Recap: Gaming studios face increasingly difficult decisions as they grapple with the escalating costs of creating cutting-edge visuals and the diminishing returns these visuals often provide.
For decades, giants in the gaming industry like Sony and Microsoft banked on realistic visuals to captivate audiences.
Meanwhile, younger generations are gravitating towards games with simpler graphics but robust social features, such as Minecraft, Roblox, and Fortnite.
As development costs soar and player preferences evolve, some studios are exploring alternative approaches.
Some, like David Reitman of PricewaterhouseCoopers, see potential in artificial intelligence to reduce the costs associated with high-end graphics.
Recap: As they struggle with the rising expenses of producing cutting-edge visuals and the dwindling returns these visuals frequently yield, game studios are forced to make more and more difficult choices. Finding a balance between eye-catching spectacle, captivating gameplay, and sustainable development methods is the difficult part.
For many years, industry titans like Sony and Microsoft relied on lifelike graphics to draw players in. Rockstar Games (Red Dead Redemption 2, Grand Theft Auto V), Guerrilla Games (Horizon Zero Dawn, Horizon Forbidden West), Naughty Dog (The Last of Us, Uncharted series), CD Projekt Red (The Witcher 3, Cyberpunk 2077), and other publishers have continuously placed a high value on visual excellence, which has resulted in both critical and commercial success.
Once flat, pixelated worlds have been transformed into immersive experiences that can compete with motion picture productions thanks to this tactic. But because it has become so expensive to achieve such realism, the gaming industry has had to reassess its priorities.
The 2023 release of Marvel’s Spider-Man 2 is one example. The developers at Insomniac Games created a visually stunning New York City by utilizing the processing power of the PlayStation 5. The famous suits of Peter Parker were depicted with complex textures, and skyscrapers accurately reflected sunlight.
The cost of this level of detail was high, though. It is estimated that the game’s development cost about $300 million, more than three times the amount spent on its predecessor just five years prior.
In a particularly notable scene in The Last of Us: Part II, Ellie, the main character, takes off her shirt to reveal scratches and bruises on her back, demonstrating the technical skill of the industry once again. This scene plays out without any visual hiccups, showcasing the meticulous attention to detail that has come to define high-end game development.
Despite their impressiveness, these images cast doubt on the long-term viability of such investments. Spider-Man 2’s developers at Insomniac were impacted by Sony’s February 2024 layoff announcement, despite the game’s commercial success, which saw over 11 million copies sold.
To put it succinctly, these investments are yielding declining financial returns. Additionally, audience preferences are changing at the same time. The New York Times quoted former sq\. Enix executive Jacob Navok as saying that gamers in their 40s and 50s are the main target audience for high-fidelity graphics.
Younger generations, meanwhile, are drawn to games like Fortnite, Roblox, and Minecraft that have strong social features but simpler graphics.
According to Joost van Dreunen, a professor and market analyst at New York University, “playing is an excuse for hanging out with other people” for a lot of young gamers. This social component has grown to be a major influence on game design and appeal.
Other methods are being investigated by some studios as player preferences change and development costs rise. The live service model, which puts frequent content updates ahead of graphical accuracy, has become more popular. Due to their enormous success, games like Genshin Impact have made billions of dollars, mostly from mobile platforms.
It is a risky model, though. Suicide Squad: Kill the Justice League by WB Discovery and Sony’s short-lived Concord are two well-known failures that highlight the difficulties of breaking into the cutthroat live service industry.
Professionals in the industry disagree about the way forward. Some, such as PricewaterhouseCoopers’ David Reitman, believe artificial intelligence has the potential to lower the price of expensive graphics. Others are concerned about the current direction of the industry and are dubious of fast technological fixes, such as independent developer Rami Ismail.
