Take-Two Interactive’s CEO, Strauss Zelnick, has said that video game development is an expensive and risky business that requires significant investment in areas such as high quality human resources, marketing, and production. Speaking to Bloomberg TV, he said:
“It’s an expensive business, and the risk profile reflects that. Those very expensive production, marketing, overhead, in the case of sports titles, licensing, they do create a risk profile.”
Zelnick went on to say that all of the above create a barrier to entry in the video game business because a developer “cannot get in not without having a couple hundred high quality engineers and artists, loads of capital and lots of money to market the title.” Take-Two is the publisher, developer and distributor behind a number of high-profile AAA titles so Zelnick is speaking from experience. He’s not the only one to make such a statement, however. Avalanche Studios’ Christofer Sundberg has recently said that AAA game development is in an unhealthy state at the moment, and that very few games make a profit due to high budgets.
Do you agree that development costs are a barrier to entry in the games industry?