Small Game Developers Struggling

Kris Erickson • Dec 8, 2008 • Comments (0)

If you work in a small independent game company, you are probably thinking: stop the presses. Small game companies have always struggled to stay afloat and generate profits, so the news that these studios are facing extreme challenges during the current economic recession should come as no surprise. Even while Wall Street analysts proclaim the recession-proof strength of the digital entertainment sector, many small game developers are reporting weaker than normal sales. It seems that video games remain popular consumer goods even when times are tough, but gamers are buying fewer, high-quality games as they cut back their spending. That means that big-budget blockbusters are selling in normal quantities, while smaller, niche games are being left on the shelf.

In a recent interview, Atari CEO David Gardner laid the problem out this way:

"I think the worry - and my worry frankly - is will the broader catalogue of products sell well when consumers are careful about spending their money? Because I think now we're seeing maybe the top two games, and maybe the number three game sell well so far, but we're already hearing stories about games below that not selling as well as last year.”

Atari’s strategy has been to cut back on the number of titles under production and focus more resources on a smaller stable of sure successes. The company laid off 100 employees earlier this year in a bid to cut expenditures. Read about Atari’s upcoming game releases. Another mid-tier developer, Midway, is also facing bankruptcy this year, as niche titles like Mortal Kombat Vs. DC Universe have failed to pull the publisher out of debt. It seems that in the current economic climate, here is room at the top for a small number of super-successful titles, while other releases languish in their shadow.

Are you part of the problem? Let us know if you plan to buy only blockbusters this winter, or if there are some must-have niche titles on your Christmas shopping list.