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Publishers Strategize Over Next-Gen Game Development

13 Aug, 2004 By: John Gaudiosi

With the table all but set next fall for Microsoft's launch of Xbox Next, code-named Xenon, and Sony's new PlayStation, as well as Nintendo's new console, code-named Revolution, expected to hit shelves in fall 2006, game developers and publishers are already working on next-generation games.

Considering the average game development time span of 18 to 24 months, new challenges in both advanced technology and rising development costs, today's software bets will have a direct impact on the launch of the new consoles.

Middleware at the Forefront
Electronic Arts (EA) just made a huge investment in next-generation game development with its purchase of UK-based game developer Criterion Software, which also owns middleware company Renderware. Middleware allows game developers to marry their own technology with that of a game console like PlayStation 2. Renderware4, which is currently in alpha, will begin worldwide distribution this fall to Criterion licensees like Activision, Atari, Konami, Midway, Namco, THQ and Ubisoft. It will allow for a swift transition between making games for current and next generation consoles. EA, which will continue to license Renderware to its competitors, will also incorporate its own proprietary technology into the software. Renderware is currently used by 25 percent of all games in development today.

David Lau-Kee, CEO, Criterion, said that middleware will play a huge role in the development of next-generation games and Renderware4 will allow game developers to focus on the content of games. Bruce McMillan, EVP, EA Worldwide Studios, added that he believes the game industry as a whole will benefit from the new technology that EA will invest in this middleware.

Respected game designer American McGee, chief creative officer of the Mauretania Import Export Company, said that development for next-generation platforms could be a $20 million endeavor, according to developers he has spoken with. That's a huge leap from the current $7 million average, although many of the big games exceed $10 million and push $20 million today.

According to Mike Mika, creative director at video game developer Backbone Entertainment, game publishers are very eager to move into PS3 and Xbox 2 territory. “Almost every business development meeting includes the potential to build game franchises into those domains.”

Current Console StrategiesWith Sony's plan to extend the life of PlayStation 2 well beyond the launch of its next console and the large installed base that PS2, Xbox and GameCube have around the world, there will be plenty of life left in current console game development.

“I've been through five console transitions over the past 25 years, and I think the industry has more concern over this transition than necessary,” said Jeff Griffiths, CEO, EBGames. “With a new platform launch comes a small audience and a small number of games. Retail will focus on the larger audience and follow sales as the new platforms evolve.”

Paul Eibler, president, Take 2 Interactive, said there's an advantage to sticking with established consoles — which have a larger audience, games that are easier and cheaper to develop, and involve far less risk than the more expensive next-generation consoles. McGee believes quality $19.99 games that offer 10 hours of gameplay could find a market. Sega released its latest ESPN NFL 2K5 football games for $19.99 last month, but that was just an experiment to expand its audience, executives said.

One trend that executives agree on is a smaller number of bigger and better games for next-generation consoles, at least at first, due in part to the large costs for developing these games.

“Increased production spending doesn't mean better games,” McGee said. “Personally, I think we should be creating more titles with mass market appeal. Who says a game has to be 40 to 60 hours and cost $60 at retail to be valid?”

Mike Sabine, video game analyst for International Development Group, said that this transition should be smoother than the past two console transitions because the game publishers understand the mistakes they made before in abandoning the older consoles too early.

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