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This Trend Is Killing Single Player Games


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Well once you play a single player game that’s kinda it. I mean maybe some DLC. But how many gamers buy that. The game has to be fantastic to want you to throw more money at it. Live Service games continuously bring in money. 

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I just hope that the industry realizes that live service games are inherently so much more risky than single player games, especially when coming from a studio that hasn't done it before successfully (which is almost everyone). There is so much talk about how expensive games have gotten, but so much of that goes away when you're not building a live service game. You don't have to design gameplay that is fun for a thousand hours, you don't have to build out the net code and endless progression paths. You don't have to have an internal pipeline for perpetual content releases. I feel like live service gets sold as a cure for the potential failure of single player games, but they are so much riskier. 

 

1 hour ago, AbsolutSurgen said:

Given that fewer and fewer people are buying and playing  single player games -- there will be less of them.

Is that true though? Last year Hogwarts Legacy was the best selling game of the year. Spider-Man, Jedi-Survivor, and Zelda made the top 10. It always seems to be the case that a good portion of the top selling games are single player.

 

 

On this topic though, I'm playing through Arkham Knight again (and it's so good). Is Suicide Squad worth $30 just to play through the story?

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7 minutes ago, TwinIon said:

Is Suicide Squad worth $30 just to play through the story?

I personally thought it was but a lot of people found the story offensive due to how the Justice League characters were treated, Batman in particular. And your points about single player games are accurate and are addressed in the video. He makes a lot of the same points you do and cites Hogwarts as well.

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4 minutes ago, TwinIon said:

Is that true though? Last year Hogwarts Legacy was the best selling game of the year. Spider-Man, Jedi-Survivor, and Zelda made the top 10. It always seems to be the case that a good portion of the top selling games are single player.

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As a reminder I reported to two CEOs of Square Enix for the better part of a decade and ran a subsidiary. I also correctly predicted last year that Square Enix was going to break exclusivity. I'll note I have no confidential information that I'm basing my arguments on. To start, we need to look at decisions made on the titles under development within the lens of 2015-2022, not the lens of 2023. For example, FF16 would have started pre-production prior to the release of FF15, which was released in 2016. This is a pre-Fortnite era. Budgets for FF7 Remake and into Rebirth would have been around this period too. This is important to note and we will get back to it. 

 

 

There's a misunderstanding that has been repeated for nearly a decade and a half that Square Enix sets arbitrarily high sales requirements then gets upset when its arbitrarily high sales requirements fail to be met. This was not true when I was there and is unlikely to be true today. Sales expectations generally come from a need to cover the cost of development plus return on investment. 

 

 

If a game costs $100m to make, and takes 5 years, then you have to beat, as an example, what the business could have returned investing $100m into the stock market over that period. For the 5 years prior to Feb 2024, the stock market averaged a rate of return of 14.5%. Investing that $100m in the stock market would net you a return of $201m, so this is our ROI baseline.

Can the game net a return higher than this after marketing, platform fees, and discounts are factored in? This is actually a very hard equation though it seems simple; the $70 that the consumer pays only returns $49 after 30% platform fees, and the platforms will generally get a recoup on any funds spent on exclusivity meaning until they are paid back, they will keep that cash. Plus, discounts start almost immediately.

Assume marketing expenses at $50m, and assume that you're not going to get $49 but rather an average closer to $40 given discounts, returns and other aspects. Now let's say in that first month you sold 3m copies with $40 net received (we will ignore the recoup). You need to surpass $254m to make expectations. (That's $100m + $101m in ROI baseline + $50m in marketing). At 3m copies with $40 per copy received, you've only made $120m. You're far off.

T.CO

Final Fantasy 16 has hit its first big sales milestone, selling over three million copies during its first week on the market.

 

From the statements made, it will take FF16 eighteen months to hit expected sales. (I used the stock market as an example but actual ROI should be higher than stock market averages).

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The sales figures required aren't wild expectations; the number of copies sold were too low. And my numbers are actually much lower than realities (game dev costs are probably 2x as high, and marketing is also likely 2x as high, and this makes ROI requirements higher too).

