Ask any grizzled gamer, who's seen the video game industry evolve over a decade or two, about his favourite era, and the answer will invariably turn out to be the 90s. It's hard to question this fact considering the sheer number of excellent games that have spawned during the decade. This is true for the rest of the entertainment spectrum as well, with the more mature music and film industries having their own glory decades a bit further back in time. There's a good reason for this common trend though. As every industry evolves through the decades from its humble niche beginnings to the modern-day corporate-funded extravagance, there lies a sweet spot somewhere in between marked by a perfect convergence of technology, creativity and funding.

From $100,000 to $100 Million

The 90s was this sweet spot for the video game industry. The decade saw the rise of talented game developers such as the two Johns of id Software, Warren Spector, Cliff Bleszinski, Chris Avellone, and Tim Schafer—all of them being talented individuals who left a distinct mark on their games. This was possible because these developers had complete creative control and, most importantly, a greater appetite for risk that saw them toy around with wild ideas and push the envelope. As the video game industry roped in the masses and grew into a mainstream entertainment juggernaut, the average cost of developing a video game swelled over to $20 million, with some AAA games costing 2-5 times as much.

This is in stark contrast to the $100,000 average cost of making games in the early 90s. In fact, Doom II was once considered the most expensive game of its time due to its $200,000 development cost. Let's not forget the fact that almost all of Doom II's production dollars were spent on the actual development staff, despite its relatively high development costs. This isn't true for today's games, as a major chunk of their budget is sunk in marketing—something that neither improves quality nor adds any value to the game being made.

Back in te 90s, developers such as John Carmack, Tom Hall and John Romero used to have total creative control

Even from the precious little spent on actual development, a large chunk of it goes towards the non-gameplay aspects such as motion capture and voice acting talent. Hiring Ellen Page (Beyond: Two Souls), Samuel L. Jackson (Grand Theft Auto: San Andreas), Liam Neeson (Fallout 3) and Michael Fassbender (Fable III), definitely comes at a heavy price to the actual quality of the game. This explains why modern games tend to be rich in cinematic sequences but fare poorly in terms of actual gameplay.

Big budgets, small imagination

There's indeed such a thing as too much budget. With budgets for most AAA titles hovering between the $40-100 million mark, this sort of investment requires games to sell between 1-2 million copies just to break even. Although big-budget publishers may translate into massive development resources, there's a good reason why they prefer to piggyback on status quo and show a strong aversion to any iota of risk. A fact that's especially true when you consider games such as Star Wars: The Old Republic, Grand Theft Auto 4 and Gran Turismo 5 bearing development costs of $200, $100 and $80 million, respectively.

Resident Evil 6: the epitome of big-budget development gone wrong

This arrangement isn't conducive for creativity and it prevents developers from taking bold creative gambles. On the contrary, their imagination is inhibited by a slavish need to adhere to feedback from focus groups. This way, the creators are no longer at liberty to give people what they need, but instead have to deliver more of the stuff the masses want. Mind you, there is a huge difference in what gamers want and what they really need. While young ones among us want another mindless cover shooter, the onus is on the developers to surprise them with a Mirror's Edge.

Think about it—in an ocean of jaded annual franchises and formulaic sequels, when was the last time you saw a AAA game that was as revolutionary as that? It is because bold concepts such as Mirror's Edge fail to rake in the moolah, we see the likes of Capcom slaughter Resident Evil 6 in its quest to check all the boxes of AAA game development. With a 600-member team, the stakes were too high for the studio to turn its uber-expensive flagship game into anything but a cliched Gears of War clone—a fact that will be apparent when you click through to my review.

Assassin's Creed, on the contrary, justifies its extravagance

However, it isn't all bleak and dreary in the world of AAA game development. Assassin's Creed III may not stray from its roots, but after having played a final build of the game, I can tell you that it's a pleasant case of don't-fix-what-isn't-broken. What you have here is the familiar free-running, stealth-killing, open-world goodness in a slickly presented package that has scaled up considerably in scope as well as complexity. Ubisoft's most treasured franchise shows the right way to leverage big budgets, and has therefore largely remained profitable over the years. Unfortunately, conceptually competent mainstream games such as Assassin's Creed tend to be few and far between.

Threat from the smaller screen

There's a silver lining though. Even if swelling game development budgets may spell the end of creativity, we can always fall back on indie games to deliver the goods. However, that only represents a small niche of the gaming spectrum. The industry, as a whole, isn't in the best of health because big budgets don't necessarily translate into huge profits. The reality is quite the contrary actually. Ubisoft posted a paltry $48 million profit after spending $1.4 billion. That's a razor thin profit margin of just 3 percent. Electronic Arts did slightly better by making $76 million from the billion dollars it had spent developing games this year.

Infinity Blade II, and not Gears of War, was shockingly Epic's most profitable production

Juxtapose these numbers with the cold hard fact that Epic's iOS exclusive Infinity Blade happens to be the most profitable game it has ever made, and you can gauge the full extent of threat posed by mobile gaming to mainstream video games. Made on a relatively paltry budget, games developed for smartphones tend to be incredibly profitable for developers.

In fact, a lot of developer talent is now giving up the uncertain world of console and PC game development and instead embracing the easier life in the mobile gaming scene, after witnessing the successes of established players such as Rovio. The onus now lies on developers to rein in development costs and spend on game design aspects that really matter.