What Is the Real Price of Failure in Creative Projects?

From E.T. to Concord, what the gaming industry’s biggest flops reveal about cost traps in games, work, and life

When I was a teenager, I spent years writing my first sci-fi novel.

I had huge ambitions for that universe I created with so much care. It would be a series of books, maybe even a movie or a show someday. All it needed was just one more revision… which quickly became two, three… I can’t remember, I lost count. Let’s say I rewrote the first chapter more than a dozen times without ever figuring out how the story ended. But I couldn’t stop tinkering. I had already invested so much time into it, and the thought of “wasting it” was unbearable. That book, I believed, was my dream project. It would define my life.

However, life itself had other plans and, in the end, I never came close to finishing a full draft of that manuscript.

Years later, with more experience (and a lot more books read), I revisited those old pages. They were, to put it mildly, pretty rough. The writing was pretentious, clumsy, and all over the place. I laughed from my lack of experience, but at the same time I felt compelled to start over from scratch, with a new and more mature story. I just wanted to feel the joy of writing again, with no pressure or high expectations…

And, surprisingly enough, I finished it. It’s not perfect, by any means (I’m still working through the second revision), but it has a beginning, a middle, and an end, something that rudimentary first draft from my youth never got close to. This time, I can see this thing being finished or even published someday, all thanks to me letting go of those unrealistic expectations.

That, my friends, is what we call the sunk cost fallacy in action. And while it happens to young writers everywhere, it also happens in the game industry. A lot. Projects that should’ve been cut, budgets ballooning to stratospheric proportions, teams burning out after hours and hours of meaningless crunch… all because someone, somewhere, is convinced that if they just push a little further, the investment will eventually pay off.

But what’s the real cost of that thinking?

This week, we’re going to trace a timeline of famous game development failures to explore what failure really looks like in creative projects, and what it costs when we ignore the warning signs.

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The Cost Of Sunking an Entire Industry

This was considered an urban legend before they discovered the landfill.

If you know even a little about gaming history, one title probably popped into your mind the moment you saw this section’s headline: E.T. the Extra-Terrestrial for the Atari 2600.

It’s the poster child for failure. A game so rushed, so poorly received, and so badly produced that it’s often blamed for crashing the entire North American gaming industry in 1983. Atari manufactured millions of cartridges — more than the number of consoles sold at the time — and when players returned them en masse, they ended up buried in a New Mexico landfill. That part of the story is infamous, however the reasons behind it run deeper.

For starters, the scope was doomed from the beginning. Atari had just five weeks to develop and ship the game in time for the holiday season, an absurd timeline even by 1982 standards. The task fell to a single programmer, Howard Scott Warshaw, who did what he could under intense pressure, resulting in an infamous game where the titular alien spends most of his time falling into pits (which, to be fair, kind of captures the experience of playing it).

But here’s where things get even messier: Steven Spielberg himself reviewed the design and reportedly asked why it couldn’t be more like Pac-Man. That’s a staggering breakdown in communication. When your IP holder, one of the most influential storytellers of his era, is confused about what you’re delivering, you’ve already committed a fatal misalignment. Add to that the pressure of holiday marketing, the blind faith that anything E.T.-branded would sell, and the sheer arrogance of producing more units than consoles in the wild, and you’ve got a perfect storm of bad bets, ignored warning signs, and a brutal market correction.

But if we’re going to talk about costs, let’s talk about the human one. Warshaw worked alone, sprinting through a month-long crunch under near-impossible expectations. The failure of E.T. didn’t just hurt Atari’s bottom line, but also overshadowed a developer’s career and fed an industry myth that “faster is better” and “done is better than right.”

We should have learned, right then and there, that crunch and miscommunication usually lead to the collapse of any creative project. But, as we all know, the lesson wasn’t learned. The same mistakes continue today. And if E.T. showed us how bad decisions can sink an entire industry, our next case shows how bad leadership mixed with sunk cost denial can nearly break the people trying to save a project from the inside.

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The Cost of Working Under X-Treme Conditions

Everything needed to be extreme in the 1990s

While E.T. was a victim of external pressure and corporate overconfidence, we could say that Sonic X-Treme was destroyed from within. This was supposed to be Sega’s grand answer to Mario 64, the game that would define the Sega Saturn and cement Sonic as a true 3D icon. Instead, it became a case study in chaos, where poor leadership, conflicting visions, and the sunk cost fallacy turned a promising idea into one of the most infamous cancellations in gaming history.