But that's not even the core of the problem, this is just me proving that expectations aren't set immodestly. The core of the problem is that the budgets were set in a period where the expectation was that audiences would grow.

Total audience growth was a reasonable expectation in the 2015-2022 era and still is today. Not only had the industry grown significantly each year, but each day that new generations were coming of age, they were coming of age as gamers. Meaning that your total addressable population should be increasing and you should be increasing your revenue.

What's happened? Not just to Square Enix, but to the industry as a whole? Audience behavioral patterns are radically different than expected in 2015. Remember, I said 2015 was pre-Fortnite. The way it used to work was that you'd pick your release date similar to a Hollywood movie, stick to it, and consider the competition to be the titles releasing the weeks before and after.

We would look at a Hitman or a Deus Ex release and consider whether there was a Call of Duty or Assassin's Creed coming out around that time, assuming that gamers had X amount of money to spend and Y amount of time, and that if we wanted to get the full sticker price (remember, discounts eat into cash received and also at that time, used disc sales were $0 cash received) we needed to get as many sales in the first two weeks as possible.

At that time, as a gamer, once you finished the most recent game you were on, you moved onto the next. You were looking for your next title once you finished the prior one. We wanted one of our titles to be the next title you bought to fill your gamer needs. This world radically changed in the last 6 years.

 

Earlier this month Kotaku had an article called "9 Great Games We Can't Stop Thinking About." There's a surprise 10th slide, and that is Fortnite.

@ZwiezenZ writes in the article: "And once again, another weekend arrives and I realize that I'll be spending most of it playing Fortnite. I'm very close to maxing out both my battle pass and Festival pass, so that's the plan. I hate how deep Fortnite has its hooks in me–to the point where I'm choosing to play it over brand-new, cool-looking video games–but I can't help it. I must finish these damn passes, get all the rewards, and earn the right to play other stuff. Well, until the next season starts up and I once again return to Fortnite to drop in and level up all over again. It's sick. I hate myself. I can't wait to play more this weekend."

This is indeed the point. Square Enix are not competing against just the latest new installments, they are competing against every F2P online game that is constantly adding content and getting more robust over time.

The assumption was that people would jump between products when they finished one. But, as you know, F2P games like Fortnite or Warzone are evergreen, they never get old. They are always updating with new content and experiences. They can continue for decades. Candy Crush has had its best years ever the last few years. And companies like Epic can continue to invest back into the products to make them better, creating even higher barriers to entry for competitors.

 

The game industry is still growing in revenue but that revenue is increasingly captured by fewer live services games that are generating a level of stickiness seen in social media companies. There are reasons there are very few competitors to Facebook. Once the network effect starts, it can keep going for a long time. Since Instagram (also FB), the only real competitor in an entire decade that showed up and could quickly reach 1bn+ people was TikTok. And this is in a trillion dollar valued industry.

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A report shows that while the industry is growing, its biggest competition is Fortnite, GTA, Call of Duty, and Roblox

I expect Fortnite, Roblox, Warzone, and similar products to continue to grow revenue. Meanwhile, put yourself in an older gamer's shoes: if you're a gamer with disposable income but less free time, and you have the choice of paying $70 to play 100 hours in FF16 or to just continue playing Fortnite with your friends for free, you'll wait to see the FF16 reviews before you decide whether to switch off FN. In other words, your switching costs (how good a game is, how exciting it needs to be) are now substantially higher than when you'd finish the latest Assassin's Creed and look for the next title to fill your time, because you’re awash with content options. Fortnite doesn't end.

This is the reason we see trends where games are either spectacular 10/10 successes, or disasters, with little in between; there is no "next hit" being searched for in many cases. And this polarization makes risks higher, and costs higher too (we will get to this in a moment.)

