Hasbro CEO, Chris Cocks, believes the video game industry needs to “think about things differently.”
Asked by The Verge for his thoughts on how to “fix” the games industry, Cocks said that while the business of making games is still growing, it’s “not growing, like, double-digits,” suggesting there’s now “just a different way of delivering video games.”
“You have this massive cost inflation for delivering the amount of content. If you want to develop a AAA video game, it’s a thousand man-years of effort minimum,” Cocks said.
“So with an audience that’s growing, but not growing leaps and bounds with more kind of substitution or new categories with inflation – which is going significantly faster than what your market is growing or what your pricing power can support – I think you have to think about things differently, I think you have to think about like, ‘Hey, when you make a game, are you always going to go to San Francisco or Austin, Texas to recruit that team, or are you going to go to these fantastic areas of talent in Southeast Asia, or China, or Eastern Europe and pair them with the team who really understands the market in question?’
Cocks chose this time to reflect on AI, too, adding: “I think a lot of gamers don’t like AI in games today, but I think eventually, someone’s going to figure out how to use AI in a way that’s high quality and is fun and makes games better. So I also think you have to think through that.
“So I really think it’s just kind of this classic equation of, ‘Hey, your input costs are X, your output is Y. How do you make sure the ratio between X and Y is acceptable for the risks that you take?’ Because any given video game has a 20 to 30 percent chance of being successful. You have to be able to cover a whole bunch of unsuccessful bets within whatever you invest.”
Cocks also talked candidly about where the money was in video games, saying he thinks “there are a ton of different ways to make money in video games, and it’s kind of publisher-dependent and brand-dependent.” He cited the three ways Hasbro works: extending its “highly sticky” brand, Magic: The Gathering Arena, working with digital licensing – “that’s a super high margin, very large scale for us, which helps us really propagate and drive reach for our brands” – and “selectively investing in publishing where we want to build that relationship with consumers.”
“We’re doing that with a more traditional business model, and not doing a whole bunch of complex battle pass or free-to-play economics,” he added. “We’re doing it more like, ‘Hey, here’s the price for your game. You get 40 to 50 hours of content, you have a lot of fun, and then hopefully, you want to go buy the sequel.'”
Asked “what’s next” for Hasbro, Cocks teased, “My hope is that you’re going to see some really kick-ass video games come from us that are going to blow you away.”
