Against conventional Indie wizdom

Discussion in 'Indie Business' started by Dan MacDonald, Oct 10, 2005.

  1. Dan MacDonald

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    The downloadable games business has come a long way in the past 4 or 5 years. Back round 2001 when the dexterity forums popped up and Steve Pavlina wrote his inspiring articles on being successful as an independent developer the market was a very different place. Real arcade was just starting to become a factor but people still fingered yahoo and msn as the bigger portals for down loadable games. Reflexive was around but not amazingly big either. Wandering indies wanting to turn the passion into a profitable business turned to the dexterity forums to collaborate and grow.

    There they learned that there was a huge untapped market not catered to by the retail games segment. There were casual gamers, women, from age demographics not typically considered the bread and butter of the games business. There was certainly potential and indie's everywhere were capitalizing on it. But a high margin business that indies stumbled on to did not stay secret for long. Distribution channels like real and shockwave started to filter their games including less and less action + blasting titles and more and more puzzle / casual games.

    New players sprang up, venture capitol entered the space bringing with it companies that didn't need to be profitable to make games. The classic retail publishing model seems to be alive and well in downloadable games. Inevitably all distribution will be downloadable. In the retail sector the cost of creating a good game is getting prohibitively high. It costs 10 to 15 million to make a console game that has a chance of being profitable, at that price the game needs to sell close to a million copies to make a return for all parties involved.

    On top of that retail shelf space is getting expensive, with an increase in supply companies like walmart only want the titles that will make money. They've reduced their catalog to 30 titles, so unless you are a property like Warcraft or Halo you aren't going to get in most retailers. Retail developers and publishers are increasingly risk averse, depending on sequels and franchises to leverage their way into distribution channels. Some genera's are disappearing from retail entirely. 2D shooters weather they be robotron style or vertical shooters like raiiden have disappeared. Platformers and many other once popular game types have simply ceased to have a retail presence.

    If your thinking to yourself, now there may be an opportunity there. then I would be thinking the same thing as you. The casual games space is pretty well jammed. There are still a few lone soldiers out there making games that hit the top 10. In almost all cases these are experienced indie developers with the right connections and the right knowhow to make this happen. Most distribution channels consider it impossible for anything less then a small full time team to produce a 10 ten title in the casual games space. While I don't agree that it's impossible, the quality of titles in that space has been increasing at an exponential rate. At one point you could make a polished game and have a pretty good chance of being a top 10 game. Now, all the games in the top 10 in the casual channels are highly polished titles.

    At IGC we herd a lot from Microsoft about Xbox Live Arcade and their plans there. They want to increase the usefulness of the xbox 360 console to the secondary users of the xbox. That would be your mom or sister if you were then one who got the xbox to play halo. They intend to do this though casual games downloaded over their Xbox Live Arcade. However, while that is an opportunity to be sure, I think it's an even greater opportunity to make like pompom's mutant storm, action side scrollers like abuse, or games like platypus. When you think about it, you have gamers who have spent or manipulated other individuals to spend multiple hundreds of dollars to purchase the console. You have hungry customers in the core market who love the hard core games like halo and doom and tekken5. Running planetthinktanks.com however, I've been amazed at how many young teen's play Halo and ThinkTanks. A lot of them say they even prefer thinktanks.

    The point is, core gamers aren't always as core as you might think they are. Many of them would appreciate a good sidescroller or shooter given the chance. Big retail hits come out only a few times a year (and mostly around Christmas) there's a distinct downtime the rest of the year where these players are sitting around playing generic games waiting for something new to come along. In short, I think the casual games opportunity has passed for most solo indie's trying to get started, but the good news is there seems to be an increasing demand for games that you might actually enjoy playing as much as you enjoy developing. (my apologizes to those developers who really love match 3)
     
  2. impossible

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    There's some truth to this, but at the same time you see a lot of core gamers that aren't interested in indie games. Sure, they'd be willing to play them, but they aren't willing to pay for them, especially not at the price most indie games go for ($19.99.) If you go to Valve's Ragdoll Kung fu forums you'll see two camps, the people that are excited about the game and think it's a great deal (for $12.95) and the kids saying "wtf, why would you pay $12.95 for a piece of shit 2D mini-game!!!! It should be free!!!!" I suspect there is a sizable portion of gamers like this. I guess it doesn't matter as long as you have a decent amount of people willing to pay for the game.
     
  3. z3lda

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    Nice post. I do agree with what you have to say due to the fact that the the current male players aged 18-30 (Me being in this market) know of "shareware" and have no problem using credit card and buying things over the internet. They also grew up playing more action oriented games. the market is already there, but I think the problem is for the developers to supply this new market.