Now if you're a younger gamer in your teens, you may not even be thinking about FF. If you are 13 years old now, you were 5 years old when the last mainline FF, FF15, came out. Your family may not own a PS5 and you may not care. You're satisfied with Fortnite or Roblox or Minecraft with your friends on your phone or laptop. I'm not say that this is the case for everyone. But it is certainly a trend. The old AAA franchises do not seem to be converting the younger generations that the industry was counting on for growth, and instead F2P social games on mobile are where they spend their time. This is the reason every publisher chased live service titles; audiences clearly gravitated toward them, and profits followed in success. (It is surprising that Square Enix, which had successful F2P live service mobile titles in Japan, left the AAA live-service attempts to Eidos rather than try to build those products in Japan, but dissecting this problem would likely require an entirely different thread.)

Regardless, the Fortnite-ization of the industry was not entirely predictable in 2015 when budgets were being planned. Even after FN came out and well into the Covid period it felt like industry growth was pulling all ships forward, not just a handful. But that isn't what happened.

Now we have to get to the cost of development. Asset generation, motion capture, textures, animation, engineering, infrastructure are incredibly expensive. Making games costs a lot of money. The recent layoff wave is generally a consolidation toward a new expected sales average in the number of titles being produced, not the cost of an individual title, which is going to continue to increase. (Spider-Man 2 cost $380m!

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Development costs have gone up, and switching costs of the consumer has gone up, and as a result companies have to invest even more because it has to be a 10/10 or gamers will stick to Fortnite. (I don't literally mean FN, but similar types of products.) Meanwhile, FF7 Rebirth, which has a 92% Metacritic rating, can't get the sales it needs (though that's also complicated due to it being a sequel.) These factors mean the status quo must change.

There are three levers you can pull to make the equation work for return on investment at a game company. You can decrease costs, increase price, or increase audience size. As noted, any non-service game is having trouble increasing audience size. Meanwhile, on the cost side, inflation is up, salaries are up, and consumers require sophisticated, beautiful products to get them to fork over cash rather than keep playing F2P titles. It is true that there are many smaller games or less beautiful games that generate audiences and are profitable. But something like Balatro is not a good example to point to. It's made by one person. AAA games can take hundreds, thousands of people to make. A single person making $2-3m in sales is life changing, a hundred people trying to split that is not enough money. And products like Balatro are lightning in a bottle, you can't generally capture that twice, and there are hundreds of thousands of competing products on Steam or App Stores that fail for every Balatro.

This leaves only price left as a lever to pull. Since the price of games hasn't substantially increased, relative to inflation, package disc games have gotten cheaper over the last two decades. The assumption was that this was okay because the audience size would grow instead of price. But the audience went to the platform titles. Prices for packaged disc games will go up. Game companies have no choice, it is the only lever left. Just look at Kotaku's article about GTA6’s price point from this week:

T.CO

Take-Two Interactive's CEO may have a different concept of value than the people who buy his games

You're also seeing this trend with Ubisoft's Star Wars game

https://reddit.com/r/pcgaming/comments/1c0o86y/star_wars_outlaws_110_and_130_editions_prompt_a/…

It's not because game companies are penny pinchers looking to fleece their users. It's because this is the only path left to make non-F2P service titles workable in the AAA space given cost and competition. Something has to give; if SQEX can’t get its cost of dev down (it will go further up) and is getting good reviews but isn’t increasing audience, they and the rest of the publishers are going to have to increase price point. Otherwise live service titles will be all we have left.

 

There's another path that I can think of, which is increasing the take rate. If publishers can capture more of the platform side revenue, they can moderate price point increases while capturing a better return on investment because they'll be capturing say $50 or $55 out of $70.

@TimSweeneyEpic

knows this which is why he's fighting the good fight on platform fees, both at EGS and with the app stores, to open up PC and mobile ecosystems. This is also why you'll see MS and others take advantage of his fight and start their own app stores. (You would think MS would chip in for Epic's legal fees given they're capturing the benefits with no risk!) But this path will take time, and is very hard on consoles, where the AAA publishers make a lot of their money, so expect price increases to still be the norm.

https://t.co/obJPEjh3Im

 

 

A long thread from X, that explains in explicit detail why the historic investment in single player games will change.

