I've been in the computer games industry since about 1983. I've had a lot of fun, as well as a few "hits". I'm best known for the 1986 Amiga game "The Faery Tale Adventure", for which I still get occasional fan mail. I've worked on about a dozen projects all told, the most recent being a massively multiplayer game for SegaSoft's HEAT network.

I'm always amused be people's reactions when I tell them that I work in the computer games industry. "Computer games!" they say, "Gee, that must be fun!" At such times I usually pause, thinking "How do I break it to them?"

I've been in the industry a long time (since around 1983), and I've watched carefully the changing nature of the business. I remember the busts and booms, the changing platforms, the rise and fall of many companies. And I've come to the conclusion that the industry has gradually, imperceptibly, transformed from a cozy industry full of creative freedom and fun into a rather unpleasant place to work.

Computer game developers work in an industry where 90% of the profit is made from 10% of the products. Or to put it another way, 90% of the products simply die in the marketplace. Sometimes this is because the products themselves are dreck; There certainly is a lot of poorly designed, poorly debugged, formulaic, or simply content free products out there. In other cases, good products wither on the vine because they are inadequately marketed, or because they can't get through all of the noise and fluff that's clogging up the distribution chain.

When the games industry started, distributors were begging for product, but now you have to bribe Fry's or CompUSA a couple of hundred thousand to get your product placed somewhere where customers will actually see it.

And this doesn't even include the large number of products that never make it to market. In some cases, a publisher or development company runs out of money before it can finish a game, or is eaten by a larger company which immediately develops a case of indigestion and dies. (This has happened to my own projects twice.)

Having been involved in a number of large, multi-million dollar projects that never got released, or were pathetically marketed, I sometimes wonder whether the computer games industry isn't perhaps a net loss to the Gross National Product. I'm not even talking about the amount of lost productivity from people playing games (which I don't consider "lost"). Rather, what I mean is that it sometimes seems like more investment money is actually wasted developing and marketing failed games than is made in profits from successful ones.

Most of my industry colleagues that I've talked to about this have expressed similar feelings. One person said that the games industry is "a transfer of funds from the rich to the lucky". In my opinion, one would be foolish to invest in a game company.

Perhaps it's different in the big game publishers, where they crank out the same formulaic sports action game or first-person shooter over and over again. But in the smaller companies where I've spent my career, the vast majority of projects either never make it to market, or completely tank once they get there.

The economic realities of developing games induces what I call "The Lottery Mentality". Lotteries are based on the idea that we tend not to be able to think very rationally about small differences in probability. The California State Lottery has been called, for example, "a tax on people who can't do math". In the games industry, this takes the form of lying to ourselves about the potential chances of creating a "hit" game. We all know that our game has only a small chance of becoming a "hit" and thereby making a profit, yet we fool ourselves into thinking: "Yes, but MY game is going to be the ONE." As one producer put it: "You don't think anyone intentionally tries to make a mediocre game?" (Well, there are some in fact who do, but that's beside the point.) But the fact is that your game is almost certainly going to be mediocre, in sales if not in quality, whether you like it or not.

The lottery mentality is what keeps investors pumping large amounts of money into the sinkhole of games development. After all, it's a very exciting, fast-paced, high-tech and "cool" sinkhole. It's "the wave of the future". I've watched how games get funded, and it's usually less a matter of the technical feasibility and artistic merits of the game, than it is the personal charm of the CEO of the development company. To paraphrase Alexis de Tocqueville: "What a fragile thing is human reason."

I should point out that my argument only applies to games written for computers, not game consoles. The economics of the console market are very different, primarily because the console manufacturers maintain a strict editorial control over what games can be published. As a result, the distribution chain for console-based software is far more consistent in quality. On the other hand, there's far less opportunity for innovation in the console market, and this is only partly explained by the strong 'parental' influence of the console manufacturers. Because consoles don't have keyboards, console games are extremely limited in the kinds of social interaction that they can support, which means that console-based games tend to be focused around kicking, jumping, hitting, running, and other brute force physical activities. This in turn limits the console market to a fairly narrow demographic, one that isn't interested in complex social interaction. Similarly, because consoles don't have hard drives, they are limited to games which are mostly "stateless", meaning that the player can only affect a small number of selected variables in the game environment.

NEXT