[patio11]

Why don't people in the big games companies realize...

It is roughly similar to "Why doesn't Google realize you can ship a product with $1 million of yearly revenue with 2 engineers working for 3 months?" No needle at Google would move if they did that -- it's objectively a worse use of those engineers' time than supervising A/B tests which marginally affect the display of 3% of all searches in South American Portuguese.

Similarly, you could ball up a hundred ludicrously successful indie games and still not hit the numbers that World of Madden's Duty 2013 will hit within two weeks of retail launch. Those also have much better characteristics to leverage the non-gaming capabilities of game studios, like the ability to spend $60 million (1x~2x the development budget) on saturation-bombardment coverage for all US men between the ages of 15 and 30 and thereby sell $90 million worth of WoMD2013.

AAA games companies would be interested in creating Minecraft if you successfully sold them that you had a reproducible process to Minecraft, like they have a reproducible process to create Call of Duty games. Non-reproducible Minecraft is not a victory condition. Reproducible name-a-successful-indie-that-isn't-Minecraft is not a victory condition. ("We skim 30% of the top off of a catalog of titles, which in aggregate must include successful-sub-Minecraft in a reproducible fashion", on the other hand, is a victory condition, and that's why all the AAA companies are trying their damndest to be platform companies and leave the game development to suckers^H^H^H artists.)

Edit for elaboration: Rough numbers so non-gamers can follow things: Minecraft is an independently developed game with north of $50 million of sales spread over several years. Minecraft is sui generis: hitting 6 figures makes you notable enough to achieve press coverage on that fact alone, and a supermajority will never come close to matching imputed opportunity costs. Call of Duty is an architypical AAA ("big budget from big company") game; the most recent version sold $400 million (not a typo) in twenty four hours on a development budget in the mid 8 figures and a marketing budget probably in the high 8s or low 9s.

[lifeformed]

Of course Black Ops 2 made way more money than Minecraft, but if you look at ROI, Minecraft is far more impressive. Black Ops 2 may have made over $1 billion in revenue, but it cost about $250 million to make/market. Once you factor in the high cost of retail distribution, you get an ROI of around 300-350%. That's pretty good for a AAA game, but Minecraft cost next to nothing to make. The costs were pretty much just whatever it took to support a couple of developers; no marketing budget or anything. A ballpark estimate is that it took about $300-500k to make Minecraft into the alpha build that made $30 million. They put more money into it since then, but now it's around $85 million in revenue. That's like 8,000-10,000% ROI.

Of course Minecraft's success is an outlier, but it's not unreasonable to replicate a 4:1 ROI with an indie game. Investing a quarter billion dollars to make back $1-2B is such a huge risk. Dropping $100k into a tiny project that could make back $500k-$1M seems much safer.

[WhaleBiologist]

>it's objectively a worse use of those engineers' time

If you are ActivisionBlizzard, or EA. What do you do if you're not them? THQ is a good example of a publisher that tried to mimic the big dogs, and failed dismally because of it. There's a huge difference between AAA games company, and wannabe-AAA games company, and the expansive graveyard of developers/publishers is a testament to that.

It seems incredulous to me that when facing a distant bankruptcy, the best choice is to keep doing what you've been doing, dump all your remaining cash into finishing the AAA games you've got going, and betting it all on black. Are these companies completely oblivious to the fact that smaller, indie-style games are, at the very least, profitable?

Maybe the games industry culture really is this self-destructive. Or maybe, with budgets so high, even for a huge company, solvent to insolvent can be 1 or 2 poor releases away.

[dagw]

Once past a certain size and far enough in the hole, being marginally profitable isn't going to help. It's go big or go home that counts. Investors aren't interested in a +-3% annual return, they want 1000% or nothing.