The failure of Marvel’s Avengers was no surprise to me. I started gaming seriously in the mid-2000s. During that time, as is the case today, the industry was choked by a sinful glut of a single genre. At the time, those games were military shooters. The success of the original Modern Warfare set the agenda for AAA studios of the day, and on the surface their financial equation was intuitive:
“Modern Warfare sold well. Therefore, games like Modern Warfare will also sell well. Therefore, if we want to make as much money as possible, we should make games that are like Modern Warfare.”
Disney and Square Enix probably followed a similar train of thought when they conceived of Marvel’s Avengers: live service games are a goldmine, right? Overwatch, Apex Legends, Fortnite, Destiny 2 have all been huge hits that popularized the ‘live service’ trend. Even previously single-player only games like Assassin’s Creed are hawking microtransactions now. Conventional marketing wisdom would suggest that a live service game based on the most popular film craze of the 21st century would rake in cash based solely on name recognition. Square Enix’s loss of over $200 million suggests otherwise.
Word of mouth wasn’t doing it any favors: the consensus on Avengers from critics and audiences seems to be that it is, at best, average. The Cosmonaut Variety Hour review sums things up pretty well:
But quality is ultimately subjective and not synonymous with popularity. There’s no shortage of critical darlings with poor sale figures, in every medium. Conventional wisdom tells us brand recognition sells better than good art. Avengers offers us an opportunity to unpack that assertion.
Marvel’s Avengers: Repeating Past Failures
Games Aren’t Cinema
We should begin with a simple question: how does one deduce that because one game sold well, a similar game will also sell well? I’m gonna go out on a limb and postulate that movies have something to do with it. Films share the top spot with video games for wealthy media empires, or at least they did before streaming exploded. And in the film industry, the safest bet is usually imitation. That is to say, you greenlight films that are like the ones dominating the box office; you follow the trend. But I would argue that the innate differences between the passive medium of film and the interactive medium of games changes this equation.
See, you can only watch a movie for the first time once. If you had your mind blown by Return of the King in theaters as a kid like I did, maybe you can relate to my ongoing quest to discover new fantasy epics. You can’t just watch Return of the King again and be equally enchanted; the tension of not knowing what will happen next can’t be recaptured. If you want more, you’ve got to watch a different movie.
Another observation of note: it’s interesting to consider that, despite their equally obsessive fanbases, films are almost never considered ‘addictive’ in the sense that games are. I postulate that this is because even if you watch films constantly, you’re probably not watching the same one over and over again: you do not appear, to a casual observer, to be fixated on a single thing. Not so with video games, as I will now explain.
Some Things Never Get Old
A few years and a console generation after I fell in love with Lord of the Rings, I found a second great love: Skyrim. But my love for Skyrim didn’t drive me to seek out new games with the fervor I sought out new fantasy stories, mostly because I never stopped playing the thing!
Skyrim’s popularity is so enduring that they’ve managed to release it about a thousand times over.
For all that I love about it, Return of the King took up maybe 10-13 hours of my young life: I watched it a few times in the theater and then again when I bought the tapes.
My Steam hours logged for Skyrim are hovering around 2000 right now; I’ve come back to it over and over after churning through games of similar structure and theme: Witcher, Fallout, Assassin’s Creed: Valhalla – nothing has managed to replace it. And judging by the sheer extent of the modding scene, I’m not alone: there are Skyrim mods that are themselves the size of full games. Unlike Lord of the Rings, if I want more of what I got from Skyrim, I just need to try a new playstyle or download a new mod, then play Skyrim some more.
Enderal is Skyrim mod that is a mod in name only: it features an entirely new world and story, independent from Elder Scrolls entirely. It’s basically a new game that borrows Skyrim’s engine.
But Some Things Do
Gameplay doesn’t depreciate in impact nearly as quickly as storytelling does. There’s no singular logical end point for the catharsis of good round of Smash or the awe of wandering Tamriel. So trying to sell a CoD clone to CoD players was probably a little bit like sticking the trailers for new movies right in the second act of the one you’re watching, and there’s at least some evidence to suggest that it didn’t work as well as publishers thought it would.
Some of these games were good, but I think we can all agree that there were just too many of them!
That isn’t to say that trends are totally immaterial in the game industry: my interest in Oblivion is what led me to play Skyrim in the first place. But I can’t help but see some echoes of the present in that old article; the contrast between the confidence with which developers pursue a trend and what that trend actually does for them. I think it stands to reason that imitation in video games isn’t the safe bet it is in the film industry: games generally take up much more of your time than movies, and are thus a more intensely competitive marketplace. I suspect we are only just now beginning to see the cost of this competition.
