 9:47 pm

    * Outsourcing to cheaper countries
    * Large corporate dominance over the industry with associated downsides and pressures
    * For Australia in particular we’re going to be hit by the lack of intellectual property being generated by Australian firms. We won’t survive on work for hire alone.

  9. December 21, 2009 at 12:43 pm

    A couple of more survey responses from workers in the industry about this topic:

    1) Internet distribution, new market demographics, social networking.

    2) Mobile devices like iphone redefine development model, giving a temporary boost to smaller developers. This however will unlikely hold and will probably be taken over again by the big studios as well.

  10. December 22, 2009 at 7:57 am

    Here is what a Independent Computer Software Professional from the San Francisco Bay area from our LinkedIn GamesDev discussion group said about challenges, issues, and drivers:

    To address Mat’s concern: “Games getting more expensive to produce but consumers tend to really only turn out in big numbers to buy franchises they know.”, I am thinking of a reusable persistent world solution for education and entertainment purpose with variety of themes.

    Games become expensive because vendors have to frequently change their contents and styles, to attract users by giving them fresh experience. Their developing efforts are less reusable. That’s why they are expensive.

    Educational contents are accumulated and reusable. When some kids finish their themes at elementary school level and start with middle school level, new kids for elementary school level will join. By being reusable, the average cost could be very low.

    Education is a different market, so it would not compete with big game brands. Parents and children is a big market, much bigger than a spill capacity of outsourcing industry as Mat mentioned.

    I just joined the group. Happy to see so much good discussion.

  11. December 22, 2009 at 11:14 am

    Here is what ANOTHER Independent Computer Software Professional from the San Francisco Bay area from our LinkedIn GamesDev discussion group said about challenges, issues, and drivers:

    Location itself may not be as important as it looks for IT sectors. San Francisco Bay Area is also far from other big cities.

    Competition in established markets could be extremely tough, as already said by many people. However entering a new market is a different story if correct judgment and decisions are made.

    For the edutainment persistent world I talked, it needs well-educated developers, but not many game developers initially. It would form its own skill sets, train new people, and establish a new small sector, a niche market according to venture capitalists. It is not in gaming industry itself, but co-exists with gaming industry as a better ecosystem.

    New enterprises could have better chance if they are in stealth mode sometimes, where people could be patient and persistent.

  12. January 21, 2010 at 12:01 pm

    I’ve been a bit busy finishing off a report so neglected this site for a couple of weeks. Scott, I’ll get back to you about the future outlook of the games industry as this involves more research.

    In this comment, I’d like to focus on findings from the study to find out whether they are applicable to the games industry. Last year we surveyed 50 employers from Australia’s Creative Digital Industries to identify their views about the capabilities of aspiring creatives, recruitment patterns, etc. Note, aspiring creatives = graduates and/or people with less than 2 years industry experience. Just over one-third of employers came from the Software and Digital Content sector. Key findings are as follows:

    1) Over 80% of employers indicated that aspiring creatives only accounted for between 0% and 20% of all workers.

    2) Over the previous 12 months, 56% of employers surveyed had recruited new workers, particularly graphic designers and programmers, with around half of the new workers sourced from interstate and overseas.

    3) Employers were more attracted to ‘creative talent and/or the necessary job skills’ than qualifications when employing aspiring creatives.

    4) Employers were most likely to indicate that it was ‘difficult’ to recruit aspiring creatives with the ‘right’ skills and attributes.

    5) Around 40% of employers mentored aspiring creatives, and 42% offered internships to aspiring creatives.

    6) Employers ranked team work skills, communication skills, motivation, problem-solving skills, and adaptability as the most important skills and attributes to their workplaces.

    7) Employers were most likely to indicate the capabilities of aspiring creatives for all 15 skills and attributes included in the employer survey were below their expectations when compared to the level of importance they placed on these skills and attributes to their workplaces.

    8) When compared to the views of employers, aspiring creatives over-rated their capabilities for 13 of the 15 skills and attributes as well as their software skills; and slightly under-rated their capabilities in the areas of motivation, positive self-esteem, and business skills.

    9) Two measures of capability gaps identified the largest gaps of aspiring creatives in the areas of problem-solving skills, communication skills, initiative & enterprise skills, team work skills, learning skills, self-management skills, and careers goals/planning skills.

    It would be great to get some comments about these points to see whether these issues are relevant to the games industry.

  13. February 17, 2010 at 10:54 am

    UK Games Industry Salary Survey 2010

    Slight increase in salaries for games developers – up from £30,442 in 2009 to £31,964 in 2010. Lots of good data on future prospects, moving jobs, and benefits and bonuses.

  14. May 11, 2010 at 10:08 pm

    A producer at a games company in Melbourne sent me the following message on LinkedIn:

    For your research, can you look into maybe why the Australian Government is doing nothing to protect the industry in Australia? There have been hundreds of layoffs over the past year, and the company I work for is also facing a dire future. No point researching whether there are enough skills and weaknesses when there’s no industry at all 🙂

    Also, I believe the Victorian government cut digital funding in half down to a measly 1-2mil over 2 years.

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