Third Party AAA Single Player Games Are Dying, But With Good Reason

There has been a lot said about single player games recently when many calling them dead or saying they’re not as viable as they once were. I always get asked about this and so I thought I’d take some time to put together my own thoughts. I’m interested in seeing if this helps contextualize some of the talk we’ve been seeing around the demise of single player games.

Are single player games dead?

The short answer is no. The long answer is a lot more complicated.

When people talk about the industry moving away from single player games they are usually referring to third party, AAA, linear, Single Player, narrative driven, $60 games. Why this distinction? Because rising costs of video game development and increased expectations means that a lot of these games simply aren’t as viable as other types of games. Gamers this generation value hours more than anything else. Online games with multiplayer are also more popular this generation. That’s why the top 10 best selling games are all games like Call of Duty, Destiny, Madden, NBA, Overwatch, Battlefield etc…

These games, that offer unlimited hours of gameplay and ongoing service and content updates appeal to the mass market gamer. They’re also less risky as a $100m investment doesn’t solely rely on millions of $60 unit sales. These games generate a return on investment through post launch monetisation methods such as DLC, Season Passes, Microtransactions and Loot boxes. Whereas a single player game relies solely on unit sales at $60 assuming there is no post launch monetisation.

It’s becoming increasingly hard to sell these third party AAA, linear, single player, narrative driven, $60 games and generate a healthy return on investment because the market for those games is now a lot smaller than it was with the mass market having moved to service games. That’s why you don’t see many of them at a AAA budget. Those that still do go for that AAA budget, such as Wolfenstein 2 for example, have underperformed and aren’t selling as much as other AAA games.

As mentioned above, single player games aren’t dead, but they’ve had to evolve beyond what they were last generation. With hours becoming more valuable we’ve seen single player games embrace open worlds, online or co-op components, post launch monetisation and larger and longer story content. That’s why Assassin’s Creed Origins has a long list of post launch content. That’s why Shadow of War has loot boxes, that’s why most of Sony’s games now have open worlds or wide linear approaches compared to before and it’s why games like The Witcher 3 and Final Fantasy XV have post launch DLC and other content. The Witcher 3 also benefits from being developed in Poland where development costs are lower, not to mention CDPR has additional revenue streams through GOG and the like. Adding on these elements makes the game more appealing to the mass market gamer of today and gives them a reason to buy these $60 single player games. All you have to do is look at the list of AAA third party single player games today to see that the above is true.

With the market for single player games smaller this gen than it was last gen, it also means that quality is a huge factor in a games success to. That’s why games like Agents of Mayhem or Quantum Break, despite embracing those changes, can end up underperforming too. If you’re releasing a single player game you need to hit a lot of checkboxes and be the top in its category if you want it to sell a certain amount. As above, with rising budgets and rising expectations, AAA budget single player games do need to sell a certain amount at $60 to be profitable. That number of units is always rising, especially when more and more people are waiting for that $30 sale. That’s why they’re incredibly risky and that’s why there are less and less pure single player linear games in the third party AAA space.

This is why AAA third party publishers will greenlight a $100m service game over a $100m single player game. Because the service game market is larger and more lucrative, because people will buy more copies on day 1 than a single player game, because service games run for multiple years and can be monetised over that period, because new content updates can bring in new players etc… It’s why games like Rainbow Six Siege, Grand Theft Auto V and Call of Duty Black Ops 3 are still on the current best sellers list years after release.

But what about game like Nier, Nioh and Persona 5?

These are not AAA budget games. They have much lower budgets and thus, lower expectations. They also don’t sell on the same level as AAA titles to in terms of units / revenue. They also follow the same trend of moving away from the 5-10 hour linear game style to having an open world in the case of Nier, having an online component in the sense of Nioh and having hours and hours or RPG content in the case of Persona. Ultimately, games in this segment are also very hit and miss and there are plenty of AA and Indie single player games that haven’t been successful. A good number have and this is a space where we can expect to see more single player games. The games market is huge and so AA and Indie single player games aren’t leaving any time soon.

What about first party? 

Everyone uses Uncharted 4 as an example of why single player, linear, narrative driven, $60 games are not going away. However, using this as an example is a bit odd. You’ll notice in my post above that every time I referred to single player linear games I threw in the phrase ‘third party’. That’s because there is a huge difference between first party and third party. These differences are.

1. First Party has a unique strategy in that it wants to create software that does not directly compete with third party so it can sell consoles and drive larger installed bases that buy first party software, third party software, PS Plus subs, online content etc… Therefore first party always targets underserved audiences and tries to be unique to make the console more appealing.

2. First party does not need to pay a license fee to distribute games on its own console. Whilst third party games need to pay Sony $10 for each game they sell, first party does not. This means First party games have much higher margins and can generally be profitable more quickly.

This is why Sony and Nintendo have many more single player games compared to any other AA or AAA publisher out there. It’s also why they take more risks (Death Stranding) than third party AAA publishers. But that doesn’t mean that Sony and Nintendo are immune to market changes. They too have noted that AAA, single player, linear, narrative driven, $60 games are becoming less and less popular. You can see that Zelda Breath of the Wild embraced an open world and DLC. You can see that Sony’s new IP, Horizon had an open world too. They’ve done this to appeal to more gamers, they’ve also designed the games to have tons of content and replayability. Just look at Sony’s other single player games line up, they all focus on hours of content these days. Having a 5-10 hour single player only game doesn’t cut it. Even God of War is 25 to 35 hours or something like that.

When you look at Uncharted, they added in a multiplayer mode that has tons of microtransactions, they’ve made the game more wide linear and they focused more on longer and deeper content. All of this is to increase the appeal of the game and make it more financially viable. Uncharted can work for Sony because they can generate a profit from it and also use it to sell PlayStations and everything that comes with that. That’s why Uncharted 4 is bundled, that’s why the Uncharted Collection was too. Sony want as many people to buy and experience these games so they can bring new users into the ecosystem and upsell to other content, whatever that may be.

So no. Single player games aren’t dead. They’re just evolving. Single Player, Linear, Narrative driven, AAA, $60 games are not as successful as they once were and so you won’t see many from third party AAA studios. If you do see single player games from AAA third party studios you’ll see them have open worlds, multiplayer / co-op, DLC and Microtransactions, longer and deeper stories and more. You’ll also still see single player games at a AA / Indie level and they’ll still come from first parties of course.

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