Following a comprehensive review of the most recent annual report, Embracer Group CEO Lars Wingefors sat down for an interview with GamesIndustry.biz. One of the key topics discussed was the obstacles faced by blockbuster games.
The hurdles encountered by AAA games
According to Wingefors, the gaming industry is grappling with the same challenges as other sectors – rising development costs due to inflation. Moreover, increasing prices in the premium PC and console market is a tough task. Prices have remained stagnant for years, reducing the chances of success and leading to higher capital costs.
When investing in large projects or games, it is crucial to back teams or franchises with a proven track record and full financial stability.
Furthermore, consumers are inundated with content choices, making it harder to persuade them to try new franchises. Adapting to this reality has been a focus for Embracer, and the company will continue to evolve.
Lars Wingefors
Exploring the possibility of raising game prices
While Wingefors acknowledges that raising prices beyond $70 is not out of the question, it remains uncharted territory. The idea of offering a massive RPG with extensive gameplay at a higher price point has not been tested yet. The decision to raise prices above the industry standard is still under consideration.
Embracer is currently adhering to conventional pricing practices, but the future may see a shift towards exploring new pricing models.
Lars Wingefors
Strategies for cutting production costs
Cost reduction is a recurring topic in discussions with management. While the specifics are sensitive, Wingefors believes that there is a demand for high-quality RPGs and single-player games. The dilemma lies in whether to raise prices or shorten game lengths. Wingefors emphasizes the importance of preserving classic gaming experiences amidst the trend towards multiplayer games with in-game purchases.
Lars Wingefors
Navigating industry layoffs
Reflecting on the industry landscape, Wingefors notes that while optimizations will continue, the peak of layoffs has likely passed. The cyclical nature of the industry, driven by global growth and capital influx, leads to periods of expansion and contraction. Wingefors remains optimistic about the future of the industry, anticipating further growth and fluctuations.
Lars Wingefors
During the interview, Wingefors highlighted the success of Dead Island 2, which achieved over three million sales within nine months, marking a milestone for Embracer. This achievement underscores Embracer’s ability to realize its AAA aspirations.
However, Embracer will soon embark on its AAA journey under a new identity, as the company plans to split into three entities and rebrand.
Source from stopgame.ru