The development of this game is legendary for all the wrong reasons, becoming the textbook of everything you shouldn't be doing when managing a game project. The team faced constant crunch, shifting demands, and multiple conflicting directives. After migrating assets from two different consoles (work began on the Genesis and passed through the ill-fated 32X before landed on the Saturn), two separate engines were developed simultaneously — one for level design and one for boss battles — because internal teams couldn’t agree on a single technical path. In the end, after being denied to use Sonic Team’s Nights engine by an angry Yuji Naka who didn't liked to having another team using his work without authorization, they ended up utilizing the boss battles engine, which wasn't prepared to deal with the high game demands. Pipelines collapsed, and Sega of America and Sega of Japan were locked in open political warfare, refusing to align on basic goals, something that would eventually doom the company a few years later.

And then came the worst part: the human toll. Developer Chris Senn, one of the project’s creative leads, worked himself to the brink of collapse. According to interviews, he suffered a complete physical breakdown and was hospitalized due to stress. Another key programmer, Ofer Alon, was described by Senn as having done the work of “six developers,” coding entire engines solo in desperate attempts to keep the project alive. The man almost died trying to ship Sonic X-Treme.

By the time the dust settled, the game had been rebooted so many times that even the devs weren’t sure which version they were building anymore. Management refused to pull the plug, convinced that success was “just a little further.” But they eventually gave up on chasing that finish line and, in the end, the game was canceled. Sonic never got his Saturn debut. Fans got a port of Sonic 3D Blast, the polarizing racer Sonic R, and Sonic Jam — a compilation that, while fun and shows a glimpse of what would become Sonic Adventure on Dreamcast, was no system-seller.

The financial loss stung, but it wasn’t catastrophic. What hurt more was the human cost. Developers physically and emotionally wrecked trying to serve a vision that never had a real chance to shine cannot be translated to mere numbers. At least, some of those devs were lucky enough to move on. Many had already shipped cult classics like Comix Zone and The Ooze, which gave them a safety net when the X-Treme project collapsed.

But that raises a more chilling question: what if the only thing on your résumé is a project that became the very synonym of “vaporware”?

As bad as Sonic X-Treme was for Sega, our next case shows what happens when your entire career is tied to a project that refuses to die… for 15 extenuating years.

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The Cost of Staying Forever

Let’s say you shouldn’t always bet on Duke

If Sonic X-Treme was crushed by internal dysfunction, Duke Nukem Forever was devoured by its refusal to let go.

Development on Duke Nukem Forever began in 1997, intended to build on the wild success of Duke Nukem 3D. At the time, 3D Realms promised it would revolutionize first-person shooters. Instead, it became a cautionary tale so infamous that the word “Forever” stopped sounding like a title and started sounding like a threat. Across 15 grueling years of development, the game cycled through at least four engines, including Quake II, Unreal, and a heavily modified in-house build that barely worked. The team repeatedly scrapped near-complete versions just to chase new trends. Weapons were redesigned, entire levels rewritten, platforms shifted so frequently that at one point, no one could even tell which generation of console the game was targeting.

The only constant was George Broussard’s unwillingness to stop chasing trends or just cancel the whole project.

The co-owner of 3D Realms clung to the belief that the game could still be salvaged, that it would “redefine the genre” once it finally shipped. But while other studios were releasing Halo, Half-Life 2, Call of Duty, and BioShock, Duke Nukem Forever remained a ghost, a black hole sucking in resources, time, and careers.

And yes, careers were lost in the process. Many developers had Duke Nukem Forever as their only shipped game. They were promised huge bonuses once the project went gold. The problem is that, with each passing year, “gold” looked more like fool’s gold. This game wasn't even finished by 3D Reams — Gearbox came to rescue and used what they had at the moment to finish the game in the best way they could and launch it in 2011.

And even if money wasn’t the issue, imagine spending a decade on something that never launches. No shipped title, no portfolio piece, no credits you can point to with pride. Years of work either scrapped or buried beneath another failed iteration.

This is where we need to talk about opportunity cost. In economics, opportunity cost is what you give up by choosing one option over another. In game development (and in life), it means the promotions you didn’t pursue, the teams you didn’t join, the brilliant ideas you left unexplored because you stayed loyal to something that wasn’t moving forward. For the Duke Nukem Forever team, that cost was massive. Some of them could’ve worked on generation-defining games. They could’ve joined upstart studios that reshaped the industry. Instead, they kept polishing a mirage.

