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Thread: Forbes article: "Casual Gold Bust"

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    Default Forbes article: "Casual Gold Bust"

    Apologies if this is a dupe, but I can't find any posts here about this Forbes article by Mary Jane Irwin, "Casual Gold Bust," posted August 1 on their website:
    But all of a sudden, the downloadable casual game gold rush appears to be over. Even though the Web-based casual games industry hit an estimated $1 billion in revenues in 2007, according to Parks Associates, game developers are finding it increasingly difficult to do business as more and more games flood the market. [...]

    "There's no way to make money in this space" anymore, says Gamelab co-founder Eric Zimmerman. "There was this promise that we could do small-scale games and we could try new forms of game play, but the portals want very cutesy, water-downed content." [...]

    But the biggest problem facing casual game developers is the Web portals they depend on for the majority of their sales. Most developers provide their games to portals for free in exchange for the mass audience drawn in by a Big Fish Games or a PlayFirst. In exchange, portals receive a 30% to 40% cut of revenues. Since the casual game portals make the most cash off spikes in game sales, it behooves the portals to constantly feature new content. The best games are lucky to survive on a portal's front page list for more than a month.
    Obviously this isn't news to anyone on this forum -- nowadays. What's especially disheartening about this dismal situation is that it was so utterly predictable. I, among many others, predicted it in my February 2006 Escapist article "Attack of the Parasites," which prompted personal attacks on my character and motives here on this forum.

    By the way, this exact same stupid story is playing out again right now on Facebook. Anyone care to attack me for saying so this time?
    -- Allen Varney
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    The same thing is also being played out on XBLA and the iPhone. Dare I say, it'll happen in the Flash game sponsorship market, too. You can't stop a goldrush, even if you can predict one.

    In the end Darwinism rewards diversity and the weak drop into the abyss, as it should be.

  3. #3

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    There's a BIG typo in the article:

    Most developers provide their games to portals for free in exchange for the mass audience drawn in by a Big Fish Games or a PlayFirst. In exchange, portals receive a 30% to 40% cut of revenues.
    developers get 30-40% of revenues. Otherwise, would be too good

    Personally I'm much more scared by the increasing "open but closed" market like iPhone, XBLA, etc. For the following reasons:
    - they get 30+% commission and you don't have any alternative (which in the case of people selling only directly like me, is already a lot compared to BMT/Plimus fees).
    - you don't have any way to do marketing. No SEO or such things, since people find the games all on iTune/Creators club.

    About the crisis on casual market, don't know. Doesn't seem to be real, even just looking only at my reflexive affiliate sales...

    /conspiracy mode on
    Maybe "someone" wants everyone to believe that there's crisis so all players should move to iPhone/XBLA/Wii etc?

  4. #4

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    "...but the portals want very cutesy, water-downed content."

    So true!

    I submitted my game Voyager (it was my game at the time; URL to it is here: http://stormcloudcreations.com/voyager.htm) to a few portals; BFG among them, and got several "game is too complex for our audience" responses. The fact that I tested the game with a number of younger "non-gamers" (and it had the graphics to compete somewhat with some of the games on there) and they learned how to play it quickly didn't matter, and the game really isn't THAT complex. Why not try something new and different from the Hidden Object/Match 3 thing?

    Made me sorta sad, and the future of the casual game industry looked pretty suspect at that point.
    Derek
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  5. #5

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    Quote Originally Posted by Jack Norton View Post
    - they get 30+% commission and you don't have any alternative (which in the case of people selling only directly like me, is already a lot compared to BMT/Plimus fees).
    - you don't have any way to do marketing. No SEO or such things, since people find the games all on iTune/Creators club.
    Or put another way, you don't *need* to do marketing, and that 30% you give Apple ( I'm not including Creators Club because I don't think it's directly comparable ) is really more of a publishing fee than a distribution fee.

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    Quote Originally Posted by MindToy Games View Post
    I submitted my game Voyager (it was my game at the time; URL to it is here: http://stormcloudcreations.com/voyager.htm) to a few portals; BFG among them, and got several "game is too complex for our audience" responses.
    I think that's just a nice way of saying "we can't take a game with such horrific, blood-curdling wights."
    Sock Dash - online games portal | Game Socks - downloadable games portal | My Games

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    Quote Originally Posted by Sybixsus View Post
    Or put another way, you don't *need* to do marketing, and that 30% you give Apple ( I'm not including Creators Club because I don't think it's directly comparable ) is really more of a publishing fee than a distribution fee.
    Yes but with the downside that's going to be much more risky... once the iPhone market will be flooded by titles (probably very soon), either you are in top10-20 and make a fortune, or you make nothing (like PPC-PDA market nowadays).
    I prefer much more the Pc/Mac market, that is really "open" to all kind of gamers, not only casual ones.

