IGC'04 Impressions, Big Business, Big Money

Discussion in 'Indie Business' started by Dan MacDonald, Oct 12, 2004.

  1. Dan MacDonald

    Moderator Original Member Indie Author

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    IGC got me all fired up and I got motivated to to write. There were some sobering things at this years IGC, I think a lot of people will be afraid to say it because it's against the people who apparently have the money and power. Luckily I have very low overhead and am not dependent on them to survive so I can say whatever I want ;)

    I also included a session summary of Jeff Tunnells Keynote on the Game Design process.

    http://www.garagegames.com/index.php?sec=mg&mod=resource&page=view&qid=6557

    www.planetthinktanks.com/dan/jefftunnell/ (game design summary)
     
  2. Bluecat

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    Thanks for that write up Dan.

    It's looking a little scary at the moment for indie developers, but I think you are correct. These new 'big' players are going to make the same mistakes as the big publishers. They'll end up risk shy and not want to fund games that haven't got a ready audience. At the same time, I think, they will grow to the point where a) they will start playing in the big publishers playground, and then b) will become targets for acquisition and be bought up by the likes of EA and VUG.

    The great thing about the internet as compared to the retail industry is that these guys do not hold all the cards. Publishers got away with shutting the indie out of retail by buying up all the shelf space. It's a little harder to buy up all the 'internet shelf space.' There's plenty of room at the bottom... and it's a real big bottom. :)
     
  3. tolik

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    I really agree with you, Dan (concerning major content holders). I've met with some of the guys and totally understand their positions. Their position are stable, they have stable markets and stable interests in stable world. Why expand into further unexplored areas if everything is stable and rock solid? Why take another niche if it's already satisfactory? Here comes a new publishing studio which takes another niche, has all the respect from the very beginning, but starts to take a significant share to become arrogant and unresponsive for the masses - "we've made our plan for this year on the content side, let's just sit and wait seeing how the money flow".

    There should be a distinction from indies and commercial indies. Or something like that - when you cross the line, you are out of it. This scene has several goals in my opinion: create Games, create Fun games and create games Yourself. When you are creating a casual game which doesn't have all these three factors (let's call them GFY) and it does reach the masses, you become a money hunter without an attitude. You don't show up on forums ;) and don't talk to other people? "What for? To share my moneymaking ideas?"

    Ahh, I don't know what I want to tell, but being a scener myself in the heart (yeah, DEMO SCENE, that's europe!), I really distinguish "Games" and "games", as well as I have an attitude to an every single thing on earth.

    Whatever, sorry for my midnight mumbling.
     
  4. lowemark

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    Very interesting reading. Thank you.
     
  5. Dan MacDonald

    Moderator Original Member Indie Author

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    It's true there is money to be made in this business, but what I value most is the lone indie who comes home from his dayjob heads out to his garage or office and starts making games because he loves to do it, because he's compelled to do it. He has fans of his game out there and to him their appreciation of his game is worth more then the actual money he receives from it. I really don't want to see that die, sure we are just a bunch of indies and in the end we really don't have that much leverage against people with millions of dollars, but I'd hate to see us consumed by it.

    So ya, I'm a little bit of an idealist, I'll admit it, after that one session at IGC I was seriously worried that this business was just going to become a money chasing commercial cutthroat business. I don't want their vision of the world to be the one that new indies adopt when they think "how can I be successful selling games online", I want those people to value their customers and value the games they create, not just try and make something that sells to 100's of thousands of people. Let's not reduce it to that. I honestly believe that if we do the games that excite us and that we are passionate about we can still be quite financially successful even if those games aren't targeted at the majority segment of the mass market.
     