When the game finally released, the damage was already done. Critics called it dated, clunky, and tone-deaf. Fans moved on as its legacy was sealed. In the end, Duke Nukem Forever didn’t fail because it was a bad game. It failed because it lived too long. It was a clear reminder that the longer you stay on a sinking ship, the less you remember how to swim.

And while this might sound like an outlier, it was actually a reflection of something much bigger, a shift that took over the entire industry during the 2000s. One where ambition ballooned out of control, and cost was no longer measured in time or money alone.

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The Cost of Industry-Wide Illusions

Good times?

Duke Nukem Forever was a cautionary tale about refusing to let go that came to its conclusion during the seventh generation of consoles. However, the roots of that mindset were already taking hold in the previous generation — the era of the PlayStation 2, Xbox, and GameCube — revealing what happens when an entire industry builds momentum without brakes.

Most players remember this period fondly. It was the early 2000s, and everything felt bigger, bolder, and more ambitious. From Shadow of the Colossus to Halo 2, Metroid Prime to Final Fantasy X, developers seemed to be pushing boundaries with every release. It felt like a golden age, a time when game design matured and genres flourished. To be fair, from the outside, it really was.

Inside the studios, however, this was the beginning of the bubble.

Production values skyrocketed. Teams ballooned. Budgets shattered previous records. Timelines stretched from 12 months to 24, then 36... no time window sounded absurd enough when you had the potential next big thing in hands. Games now required more cutscenes, voice acting, art assets, QA… and all of it had to run on shiny new hardware that most devs were still figuring out. As result, crunch became normalized. Project management often didn’t scale with complexity. And most dangerously, “bigger is better” became the gospel.

No one wanted to say it out loud, but the fear was everywhere: fear of downscoping, fear of canceling, fear of admitting a project needed to shrink instead of grow. Games had grown from scrappy creative works into “event launches.” Each one had to be bigger, more cinematic, more content-packed than the last. Indie games were beginning to emerge in the mid-2000s, but they weren’t taken seriously just yet. Until then, big publishers and AAA studios kept pouring money into ever-more-expensive bets, chasing scale instead of sustainability. The industry kept feeding the bubble, convinced the returns would rise forever. And for a while, they did.

It reminds me of another boom: the pandemic-era surge in streaming and delivery services. Companies like Netflix, Peloton, and DoorDash experienced explosive growth during a unique global moment. But when that moment passed, many were left overstaffed, overbuilt, and overextended. They believed an exceptional circumstance was the new normal. Nowadays, with the benefit of hindsight, it’s clear that those practices weren’t sustainable in the long run. The “new normal” became just… the normal.

The game industry made the same mistake, but it seems that it still walking the wrong path. The sixth generation planted the seeds of overproduction, and those seeds blossomed into the AAA bloat we see today. Bigger budgets, longer dev cycles and overreliance on crunch might not have started in that generation, but this was when it became the norm.

And the results are everywhere now: the flood of sequels, the reliance on remasters, the live-service copycats. It’s like the entire industry became allergic to failure. Now, failure means tens of millions lost and reputations on the line.

But here’s what we often overlook: the biggest cost is more than financial. It’s creative. As risk tolerance dropped, innovation slowed. Big studios became less willing to explore uncharted territory unless the path was already paved by someone else, originality gave way to formula, live-service became the blueprint, open worlds became a cliche… Most AAA games started to look, sound, and play the same not because that’s what players wanted, but because no one wanted to be the next expensive mistake.

This industry-wide illusion that scale equals success is still very much alive today and it’s the reason why, with a few honorable exceptions, so many studios are chasing trends instead of charting their own course. Which brings us to a modern cautionary tale, one that shows what happens when a company follows the market instead of their mission.

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The Cost of Chasing the Wrong Trend

Did we really need another 5v5 shooter?

Creative projects are messy. Many of them never see the light of day, and that’s okay. Canceling early can be the wisest move you make. For every hit that lands, there are dozens quietly shelved behind the scenes. But what happens when a project doesn’t get cut in time? What if it goes too far before anyone’s willing to admit it’s no longer viable?

That brings us to Scalebound, a game that almost happened.

