All Your History: 2012 in Review Part 1 – Double Trouble
The year 2012 was transformative for the video game industry. It began with more than one uncomfortable glimpse into the industry’s dark side, exposing the prices paid to keep business running. And a surefire hit franchise stumbled, leading its fans to lose faith, and its creators to lose face. As the year progressed, however, it seemed as though the status quo was shifting. Amid the deeply entrenched system of big budget studios and publishers, suddenly smaller projects were capturing the hearts and minds of gamers. And instead of simply garnering attention, these projects were actually getting funding. But will these new paradigms kick start a new age of video gaming? Or will the big boys come back in 2013 with a vengeance?
Shortly after the start of the New Year, shocking news rocked the video game world, and the tech industry as a whole. In early January, three-hundred workers in China had gathered on the roof of their factory and threatened mass suicide to protest unfair working conditions. The factory was making Xbox 360 consoles, and was owned by Foxconn, the Chinese corporation whose plants manufacture electronics for Microsoft, Sony, Nintendo, Apple, and more. Though the incident ended peacefully, the effect on the industry was bracing.
The protests were something of a wake-up call for many companies, spurring probes into the way Foxconn ran its factories. Three months later, an investigation by Apple revealed a number of labor law violations being perpetrated at Foxconn-owned facilities. Despite these revelations, most tech companies continued to contract with Foxconn for manufacturing duties, though it’s said reforms are being put in place.
But while the harsh realities of the industry’s manufacturing practices were exposed for the world to see, dark clouds continued to gather over the business’s corporate side. THQ, a publisher whose financial difficulties the year before forced it to cancel franchises and close several studios, announced in late-January that it would begin a “strategic realignment” to focus on “core game franchises.” The result? Two-hundred-and-forty employees being laid off, CEO Brian Farrell taking a 50 percent pay cut, and even more studio closures.
A few days after THQ’s announcement, the company received an official warning that it was in danger of being delisted from the NASDAQ stock exchange, a result of their stock’s value having dipped below a dollar to 70 cents a share. Aside from the rough economy and lower-than-expected sales, THQ pointed the finger at its uDraw Tablet peripheral, a stylus-enabled controller that was a hit on the family-friendly Wii in 2010…and an utter flop for the PlayStation 3 and Xbox 360 in 2011. The company claimed the uDraw was to blame for its disastrous loss of $56 million in the third quarter.
While THQ’s troubles were the most visible, early 2012 brought plenty of doom and gloom elsewhere as layoffs abounded. id Software, Sega, Starbreeze, and Obsidian Entertainment had all laid off staff in the first three months of 2012, a result of the sluggish economy. All in all, it was a difficult time to work in the video game business.
So what about the consumer side of the industry? In February, Sony released their brand new portable console, the PlayStation Vita, in North America. Since Nintendo’s 3DS handheld had seen a rocky launch the year before, some analysts predicted a similar uphill battle for Sony—a belief reinforced by the console’s slow adoption after its Japanese launch in December 2011. Each week after its Japanese release, the Vita’s sales dropped lower and lower, being surpassed for numerous weeks by its predecessor, the PSP. Unfortunately for Sony, the slow Japanese launch was as a sign of what was to come in North America. Despite excellent reviews, the console failed to catch on, and still struggles to find its place in the marketplace.
But the market wasn’t all doom and gloom. A brand-new IP published by Electronic Arts in February managed to find a solid audience, no mean feat in a marketplace so dependent on sequels and brand recognition. The game’s stylized fantasy world was conceived and designed by legendary author R.A. Salvatore and comic book veteran Todd McFarlane, and developed at Maryland-based Big Huge Games.
Kingdoms of Amalur: Reckoning, was launched to solid critical reception and sales approaching half a million. The game’s release was more than just a victory for a new IP—it was a success for Big Huge Games’ parent company, Rhode Island-based 38 Studios, which had rescued Big Huge from its former owner—THQ—which planned to shut it down. Based on the strength of Amalur’s performance, it looked as though the industry had a new force to be reckoned with, and a sequel seemed inevitable.
