The video game industry has seen plenty of mistakes and poor decisions over the years. While developers and publishers have been known to overestimate how popular their titles would be, or include bugs and issues that can cause problems for consoles, as well as other pieces of hardware. More often than not though, these errors will be relatively minor and not cause too much fuss. Although, there are a few exceptions. These mistakes were not simply miscalculations, but large blunders that cost the companies involved dearly. If more thought had been put into development and the other areas of releasing these games and consoles, then millions of dollars could have probably been saved.
10 Def Jam Rapstar
Def Jam Rapstar was essentially a game in the same vain as other music games, that required players to rap the correct lyrics in time with the music to earn points. It faced a mixed reception on release, but still sold a reasonable number of copies. The main problem came from the fact that the developer 4mm Games, and distributor Terminal Reality, had apparently not secured the correct rights to use all of the music in the title. This led to both companies being sued by EMI for more than $8 million, and a portion of the profits to act as payment for copyright infringement and royalties. Later, the City National Bank also sued the publisher Konami for $8.9 million in damages, for alleged fraud that was carried out to secure funds to produce and distribute Def Jam Rapstar.
9 Virtual Boy
Before the Virtual Boy, Nintendo had been a hugely successful video game publisher and manufacturer. Every piece of hardware they had released, including the NES, SNES and various iterations of the Game Boy, had been a strong commercial and critical success and so it came as a huge surprise when they released the Virtual Boy, in 1995. The console was advertised as a virtual reality headset that could display 3D graphics but in reality, it just didn't work as originally intended. It had a very high price and was uncomfortable to use, making it unpopular with players. It also had a hard time competing with Nintendo’s other systems. It also wasn't very portable, so it couldn't be used in the same way as the Game Boy, while its wireframe graphics and sparse selection of games made it look inferior compared to the Nintendo 64 that launched the next year. It was killed off after less than a year, at retail having sold around 1 million units, meaning that all the marketing, development and research that went into creating the device, was largely wasted.
8 APB: All Points Bulletin
APB was meant to be a combination of games such as Grand Theft Auto and Crackdown, in a persistent online world that would see gamers playing in an open world with groups of friends. It had a protracted development period and the studio working on the title spent more than $100 million to create it. Realtime Worlds made a number of decisive mistakes by ignoring feedback from beta testers and by releasing a game with subpar mechanics. One of the most critical though, was a review embargo that prevents critics from posting their thoughts on the game until a week after launch, something that is speculated to have caused many potential customers to put off on buying the game. The studio went into administration just six weeks after APB launched.
7 Too Human
Silicon Knight’s Too Human was an action role-playing game that was in development hell for more than 10 years. Originally, it began life as a four-disc game that would have made its way to the PlayStation before development moved onto creating a game for the Nintendo GameCube. Eventually, the studio settled on releasing the game for the Xbox 360 and it hit the shelves in August of 2008. The game was critically panned but the biggest error from the studio wasn't the poor game, but a lawsuit they initiated against Epic Games that they went on to lose, forcing them to pay the company more than $4 million in damages. With a development cost of at least $60 million and the costs of losing the lawsuit against Epic Games, as well as additional legal action against them, Silicon Knights ran out of funds and officially filed for bankruptcy in 2014.
6 PlayStation Network Hack
The PlayStation Network hack that brought down the online service for the PlayStation 3 and PS Vita, and led to information from more than 70 million accounts being stolen in 2011, was one of the biggest data breaches in history. For lax security and the data breaches, Sony were fined by various governments around the world. Sony later revealed that the overall cost of the outage would be somewhere in the region of $170 million. This was due to the fact that they needed to hire security experts to investigate the cause and then beef up the measures that would help further instances in the future. The company also had to compensate PlayStation 3 users with free membership and identity fraud protection.
5 THQ’s uDraw
THQ already had some financial difficulties when they finally released uDraw and the accompanying tablet for the Wii, to modest success. The publisher then decided to release it on Xbox 360 and PlayStation 3, despite the fact that both of those platforms have very different demographics to the Nintendo Wii. Anticipating large interest in the tablet and the associated software, the company produced far too many units. According to THQ, 14 million units were left unsold and those that did, had to be vastly reduced in price. This meant that the company made a total of $100 million less than they had initially estimated.
4 Myth II: Soulblighter
Before Bungie began work on Halo, and in the days when they hadn't been acquired by Microsoft, the studio released a real time tactics game called Myth II: Soulblighter. While the game was expected to be positively received by critics, and to be a hit with customers, there was a slight problem for Bungie. Just days before the game was due to hit store shelves, someone discovered that in a very specific instance, if the game was uninstalled, it could go on to delete all the content on the hard drive. The developer therefore had to recall every single copy of the game to swap out the discs for a version without the bug, virtually wiping out all of the profits that they could have made from the title.
3 Nintendo Choosing Philips Over Sony
When the CD-Rom first began to take off in the late 80s, Nintendo and Sony had come together in a tentative agreement to create an add-on for the SNES, that would incorporate the new disc based technology. Dubbed the Play Station, the device was due to be announced in 1991, but Nintendo pulled out at the last minute and instead, decided to ally themselves with Philips, as this would give them greater control over their franchises on the new hardware. Eventually, the add-on with Philips was cancelled altogether and instead, Nintendo simply agreed to allow games based on some of their biggest series to be made for the CD-i.
Not only did this mean that Nintendo lost out on the chance to co-create a product that ultimately would go on to be incredibly successful, but the failure of the CD-i directly led to Philips leaving the gaming industry for good, as they had lost in the region of a billion dollars through developing, marketing and releasing the product.
2 E.T. the Extra-Terrestrial
The E.T. video game is perhaps one of the most famous titles in the history of the industry, but for all the wrong reasons. It proved to be a commercial and critical failure with millions of copies being returned by disgruntled customers. There wasn't any one mistake that led to the game being so terrible, it was a combination of the fact that Atari paid $25 million to secure the rights from the film, only giving the developer five weeks to complete the title, having no play testing and then grossly overestimating how popular the game would be.
The consequences from the disaster of a game were huge and widespread. It led to Atari losing close to $100 million through development and production costs, which ultimately ended up being a large contributing factor to the demise of the company. It also played an important role in the video game crash that plagued North America and broke trust between publishers and customers for many years.
1 Red Ring of Death
Despite the Xbox 360 largely being a huge success for Microsoft, with the console directly competing with the PlayStation 3, there were a number of technical problems that led to millions of complaints from customers. Some involved scratched discs and general failures, but the biggest issue was with the so-called "Red Ring of Death" that led to a huge number of consoles ceasing to work. In response to the problems, Microsoft agreed to extend the warranty for the system from one year to three. During a conference call with shareholders and reporters in 2007, Microsoft revealed that they expected the total cost of the technical problems and the extended warranty, could add up to more than $1 billion. This makes it arguably the most expensive mistake ever made by any company involved in video games and problems.