  6. Hamumu

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    I spoke about this very phenomenon in my amazingly astute prescient fashion in an interview on the very site that this site used to be! I think that's where I did it. It was a year or two ago, anyway. I talked about how the bigger indies of today would grow up to be just like what the retail is today, and then there'd be a new set of indies under that. It's what happens. Indies will never go away/be consolidated. The CURRENT ones will, but the indier ones will out-indie them from underneath. I think it's inevitable that the ones that do huge business become these big risk-averse corporate entities, and that system froths up into being, but there's always someone smaller underneath filling the gaps. Who then grows up big and risk-averse, and so on. It's a cycle. I intend to stay on the little side of it for good (not that I have much choice, but if I did, I'd choose to).
     
  7. Chris Evans

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    Great article Dan.

    Well that pretty much sums up a huge reply I was getting ready to write. But I'll say this.

    I don't have a problem with selling games through portals (I plan to sell my game on a few myself). But as Indies, I hope we continue to create games we want to make. As Dan put it, create games that excite us and that we're passionate about. I don't want us to get to a point where we THINK we have to make a 3 color match game (or any other game the portals dictate) to be successful.

    I've already seen it the past couple of years. Many Indie developers pushed aside the real game they wanted to make in order to make a quick buck creating casual games. The problem is the developers had little interest in the actual game itself. The purpose was to make money pure and simple. So when portals started dropping royalty rates, many devs accepted the deals anyway because they didn't really respect or value their own product.

    Call me idealistic or sappy, but I really think a game should have a soul. For me, a game has a soul when the creators are really passionate and believe in the game. They either enjoy the genre or they're intrigued by it. Don't get me wrong I'm not one of those who think only Indie games have a soul. There's quite a few retail games too, such as Halo, Fable, and pretty much any Blizzard game. But I think we can all agree, it's much harder in retail due to the cutthroat nature. Just to get a game on a store shelf, a lot of compromises have to be met to get through all the hoops and middlemen.

    The advantage of being an Indie, there isn't a huge gatekeeper between you and the player. You can make a game you're passionate about that you think people will enjoy and no one can deny you shelf space. The Internet is huge and getting bigger everyday.

    But many of these casual games on the portals simply have no soul. It just solidifies my viewpoint when I go to the developer's website and there's barely any mention of the game. If you're lucky there might be a half-hearted placed Buy Now button.

    Sure, a hit on a portal can mean lots and lots of money. But I'm sure many of us didn't become Indies simply for the money. I'm willing to bet a great majority of us could be making more money at a "regular" day job. Yet, we became an indie or desire to be an Indie because of the FREEDOM. Freedom in all respects. For example, I want to have the freedom to look my customer in the virtual eye and ask him if he liked my game or not. If he/she has a good suggestion, I want to be able to implement it and hopefully continue to have a long relationship with that customer.

    So I just hope people don't get confused thinking that portals are the gatekeepers to the downloadable market. As Dan mentioned in his article, they want you to believe this. However, they are simply gatekeepers to their audience. They have a very big audience, but there's nothing saying you have to go through their audience or only cater to that type of audience. You are free to cater to other audiences that are niches or simply haven't been discovered yet.

    This is why I think developing marketing skills are so important for Indies. I know many people just want to create games, but by developing proficient marketing skills it gives you the ability to find and cater to your own target audience, thus giving you true freedom to create the games you want. Exposure is the biggest problem for Indies, but we don't need to shove our games in front of millions of eyeballs to be successful. Several thousand that are well targeted well do just as well.

    That's why I personally don't feel threatened by portals. Especially, since it seems many of them are getting more "casual" not less. They've found a fairly large market segment of 40 year-old women who play games. That's great, but obviously 40 year-old women aren't the only ones who play games. As the portals start pushing the upper extremes of the casual market and retail games get more hardcore, I think there's an unknown middle ground that's getting bigger. We just have to find it. :)

    EDIT: I guess it still ended up being a long reply. :p
     
  8. Anthony Flack

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    Good read, everyone. I'm glad this has come up.

    It hasn't been the "evil" portals that have concerned me so much. They are doing a lot to help people get used to the idea of buying downloadable games, and that's great. I don't like the way that downloadable games are becoming defined as the most casual of casual games; that's a bit of a worry, and a shame. But you can't blame the portals for that - the real issue is that developers are focusing too much on casual games.

