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Incredibly Expensive Video Games Are Not Necessary And Contribute To Job Losses, Exec Says

"I don't think it's necessary. I don't think it's appropriate."

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Saber Interactive founder Matthew Karch has shared some pointed words about the state of the AAA video game market. Speaking to reporter Stephen Totilo aboard a private jet that he paid $23 million for, Karch said incredibly expensive AAA games may become a thing of the past and are contributing to the string of job losses in the market today.

"I think that the age of the $200 million, $300 million, $400 million AAA game is on its way out. I don't think it's necessary. I don't think it's appropriate," Karch said.

The executive went on to say he believes the costs associated with making such big-budget games may help explain why the video game industry is seeing so many layoffs today.

"I don't know how best to put it….I think if anything has contributed more to the loss of jobs, it's the multi-hundred million dollar budget," he said.

In 2023, Karch's Beacon Interactive bought certain assets from Saber's parent company Embracer as part of a divestiture from Embracer's business operations in Russia. It was at this time that Karch and Embracer officially parted ways, with Beacon effectively buying Saber out of Embracer.

Before this, Karch lamented how "games are getting cut left and right" due to certain economic conditions within the video game business. "The consolidation that's been going on in the industry is gonna hurt that as well, and the costs and the turmoil that the industry has been going through… Teams will regroup but the capital at the moment, it just isn't there," he told GI.biz. "And so the industry is actually contracting somewhat and the supply of content is going to be way short of the demand."

Karch has also questioned the $70 price point for games, saying he would prefer not too charge that much and believes it's "almost not fair" to do so. He cited Helldivers 2, which launched at $40, as being an example of a lower-priced game that went on to enjoy huge success. One of Saber's biggest recent releases was 2024's Warhammer 40,000: Space Marine 2, which was priced at $70 despite what Karch thinks about that price point.

Saber's Tim Willits, commenting on the success of Space Marine 2, said it's a sad truth that many game studios declare a game a failure if it doesn't sell 5 million copies. "I mean, what business are we in where you fail if you sell less than 5 million?" he said.

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GuitarWarrior66

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Well they ditched regional pricing so they only made video games not scam in USA and few countries in Europe, additionally world economy is very bad people cannot even buy eggs in America duck yeah even after Trump made America great again lol so they expect people to happily pay $100. You'll clearly lose customers so it would ruin the video game companies for not making a sell as you'll even cry for $40. Some will continue to buy games at discounts but this becoming a personal issue therefore just like how people stopped buying games because of Denuvo as they only buy from GOG anymore this price will make people stop buying to make a stand. Enough is enough. Learn your place. People can survive without your product but you cannot exist without customers. If you won't sell fairly you'll buy your doom. :DDD

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Tiwill44

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Edited By Tiwill44

Better to have 20 expert cooks in the kitchen than 2000 incompetent ones. Cheaper too. And when a project doesn't quite work out, it's not as much of a catastrophe.

After all, many beloved series began as smaller scale games that only got popular later on, through word of mouth or after a number of sequels. Not every game will be a hit on its first try, but that doesn't mean it'll never happen. Look at Fire Emblem, it took them 13 games from the NES to the 3DS before it actually became popular. That success would never have happened if the first game had cost 200 million dollars to make.

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GirlUSoCrazy

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Edited By GirlUSoCrazy

Apparently much of the reason that video games become incredibly expensive is because of mismanagement.

Jason Schreier writes:

Most alarmingly, games are growing more expensive because of rampant mismanagement — because of companies chasing trends, making bad bets and lacking a clear creative vision. Inefficient workflows, technological shifts and insecure executives can all be the cause of wasted time, which equates to higher budgets.

There’s the feature that gets canceled because the CEO’s teenage kid didn’t like it, or the level that everyone knows is going to get axed but that they all have to keep working on because the cancellation hasn’t officially been communicated yet. Or maybe it already has been canceled and nobody told the audio team.

It’s worth noting that video games do need ample iteration to be good, and some of the most successful games have been the result of so-called “wasted” work. Cuts and cancellations are not always a mistake. But there are also countless examples of teams of hundreds floundering in pre-production as they try to figure out what a game’s “core loop” will actually look like. That might seem like welcomed news for workers who get to relax for a while - until crunch time comes along and there’s no more leeway for the game to slip.

There is also a pretty good video breaking it down you can find here.

"Folks accept uncritically that games are too expensive to make without asking why the suits who are literally in charge of how much things cost aren't in charge of how much things cost"

"Guess what class of [expletives] are to blame" "has anyone asked them why games are too expensive to make but executives aren't too expensive to pay"

Maybe it is time to turn the spotlight more on the management, and for the games media to start asking questions regarding the failure of management of unsuccessful games, and how they will improve management in the future.

It sounds like companies would do better making a smaller concept that is fun, and then building on that if it is successful.

Some companies have let employees work on their own pet projects during company time, using company resources, on paid time. It is a certain percentage of their workday that they get to spend on this. Some excellent games have come out of people working on what they find fun, and this approach might also be good.

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Welverin

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Sounds like he's describing post ME3/DAI Bioware. Anthem, Andromeda, and Veilguard are all games that wallowed in development hell.

Anthem they could never decided on what the core of the game was. Andromeda and Veilguard both went through multiple iterations before they settled on the final form.

Anthem and Andromeda were both forced out before they were ready, simply because someone decided they had been in development long enough and they didn't want to spend more money on them. Veilguard was at least allowed to be finished, but is a failure because it was crazy successful enough to recoup ten years of development time (what could, honestly).

@girlusocrazy said:

Apparently much of the reason that video games become incredibly expensive is because of mismanagement.

Jason Schreier writes:

Most alarmingly, games are growing more expensive because of rampant mismanagement — because of companies chasing trends, making bad bets and lacking a clear creative vision. Inefficient workflows, technological shifts and insecure executives can all be the cause of wasted time, which equates to higher budgets.

There’s the feature that gets canceled because the CEO’s teenage kid didn’t like it, or the level that everyone knows is going to get axed but that they all have to keep working on because the cancellation hasn’t officially been communicated yet. Or maybe it already has been canceled and nobody told the audio team.

It’s worth noting that video games do need ample iteration to be good, and some of the most successful games have been the result of so-called “wasted” work. Cuts and cancellations are not always a mistake. But there are also countless examples of teams of hundreds floundering in pre-production as they try to figure out what a game’s “core loop” will actually look like. That might seem like welcomed news for workers who get to relax for a while - until crunch time comes along and there’s no more leeway for the game to slip.

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Gawkerfools

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Edited By Gawkerfools

And there it is, the truth, keep prices below $70, best $50 if you want people to keep buying your stuff, otherwise it will be in the bargain bin before it is bought up.

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