AAA games Inspiring the medium, failing the industry

As part of our aim to help the local gaming industry, I do mentorship/teaching for teams looking to publish their first games. One common issue I keep running into with them is they all want to make something like their favorite AAA game. The one most commonly referred to right now is the original Last of Us, but Age of Empires and Forza regularly come up. Imagine trying to explain to a 20 year old looking to enter the industry that perhaps their first game shouldn't be a narrative-driven, AAA, open-world, action-RPG game. Sometimes this conversation becomes a study on the viability of the AAA gaming model. This has led me to start thinking about (if possible to be made in the Middle East) would they help or hinder the industry's growth locally or basically if the model is viable for a new entrant?

 A couple of years ago, I came across a post on Quora asking if AAA games were dying. The author argued at that point that they were not dying but had become stagnant. The original post can still be found here: Is the age of AAA gaming dying?

Just so that we are all on the same page, I am using Wikipedia's definition of what AAA games are: AAA (pronounced and sometimes written Triple-A) is an informal classification used for video games produced and distributed by a mid-sized or major publisher, typically having higher development and marketing budgets.

 I wanted to revisit the question in 2021. In the past year, we have had a global pandemic, the resulting quarantine being a boon for the gaming industry. A new generation of Consoles was launched - admittedly to less fanfare than before. As a whole, it seemed that unlike Cinema (The sector that most compare to games ), 2020 was a good year, but how was it for the AAA industry?

 Some genuinely great AAA games were released: The Ghost of Tsushima (an original IP), Half-Life: Alyx (First AAA VR game, based on an existing IP), and The Last of Us Part 2 ( A direct sequel), to name a few. There were significant low points, too, with the launch of CyberPunk 2077 and Marvel's Avengers' failure being particularly noteworthy. Reading any list of "The best AAA games for 2020" will, of course, echo the same faults that have been leveled at the industry. A lack of innovation and businesses' first approach leads to companies investing in sequels and games within the same IP. Half-Life: Alyx is probably the major highpoint for AAA games in 2020; even though it was based on an existing property, it pushed the envelope for VR games.

So we can still safely say that the AAA industry is still stagnant, even in a year that saw record growth in the industry.

A lot happened in 2020, interestingly though, not much changed. The biggest games were still sequels or continuation of games released two or three years ago. Fortnite with more than 350 and PUBG with around 500 mil players on Steam and 700 overall are still the go-to free-to-play (Pay to play on PC for PUBG) games aimed at core gamers. The only new game to crack into these high numbers is Among Us from 2018, which founded a new audience through bringing social deduction from the tabletop to the digital arena. Of course, the lockdown played a part in its success. Among Us is a huge hit, but it's not a AAA game, neither is PUBG. The only game from an established publisher to command these types of numbers is Fortnite. For context, Activision's Call of Duty: Warzone has 85 million players, and EA's FIFA franchise caps out per annum at below 30 million. The numbers above are all for mid-core to hardcore games. If we consider casual mobile games then the comparisons become even more ridiculous: it is estimated that over its lifetime Candy Crush has had more than one billion players. Sony has yet to sell half that many Playstations.

PUBG Steam player Count from April 2017 to October 2020

One clear disadvantage to AAA games is that they are not on the right platform.

Many people own consoles, but compared to iOs or Android devices; the numbers are paltry. These games are becoming more expensive to build, yet the eyeballs are either focused on other platforms or existing games.

To alleviate AAA games' high development and upkeep cost, more and more companies are focusing on increasing their LTV per user than any real innovation. From admittedly a very cynical point of view, you can argue that Half-life: Alyx was part of the Valves strategy to increase the sale of their VR hardware. The preferred tool to increase the LTV has been the inclusion of microtransaction in premium-priced products. The "evils" of microtransactions are well known, and games like NBA 2K1 and Madden NFL 21 routinely see improvements in the modes focused on these types of revenue while treating the players who "ONLY" bought the base game as second class citizens.

 To sum up:

• The platform is wrong from a pure ROI perspective. The same investment on mobile devices can hope to capture a much larger audience—a strategy pursued very successfully by Asian publishers.
• The audience isn't as engaged as it once was because there isn't enough time to devote to all the games available.
• The solutions that the publishers are pursuing is alienating a segment of their audience.
• The increasing cost of development is causing publishers to only focus on proven hits and established IPs.

So the AAA model isn't advancing the industry as much as it should considering the money, talent, and reputations involved. Instead of gameplay innovations, most yearly releases see innovations in monetization. Instead of new gameplay ideas, the old ground keeps being tread. Worst of all, the model has those adopting it chasing a carrot that is constantly moving further away with more and more hungry mouths biting at it. In 2020 we saw Konami skip an annualized release and only provide a content update to their previous game at a discounted price. FIFA released a full game at a premium price where the main improvements were to FUT (the game's live service mode, containing its microtransactions). What many might have missed, though, is that FIFA 21 actually has a lower score than Konami's content update on meta critic.

Can we assume that the audience enjoyed the honesty exhibited by Konami and didn't mind skipping an annual release?

Not great for EA ...

From a business/industry perspective, the model is either failing or at best is stagnating. The flip side is that without this model we wouldn't have had the New God of War, The Last of Us, and Red Dead Redemption 2. Just a small sample of games that showcase what the medium can be at its height, merging technology, art, and storytelling to create experiences that make us fall in love with the medium. I truly believe for the gaming ecosystem to take the next step in the middle east, we need to invest and create the infrastucture to make AAA games even if we cannot make the numbers work right now.

Because if we fail to, we risk losing our voice in what the medium can become and end up with our developers never finding insipiration at home.

 So yeah, AAA games aren't in a great place, but GAMES as a medium would be much poorer without them. This aspect is something unique to our industry. When we talk about great cinema, we rarely mention Hollywood blockbusters. More often than not, within games, it is the AAA games that tend to elevate the medium and push its boundaries. They are the ones we refer to when we want to discuss great games. As a whole, the model has become progressively less viable but when its done right, the games that are created truly push our medium forward.

 What can the industry do moving forward to encourage the creation of masterpieces still and celebrate and support games that have player counts larger than most countries.