Silicon Knights: "developers can't afford next gen"

And "preowned is cannibalising the games industry"

Silicon Knights' Dennis Dyack isn't feeling the love, people. On the one hand, he reckons the pre-owned market is responsible for massive publisher focus on launch week sales and thus, rising game prices. On the other, he entertains serious doubts about next generation development costs. Let's look at the last of these worries first.

"On the top side of the triple-A, highly-funded titles, you have $100 million games, and looking towards next generation people once again are saying we're going to have development costs that are two or three times of what they were last generation," Dyack told GamesIndustry International in an interview. "I cannot see how that economy is going to continue."

In other news, Dyack says Too Human 2 isn't an impossibility.

"I don't think as an industry we can afford $300 million budgets. I think some games can, don't get me wrong. For a game like Call of Duty, if they had a $100 million budget, or whatever their budget is, they can afford it. That's not the industry, that's sort of a one-off. But what is everyone else going do?"

Epic's Cliff Bleszinski has also sounded a note of caution about next gen development costs, suggesting that "the six-to-eight hour triple-A game might be going away" save for a handful of mega-franchises.

The answer to upward-spiralling budgets could be "recurring revenue systems" that squeeze moolah from games post-release, reducing the importance of initial sales spikes. "We need a system with recurring revenue and that's why I think digital distribution is going to play a big role in things to come," Dyack continued. "That's why I am still very big on cloud computing."

It was easier to maintain sell-through before pre-owned came to power, he reflected. "From a consumer side, [in the last few years] we started seeing used games really come into fruition, and I believe that has caused quite a problem. I would argue that used games actually increase the cost of games."

"There used to be something in games for 20 years called a tail, where say you have a game called Warcraft that would sell for 10 years. Because there are no used games, you could actually sell a game for a long time, and get recurring revenue for quite a while. Recurring revenue is very key."

"Now there is no tail. Literally, you will get most of your sales within three months of launch, which has created this really unhealthy extreme where you have to sell it really fast and then you have to do anything else to get money," he went on, in a possible allusion to strategies like day one DLC.

"I would argue, and I've said this before, that used games are cannibalizing the industry. If developers and publishers don't see revenue from that, it's not a matter of hey 'we're trying to increase the price of games to consumers, and we want more,' we're just trying to survive as an industry.

"If used games continue the way that they are, it's going to cannibalize, there's not going to be an industry. People won't make those kinds of games. So I think that's inflated the price of games, and I think that prices would have come down if there was a longer tail, but there isn't."

Frontier Developments boss David Braben made a similar case last week.

"People will say 'Oh well, I paid all this money and it's mine to do with as I will', but the problem is that's what's keeping the retail price up," he argued. "Prices would have come down long ago if the industry was getting a share of the resells.

"Developers and publishers need that revenue to be able to keep doing high production value games, and so we keep seeing fewer and fewer of them."

What do you think?