    I've certainly noticed it on these boards... as people get serious and professional-minded, they start to make games based on a simple cost-benefit analysis, rather than making games because the game grabbed them by the shoulders and demanded to be brought into the world. I would say that probably 9 out of 10 games I see here are simply products designed to make money. You make casual games because the market has been established and it's low risk.

    But anyway, the internet knows no bounds. Even if the "indie" market becomes the ultra-casual market, at least people are starting to come around to online sales and distribution. Other markets will spring up wherever there is a demand to be met. Anyone that is making games that people like and can't get elsewhere, surely has a future.
     
  9. svero

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    I dont think of the portals in terms of whether they have good or bad intentions etc... They're businesses pure and simple.

    That being said the market HAS changed and as far as the smaller developer is considered it has changed for the worse. Basically we have no more free places to promote our games and reach a reasonable audience. So we either give up a large part of what our games make (if we're lucky enough to get distribution!) or we spend our own money. Most of us don't have the cash flow to advertise heavily enough to succeed and we don't have the cash clout to get fair deals advertising. When real etc.. buy ads they buy ads across 20 sites for a year at a time and negotiate a deal to advertise a site that sells many games. When we look at advertising we look to advertise a single game for 1 month and hope to pull a profit. Near impossible.

    For my part im now working on some clones. Seems to be all that I can do. Hopefully they will generate some cash flow and let me go back to doing what I want to do. If not I'll be taking a serious look at the app market which may or may not be better.
     
  10. Dan MacDonald

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    I agree that the big distributors and the new publishers in the downloadable games space are not inherently evil. The exist because there is a business case for them to exist. It's like the formalization of any new market, once it reaches a certain size and has certain economics that can be presented to Venture capitol, the big players are going to be jumping in the pool. Guys like popcap and gamehouse will leverage these new players and generate great profits.

    I personally don't buy this for a second. It's true if you are going after the same exact market the distribution channels are going after. From what I've seen they are increasingly becoming less and less creative and becoming more and more intensely casual, mindless games of luck involving colors and matching etc...

    I don't believe for a second that the the 250million people who buy games online are all grandchildren and women over 35. Sure that might be the majority, and in the past that was the bread and butter of the indie. But times have changed, small guys need to shift their focus and more then anything make game they care about. If you have 100k like popcap to spend developing a game, you can develop a game that you don't really care about and polish the heck out of it. It's hard enough to finish a game as a lone wolf developer or indie in the closet, it's 10x harder if the project your working on doesn't really excite you. Think pyrogon, and the infamous
    Pyrogon Postmortem. This is what happens to you when you make games to make money instead of making games you care about. Thomas Warfield does so well with goodsol in large part because he actually loves playing solitaire, and it shows in his product.

    I was talking to Mike Welch at IGC, the creator of DX Ball and Pocket Tanks, two very successful indie titles. A huge portion of his customers are women and kids, but neither of his games are particularly casual in nature. He does little to no promotion and still he sells enough to rent a small office, pay his mortgage and support his wife and kids. I don't believe he is an aberration, a fluke, I think he is the recipe for success, a model to be emulated.

    It comes down to what Jeff Tunnell said in his keynote address on game design.

    The point is, love your games, and make fun games. No matter who is in power or who has the money, you will be able to sell it. So don't try to make fun games for an audience you don't understand in a game type you don't enjoy. Make a game that excites you and YOU know is fun, as opposed to guessing what other people think of it.
     
  11. svero

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    Bigger companies have made a conscious decision to take over the distribution in the market. They don't care what people will buy whether its casual or something else. The point is control of how games distributed. That's how they make their money.

    So the real scenario is this...

