Developers now have to optimize multiple versions of their games
The iterative cycle will potentially make developer's jobs much more challenging. On the positive side, devs now have much more power to tap to deliver amazing experiences. On the flip side, however, they still have to scale the game so it's playable on older systems like the Xbox One and PS4 as well as the newer PS4 Neo and Project Scorpio systems. So they could end up doing double duty, or even more down the track a bit.
What's worse is that devs will have to make multiple versions of the same version. Both PS4 Neo and Project Scorpio not only do 4K native/upscaled gaming for play on UHD TVs, but also have enhanced modes for 1080p users too.
PS4 Neo does two "modes" with three different sub-modes: Neo Mode (1080p 60FPS, upscaled 4K) and Base Mode (1080p dynamic resolution for older games). So developers will have to optimize their games for all of these modes on consoles now, not to mention all the myriad of scaling that goes with multi-platform PC games.
Project Scorpio, however, is said to deliver "true" native 4K gaming. So the new Xbox could potentially have four different modes: variable 900p + dynamic res for older Xbox One consoles, native 1080p 60FPS, native 4K 30FPS, and upscaled 4K 30FPS+.
There's also the possibility that devs will patch in "Neo" and "Scorpio" mode support for older games, allowing them to tap 4K upscaled resolution and performance boosts from each console's hardware.
PS4 Neo and Project Scorpio's 4K upscaling could end up being a big problem for some developers, and it just depends on the console, the dev's tools and technics of the developer and the game in question. Mostly, though, the scaling shouldn't be too involved - again it just depends on the console's limitations/power and the dev's toolset.
The biggest problem, I think, is having to make the games playable on old consoles and new consoles at the same time. Developers usually only have to do this when two cycles overlap before one cycle has retired and the beginning of another. Since the process seems so complicated, I think that first-party Microsoft and Sony dev teams will benefit the most because they're so close to the console's architects, and will have more support and tools and knowledge at their disposal.
I'm curious to see what developers think about this--not Ubisoft or Bethsoft PR reps, but actual developers--and how certain publishers/dev teams plan on handling this. The 4K upscaling is just another bit of bother, kind of like the cherry on top of a stress sundae.
And when developers get stressed, we get bad games.
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