On the subject of sequels, EA had yet another big game to publish shortly after Amalur: Mass Effect 3, the epic conclusion to BioWare’s space-faring RPG. Released in March, Mass Effect 3 earned extremely high praise from nearly every critic, and debuted to huge sales. During its first month on shelves, it sold 1.3 million physical units for PlayStation 3, Xbox 360, and PC, a figure that didn’t take the game’s digital sales into account. Mass Effect 3 seemed to be another hit.
But sales and reviews weren’t the whole story. When gamers completed the single-player campaign, many were shocked to discover an ending that failed to live up to their expectations. Despite a series that managed to carry each gamer’s decisions and stories from one installment to the next, the ending seemed not to take any of what had gone before into consideration. What should’ve been the trilogy’s final triumphant crescendo instead rang hollow in gamers’ ears. The legions of fans Mass Effect had built up over the years were not happy.
Gamers started online petitions to convince EA and BioWare to change the ending, with one fan going so far as to send BioWare $1,000 worth of cupcakes to sweeten them into a new finale. Another fan reported EA to the Federal Trade Commission and the Better Business Bureau, claiming the publisher had failed to live up to its claims for the game. The rage continued into April, with Electronic Arts being named by the Consumerist as “Worst Company in America for 2012.” A week later, the Better Business Bureau agreed with the angry fan’s allegations that EA had misled its customers about Mass Effect 3. Another group, calling itself “Retake Mass Effect,” raised $80,000 for charity in to try and prove that fans were serious about wanting a new ending.
For their part, EA and BioWare announced they would release an “extended cut” of the game’s ending as downloadable content later that summer. Whether or not the DLC was always planned for release, or if it was devised as a way to mollify angry fans, was never clear. Either way, the announcement seemed to provide some relief and the furor began to subside.
While fans demanded change in one sector of the industry, they were effecting it in another, sowing the seeds for what may become a revolution in the way business is done. In early February, Tim Schaffer’s Double Fine Productions launched a Kickstarter project that sought funding for a new adventure game. Its goals were modest: raise $400,000 to make the game and film a documentary about its creation.
Within a mere eight hours of launching, the project met its goal. A Kickstarter spokesperson confirmed that the project set a record for time taken to meet its goal, and had “more backers than any other project on the site.” Before the day had ended, the project broke the $1 million barrier. And Double Fine’s runaway success didn’t end there. Once its thirty days were up in mid-March, Double Fine Adventure had earned $3.3 million in pledged funding, more than 800 percent of its originally sought amount.
Double Fine hadn’t just kick started their new project, but a potential revolution in how games found consumers. Suddenly the industry sat up and took notice of a new way to fund games. Critics began to raise questions about the role of publishers. Many developers had always regarded them as a necessary evil to bring projects to market. The Mass Effect 3 debacle seemed to prove to fans that publishers were still evil…but if Double Fine could raise so much cash, were publishers actually necessary?
For many independent or small-scale developers, the answer was still ‘yes’—not every studio enjoyed the fan-clout of Double Fine. After five years of arduous development, indie studio Polytron finally finished its long-awaited debut game: FEZ. Its publisher, Microsoft Studios, scheduled the game to hit XBLA in April, a full two years after it was first supposed to launch. But it was worth the wait: after one month on the market, FEZ earned over 100,000 in digital sales and received high praise from critics who’d eagerly awaited its release.
April also saw the release of another unconventional game on digital platforms. Telltale Games had long flown under the radar, releasing critically acclaimed point-and-click style games based on quirky licenses like Back to the Future, Sam & Max, and Homestar Runner. In February, Telltale announced a licensing deal with comic book writer Robert Kirkman to make episodic games based on his successful series, The Walking Dead. The property had already been adapted into a hit show on AMC, and interest in the game was high, even if expectations for another point-and-click from Telltale might have been modest. After all, how could the terror of a zombie apocalypse translate to the format’s slow style?
As it turned out, it translated better than anyone could’ve imagined. Upon its late-April release, the first episode of The Walking Dead earned rave reviews, and sold over a million digital copies in only two weeks.
An adventure game raising over $3 million directly from fans? A point-and-click game tearing up the charts? Mass Effect and BioWare…making fans angry? The first four months of 2012 had defied expectations, and no one could predict what the next few months would bring. And in May, one of the industry’s newest stars would fall, making national headlines and leaving onlookers stunned…
Tune in next time for the true Reckoning…
Part 1 | Part 2