    - The download sites no longer serve the gamer - they dropped the ball and sold their distribution to bigger companies - gamers of all kinds have learned this. They simply don't have the traffic anymore.
    - Gamers have learned not to go to download sites to look for stuff. The hard core audience reads bluesnews, gametab, avault etc... and the casual players and downloaders now go directly to the portals.
    - Download sites therefor no longer provide a valid base for marketing. You only need to submit to know that's true. Anyone who's been in this for a while like I have has seen the difference between now and just a couple of years ago. if you submit a new program to sites there is NO sales spike whatsoever. Genre is not a consideration. Doesnt matter if it's simulation or casual.
    - Press releases to game sites DO provide sales for the first month a game is released. Space Taxi 2 saw quite a few sales the first month from mentions in places like bluesnews, avault etc.. but to keep that going I now need to spend my own money on those sites. Not cheap.

    So anyway..in a nutshell I don't agree with your assesment. I don't think it's possible to make a living off games unless you make something that is good for the portal audience or you have the money to promote it yourself. There will be odd exceptions. Maybe some game will be so amazing that it defies the rules and catches on by word of mouth. But for most of us that's the business reality. It basically comes down to this. You *can not* sell a game that nobody sees. That's pretty simple. If nobody sees it they can't buy it. How are you going to get the eyeballs? Download sites? Can't. Advertising? You probably can't afford it. Just pray for word of mouth? That's not a business plan.
     
  12. James Gwertzman

    James Gwertzman New Member

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    Reading Dan's writeup and these responses I feel compelled to write. I disagree with a lot of what I'm reading here. I feel like people are turning this whole thing into a black vs. white issue whereas in fact there are lots of shades of grey.

    In the book "Built to Last" (great book, btw, for anyone trying to build a company that will stand the test of time) there's a great chapter called the "tyranny of the or". The basic idea is that when forced to make a tough decision, many great companies find a way to somehow do both.

    On this thread, the general synopsis seems to be "make money but be miserable OR make innovative games and have fun but barely make a living".

    I completely reject that premise. Here at Sprout Games we've completely embraced the portals (we don't even try to sell games ourselves), we own 100% of our own IP, we're doing well financially, we make games that we think will be fun and that will entertain as wide an audience as possible, and we're having a blast doing it. You CAN run a successful business without letting a focus on the bottom line destroy your fun & creativity.

    I'm extremely proud of our best-selling game, Feeding Frenzy. I think it's innovative (it's based on the same core mechanic as the original Intellivision game Shark Shark, but we've gone way beyond that original concept), a lot of fun for gamers of all stripes, beautiful, and well-crafted.

    Furthermore we've sold nearly 100,000 copies at this point (and still going strong), and I know that we would never have sold that many if we hadn't been working with all the major portals and had a close relationship with RealArcade who is essentially acting as our publisher.

    So what if we're making less money per copy than we could if we sold it via our own website? A small percentage of a huge number is still a very big number. Also, I know that our core competency is making great games. It's what we live & breathe. It's what we love doing and it's what we want to focus 100% on doing. Why shouldn't we focus on doing what we do well, and let someone else (like Shockwave, or Oberon, or Trymedia, or Real, or any of the other portal/distributor/publishers) do what they do well?

    I learned a long time ago that you'll never be as good at something you don't enjoy as someone else who truly loves it. I know that this is the "business" board, but I suspect most people on here like writing code more than they like dealing with marketing & PR. Why not outsource that stuff to someone else who's probably better at it than you are? Then you can truly focus 100% of your energy at making the absolute best games possible.
     
  13. Dan MacDonald

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    Make sure you read the comments I made on my .plan post as I think they help clarify my motives and the intent of the origional post somewhat.

    James I certainly respect you as a person and your perspective but I also respectfully disagree. Have you ever thought how much you could have made if you cut out your middle men? Everything I've learned from indies who self publish is that their software (with steady updates) continues to sell, more and more each year. Take www.goodsol.com for example, I don't know exactly how long he's been selling his game pretty good solitaire but I know it's in excess of 7 years and it has sold more each year, and in some cases exponentially more.

