Video game industry practices
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Video game industry practices are similar to those of other entertainment industries (e.g. the music recording industry), but the video game industry in particular has been accused of treating its development talent poorly. This promotes independent development, as developers leave to form new companies and projects. In some notable cases, these new companies grow large and impersonal, having adopted the business practices of their forebearers, and ultimately perpetuate the cycle.
However, unlike the music industry, where modern technology has allowed a fully professional product to be created extremely inexpensively by an independent musician, modern games require increasing amounts of manpower and equipment. This dynamic makes publishers, who fund the developers, much more important than in the music industry.
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Breakaways
A particularly famous case is the "original" independent developer Activision, founded by former Atari developers. Activision grew to become the world's second largest game publisher. In the mean time, many of the original developers left to work on other projects. For example, founder Alan Miller left Activision to start another video game development company, Accolade (now Atari née Infogrames).
Activision was popular among developers for giving them credit in the packaging and title screens for their games, while Atari disallowed this practice. As the video game industry took off in the mid-80s, many developers faced the more distressing problem of working with fly-by-night or unscrupulous publishers that would either fold unexpectedly or run off with the game profits.
Economics
Economic problems remain today with regard to publisher-developer contracts (see copyright: transfer of rights). Typically, developers receive around 20% of royalties, and the rest goes to the publisher. Rather than dividing royalties, many publishers buy the development studio outright. Some developers begrudge the tendency for the studio's original management to leave in the wake of a buyout, while the remaining employees try to finish the project only to be shut down after a few years. These buyouts often result in a big push to finish video game projects in time for the holiday purchasing season, and transfer of creative control to the publisher.
Creative control
Some people disapprove of publishers having creative control since they are more apt to follow short-term market trends rather than invest in risky but potentially lucrative ideas. On the other hand, publishers may know better than developers what consumers want. The relationship between video game developers and publishers parallels the relationship between recording artists and record labels in many ways. But unlike the music industry, which has seen flat or declining sales in the early 2000s, the video game industry continues to grow while producing both low-quality, unoriginal games, and innovative and popular titles such as the Grand Theft Auto series and The Sims series. Also, personal computers have made the independent development of music almost effortless, while the gap between an independent game developer and the product of a fully financed one grows larger.
In the computer games industry, it is easier to create a startup, resulting in many successful companies. The console games industry is a more closed one, and a game developer must have up to three licenses from the console manufacturer:
- A license to develop games for the console
- The publisher must have a license to publish games for the console
- A separate license for each game
In addition, the developer must usually buy development systems from the console developer in order to even develop a game for consideration, as well as obtain concept approval for the game from the console developer. Therefore, the developer normally has to have a publishing deal in place before starting development on a game project, but in order to secure a publising deal, the developer must have a track record of console development, something which few startups will have.
Alternatives
An alternative method for publishing video games is to self-publish using the shareware or open source model over the Internet. However, it remains to be seen whether freely made and distributed games can survive in the era of multi-million dollar productions.
Japanese video game industry practices
The Japanese video game industry is markedly different from the industry in the US and Europe.
Arcades
Video game arcades are still relatively popular in Japan; for every arcade game released in the US, nine are released in Japan. The history of the Japanese arcade is very significant in the story of the decline of the American arcade, and in the shape of game design in general. In particular, the arcade scene in Japan has caused them to lag behind in the field of sound effects and sound design, because this is less important in an arcade. For example, a modern game like Tekken 4 still uses the same 16khz samples as was used in the original arcade version.
Media
Consoles and arcade games are the main media for Japanese game design; PC games are nowhere near as popular. This necessarily dictates that there are fewer independently developed games coming from Japan, as its far harder to develop independently for a console than it is for a PC.
Development environment
The structure and culture of a Japanese game developer is far different from a western one. Throughout the history of Japanese game design, many developers have seen fit to remain mostly anonymous, even using pseudonyms to a large degree in video game credits.
Also, the division in labor for video game development is far different. For example, Japanese game design teams had a dedicated designer, (which they called a "director") far earlier then American design teams adopted the practice. Yet it was clear that even with this centralized design process level designers and character designers were given a lot of leeway to work within their boundaries as much as possible. For example, almost every level in Super Mario Bros. 3 has new gameplay concepts within it.
Secondly Japanese game designers throughout history generally had far more people working on a particular game then a comparable western design team. For example, Mortal Kombat, an American title, was developed by four people: a programmer, an artist, a musician, and a background artist. Street Fighter 2, a comparable Japanese title, had almost one artist working on every character in the game, plus two programmers, plus a musician with the result being a team of twenty or more people.