    I think what comes down to is mostly cost of development of these "action" games. IMO the cost considerably increases when you are developing a game for this market. You arn't just making a single screen cutesy game anymore.
     
  4. Black Hydra

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    From what I have seen. Many gamers will play smaller indie titles and think they are fun. Pay for them? No way.

    The fact is that they would prefer massive titles like Halo 2 or Warcraft. That is where they feel they are getting value from buying.

    Frankly I'd rather compete with the current casual game audience than go up against the hardcore market.

    In order for someone to buy your game they have to think it has a lot of value, which is more than just the fun factor. And for the most part, I think hardcore gamers see indie games as cute little distractions but hardly worth their money.

    So even if they think they like ThinkTanks more than Halo 2, let me guess which game they will actually buy?

    I think there is an avenue for making games that don't appeal directly to the demographic targetted by match-3, but I think if you are trying to appeal to those who are currently Halo 2 players you might be heading into more dangerous waters.

    But what the hell do I know...
     
  5. Dan MacDonald

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    Some interesting facts from the IGC keynote by microsoft. On the existing Xbox Live Arcade system (on xbox 1). Where you have to have a disk and you have to be a Live Subscriber in order to even see a single downloadable game they have staggering conversion rates. Across all the XArcade titles they have a sustained 8.5% conversion rate. Their best title converts at 22% and their worst title converts at 4.5%. A hit downloadable game may convert at 2-3% with gusts up to 5% anything above that is rather unheard of.

    Admittedly the sort of stringent barrier to entry makes the customers somewhat self selecting, but these are games like mutant storm and marble blast that are selling on the current XArcade. The general stereotype may be that the core gamers wont buy, but then again who buys cellphone games? Out of all the people you know with phones have you known any of them to buy games on a cell phone? Me either. Yet it's a massive industry... and profitable to boot.

    At a certian point it's about catering to a very specific niche in a very large market that makes you the money. Most flash game players wont pay for a downloadable version, but some will and many developers have had value added to their bottom line by adding a flash version of their downloadable game.
     
  6. soniCron

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    I think you're underestimating that barrier. These people have already shown an expressed interest in the games XArcade provides by obtaining the disc. This is likely to inflate the conversion ratios by an order of magnitude. At the very least, the information is too skewed to make any assessment of gaming stereotypes.
     
  7. Dan MacDonald

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    strin•gent

    "Imposing rigorous standards of performance; severe"

    I don't think I'm underestimating anything, I think "severe" barrier is fairly indicative of the amount of effort someone needs to go though to get on the current XArcade. Yes the numbers are inflated, and yes they will not sustain those numbers when XBox 360 ships. But Indie titles are going to be launch titles on the Xbox 360 and Microsoft is shipping XBox 360 with a free XArcade title so peopel are going to be going to the XArcade to check out their free game and whatever else happens to be there. (Wik, Mutant Storm, Marble Blast) If you don't see potential in that or economic significance then I believe you to be a true pessimist.

    The point is we don't need to assess stereotypes to assess opportunity. You look at market size, you look at demo graphics, and you look at past performance. Even if you could express a "gaming stereotype" with absolute certainty it wouldn't be of much use to you. Money is rarely made in trying to be all things to all people or dealing in generalities. Even our "Mass Market" casual games are actually a fairly specific subsection of the gaming market. It just happens to be a large and lucrative one and recently overcrowded and over catered to. Opportunity for indies has always been ignoring the stereotypes and catering to the specific needs of an under represented sub segment that goes against the stereotype. This is why I offered examples of cases where people have made lots of money going against the stereotype.

    It is also why I see opportunity for creating action oriented games that have become under represented in the retail segment.
     
  8. Matthew

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    Hasn't Microsoft already inhibited downloadable games for Xbox 360 with the optional HD? Or is a HD not required for LiveArcade on the 360?
     
  9. Mark Fassett

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    In most cases, downloadable games will fit two to a memory card with about 16mb to spare - that is the goal they have. They recommend a file size for a game of 25mb - with a maximum acceptable size of 50mb.
     
  10. Dan MacDonald

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    An interesting feature of that is that games can be copied from HD to Memory card or from card to card. So if a player takes his full version game over to a friends house and copies it to the drive of his friends xbox, he can play the full version if he logs into his profile. His friend can play multiplayer with him etc. However, once he leaves and the friend logs into his own profile the game will act like a trial/demo version on the friends xbox. When the friend plays though his demo he will be prompted to buy the game just like anyone else. Xbox 360 has in-game purchasing so the friend can just spend some gamer points on it and continue playing the full version. It's a very compelling scenario.
     