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    Quote Originally Posted by Sybixsus View Post
    Or put another way, you don't *need* to do marketing, and that 30% you give Apple ( I'm not including Creators Club because I don't think it's directly comparable ) is really more of a publishing fee than a distribution fee.
    If the portal bubble referenced in this Forbes article has taught us nothing else, it has indisputably taught us the peril of abandoning control of one's own marketing.

    "I don't need to do marketing" = "I have surrendered access to my own customers" = "I'm not running a real business."
    -- Allen Varney
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    Quote Originally Posted by Allen Varney View Post
    If the portal bubble referenced in this Forbes article has taught us nothing else, it has indisputably taught us the peril of abandoning control of one's own marketing.
    And that opens a whole load of new business opportunities for us all.
    Indiepath Ltd
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    And that is not the general opinion of Indiepath Ltd - etc... legal .... blah..

  10. #10

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    Allen speaks the truth in spades.
    The portals have saturated us with hidden object and match3 games. Thus supply and demand means these games are virtually worthless.
    All that means is you should make something else.
    People are not bored with games, any more than they are bored with books.

  11. #11

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    Quote Originally Posted by Allen Varney View Post
    If the portal bubble referenced in this Forbes article has taught us nothing else, it has indisputably taught us the peril of abandoning control of one's own marketing.

    "I don't need to do marketing" = "I have surrendered access to my own customers" = "I'm not running a real business."
    Well firstly, it's patently not indisputable, or I wouldn't be disputing it. As for the stuff about someone else marketing for you not being a real business, that's absurd. Sit down and think for five minutes and you'll come up with a very long list of large companies who - according to you - aren't running a real business. I bet some of them are making "flipping great wads of cash" too. It's a perfectly viable business model if you know the risks, and know how to deal with them.

    Which is just it, Jack's spot on with his reply to my comment. It's just a bigger risk. If this is your business model, you get in, make as much money as you can as quickly as possible and start looking around for the next opportunity when the bottom falls out of the current one. It's the opposite of the Cliffski or Cas business model.

    I hate to disillusion you, but whatever negative comments you got at the time likely weren't from people who were too stupid to predict it, but rather from people who were already eyeing up the next cash cow to jump into and milk before anyone else got there, and didn't particularly want you pointing it out to anyone who hadn't managed to predict it themselves. "Methinks the lady doth protest too much," and all that.

  12. #12

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    From the Forbes article:

    "Indeed, anyone with a little programming know-how can create a game and ship it off to publishers."

    Yes, and I built a working replica of a Tiger tank in my garage and a pressurized water reactor in my basement. It's easy with just a little know-how

    OK, there may be a glut of casual games hitting the market but my guess is that most are the result of lots of hard work, dedication and some serious know-how. Or can you just submit Hello World and join the crowd?
    Turn Based Strategy Games
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    The portals have saturated us with hidden object and match3 games. Thus supply and demand means these games are virtually worthless.
    All that means is you should make something else.
    People are not bored with games, any more than they are bored with books.
    Couldn't agree more. We aren't taking any more hidden object or match 3 games unless they are blockbusters. I think many portals are painting themselves into a corner.
    Jim Rosenquist
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    Download Free Games

  14. #14

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    I 'm officially scared of a hidden object and matching game. I wish game developers would give these genres a long break and start focusing on others to rejuvenate the market.

    Remember Warren Buffett 3 I in any business/investment cycle.

    Innovator, imitator and the idiot (the disaster phase).

  15. #15

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    Well most HO and match3 games released nowadays totally sux - they can have insane presentation and production values, but the gameplay (a mysterious entity for most of portal casual gamers it seems) is really crap, repetitive, boring.

    That's why when a really fresh title with at least some innovation appears, like Azada or Fairway Solitaire sells very well!

  16. #16

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    Quote Originally Posted by Allen Varney View Post
    I, among many others, predicted it in my February 2006 Escapist article "Attack of the Parasites,"(...)
    I just would like to point out that people in Funpause, evil doers in your article, have been the core force behind Azada which totally broke out from the TM or HO or M3 formula....

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    Quote Originally Posted by Jack Norton View Post
    Well most HO and match3 games released nowadays totally sux - they can have insane presentation and production values, but the gameplay (a mysterious entity for most of portal casual gamers it seems) is really crap, repetitive, boring.

