One of my majors in university is Economics, and there is a concept in economics known as ‘diminishing returns’, which essentially means that if you increase one input the typical example is labour, then your total output will increase, but as you continue to increase this same input holding everything else constant, the increases in your output marginally decrease. This basic idea is plotted on the following graph.



Ok, so what the hell does this have to with videogames? Well it turns out that the same sort of theory is being used in a videogame context, all we do is simply replace the variables of labour and output in the economics model, to graphics and fun.
This means that when you increase the graphics performance of a videogame console and leave everything else equal, initially you see an increase in fun, the better graphics make the game more enjoyable. But this relationship is not constant, eventually we reach a stage where the increase in graphics (holding everything else constant) does not significantly impact the fun, i.e. the better graphics performance of the videogame console does not make the games that much more fun. Using the same diminishing returns graph we can illustrate this.



There are certainly examples of this diminishing returns relationship already, the Xbox 360 has launched and it has increased graphics performance compared to the Xbox, but has it made the games anymore fun? Take your latest Xbox 360 games, Splinter Cell Double Agent, Dead or Alive 4 for example, are they any more enjoyable than the Xbox games Splinter Cell Chaos Theory or Dead or Alive Ultimate? Of course this is not an exact situation of the diminishing returns theory in practice, because there were other changes besides graphics, just as storyline, online features and the like with these games. However the gameplay mechanics of the games are very similar, and in analysing them from a purely better graphics v.s. more fun standpoint, it can certainly be argued that the Xbox versions of said games are just as fun as the 360 versions. If this is true across the industry this would indicate that we are at the point on the curve where it goes flat rather than increasing, that is the further increase in graphics has not significantly increased the fun of the game, illustrated by the red dot on the below graph.



The problem with this phenomena is that it renders new videogame consoles pointless, why should anyone buy a new videogame console if the fun they get will be no different from the previous console? Of course there are a number of reasons even if the fun is no different, firstly the latest games will not release on the old consoles, so therefore if you want to buy new games you have no choice. The next reason and perhaps the more important one going forward, is that the new game consoles offer new features different from graphics that further enhance the experience or fun. Now clearly we have seen this in new consoles already, graphics was not the only element that increased, but so did sound abilities for instance, but nevertheless in the past it was the graphical horsepower that was the main driving factor in new consoles.

The most obvious change from this trend is Nintendo’s Wii. Here we have a console that has a very insignificant increase in graphical abilities, but if we are indeed at the red dot point on the curve then increasing the graphical abilities isn’t really going to increase the fun is it? And so we have the Wii Remote, instead of changing the graphical abilities Nintendo has decided to fundamentally change the user interface, which in the past had only experienced marginal increases that typically involved adding more buttons, more sticks and as a result getting more complicated. What does the Wii Remote do? If Nintendo’s vision succeeds it will be adaptable to current games, at the same time create new genres of games that non gamers can enjoy and in relevance to the diminishing returns argument, increase the total ‘fun’ one gets from their games. Having had some personal hands on play experiences with the Wii, I can certainly agree that Nintendo’s philosophy is on the right track, playing games with the Wiimote is more immersive and does seem to be more enjoyable, we wont be able to fully answer this question yet, but this shift could certainly be something big. Hence going back to diminishing returns, if Nintendo’s vision does indeed hold true, then the curve that I have illustrated would shift up, which would mean that Wii games would be more fun than traditional games at every level of graphics performance.



This indicates that graphics are still important, but the Wiimote solves the problem of no longer getting any direct benefits from increased graphical abilities, by allowing us to get to levels of ‘fun’ that we could never get before.

Nintendo is not the only company that sees this diminishing return situation, only Nintendo is a company that clearly believes we are at the red dot point to a greater extent than its competitors do, however Microsoft for example has also incorporated features in an effort to shift the curve upwards as well. Features of the Xbox 360 console, from Xbox Live, Achievements, game demos access, and micro transactions and of course better horsepower creating more expansive games worlds, and realistic physics systems to be incorporated into gameplay, these are all elements that again look to increase the level of fun we get from our games, and thus shift the curve up in a similar manner that the Wiimote does. Which approach is the right one certainly remains to be seen.

What’s your take? Do you see the diminishing returns in graphics? Are better looking modern games not much more enjoyable than games you played a generation ago? Are you more excited about other features of new games consoles that have nothing to do with graphics? Or, do you think that we are not at the red dot yet, that there is still a way to go before this diminishing returns situation becomes a reality? I hope that was an interesting read and perhaps we can get some interesting discussion to derive from it, thanks for reading. Post your opinions, what do you think?

Amazing article borgster, and i have always believed in the Gameplay, Originality >Graphics theory. How else would you explain the sale of games like Katamari?

This is an interesting thread and one I'd like to comment on quite a bit, but it ain't gonna happen at 5am in the morning. ;)

That should be that if you increase a certain input, your output will eventually increase. A point will eventually be reached...etc.


I do economics too man. You'll be made the examiner's bitch if you forget the 'eventually'. I learnt the hard way :(.

