• by Shankar Gupta , February 27, 2009

Much like many industries in today's uncertain economy, video game software developers are taking a bit of a beating. Major publishers like Electronic Arts, Midway, Eidos, Microsoft Games Studios, THQ and others are making some hard budgetary choices, cutting projects, and laying off development staff.

And part of the buzz currently around this trend is that with the loss of creative staff at these firms, creativity will start to suffer in the 2009 and 2010 release calendars.

This idea is not a stretch -- although everyone claims to love original intellectual property, the latest roster update of EA Sports' Madden franchise routinely outsells innovative and entertaining titles like Dead Space and Mirror's Edge. And during tough financial times, it's better business sense -- and managements' responsibility to the shareholders -- to go with tried and true franchises that will pay the bills rather than risk an untested new title. After all, even though many gamers will pile contempt on long-running franchises and claim to love original IP, eight out of the top 10 selling video games of 2008 were long-standing franchises -- the only two that weren't were Wii Play and Wii Fit.

Earlier this month, Electronic Arts and Microsoft reaffirmed its commitment to original IP, despite the recession. While these pledges make for good PR, it's hard to believe that with the huge staff cuts going on at those two firms, their new IP won't be affected. After all, if you're a manager who needs to lay off a chunk of your development staff, are you going to choose people working a project that will reliably bring in a windfall, or an untried property that might modestly succeed (but probably won't be one of the top games of the year, if 2008's data holds)?

The slowdown in original IP is going to be one of the most problematic parts of weathering this recession -- and not just because creating new games with new mechanics and storylines rather than just updating aging franchises makes for more interesting and innovative titles. At some point, every franchise was new IP. The Gears of War series, for example, wouldn't be the powerhouse it is today if Microsoft hadn't taken a risk on producing the first Gears of War. So, down the road, will we see a dearth of strong franchises thanks to the slowdown in new IP coming in the next year or so? Or will publishers be able to get by taking last year's hits and adding +1?