 

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2 hours ago, Biggie said:

Well once you play a single player game that’s kinda it. I mean maybe some DLC. But how many gamers buy that. The game has to be fantastic to want you to throw more money at it. Live Service games continuously bring in money. 


That’s really why I’m in the ecosystem of trading in physical games (which isn’t a complete shit show n the UK). I’m not going to spend £70 on FF7: Rebirth, but I would spend it via trade in, where it fees more like an expensive rental.

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51 minutes ago, AbsolutSurgen said:

It's the way to judge what people are actually playing.  The main reason the single player game market isn't growing is that huge amounts of people are playing live service games.

 

That's not a correct way to judge the success of a single player game by virtue of the fact that they are, most often, a single playthrough affair. Live service games are judged by hours played, but single player games should be judged by copies sold. Why would studios of single player games care about how many times players play through their games when the most important metric for them is how many copies they sold and how likely a player is to buy a sequel?

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Just now, Ghost_MH said:

 

That's not a correct way to judge the success of a single player game by virtue of the fact that they are, most often, a single playthrough affair. Live service games are judged by hours played, but single player games should be judged by copies sold. Why would studios of single player games care about how many times players play through their games when the most important metric for them is how many copies they sold and how likely a player is to buy a sequel?

You're completely missing the point.

People are buying less "new" single player games because they're playing live service games, or annualized sequels.

Last year, only 8% of game time was spent on new (i.e. less than 2 years old) non-annualized games.

Single player games need to convince people to shell out $70, rather than to keep playing their favourite live service game.

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10 minutes ago, AbsolutSurgen said:

You're completely missing the point.

People are buying less "new" single player games because they're playing live service games, or annualized sequels.

Last year, only 8% of game time was spent on new (i.e. less than 2 years old) non-annualized games.

Single player games need to convince people to shell out $70, rather than to keep playing their favourite live service game.

 

Do we actually know people are buying fewer single player games, though? The numbers you posted spoke only of game time when, again, game time isn't how your measure the success of a single player game. Sure, the most profitable games right now are live service games, but those are also the games losing studios the most money.

 

Do we actually have any good info on how many single player games wind up being financial flops? Like, how many games like Forspoken came out in the last couple of years?

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8 minutes ago, Ghost_MH said:

 

Do we actually know people are buying fewer single player games, though? The numbers you posted spoke only of game time when, again, game time isn't how your measure the success of a single player game. Sure, the most profitable games right now are live service games, but those are also the games losing studios the most money.

 

Do we actually have any good info on how many single player games wind up being financial flops? Like, how many games like Forspoken came out in the last couple of years?

There have been numerous games cancelled this year, and massive industry wide layoffs.  That's  a pretty good indication that a lot of games have not been earning back their investment.

 

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18 minutes ago, AbsolutSurgen said:

There have been numerous games cancelled this year, and massive industry wide layoffs.  That's  a pretty good indication that a lot of games have not been earning back their investment.

 

And most of those high profile money losers over the last few years have been poorly received live service games. This entire thread is based on a video about how some studios that excel at single player games have been forced to work on live service games that then flopped.

 

I'm not sure how that proves the market for single player games is floundering.

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3 hours ago, AbsolutSurgen said:

 

[article quote] “If a game costs $100m to make, and takes 5 years, then you have to beat, as an example, what the business could have returned investing $100m into the stock market over that period. For the 5 years prior to Feb 2024, the stock market averaged a rate of return of 14.5%. Investing that $100m in the stock market would net you a return of $201m, so this is our ROI baseline.”


Umm, historically that’s way higher of an average than the market typically returns, and there’s plenty of risk there too year by year.  If 14.5% is the ideal number to beat when green lighting, maybe they’re not actually a video game company, but an investment firm getting insider tips from congress.

 

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The market for single player games is strong, live services aren’t killing single player games by out competing them. The live service model is killing otherwise good single player games by ruining them. 

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3 hours ago, crispy4000 said:


Umm, historically that’s way higher of an average than the market typically returns, and there’s plenty of risk there too year by year.  If 14.5% is the ideal number to beat when green lighting, maybe they’re not actually a video game company, but an investment firm getting insider tips from congress.

