HA3 - Task 3 - Current Financial Issues

Current Finical Issues:

The games industry is going through financial issues at the moment with many companies shutting down from simply not having enough money to even start a new project.

One reason why it is going through financial issues is because publishers are removing their funds from companies projects because the game is either not what they expected on is on route to miss the deadline so the publishers don't want to waste anymore money on this particular project as they wouldn't benefit from it. This means the company has to stop the project due to insufficient funds or they have to try and find another publishing company to fund the project. However if this keeps happening time after time then the company will eventually run out of money and be forced to close or sell the studio they own.

Another reason why the games industry is going through financial issues is because companies are rushing the games so that they can get put on the shelves as fast as possible instead of properly testing them and removing all the bugs/glitches in the game. Examples of games released too early are Battlefield 4, Assassins Creed Unity, Red Dead Redemption, Halo: Master Chief Collection and Fallout: New Vegas. These games are all main titles with big, famous companies behind them but they still fail to release a fixed game because that particular company may be running low on money so they just see this as getting a boost of money while people buy this game during the first week of release before realizing how broke the game actually is. Often when the company gets many complaints about the game being broke they will give their customers a free gift (Ubisoft gave everyone who bought Assassins Creed Unity the game Limbo for free) and they soon after release patches to do what they should have already done.

One more reason why the games industry is plummeting is due to substantial companies creating free to play games as they are incredibly cheap to make but they then add in-app purchases that may give a certain player an advantage over other players or many extra lives/moves which generates a lot of money over time for that company such as Candy Crush which allows players to buy extra lives so that they can continue to play and as this is an addictive game, a lot of people often fall into this trap and continuously spend money to get more lives just so they can advance to the next level. Games like this (pay to win) are currently ruining the industry in my opinion as they are basically forcing people to buy things to advance or give an advantage which makes the game less fun for those who don't spend money as is isn't a level playing field.

Games Companies Which Have Shut Down:

There are a number of games companies which have been such down over the years due to insufficient funds or just being bought out by other companies and then shut down after as they cost too much to maintain.

Red Octane: This company was the creators of the series Guitar Hero which was a popular series that I personally enjoyed myself but this company was bought out by Activision in 2010 and shut down shortly after.

Kaos Studios and THQ: Kaos Studios only made two full games (Fuel Of War and Homefront) while THQ made a total of 18 games (most famous for the Darksiders series and Saints Row). After the poor first week sales of Homefront Kaos studios were shut down by their owners which happened to be THQ and shortly after this closure THQ went bankrupt themselves and had to shut down themselves.

LucasArts:  This company is was very popular and had many memorable games, they were mostly known for their LEGO games and they are responsible for many of the Star Wars games that are out their. However in 2013 the games company was shut down however Disney bought the rights to the Star Wars franchise and new games are currently in development.

Why Is Finical Planning Important?

Having a finical plan is extremely important as you don't want your company to run out of money before the project you have been asked to do is complete. There are many ways in which you can set up a finical plan, you can see the total amount of money you have and dedicate certain percentages to each section so that when you get to that step you don't over spend on one aspect which leaves you to not have enough for another aspect. Doing this also allows you to see the big picture and see the end product and create long-term plans instead of making quick decisions as you could possibly make the wrong choice which will lead to failure. You should set milestones for yourself and your team so that when you reach a milestone, everyone meets up for a review to ensure that everything is going as planned and if their are setbacks then you will need to address them in the best way possible.