    That's why when a really fresh title with at least some innovation appears, like Azada or Fairway Solitaire sells very well!
    But because you don't like it doesn't mean there aren't hundreds of thousands who do. It's a perfect example of supply and demand.

  18. #18

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    Well I can't believe that nobody likes to play arcade/platform/pinball etc. Also do you remember what happened to match3, 2 years ago was a boom, nowadays rarely a match3 enters in top10.
    I'm willing to bet HO games will fade in about 1-2 years in favor of normal adventures or collection of games like Azada.

  19. #19

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    Quote Originally Posted by cliffski View Post
    Allen speaks the truth in spades.
    The portals have saturated us with hidden object and match3 games. Thus supply and demand means these games are virtually worthless.
    All that means is you should make something else.
    People are not bored with games, any more than they are bored with books.
    I disagree, I think the portals are responding to their customers. We attend every Casual Connect event and meet with all the portals to get a feel for the market. In 2006 and 2007, the major ones (particularly BFG and Oberon) were asking, arguably pleading for innovative content and risk taking. In fact, one of them gave us particularly good deal terms to try something new (at the time, almost everything was Match-3). At the various shows this year, it was clear they got their teeth kicked in (as did we) with anything that deviated from the norm. In fact, some of our counterparts at these companies lost their job because of this. The fact is a solid but unspectacular hidden objects game will sell 30k-50k units the first month on one portal, while a good, somewhat innovative game (which reviews great) will be lucky to sell 3k-5k units.

    This is the reality of the market and what casual consumers want. It is not an evil plan by the portals, it is a response to what sells . Let's not blame the portals or the customers (if they like a basic hidden objects game or match-3, what's so bad about that). You can still make something innovative, but you have to accept that the sales may not reflect that because the bulk of casual consumers don't want it.
    Lloyd Melnick
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    I would say that the "casual gold rush" actually started before the portals, and that the portals were just a natural cause of the increasing popularity of casual games on the web. They sure played their part in making the casual games market big, but people were making good money off games sold on the web even before the boom.

    Portals made it a lot easier for many developers to get their game out to lots of customers. Some devs made lots of money off the portals early on, and it's no surprise that the terms aren't as good now: The portals took a lot of the initial risk, and are now in a position to really profit on that effort. They've grown big now, and I think they now do what any big company would do: play it safe and look at reducing risk. Which in this case means stick with what's proven.

    Maybe this is the time for indie devs to stop relying so much on the portals to generate sales. Maybe now is the time for self-publishing to grow bigger again, an opportunity for the next small niche market to grow explosively, creating the next gold-rush... Time will tell, I guess
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    I disagree, I think the portals are responding to their customers.
    Absolutely, and that's part of the problem. By nature the larger the target audience the more generic the product has to be. And ultimately the more hit-driven the market becomes.

    The publishers don't have a problem making a profit in this marketplace, it's the developers who do, which is why the only long-term business model for casual developers is to be become a publisher or be bought out by one.

  22. #22

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    The thing now is: how can we be benefited by this?, in what way, shape or form?.

    I have allways thought that all indies should form a network, but i dont know the "how". So that we dont need someone in the "outside" to support us, we support us, to make things easier so that possible players can very easely know our games, but without the hit driven method. Its just a matter of joining forces, taking the time to design it, and make it...

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    That's what this place is, right? A place for professional indies to network.

    Anything more formal, is doomed to fail I think...
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    The purpose of "Web 2.0" is to sort communities by interests. The challenge then of a central portal is that they're not very good at doing that.

    People already know how to find useful information online. Rogue-like fans have a great knack for finding rogue-like games even when they aren't being actively marketed. The challenge is knowing the audience well enough to make a game that will show up on their radar.

    I honestly don't have the answer for the downloadable market, which is why I left. But I know Manifesto Games (an indie portal without any hits) is not it.

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    I knew this was long overdue. It used to be, about a year ago, I would check Big Fish every day for new releases. Now I can't even be bothered to read the emails they send me. It's all gotten very boring.

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    Quote Originally Posted by dma View Post
    I knew this was long overdue. It used to be, about a year ago, I would check Big Fish every day for new releases. Now I can't even be bothered to read the emails they send me. It's all gotten very boring.
    Same here, I used to use their newsletters to get an idea of what is the current trends in casual (back when I as interested in casual), but as is clearly evident, theres simply no need anymore, same old same.

  27. #27

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    How do we innovate and sway gamers into our corner?

    My recipe:
    1/4 cup of something old
    1/4 cup of something new
    1/4 cup something borrowed
    1/4 cup of something blue

    Mix thoroughly and salt for flavor!

