Greg is talking about the severe pressure the game industry is under. Development budgets have increased in a Moore-like way but revenues haven’t: A game ten years ago cost about $200,000 to produce; now it costs $2M+. App size has gone up two orders of magnitude in just a few years. Most of the costs are for graphic design. I.e., it used to take a one person-day to build. A Doom III level takes 2+ weeks.

But the industry feels it has to keep moving up. The audience has no “Indie game” aesthetic. And games are sold to distributors on the basis of brief demos that highlight the graphics. Actual gameplay is too hard to judge to play much of a role in the decisions. And, historically, supporting advanced hardware has increased sales, but (says Greg) that’s because the hardware has sucked.

Games lose money. And it will get worse. Consequence: The field is driven by mega-hits. Over 89% of sales are generated by thhe top ten games. Publishers will continue to consolidate. And games will be more like other games; the most lucrative approach is to publish a sports game that has minor annual updates. And basing a game on a commercial character (or doing a sequel) reduces the risk. It has to fall into an existing category, with innovation only on the margins.

There is interest in independent game development because people are desperate for a hit. Also, mobile games are showing signs of life becausegames mobile platforms require much less develop time.

But, overall, says Greg, we’re facing the “comicization” of gaming, marginalizing it as an artform. But, the field is wide open in terms of possible innovation.

Possible solutions: Keep costs down by having the games companies conspire to work together. Or find new sources of revenue. Or online distribution, which works for puzzle games (e.g. Jewel, Tetris) on Yahoo Games, etc. We will see a revival of shareware. And mods will survive, although there’s no real business model. We need a parallel distribution channel for independent games, analogous to the indie music scene an d art house for film. Possibly we’ll see “advergaming” as per WildTangent. And the academic environment is producing some interesting games.

Or maybe we won’t keep pushing against Moore’s Law once we have cinematic quality games. And then perhaps cinematic quality won’t be required in every game: photography gave rise to abstract art, says Greg.

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