    I also herd that he sells on average, in excess of 60 copies a day from his own website. No middlemen. I wonder how long the shelf life for feeding frenzy is before it falls off the sites? A year? two? You become dependent on having a few hit's each year to keep your revenue up, and what if the next two games turn out to be only moderate successes like word harmony? Will you be able to sustain yourself if that happens? And what about your most valuable resource, the customers who play your games? Wouldn't it be nice if they were YOUR customers and you could market feeding frenzy 2 directly to them without middlemen? As it stands you really don't know that much about your customers.

    You should be proud of feeding frenzy, it proves that the mass market doesn't just want to eat up abstract bubble poppers or connect 3 games. I also think feeding frenzy is a game you were genuinely passionate about during it's creation and it shows. (As opposed to pyrogon who was creating them purely for the money) However I think that while your present may be secure, your future is less secure because of your dependence on the portals. I think the bottom line is, if you want to build a business that lasts you build a business who's customers are the people buying the product, not a long value chain of middlemen.
     
    #13 Dan MacDonald, Oct 13, 2004
    Last edited: Oct 13, 2004
  14. lakibuk

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    Ok,but what when the portals don't want your game (like mine)? You can't spend months or years for developing a game hoping a portal will publish it.
     
  15. Greg Squire

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    There's seems to be a certain amount of arrogance entering into some of the portals, almost as if they think the own the customer, just like retail publishers own the shelf space. Maybe not intentional, but a by product of the way they're running business; more customers = bigger ego (unless you keep it in check). The problem with this mindset is that there's no way to "lock up" the shelf space (or the customer) on the internet. If they loose site of where they're money comes from they're going to dry up, as the customer and the developer are certainly free to go elsewhere. I not saying that portals are evil; it's certainly not that black and white. But they need to realize this direction of giving less and less to the developer is not the right one. They are in a "symbiotic relationship" with them. It's either going to be a win-win or a lose-lose situation for them (not a win-lose like some tend to think).

    I believe the big reason that people go to the portals, is because they've learned that they can find a lot of games there easily. They could find the other games not on portals (indie or not) if they tried, but most feel they don't have the time for that. The only "value add" these online publishers (portals) have is in connecting customers to product, and we all know there are other ways around this (maybe not as lucrative but possible). So, on the customer's end it all comes down to search ("How can I find a game I want quickly?"). On the indie's end it's all about exposure ("How can I get my game in front of enough eyeballs to be profitable?"). I think there are ways in which the industry could still shift. Who says there isn't room for another portal (more indie friendly) out there? I think sites like grab.com are a step in that direction. It is helpful from a customer's perspective, to have a handful of clearing house sites, instead of looking on every singe indie developer's site. That's why they gravitate to the portals. Perhaps if an alternate portal (a more indie friendly portal) existed, then they may eventually gravitate there.

    Let’s go “Kick the Bearâ€￾! Or at least the bear cubs (Those of you who went to IGC will know what I’m referring to here.)
     
  16. tolik

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    @James Gwertzman:
    You are one of those people, who can preserve fun gameplay, great graphics and atmosphere and still think as of Indie.

    Your game looks so professional, that it wouldn't be classified as Indie by a lot of Indies, I guess, but as a game similar to PopCap's one.
    Your Game is Fun, I can't disagree. I was able to complete it from the first try in time before it expires the day it came out. I love it, it's great!

    I (Dan, correct me if I'm wrong) guess we are referring to those individuals, who are making another useless clone of a True Game, but now it's 100% casual. The game doesn't have anything in heart - it has ugly graphics, simple gameplay and stupid levels but still is #1 on every channel. A wide marketing & sociological research was done to significantly improve usability, accessibility, as well as stupidity to reach the proper top-niche of the market. Then, publishers put it as a #1, try to preserve it, and by making exclusive agreements force developers to create second game out of the dullest heartless idea on earth (proved). The genre is killed, no more games in this genre can really interest a publisher since he has an essence of the success and doesn't care much about any other games similar to this. And it already sold 7 times more than your game, James.

