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So, nobody invests in naval sims because they aren't successful, and, they aren't successful because nobody invests in them?
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No I don't think that's what he meant. The last two of these SH games just barely broke even if that. So it's not worth the investment to them to then not make a profit or take a loss.
One of the lessons I drew from my involvement with the gaming folks was that the industry resembles other forms of entertainment to the extent that as Fred Allen once remarked, "Imitation is the sincerest form of television." If sitcoms are hits make more sitcoms; it's why there are so many sequels in movies.
The production costs for a top flight game are now so enormous, they take as few chances as possible.
Sid Meier is the Steven Spielberg of game designers. Last time I looked, something like 20% of the games in the hall of fame were his designs. I sat thru a speech of his once at E3 in which he lamented just this issue. Where's the innovation? Why can't we do something other than Call of Duty XXII and Assassin's Creed XI?
For almost all the formative years of the industry, they were hardware limited. The machines couldn't do what the designers envisioned, but Meier made the point in his speech that those days were over. The hardware was approaching movie quality graphics capability and now they were imagination limited. This hardware advance has actually worsened the imagination problem tho. Every year the bar gets ratcheted up to get even better graphics because the hardware can do it now which increases development costs which then increases risk avoidance strategies even more.
So if you are a development house like Creative Artists say and you are going in to pitch a new startup game genre or a revision of a dead line to a production company like Sega and that genre has a crappy sales record or none, you're in for heavy sledding. You're asking them to bet ~$25-50 million on your idea. At $50 or even $75 per box, that's a lot of boxes before they even make their nut back and profits start coming in. So you can see the issue with naval games. No one is going to invest the money required to mine the market based on uncertain interest and past poor performance.
We know that we'd accept less than current industry standards of graphics to get a decent game, but that's not sellable because the largest demographic slice that buys games is young males early teens to late twenties. Most of whom are enthralled with the coolness of graphic violence, have been unencumbered by the education system with historical curiosity and are uninterested in things that happen at the blinding speed of 10-15 knots.