Nice article...it's a bit hypothetical. I think it's the games that need to change more than the consoles though.

Developers do want their games to look good, there's nothing wrong with that, the graphical style of a game aids in delivering the experience to the player.
But what you're saying is that dev's will concentrate on graphics only, you say an improvement in graphics while holding back or leaving the other variables (such as gameplay, sound, innovative game design etc...) at a constant will decrease the fun, which could be true but is impossible in good dev houses. A good developer will certainly want their game to look as good as possible but will also want to introduce new innovative gameplay techniques to the player.
The Wii is definitely innovative, creative, imaginative... fun in general. But then, bad graphics could also kill a promising game, or framerate issues could seriously affect gameplay and the fun factor.

If a developer thinks only graphics can make a good game then they aren't gonna be making the best games out there.

Yeah I know, I just simplified it so those people who dont study economics would understand, don't want to get too complicated ;)

DZ: indeed, in order for me to draw a graph that describes diminishing returns in two dimensial space I had to only increase one input graphics and hold everything else constant. You can think of increasing/improving any other input, like sound, online abilities, controller and the like as shifting the curve up, like shown with the Wiimote example.

The main issue here is, are we at the 'diminishing point' now? Think of the Xbox 720 and PS4, if we see an increase in graphics capabilities again, is it going to make a difference on the bottom line? Enjoyment?

This is nothing like Economics, sounds more like Marketing to me.

Well zinger for you, do you want a cookie? :P

Seriously though what?! :huh: Anyone who has studied some economics would disgaree with what you said there..

In anycase this isn't a "marketing push" for the Wii or anything, more of a general discussion, I just used Wii as an example because it's the console that most 'believes' in the theory. And obviously I'm not going to go into the whole calculus that would be pointless for this discussion.

Fun isn't quantifiable like labour and output. Graphics need artistic direction to be appreciated, which is also not quantifiable.

If you wanted to write an essay using economic principles, you could have written something about the amount of artists it takes, and the costs associated to make next gen games, and then compared those costs to the amount of sales you're likely to make. That actually would be working the principle of diminishing returns into the console wars, and you could scew it favourably towards the wii and I'm sure a lot of people would agree with you.

Thanks for sharing that Reggie.

That's true, but economic theory particularly in relation to describing consumer behaviour uses non quantifiable principles and gives them an arbitrary number, economists use numbers to measure fun, they call it "utility", of course you can't really measure something like fun like you can with labour and output, but it is an assumption that is made for theoretical and hypothetical purposes, mainly so they can use mathematics to ‘prove’ these theories. Don’t think of the fun as pure numbers per se, but more like less fun, and more fun and then there are degrees of fun between them.

If I was to do what you suggested, discuss the issue regarding the cost, that would miss the point of this discussion, namely the benefits to the consumer. Economic theory attempts to describe the behaviour not only to companies but of consumers as well, I'm using the diminishing returns principle from a consumer perspective, because as we on the forum are all consumers it's something thats more interesting to us.

But this thread isn't intended for an argument about whether this economic theory can be used in this context (because it can) it's about considering as to whether we as consumers are getting any significant benefit from better graphics as the generations move forward, many would agree that we have indeed enjoyed the benefits as generations moved on, but is this benefit diminishing as we continue along each generation?

Borg is right. I might get 45 utils of satisfaction from playing on the PS3 but 60 utils from playing on the Wii. You can measure fun if you look at it that way. It looks slightly retarded, but hey, that's economics for you.

Care to share your comments, at a more resonable time ;)

DEFCON. Discussion over.

Heh, I actually had a big post that I was making for this thread a few nights ago but I lost my train of thought while typing it and gave up on it as a result. So before I forget to state my opinion in here at all, I'll just answer one of your questions Borg. :)

Is it going to make a difference? Obviously, it depends on the game in question. But getting into it a bit more, yes 'better' graphics will make a difference again with the next round of consoles in a few years. Perhaps much in the same way as they have done for this current gen (that's the 360, PS3 and Wii people - no use referring to it as next-gen when it is happening now...) and indeed the previous gen (PS2, Xbox, Gamecube). While some developers clearly disagree, to me the amount of polygons a game (or console for that matter) can push is becoming irrelevant. It's what you do with this power that is important and I think that some developers have shown that with this power they are able to give their games the sort of art direction that they need to boost the overall experience and therefore make a better game. Art direction ended up being quite the important factor in some games last generation, what with Metroid Prime and its daunting yet eerily enticing atmosphere or with Resident Evil 4's similar daunting yet scary as all hell experience. But it wasn't just atmosphere that the art direction approach helped deliver, games like Shadow of the Colossus or Okami have had different experiences to most games and a good portion of that is because of their strange yet beautiful art direction. Even We Love Katamari had a unique art direction to it which ultimately added to what was essentially a simplistic and addictive approach to gaming. Speaking of simplicity, that is something else that is being developed more and more as the graphical capabilities of a console continue to increase. Subtle and simple things can now occur in games that couldn't happen before, be it physics (which has also become a big thing) or just anything in general. It provides to the experience because not only are we seeing more realistic things happening in the games that are supposed to be semi-realistic, but we are also seeing things that we expect to see. However we might not realise that we expect to see them until we actually do. So yes, graphics increasing in the way they do will in turn add to the experience with each generation that goes along. But as I said above it isn't just about what a console can do performance wise anymore, it's about how this performance is used and as such that is why I think we are seeing mixed results with the current generation.