Developed by PlatinumGames and set to be a major Xbox One exclusive, Scalebound promised co-op monster battles, flashy dragon companions, and a bold new IP for the platform. But as development dragged on, technical hurdles piled up, the scope ballooned, and internal confidence waned. Eventually, Microsoft made the tough call and pulled the plug. Disappointing? Sure. But in retrospect, it was a mercy kill. Better to cut losses than double down on a project already slipping.

And then there's Concord, a game that shouldn’t have happened at all.

Developed by Firewalk Studios and published by Sony, Concord was a 5v5 hero shooter entering a market that’s already oversaturated and fatigued. It launched in a post-Overwatch, post-Apex Legends world, where even juggernauts like Call of Duty are struggling to maintain live-service momentum. Yet here comes Sony, pushing Concord with cinematic trailers, developer showcases, and pre-order bundles while the public response has been tepid at best.

This is where the sunk cost fallacy rears its ugly head. As a reminder, the sunk cost fallacy is the belief that we must keep investing time, money, or energy into something simply because we’ve already invested so much, even when it’s clearly no longer worthwhile. That defines the whole Concord endeavor to a T.

It’s not that the game looked terrible, but it feels uninspired, overly safe, and trend-chasing in all the wrong ways. In a genre driven by community hype and long-term engagement, “safe” is the riskiest play you can make. So why they kept pushing forward? Probably because too much has already been spent during its 8-year development cycle. The studio was acquired, the marketing budget allocated, the launch window locked… and the pressure to “make it work” became less about player demand and more about salvaging ROI.

That’s the danger of chasing fading trends: pouring resources into visions shaped by yesterday’s market, not today’s players. You already took too much time and effort to develop the idea, therefore you keep going because it has to work. Anything else would mean admitting defeat. You start to ignore the red flags, especially in a case where the real cost may not be money, but momentum, opportunity, and years of creative energy that could’ve gone toward something bold instead of something calculated.

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How to Fail Smarter

And that brings us to the most important part of this entire post: what we can learn from all this, not just as players or developers, but as people building things of our own.

Sure, we’ve talked about E.T., Sonic X-Treme, Duke Nukem Forever, Concord, and the entire industry’s love affair with overproduction and trend-chasing. From those, we came to the conclusion that sunk cost fallacy, opportunity cost and bad communications are the main pillars of creative projects destined to sunk. Those mistakes come with the price of pushing too far or too long for too little.

I could be deep diving about failed game projects and psychology of spending for hours on end, but at the core, the real thread that tied all those stories together is how we spend our time, energy, and attention — and how we can let those things spiral out of control just because we’re too deep in to walk away. One of the first things you learn in project management is that a project is a temporary endeavor undertaken to create a unique product, service, or result. Creative and tech initiatives are meant to end eventually. The moment you forget that, you risk turning the project into a prison.

That’s why the best thing you should do is to fail smarter. By this, I mean you should test ideas as fast as you can, fail quickly and learn from it before you go to bigger things. And I say to do this faster because we need to constantly remember that we don’t have unlimited time. Or energy. Or money.

That idea you’ve been nursing for years but never built? That job that doesn’t excite you anymore? That “passion project” that now feels like a weight on your back? Maybe it’s time to pivot. Sometimes all it takes is spotting the red flags early or listening to external feedback, whether it’s from players, peers, or that one brutally honest friend who tells you what you don’t want to hear. The folks at Sega Technical Institute, for example, probably wished someone had stepped in and helped them reset before the pressure to make the next Sonic game for the Saturn turned physical. The cost of those bad decisions doesn’t come back.

Walking away doesn’t mean you failed. Beyond the lessons learned to work on better projects in the future, it means you finally understood that persistence and discipline are different things and perseverance without purpose can turn into a trap. And while the game industry is still learning that lesson the hard way, you don’t have to do the same.

So here’s what I remind myself constantly, especially after writing a post like this:

• Don’t confuse effort with worth.

• Don’t stay in something just because it took a lot to get there.

• And most importantly: don’t be afraid to shelve something to make room for what’s next.

And yes, I say all this fully aware that I still haven’t finished the new book I mentioned in the intro. After spending the last 3,000 words warning you about cost fallacies, I might be falling into one myself. But hey, that’s the game. We all stumble here and there. What matters is that we learn to make smarter decisions.

Now I’d love to hear from you. Have you ever worked on a project that took too long, cost too much, or taught you something priceless?

Drop it in the comments. It doesn’t have to be from the game industry (though I’m always down to talk about those).

Until then, let’s keep leveling up, one boss level at a time.