AAA games studios are in turmoil bringing forth hyper-realistic graphics at very high costs, while their gamers are moving even more toward the titles that have very strong social features. Thus studios must finally be caught in this dilemma of deciding on the increased costs of using ever better visuals being forced to reduce the returns on those investments. The problem lies in balancing the razor’s edge in visual spectacle, exciting gameplay, and sustainable development practices.
“Instead, they want reality and photo-realism,” states Craig McRae. For decades now, industry giants like Sony and Microsoft have relied on realistic visuals to wow the audiences. Publishers such as Naughty Dog (The Last of Us, Uncharted), CD Project Red (The Witcher 3, Cyberpunk), Rockstar (Red Dead Redemption 2, Grand Theft Auto V), and Guerrilla Games (Horizon: Zero Dawn, Horizon: Forbidden West) have traditionally laid more preference on their spending with opening-cut credits showcasing resplendent moving images. Critics and fans have rewarded this artwork that has created magical pixels overflowing into a lifelike experience blended with moving cells rivaling the world’s greatest motion pictures. The price tag for imaginary fantasies has shot through the roof, thus forcing a reassessment of priorities in the gaming industry.
An example of this is Marvel’s Spider-Man 2, released in 2023. Developers from Insomniac Games modeled a photorealistic New York City capitalizing on the muscle of the PlayStation 5. Strong textures formed an iconic suit for Peter Parker, while skyscrapers reflected sunlight in strikingly realistic fashion. Such advancements, however, came at a price as the development budget for the game hit almost USD 300 million reported, which is twice compared to what was spent in produce its predecessor.
Another demonstration of the technical prowess of the industry comes from The Last of Us: Part II.
While these visuals are impressive, they raise questions about the sustainability of such investments. Despite the commercial success of Spider-Man 2, which sold over 11 million copies, Sony announced 900 layoffs in February 2024, affecting Insomniac’s developers. This highlights the diminishing financial returns on these massive investments.
Simultaneously, gamers’ preferences are shifting. According to Jacob Navok, a former executive at Square Enix, high-fidelity visuals primarily appeal to a specific demographic of gamers in their 40s and 50s. Meanwhile, younger generations are gravitating toward games with simpler graphics but strong social features, such as Minecraft, Roblox, and Fortnite.
Joost van Dreunen, a market analyst and professor at New York University, notes, “For many young gamers, playing is an excuse to hang out with others.” This social aspect has become a driving force in game design and popularity.
As development costs rise and player preferences evolve, some studios are exploring alternative approaches. The live-service model, which prioritizes regular content updates over graphical fidelity, has gained traction. Games like Genshin Impact have achieved massive success, generating billions in revenue primarily through mobile platforms.
However, this model comes with risks. High-profile failures such as WB Discovery’s Suicide Squad: Kill the Justice League and Sony’s short-lived Concord highlight the challenges of entering the competitive live-service market.
Industry professionals are divided on the way forward. Some, like David Reitman of PricewaterhouseCoopers, see potential in artificial intelligence to reduce the costs associated with high-level graphics. Others, like independent developer Rami Ismail, remain skeptical of quick technological fixes and are concerned about the industry’s current trajectory.
In summary, the gaming industry stands at a crossroads, grappling with rising costs, changing player expectations, and the pursuit of innovation. Balancing visual realism, engaging experiences, and sustainable practices will be key to navigating this complex landscape.
