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Why do first party games matter?

Third Party games are studios, which may/may not be owned by a publisher (EA, Ubisoft, Activision etc.) but tend to have a contract with said publishers. Both the publisher and Game Tester / developer have a say in the game's design and content.

Rahul Raj, Blogger

September 3, 2018

8 Min Read

Ever wondered what the hell do people mean when they talk about First Party/Third Party games? No, they do not mean what sort of camera the game is goanna use (that’s called First Person/Third person if anyone is wondering). So then, what does First Party/Third Party games mean?


Well, First Party studios are owned/operated by a Console Game Compliance maker who has more than 90% of the ownership of the studio. Basically, these studios have been either bought by a console maker (Sony/Microsoft/Nintendo) or were created from the ground up to make games exclusively (This is the most common term used in the game industry, although there are some leeway’s when it comes to using this keyword) for a specific platform.


An example would be, Naughty Dog which makes games exclusively for Sony, Bungie for Microsoft and Retro Studios for Nintendo.


Third Party games are studios, which may/may not be owned by a publisher (EA, Ubisoft, Activision etc.) but tend to have a contract with said publishers. Both the publisher and Game Tester / developer have a say in the game's design and content. However, the publisher's call overrides that of the developer in this case. They make games for any/all platforms. An example for this would be Rockstar North.


There are also second party studios, Studios that are independent but have a contract/licensing agreement with any of the console maker and hence release for that specific console. An example for this would be Insomniac Games which released Sunset Overdrive as a Microsoft exclusive. The same studio is going to release the upcoming Marvel’s Spider Man game which is going to be a Sony exclusive.


If you’ve been keeping up with the latest gaming news, you might’ve come across something that's fascinating. During Microsoft's E3 2018, Phil Spencer (Head of Microsoft Gaming) announced that they had acquired 4 new gaming studios (Ninja Theory, Undead Labs, Playground games and Compulsion games) and also started a new venture called The Initiative.


Why do you think they went on an acquiring spree to get these studios into the Microsoft family?


Simple, first party games are what sells any console.


When you are planning on buying a new console, what do you first consider? Hardware? Social features? Or just what your friends are playing on? All are relevant, but what's the one deciding factor? You guessed it right, it's the games. What games does the console offer that stands out for you.


Now this depends on what type of a gamer you are. Do you primarily play third party games such as Call of Duty or Far Cry, or are you the type who enjoys unique games and not attuned to any specific genre?


Sure the quantity of games for any console matters, the more games you have the more options you have to play. That's good right?


Well, yes and no


Most steam users have hundreds of games in their library, but mostly play 2 or 3 games at a time.


Of course, having options is obviously a plus point for any console, but that's not exactly a selling point for the mass consumers is it? You can play most of these games on PC and we all know if we had to choose between PC or console...well, let's just leave it at that.


Now why am I explaining all this? Why don’t I ever get to my point you ask? Well, people need to understand what really makes a console exist.


It's mostly because of their exclusives


Let me break it down,


Imagine you want to buy a console, you are presented 2 options 1. Console A and 2. Console B


*If you are a casual gamer and you are just into mainstream FPS games like Call of Duty or Far Cry, you can pick either Console A or Console B since it doesn’t matter.


But, if you are expecting something more.


Console A has games like Uncharted 4, Horizon: Zero Dawn, God of War, Nier: Automata, Shadow of the Colossus, Yakuza 6, Detroit: Become Human, until dawn, etc.


Console B has Cup head and Sea of Thieves (Both of which are playable on a PC).


Which would you buy? Kind of obvious isn’t it?


If you haven't guessed it yet, Console A is PlayStation 4 and Console B is Xbox One


What proof I have that Exclusives matter? Simple, PS4 has sold over 73.6 million units by the end of 2017, Xbox one has sold over 29.4 million units at most.


Basically means PS4 has outsold Xbox one 2-to-1.


Both are powerful consoles, both have the same roaster of third party games, both had the same amount of time in market, then why is PS4 kicking ass far more than any of its competitors? Because they have best exclusives.


It's not easy to make a first party AAA game. They need to appeal to a huge market for any of them to be viable. Why? Because making an exclusive is a huge investment and highly risky.


AAA games used to cost about 2-3 million dollars with a team size of about 25-50 people and take about 1-2 years to complete during the PS2/Xbox era.  Nowadays an average AAA game takes 3-4 years (7 years in some cases (Horizon Zero Dawn) and even more if they end up in development hell) with a team size ranging from 200-500 and easily cost a minimum of 200 million dollars to make!


That’s excluding the marketing cost which could easily add up to 100-150 million dollars. So you’re looking at a ballpark figure of 300 million dollars to make market and sell your game.


A single game $300 million. So you see, the stakes are too freaking high. Now add to that fact that, unlike Third party game which can sell to any platform and has the highest number of people to sell their game to. First party games only have their platform gamers.


How does Sony stay afloat then?


Well, Sony has SIE Worldwide


What's that you ask? Sony Interactive Entertainment Worldwide is a collection of video game developers wholly owned and operated by this single internal entity.


It currently owns 13 studios under its wings, and they are the best of the best when it comes to producing quality first party games.


(Wondering why I’m solely focused on Sony and mostly just praising them? It’s because this generation was utterly dominated by Sony because of the exclusives). Sony's strategy is simple, they make games that's fun, unique and worth buying. They understand the importance of appealing to their fan base, which in turn results in positive feedback and hence has a good word-of-mouth going, and this in-turn leads to others who don’t have a PS4 intrigued by the game, which makes them want to buy a PS4 just to play the said game.


This puts Sony in the forefront of selling their console to a growing market base and hence investing on a huge AAA game pays off. Not only do they get more PS4 units sold, they also get to sell more of the first party games to new people who bought PS4. This continues the cycle.


That's the reason Sony restructured their entire SIE World Wide Studios this year, so that they can focus more on their First party titles.


Xbox stumbled and couldn’t compete this generation because of their lack of good exclusives. Sony kept putting out critically and commercially acclaimed first party games year after year, while Xbox did have some decent exclusives, it did not warrant on purchasing it over PS4.


This is the main reason Microsoft has bought 4 studios and created a new one. They finally understand the emphasis for good first party games. So Xbox owners have something to rejoice about now and for the new future.


Currently the 8th generation of consoles is at their end of their life cycle (Damn, feels like I just bought my PS4 last year). It's been 5 years since the 8th generation started and a consoles life cycle is typically between 5-7 years.


If you’ve just bought a new console, you don’t have to worry. Typically any new console has its best days during the end of their life cycle, most of the developers would’ve gotten used to the systems architecture, games look much better since they tend to be optimized more efficiently.


PlayStation fans are sure in for a treat with Insomniac’s Spider Man (September 7th!!!), Hideo Kojima’s Death Stranding, Bend studio’s Days Gone, Sucker punch’s Ghost of Tsushima, Media Molecule’s Dreams all slated to come out for PS4. So, if you’ve just purchased a PS4, fret not my child. The glory days are about to shine.


So why does first party games matter?


Imagine this, without first party games would any PS4 gamer be balls to the walls excited about the upcoming. The Last of Us: Part 2


Thanks and Regards,

Rahul Raj (E&A)

iXie GamingLeading Game Testing Company USA

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