Servicing Nobody
Pay to Lose
Trend chasing in gaming hasn’t gone anywhere, but the trends themselves have changed: right now the order of the day are live service games and open world games, and these trends are even more illustrative of my point than shooters were.
Live service games are not only asking for an infinite time investment from players, they’re also asking for continuing financial investment. The closest equivalent when I was growing up were MMORPGs, and most of them failed to put a dent in the crown of World of Warcraft, precisely because most people do not have the money or the time for more than a few games of that size. It’s really a simple problem: if you’re already playing Fortnite every day, why would you want to spend your money on a game almost exactly like Fortnite?
It seems almost too obvious, but game companies appear to be neglecting it all the same: your products need to stand out from your competition. Companies like Nintendo and From Software understand this: it’s more secure to occupy your own niche than it is to try and bum rush your way into an already crowded one. It’s starting to look like the whole AAA industry is just one giant example of sunk cost fallacy.
Play to win mechanics hurt more than the players, they hurt the whole marketplace by hoarding time and money.
Chaos Control
Trend chasing comes from a need for security: games are more expensive than ever to produce – multi-million dollar gambles that always need to pay off. It’s only logical that companies want to use time tested strategies. But the desire for massive, record breaking success and the desire for predictable outcomes are mutually exclusive: the AAA game industry is pursuing a level of security that simply does not exist. It is a hubristic, almost Frankensteinian quest for control over something that is fundamentally chaotic.
So what are they supposed to do instead? Just spend hundreds of millions of dollars and accept that they have no control over whether or not they make it back? Maybe the first step is to deconstruct the premise: why do we assume that the more money you spend on a game, the more you’ll make?
Sit Down, Be Humble
A Little Game Called Undertale
Let’s cast our eyes over at the indie scene for a moment, at a game you’re probably sick to death of hearing about: Undertale. I promise I’m not here to wax poetic about the virtues of the game. If you know what it is, you know why it’s beloved. Rather I want to use it to illustrate a point about the correlation of manpower to profit, or rather the lack thereof.
Undertale is beloved for its charming characters, quirky humor, and highly reactive story.
Undertale is a short, simple game by the standards of its time. It was developed over 32 months by no more than 2 people: Toby Fox – the primary creative force behind the project – and one artist, Temmie Chang. All in all, the Kickstarter for the game raised about $50,000. Imagine for a moment that a AAA studio, for whatever reason, had decided to fund this game. 50K is practically a rounding error for publishers like Ubisoft – it would have barely been an investment. And Undertale sold over a million copies in less than a year.
Really ruminate on that ratio of money in VS money out: using the lowest price it was ever sold at, roughly 3 dollars, that is a 60 fold return on investment, and the real number is probably much higher. One guy at his desk raked in more profit than Square Enix did with over $200 million worth of talent.
Most indie games do not make nearly as much money as Undertale, if they even turn a profit at all. But the fact remains that Undertale lacked most of the features AAA studios treat as if they are compulsory: it doesn’t have high-end graphics, it doesn’t have endless hours of content, it doesn’t have a physics engine or a live service marketplace. These things are the reasons why games are so expensive to make, but for all that Ubisoft, Square Enix, and company insist otherwise, I am not convinced of their necessity.
Playing the Lottery
Undertale’s aesthetic is simple, but appealing: a masterclass in using simple tools well.
Perhaps instead of allowing game projects to become blackholes of time and money in an attempt to make them as impressive looking as possible, publishers could benefit from employing smaller teams, to make smaller games which can, demonstrably, still turn an incredible profit. Undertale is proof that you cannot mathematically quantify what makes a game successful. Art is an emotional landscape, and human emotions are not predictable. But this also means that you don’t always need to spend money to make money.
So treat the act of investing in a game as the risky proposition that it really is. Stop burning money trying to put your finger on the scale. Instead of maximizing profit at all times in every way possible, focus on managing cost instead, with the understanding that the bulk of profit will need to come from a lucky windfall. When your chances of success are low, but the rewards are high, the strategy is to play as often as possible while expending the fewest resources possible.
Marvel and Square Enix should learn at least one thing from the failure of Avengers: If you can’t guarantee you’re going to make $200 million, don’t spend $200 million.