A lot of people claim that the 360 is just a graphics upgrade and nothing else. While that's a massive generalisation and it usually comes from those who have little or no time with the console, you can understand these comments and why they are being made too. I mean, on the outside it does just seem like graphics are upgraded and nothing more. But really, already I have had experiences on the console that I never thought was possible, nor experiences that I thought I would ever see in my gaming 'career'. Looking forward to what's in store for us in the near future and all I can say is wow. The future is looking bright and I can't wait for it.

So in summary I guess that means that no, I don't think we're at the 'Diminishing Point' just yet. Sure graphics can't progress as much as they used to but then that's irrelevant these days.

That will do for now, wonder what you lot will think.

What you've said there, specifically regarding the 360, you said you have had gaming experiences that were not possible before. What are these? Are they related to graphical horspower specifcally, or is it something else about the console, like online, achievements, marketplace etc? If it's the latter, then I suppose you could say we are at the diminishing point in terms of graphics, because the benefits you get are related to other components of the console. Perhaps going foward this will be more important, with new consoles these 'other' features will become the main ones.

With 360, I've had experiences in Dead Rising you could say I could never have had before, with the swarms of zombies on screen at once, but at the end of the day I dont know if this experience was any better than a current/past gen game with a similar theme (e.g. RE4).

Art direction is interesting, I think it's going to be especially important on the Wii, where you have a lack of horspower it is these games with fantastic art direction that are going to look good, games like Red Steel, Zelda, Mario Galaxy and Metroid are some of the best looking Wii games so far and it's primarly due to their great art direction.

And yeah it's certainly at a game by game basis, there is a lot that can be said about this subject. I think it's pretty clear that diminishing returns with pure graphics improvements alone is indeed pretty close, this is why we see some much other additions to our videogames consoles now, Marketplace downloads, media features, new controller interfaces, online etc ... without all these other additional features the benefit of the consoles that had only better horsepower would be reduced.

Well obviously they are all factors into the experience, depending on either the game or the intention you have for the console at the given time. But the moments I was referring to was a mixture of both, some were related to the graphical horsepower or what could be done with said horsepower, others related to the achievement system (incentive that perhaps wasn't there before) and the like.

Well my best example I think would be Test Drive. I mean obviously it isn't the best looking game on the system, but I do think that the type of performance that the 360 can push graphically meant that it just finalised the Test Drive experience for me. You could argue that a game of this type could have been done on previous consoles and in some ways I'd agree with that, but the reality is that it didn't happen on those consoles and that is that. But anyway, for years I have wanted a game that provided an experience to me where I could jump into a car of my choice and just take it for a drive. People who pay attention to me a fair bit (none of you then :P) will have noticed by now that I always refer to going for a drive in Test Drive as going for a cruise. I use this word because it sums up exactly what I wanted from a game, the ability as I said to take a car for a spin at my leisure and do whatever I want on the roads. Gran Turismo provided me the experience of driving cars (be they road or race cars) around many tracks and a situation where I could hone my lap times, experiment with cornering and whatever I wanted at the time. Test Drive has now given me my other desire from a car game and while what I have just outlined then doesn't have anything to do with graphics, I do still believe that they added to the overall experience. Again, because I like to repeat myself and all, the graphics in Test Drive aren't as good as the 360 can do. But what they did do was enough to satisfy exactly what I wanted from the game. Not only did it provide a nice driving experience for me, it provided this experience in nicely modelled cars and gave me a beautiful island to do it in.

Now obviously the experience I example here doesn't have too much to do with the actual topic of this thread but I do think it details my point/s from the first post nicely. Again it isn't just what a console can do anymore, it is about what is done with this power and I do believe that the 360's power has provided quite a few experiences that I haven't had before.

I believe the Wii will be the console to turn to if you want to form an understanding of art direction and how it can be used to provide new and refreshing experiences. Looking at the Gamecube library for just a moment, there weren't many games made for the console that screamed 'sexy', but the games that did were the ones that had art direction in the bucketloads and it just worked. While the Wii is more powerful than the Gamecube, I think a similar thing will occur and well Metroid, Zelda and even Red Steel (to use your brilliant examples) are already proving this. The Wii's graphics will be about the art direction and personally I think that is an awesome thing.

It is indeed close, but we're not there yet and when we get there it won't matter anyway. Why? Because by the time we get there the industry will have realised the benefits of creativity and how impacting it can be on a game's overall experience and as such they will have all shifted their focus towards this, rather than the "my character's arm looks better than yours" approach that some developers have today.

Good post Nismo :D

So from the looks of it, the reality of this diminishing returns situation, will most likely be better for gaming on the whole because of the reasons that I and yourself have mentioned.