  11. soniCron

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    I never said I didn't see any potential in the market. But you're throwing around conversion ratios like "8.5%" and "22%" as if that's supposed to prove anything.

    I think there's certainly an opportunity for the classic action and arcade games on the new console, but I don't remember there being any stereotype that identifies core gamers not liking said games. They've traditionally failed on the PC for many reasons: quality, accessibility, and marketing. Not because core gamers don't like them.

    And thanks for the vocabulary lesson.
     
    #11 soniCron, Oct 11, 2005
    Last edited: Oct 11, 2005
  12. Jay_Kyburz

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    I've never been interested in the casual market. I'm just not interested in making those kinds of games. I've been working on a very hard core and nerdy game.

    If you could say that casual games are to the left of the mainstream then you might say my target market is to the right.

    I have no doubt there are larger numbers of people willing to pay for these games. From what I can tell this is also the market Kostigan is interested in.

    I can't get to excited about the console issue as it will always be a tightly controlled channel. You'll never see a dope farming game on xArcade.
     
  13. Dan MacDonald

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    Actually that's not the case, it turns out the market (and when I say market I mean Xbox Primary customers) prefers M rated games with gore, guts, nudity, language and all the rest. That's where the original Xbox positioned itself as a console for mature gamers. I talked to the Microsoft representative and she said that they do not discourage mature or teen rated games but they are trying to leverage XArcade to expand a more casual offering. While there's probably plenty of money to be made converting real's top 10 to XArcade, the current generation of games on XArcade fall closer to the core gamer market then the casual. However just like the downloadable casual games market, I think there's more opportunity there for indies (especially ones staring out) in making something other then a casual title.
     
    #13 Dan MacDonald, Oct 11, 2005
    Last edited: Oct 11, 2005
  14. Hiro_Antagonist

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    Yeah, I was at the talk, and those numbers, while true, are meaningless.
    But Dan wasn't the one "throwing around" those numbers. He was citing Greg Canessa of Microsoft basically verbetem. You act like it was Dan inventing those claims himself...

    That said, you're right about the comparisons being unfair. The process that people had to go through to get an XArcade disc was so cumbersome that only people *seriously* interested in buying those games would even jump through those hoops.

    Another issue contaminating those conversion rates is that on XArcade, the demos only last 5-10 minutes -- not 1 hour. Many people download games to play 'for free' for an hour on PC, with no real intent to buy. Or they manage to get their fill in an hour with no real need to pay to play more. But on XArcade, the demos are so short that only people seriously interested in buying them in the first place would bother. So again, of course the conversion rates will be higher, because people aren't downloading those game just to play for free for an hour.

    So yeah, comparing those rates to traditional PC conversion rates is totally comparing apples to oranges and not of any real value.

    But despite the dubious relevance of those percentages, most of the ideas still stand and are very valid.

    One big issue is that the cost of putting a game on Xbox Live Arcade is still well out of reach of most people here (around $300k according to GarageGames' Jay Moore, but you could probably crunch that down to $200k if you tried.) But its worth pointing out that these budgets are a tiny fraction of what it takes to make traditional console games. They have taken an absolutely massive step in opening the door to indies, even if the majority of indies (the part-timers and hobbiests) still can't afford to compete. In my experience, if you have the ability to build a serious prototype of a game that should be on there, and if you have the ability to run a business, assemble a team, and ship a product, then you will almost certainly find the resources to make it happen.

    Also, FWIW, I know there are places like Oberon that will port games from PC C++ to XArcade... for a fee, of course. The off-hand estimate I was able to get for that was $50k-$100k. That wasn't a binding estimate or anything, but it sounds about right to me. Frankly, I was expecting more like $100k-$150k, so it sounded very reasonable.

    I personally am making my next-generation games with this sort of opportunity in mind. I'll be investing more money in art and sound, and continuing to design accessible mechanics, such that a port to these platforms would be a relatively simple matter of "if we invest ~$100k for the port to Xbox Live Arcade, could we make that back?" Luckily, by the time we get around to it, there should be plenty of sales data to answer that question....

