Finance
Financial planning is vital when it comes to the game industry as a game will be in development, on average, for at least 2 years. This means that the finance must be managed over several years used on teams of several people and equipment. The finance ensures that you can hire different roles and people to work on the game, it also ensures that you have a game plan that will schedule how you will spend the money over the amount of years that the game is in development. If the finance is not planned accordingly then the game could be produced terribly with low quality, could get spent wrong (e.g. overspending on voice actors/teams) and the money could get spent on unneeded equipment that is never used. These are just few examples of how money could effect the game but there are many more. The effect that this has on the game is that it will get produced very poorly, if a game is produced poorly then the game will lose a high amount of consumers who could have bought it which could lead to a loss of profit depending on how many copies the game does sell. Depending on the loss of profit this could endanger the future of the company and could potentially send them into bankruptcy. The role of financial planning involves three categories which are strategic role of financial management, objectives of financial management and the planning cycle.
As the games industry as progressed money has become a lot more influential. When games were first around they were quite cheap to make, for example, pacman is a well known game with a massive fan base. It was created during the 1980's and only cost $100,000 to make (the company who made it is known as namco.) The budget nowadays would be considered massively cheap to make and it was due to the simplicity of the game, it took over 1 year to make and was developed by a ten man team. Since home consoles weren't massively popular during this time period games were usually created for arcades, it would usually be quite cheap to play video games as well costing only a quarter also known as $0.25 to have a game. Due to the replay ability of the game, people would spend countless of hours trying to get the highest score, this has caused pacman to accumulate over $2.5 billion quarters. It achieved so high because of how Toru Iwatani planned his finance. He knew that he would only need a small team of developers to create the game and so hired nine men to help him, this means that the money spent will be very little as this team of people isn't too big. He hired the correct equipment and used the $100,000 accordingly, so much that they made a high amount of profit.
As the years have gone by the way that money was earned became easier and was made in higher amounts, home consoles began being made so that people didn't have to go out and play video games, instead it could be done within the comfort of their own home. Home consoles were created and sold for a high price due to the hardware involved. Then the video game prices were higher than a quarter as well and were sold at the same price of around $40-$50. However, due to inflation this means that the prices have changes and if those games were sold at those prices today then they would cost a lot more. In the article below it shows the price of every console over the years and how much they were back then compared to what they would be if they would have been sold in todays times with inflation. Between the years of the 80's to the 00's games were sold within cases and were in a physical form especially during the 80' and 90's. Slowly during the years coming to the end of the 00's and into the 10's it started becoming online so people could buy the games digitally, this would put distribution stores down in sales and would mean that people could sit in the comfort of their homes and buy the games digitally. It will continue to change as the years progress.
http://uk.ign.com/articles/2013/10/15/the-real-cost-of-gaming-inflation-time-and-purchasing-power
Market trends
Market trends in the industry are basically trends that are in high demand within games. They are the main genre or trend for games publishers/developers to focus on and will appeal a lot more to the consumers. There are three types of trends: secular, primary and secondary. A secular trend means that it will last or has lasted for a very long time. A primary trend means that is will last or lasted for a long time but not too long compared to secular and secondary trend means that the game has had very little time in the trending spotlight. Trends are important both to the industry and to the consumers as it will shape the next few years of gaming, due to trends this will determine what type of game the publishers/developers need to make. If they make a game outside of the trend it may effect sales, this could make a loss on profit depending on whether the game looks original and plays fantastically. Trends effect the consumers because since the trend will dominate the industry the amount of games within that genre developed will increase by ten fold. This will mean the amount of other games made will decrease leaving the consumer with fewer options. This may also lead those games that have not got a centred story around the trend to include a game mode that involves the trend.
An example of this can be shown in call of duty world at war, this is a game that was built around the events of world war 2, it had a campaign that lead you through the events from the year 1942 through till the end of the war. The multiplayer was also centred around the first person genre that it was with it being a typical shooting online game. However, they also introduced another game mode called nazi zombies. This was a massive trend at one point within the gaming industry and a lot of zombie games were being made. The developers treycarch thought they would include a game mode that was with the trend at the time and created nazi zombies, a survival game mode where you fight through hordes of zombies to achieve the highest round you can, it has gone on to be a smash hit within the series with a lot of people enjoying the zombies game mode.
The most recent game trend has been app games on smart phones and micro transactions. App games are being developed massively and a lot are freemium based where you can download it for free, however, in the majority of these games you can spend real money to upgrade the character easier, speed up time based objectives and even completing a mission with full percentage. It has become so big that even triple A based games are doing. An example of this can be seen in the latest call of duty, it doesn't influence the game greatly but they are used to buy some pointless elements of the game such as the black market crytokeys or the liquid divinium. These two elements are used to get stuff that will help with gameplay or customise characters so people don't really use it that much but there are games who rely heavily on micro transactions to completely change the game. On top of the £40-£50 game companies expect people to churn out more money and if they don't then it can effect the players experience entirely. An example of it being effected greatly is in the game fifa, it gives some people the upper hand over others in the ultimate team game mode. Due to this it can be unfair gameplay for those who wish to earn money for packs using the matches and trading compared to someone who will use real life money to gain as many packs as they want to get the players and high amounts of money.
In some cases micro transactions can be done correctly in games such as smite or DOTA 2. These are free games but real life money can be spent to get currency to spend in game, it will help people to unlock characters faster than others but it won't make for any unfair gameplay. The reason this works is due to the game being free from the start yet they offer you the chance to pay for characters in advance without getting a head start over others. The developers also know where to draw the line and not to overprice on any packs that they offer, they also make sure that any money being collected helps to make the game at hand improved. That's the beneficial part of micro transactions, they can help to improve the game and make for improved gameplay. However, they can be unfair due to the fact that it can make some players more powerful than others and can be used to buy stuff that don't really matter in the game anyway while overcharging people for a game that they already spent lots of money on in the first place.
Another trend which isn't helping the games community but is starting to pick up recently are games which rely heavily on dlc. In the past dlc was originally made to add content onto the game, it let the player experience more of a game after release and gave players more enjoyment. However, recently companies such as EA and Ubisoft have started to release unfinished games then selling the content to make the game include content that should have been there since the start. The games that have this in are star wars battlefront and Tom Clancy's The division. The thing with this is that people spend around £40-£50 on the game itself then have to spend another £40 to buy the content meaning that people are spending more money for stupid reasons being unfair to the consumer. Hopefully this is not a trend that will catch on but many companies nowadays aim to spend as little time and money on the game and giving as little content or working on smaller elements instead of major content yet making the consumer spend full money on these underproduced products so the companies just gain more money.
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