 

That was an executive from  Square.

If they're not trying to earn a better ROI than 15%, they should probably get a better management team.

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If a game costs $100m to make, and takes 5 years, then you have to beat, as an example, what the business could have returned investing $100m into the stock market over that period.

 

And there it is: everything wrong with the game industry and most of the world. The goal isn't making games and making a profit from it. The goal is make as much money as possible. Games are just an arbitrary thing to the suits.

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3 hours ago, legend said:

 

And there it is: everything wrong with the game industry and most of the world. The goal isn't making games and making a profit from it. The goal is make as much money as possible. Games are just an arbitrary thing to the suits.

 

That's true, but there's also the tension that good games make more money than bad games. For every successful live service game there are dozens of failures. There are plenty of games that could have been good but are ruined with cynical monetization plans. Suicide Squad was a spectacular failure along these lines. Live servicing a game is a risk it seems more developers are veering away from as that segment of the market remains saturated. The only recent breakout success I can think of is Helldivers 2, which achieved this by being a fantastic game by all accounts. Despite all the doomsaying, or maybe partially because of it, the gaming market seems incredibly fickle and relatively resistant to enshittification.

 

The big counterpoint are the semi-annualized Ubisoft franchises and Call of Duty, which have been making a shitload of money despite being lazy and iterative well before the live service trend began.

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8 hours ago, AbsolutSurgen said:

That was an executive from  Square.

If they're not trying to earn a better ROI than 15%, they should probably get a better management team.


That’s fair and not totally unreasonable.  Making at least 15% on the average of your investments doesn’t sound too greedy for industries like games or film, where flops are such a risk.  It’s the value comparison to higher-than-typical returns in stock indexes that is giving me the double take.
 

I thought the issue was more the cost of borrowing money than looking at stock returns with 50/50 goggles.

 

8 hours ago, legend said:

 

And there it is: everything wrong with the game industry and most of the world. The goal isn't making games and making a profit from it. The goal is make as much money as possible. Games are just an arbitrary thing to the suits.


The S&P was down -6.5% in the 5 year period ending in 2009.  Was any company not losing as much money then actually succeeding?  Or would the goal then just shift to beating savings account rates or inflation?

 

It’s a stupid barometer, even greed aside.

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3 hours ago, SoberChef said:

The trend that single player games have to be continuously monetized in lieu of a single transaction is what is actually killing single player games as a whole. 


I actually don’t see it this way today.  There’s still some scummy patterns such as selling XP boosts and cosmetics at launch, but generally, the games feel complete, and the season pass sold for them feels a lot closer to the historical 'expansion pack' than I would have ever thought we’d return to.

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4 hours ago, Moa said:

 

That's true, but there's also the tension that good games make more money than bad games. For every successful live service game there are dozens of failures. There are plenty of games that could have been good but are ruined with cynical monetization plans. Suicide Squad was a spectacular failure along these lines. Live servicing a game is a risk it seems more developers are veering away from as that segment of the market remains saturated. The only recent breakout success I can think of is Helldivers 2, which achieved this by being a fantastic game by all accounts. Despite all the doomsaying, or maybe partially because of it, the gaming market seems incredibly fickle and relatively resistant to enshittification.

 

The big counterpoint are the semi-annualized Ubisoft franchises and Call of Duty, which have been making a shitload of money despite being lazy and iterative well before the live service trend began.

 

I agree of course, but I think all conversations with these people is inherently hopeless because there are fundamentally different goals between gamers and developers, and the shareholders. The former group wants to make and play games, and is happy to reward good ones so that they make a profit. The latter doesn't give a shit about the games and the and community and it doesn't care if it makes a profit, only that it makes the *most* profit possible across all possible revenue sources. To make it worse, shareholders not only only care about the *most* money, they care about the most money within a myopic window of time.

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If you are going to work on developing something that costs several hundred million dollars of someone else's money to make, and want to be paid for it in advance, you need to recognize that the people who are fronting the money need to earn a return. AAA (and if you take the new "in" term AAAA) games take a LOT of money to make.