    ~*~*~*~*~*~*~*~*~*~*~*~
    Amanda Fitch | Game Designer | Facebook | Amaranth Games, LLC
    Our Games: Aveyond, A Gypsy's Tale, Grimm's Hatchery, Yummy Drink Factory

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    I think there are two separate issues in the article presented as one.
    1 - It's more difficult to make money on casual games
    2 - It's more difficult to make money on games with 'New kinds of game play'

    I think 1 is true to a point, but not for the reasons mentioned.
    I disagree with 2 as well, but just because I think it's always been next to impossible to have experimental game play and make money at the same time. Most experiments fail, it's part of life.

    Some misconceptions that despite saying the same thing over and over again, no-one seems to listen to.
    - The portals launch a wide variety of game types.
    (For 2006-2007 on Reflexive for example, HO, Match-3 and Click Management accounted for 28% of the new games, meaning 72% were something else. HOWEVER, 40% of the revenue came from those game types and 58% of our Revenue growth came from those game types. If you do the math it means you did better making one of those games than anything else...taken as an aggregate it was safer...but in that same aggregate you see MOST of the games on the portals didn't fit into that group).
    - The portals launch a wide variety of game types.(not a typo)
    Take a look at BFG last month and you'll find everything from crazy indie game Bloom Busters to platformer Turtix 2 to quirky sports title Elf Bowling to a few 'different' puzzle games: World Mosaics (picross) & Space Journey. On Reflexive for the last month we had games like Starscape, Laser Dolphin, Oval Office & Depths of Peril (mac). The issue isn't variety in catalog. The issue is that most of that variety isn't selling well. However, I state again, that 'original' doesn't usually sell well. Original needs friends and word-of-mouth and can become huge mega-hits, but typically it's ignored because it is original. Perhaps the portals are the cause for that (though this goes beyond just the casual games industry). I can't speak for other portals, but for Reflexive's part we work hard to get original content...and are sad when it doesn't sell. I too believe it will come back to bite the industry in the behind, but so far our approach of diversifying hasn't shown that it is grabbing a different customer. Despite our best intent and wishes. Still we continue to carry original because we like it .


    So that said, I do agree that it is getting harder, in some ways, to make money. Some of that is self-induced as we narrowly define what the casual market is. If you define the casual market as the portals, then you have to know what type of customers you have on the portals. If you want to make a game for those customers (again assuming you understand them, which many people don't), you have a great audience who is ready to buy!

    If you don't want to make games for that customer type (the portal customer type), you will sell a few copies, maybe even the 3k Lloyd suggests, but you will have a harder time making money. Think of it as trying to sell helicopters or bicycles at a car dealership. Some people will be intrigued and buy one, but that isn't why the person went to the car dealership. They went for a car. If you try to sell a car at a car dealership, you'll see higher sales.

    That doesn't mean the sky is falling or that it's good to hate on casual games because they are successfully selling and those same customers don't want to buy your games.

    It just means you need to decide what you are doing and do it. It means the casual portals might not have your customer and you need to find them or make games for customers who have already been found. You can be successful doing a lot of things, but that doesn't mean everything you want to do can be successful.

    Many here have mentioned going for a different market. I think there is some sense to that, though I don't envy the journey, it's by no means as easy, in my mind, as going after a known audience.

    btw...quick rant on the 'it's boring' comment. I understand and agree to some degree, but I hope that you're playing before dismissing. I've become uber-frustrated, especially with the hardcore's hate of the Wii, with people who will dismiss an entire catalogue of games without having played enough to know the ins and outs and be able to discuss game by game what is good or bad about them. There are some Hidden Object games (Women's Murder club being the last one) that I think are very well done and quite gripping. There are others (most of them) that I find un-interesting, but I can tell you why...because I've played them. My .02 is to play something before you get an opinion of it. I'm sure the lovers of 'shooters' who feel angry everytime the media rags on the genre without actually playing GTA or Halo can understand where I'm coming from.
    Last edited by cyrus_zuo; 08-07-2008 at 01:01 PM.

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    That's a cracking post Russell. Agree with every word of it.

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    I wonder if we've hit the limit of what a portal can do for their audience and that's why game designs are starting to stagnate.

    If the hardcore fans of hidden object games were allowed to splinter off into a another community I bet the designs for that type of game would gain much more depth and complexity as they're allowed to forget about appealing to "everybody" and instead go for the hard targeted niche.

    But then if you're looking to sell games at $19.95 with a sub 30% royalty and maintain an office space with employees (let alone your own mortgage) the words "targeted niche" aren't part of your vocabulary.

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