    The same game could be done in a manner, that everybody, EVERYBODY, not just pure poor casuals which don't suspect anything fishy with this "oh man fun game" would love. Add cute graphics, check, add cute replayability value, check, add cute sounds, check, add zillions of levels for every type of gamer to bring pleasure, add everything else and become a Fun Indie Game, check!
    I don't want to take it personal but the game without all of this became a hit this/last year and closed the road to other games on casual channels and proved the correct direction for publishers + blasted the trend Dan has discussed.

    The publishers will continue to look for quintessence of the most casual thing on earth and deny existance of truly Indie games. You will need to be either a professional with real mind online (having game design, programming and other skills with years of experience) to create the games which would satisfy both big publishers and still qualify as Indie (your case, James), or work on their ideas to implement the most casual ideas denied by most of the truly indies.

    In order to become professionals, you'll need to work for years as a "Refugee from the Mainstream Games Industry" (quote from the forum's thread title).

    These are my thoughts...
     
  17. Andy

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    Real (for example) doesn't like to take even our best games - writes some misty explanations in change. That's why really... :)

    But I'm 100%-agree with your opinion in common James.

    And your Feeding Frenzy - "isn't bad" game btw. :D
    Actually congrats with your success and good job guys!
     
  18. Chris Evans

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    @James Gwertzman

    I never meant to imply the issue was black or white. However, the portals have been kind to you because you specialize in the games that cater to their audience. I'm glad to hear you really enjoy making the games you guys develop at Sprout Games, I'm sure that greatly attributes to your success. Though you have to understand, not everybody wants to create casual games. The portals are extremely selective of the non-casual games they distribute if at all. Doesn't matter how good your game is, if your game appears to be a little too complex or a bit offbeat, they won't distribute it.

    So I'm not really sure how relevant your post is for developers who don't make casual games. Developers who make niche or semi-hardcore games, there's no huge "marketing/PR" force that you speak of. There's no big portal that specializes in those games (Garage Games is trying, but they're still growing). So the developers who make those games have to pretty much go at it alone.

    I've been lucky with my game Pow Pow because it's kind of a "fringe" game. It's not too hardcore and it's very colorful, so many of the portals are intrigued by it. However, one of the portals in particular think the game might be too complex for their audience, so it's not something I can rely on completely (And I refuse to dumb down my game, I think it's pretty straight forward as it is.) Fortunately, the game has been getting a pretty good buzz, so I'm confident I'll be able to do at least okay self-publishing through my website. Ideally, I'd like to sell my game both on my site and on the portals. Physical copies on my site, electronic copies on the portals.

    You mention you don't even sell games on your website, what happens when Real or the other major portals shift their focus? What if simulations become the new craze? Will you continue developing puzzle games or are you guys all of a sudden going to start developing sims even though you may have no interest in them? No one ever has complete control, even those who self-publish. But right now for you guys, the balance of power weighs heavily with Real and the other portals. Your business sinks or swims based on whether they decide to publish your game or not.

    I'm really glad you guys are doing well (I mean it). But I can't but help thinking you're treading on similar waters of Pyrogon. Fortunately, it seems you guys actually enjoy making casual games (unlike Pyrogon), though it also seems you're overly reliant on portals just as they were. It kind of scares me that you're not even trying to sell games on your own site. If you're essentially a 2nd party developer of the portals, then I guess it doesn't really matter. But then again, how independent are you to make the games you want to make?
     
  19. Anthony Flack

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    Yikes! I hope the definition of a "true indie" doesn't hinge on being unprofessional and rubbish!

    Now, if I could sell 100,000 copies of a game, honestly I wouldn't worry too much about the future... I could probably just about retire and live quite comfortably off that.
     
  20. tolik

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    I guess here comes definitions and differentiations of projects like "absolutely polished vs polished to some extent", "casual vs casual to some extent", etc. I can't yet define the real difference between truly casual and truly indie (besides the money point). A lot of the indie games doesn't become casual because of the "more-than-casual" gameplay (e.g. innovative gameplay), "a-bit-unpolished" interface, "B"-level graphics, etc.

    I would like to hear everybody's opinion on this theme - should there be a distinction between casual and indie?
     

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