 

If developers don't want to deal with shareholders, and want their own creative freedom, they are free to do what hundreds of others do, and work on their own indie game.

 

1 hour ago, crispy4000 said:


That’s fair and not totally unreasonable.  Making at least 15% on the average of your investments doesn’t sound too greedy for industries like games or film, where flops are such a risk.  It’s the value comparison to higher-than-typical returns in stock indexes that is giving me the double take.
 

I thought the issue was more the cost of borrowing money than looking at stock returns with 50/50 goggles.

Given the inherent risk in video games, they should probably be targeting higher than 15% (particularly with IPs that aren't "guaranteed" success like CoD, Madden, GTA, etc.).

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4 hours ago, AbsolutSurgen said:

If you are going to work on developing something that costs several hundred million dollars of someone else's money to make, and want to be paid for it in advance, you need to recognize that the people who are fronting the money need to earn a return. AAA (and if you take the new "in" term AAAA) games take a LOT of money to make.

 

The issue isn't providing a return. The issue is providing the maximum return without any care for anything else.

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18 hours ago, legend said:

The issue isn't providing a return. The issue is providing the maximum return without any care for anything else.

 

Which is always the best mindset for any creative endeavors.

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This is what capitalism does. It seeks to make the most amount of money in the cheapest and easiest way possible. Big money people don’t care why a game is popular, but they see one that is and think any piece of shit can bring in that kind of money.
 

it is like how in movies it seems the only movies getting funded are ones studios expect will make $1B. Everyone was chasing to have their own cinematic universe to make that Avengers money. And not even Disney can seem to remember how they did it before. They’re trying to film everything in a closet with LCD screens, forcing VFX studios to run like sweatshops with poor planning and short timelines, and think audiences will love any character and story that gets vomited on screen. 
 

Pretty much everything is made to make money. But the art is getting squeezed out for the sake of chasing trends and turning game development into a soulless assembly line. They design games backwards, trying to fit something into the buzzwords that money guys think will sell the most. Halo had to be open world.  Why? Because it was the only way to tell their story? It made the most sense with the gameplay they were making? No. Because surely Open world will sell more Halo. Did it? Did wasting all that time and delaying the game a year to fill in the open world because it was, per Joseph Staten was boring. Congrats!! But don’t worry, the live service part of Halo infinite went off without a hitch and was well received too, right? 

 

 

[insert the same kind question with same results for suicide squad]. 
 

Here’s the thing, so many of the top live service games didn’t start as live service games. Or at least not the way we know of live service today. They were closer to No Man’s Sky than they were to Suicide Squad. They came out, some of them to muted reception, they either pivoted or continued to improve, adding content, and THEN slapped on a battle pass to it. Destiny was on its third DLC and its second year before adding a cashshop, and didn’t add a battle pass until year 6 of the franchise. 
 

publishers want to skip the whole “make a good game and build a community” part and just right to them “money please!!” And you can fucking feel it in the final product. 
 

the game industry got too successful for its own good. The money people are trying to squeeze every dollar out of the industry with little regard for health of the industry and quality of the products. 

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2 hours ago, Spawn_of_Apathy said:

Halo had to be open world.  Why? Because it was the only way to tell their story? It made the most sense with the gameplay they were making? No. Because surely Open world will sell more Halo. Did it? Did wasting all that time and delaying the game a year to fill in the open world because it was, per Joseph Staten was boring. Congrats!! But don’t worry, the live service part of Halo infinite went off without a hitch and was well received too, right? 

 

I agree with pretty much everything you're saying, and Halo going open world surely had business motivation. That said, I thought it going open world actually worked pretty well and was a good fit for it -- at least in the way they ultimately did it (earlier versions may have sucked!). That's because part of how Halo started was in making (for the time) very big open levels that immersed you in an alien world and afforded a lot of creativity in how you approached things. Pulling that out into a bigger singular open world in Infinite works. And Infinite is the only 343 Halo I think is worthy of the name.

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