    -Hiro_Antagonist
     
    #14 Hiro_Antagonist, Oct 11, 2005
    Last edited: Oct 11, 2005
  15. Dan MacDonald

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    You took a positive thread about potential for independent developers and attacked what you thought was the basis of (reasoning behind) that topic. I can only assume that your agenda was to invalidate the hypothesis of the post (opportunity). The only reasonable conclusion to be drawn from that action was that you were a pessimist who refused to see opportunity for yourself and beyond that are willing to make a case that there is none for anyone else.

    Seeing opportunity is rarely an empirical affair, by the time you gather all your measurements and analysis the opportunity has passed. I posted data points not as proofs but as indicators. They are not promises but they indicate potential, those who are optimistic will try to realize that potential those that aren’t will shoot it down.

    In actual fact, I do not think that you are pessimist, but rather a contrarian who feels the need to represent the opposing voice in any engagement regardless of weather you are personally vested in that position or not.

    Life is too short to fight empty battles, find your passion and fight for that. State what you believe and carefully select the hills you choose to die on. Some things are worth fighting for and others are just pointless exercises in rhetoric. I don't think you would be on these forums or perusing independent development if you did not believe passionately in something. Have a consistent voice, post about your passion instead of trying to shoot holes in everything; it gets tiring after a while. Fight for what you believe in instead of against what everyone else believes. You'll find yourself a happier better liked person.
     
  16. impossible

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    What does this cost include? Does it include development costs as well, or just the price of a devkit, certification and "manufacturing" (paying for server space or something.)
     
  17. Dan MacDonald

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    So I think these numbers are way off. I talked to the PM for XArcade and she said that there are basically two barriers to launching a game on the Xbox. One is the localization issue (though you can choose to have none) and the other is Certification.

    Certification is free the first couple times, but if they feel you are using certification to do QA they will start charging you for it. A lot of people want to know about the Dev kits, they cost $10k per unit. Microsoft will actually "lend" these kits to developers who have been approved to make an XArcade game. They have also negotiated competitive rates with testing and localization 3rd party vendors. The PM quoted me about 16k for a full test engagement during the entire development of the game, they also guarantee you will pass cert. For localization to all the countries that matter you are looking at about 10k (40 cents a word or something like that).

    These games (even on the existing XArcade) are seeing at least enough to recoup the costs (one would think) otherwise they wouldn't be pushing this initiative so hard. Since most Indies’ eat their development time, the actual costs for an independent developer is more like 26k which is certainly reasonable for someone serious about seeing their game on Xbox 360.
     
  18. soniCron

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    No. I was merely stating that there's little indicative of numbers so greatly skewed.

    In fact, when I said...

    "I think there's certainly an opportunity for the classic action and arcade games on the new console, but I don't remember there being any stereotype that identifies core gamers not liking said games. They've traditionally failed on the PC for many reasons: quality, accessibility, and marketing. Not because core gamers don't like them."

    ...I was attacking the basis for the topic, to which there has been no reply. (And that is my passionate stance on the issue.)
     
  19. svero

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    I agree that different sorts of titles can sell, but what happens with match 3's and other common top 10 sellers is that they open doors. They can raise money, get you contracts, get a portal that wouldnt normally deal with you to work with you etc.. When you approach companies with a title that they consider risky, even if it's destined to be a big hit, you have to knock down a few walls to get the distribution going unless you already have established relationships. So that's one thing to consider.
     
  20. Dan MacDonald

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    Only after I called you a pessimist for refusing to see any potential, to which you grudgingly admitted there was some.

    That's where you made your mistake, those numbers are not the basis of my reasoning.

    I think I came across as downplaying the significance of the current XArcade system and it's impact on the conversion rate which is what set you off. I do not think that those numbers will persist though a more open system, but they are interesting to note none the less.

    The basis of this discussion, is the observation of something that has changed in the last 5 years. When we started out everything was "go casual", "go where the big guys aren't". Well guess what? the big guys are casual. The advice "go where the big guys aren't" still holds true today, but the advise "go casual" doesn't. I see potential for indie's making platformers / shooters and everything else that we didn't think there was much of a market we could reach 5 years ago because we were competing too close to the retail market.

    The retail market has taken things to the next level in terms of the size and production value of what they are creating. Because of the complexities of retail distribution there is a void between casual games and hard core retail super titles. That void is soon to be filled by smaller low cost titles that will be delivered online or on consoles like Xbox that support it.

    That reasoning is the basis of my argument, the quoted data points are only for reference and provided for those who are interested. I took note of them at IGC and though that there would be some value in re-stating them here for those who are interested. I tend to think they support my hypothesis but they are no means the basis or the proof of it. I'm certianly open to people not agreeing with their significanc, but not having that data does not invalidate the basis of the argument.
     

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