The immense power of next-gen consoles might seem good on paper, but it comes with some less obvious downsides that could threaten the video game industry.
It’s no secret that the PlayStation 5 (PS5) and Xbox Series X/S consoles, so called “next-gen” consoles despite their release over three years ago, are both immensely powerful machines. The two consoles are capable of running the most graphically intensive games and are often a subject of debate as to which one outperforms the other.
But while additional power might always seem like a good thing, the experiences of game development companies reveal that there might be more to the picture.
The main issue with the normalisation of such high horsepower is that it makes AAA game development unsustainable. As consoles become more powerful, the demand for more powerful games that take advantage of the hardware’s capabilities increases.
A 2023 report by the UK Competition and Markets Authority (CMA) revealed that AAA games greenlit for potential releases in 2024 or 2025 often have budgets of $200 million or even higher. This displays a rapid increase in development costs, as only five years ago, the typical development budget was between $50 and $150 million.
This was further corroborated by the recent Insomniac Games hack, which revealed that the company had a whopping $300 million budget while developing Marvel’s Spider-Man 2, a PS5 title. This is triple the budget for the game’s predecessor, which was released for the PS4 in 2018. As reported by Forbes, many elements from the first game were pulled over into the second, which partially explains why this development cost is so shocking.
Yet at the same time, it’s not shocking at all. As consoles become more powerful, there is more pressure on development studios to take advantage of the consoles’ increasing power, and it stands to reason that games would get more expensive to make.
While these increased budgets certainly lead to better-looking and better-performing games, they are ultimately unsustainable for the companies behind them. Insomniac is fortunate to be putting out titles that rely on the names of major brands to draw in sales (in this case, Marvel’s Spider-Man), but if a major studio were to pour hundreds of millions of dollars into a game that flopped, it could easily crush the entire company. If a game with a smaller budget flops, there might be time to earn that money back, but companies with budgets as big as Insomniac’s simply can’t afford to fail.
These major titles also require more development time, which means there are fewer AAA titles for gamers to enjoy. If a company is required to dedicate years to a single project, they might not be able to allocate resources to other projects, and they will inevitably produce fewer games as a result. In 2022, an industry insider reported that Grand Theft Auto VI will be Rockstar Games’ only title throughout the entire PS5/Xbox Series X generation. While this report is unconfirmed, when observing the enormous scope of the upcoming title and the fact that Rockstar’s last original game was Red Dead Redemption 2 in 2018, this isn’t hard to believe.
More power in next-gen consoles means that games look and perform better, but it also means there are fewer new games to play. When factoring in the increasing costs of these AAA titles – which are almost certain to continue increasing in the future – and the catastrophic effect that a single failed project can have on a development studio, it becomes clear that “next-gen power” could eventually spell danger for the future of the video game industry.