Indie boom imminent?

Discussion in 'Indie Business' started by Aldacron, Aug 14, 2004.

  1. Aldacron

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    It struck me during a recent discussion regarding the advancement of technology that independent game developers are on the brink of a huge boom. Not just in sales. I think the market is set to explode with demand for indie games of all shapes and download sizes. The mantras that we have been following (keep your download to 10MB or less; pump out small, casual games) will be invalidated.

    It seems to me that technology is moving at a faster rate than the low end of the games market can keep up with. Buy an affordable mid-range system today and in 6 months it barely meets minimum requirements. I do not think that a significant number of people will keep up. So as the high end of the market gets rapidly higher (and smaller as a side effect), the low end moves much, much more slowly. Where then, lies the point of diminishing returns for the game companies? Where do they set their minimum requirements? I think that, in terms of development costs, this decsion will become more difficult to make as time goes by. Ultimately, they will be cutting out a portion of the market which is above the point of diminishing returns.

    When that day comes, it will bring about an indie boom. Gamers who can't afford to get all of the latest bells and whistles in the latest AAA titles will turn to lower cost, more widely supported indie games in the same genre. RPG, RTS, FPS... anything goes. These will be people who are not in the casual PopCap crowd. People who don't mind downloading a 50, 100, or 200 MB game.

    Is this just a pipe dream or do any others think it might play out this way (or similarly)? And if you do agree, when does it happen? I'm thinking we'll see the beginnings of it soonish, around the time the Unreal Engine 3 games hit the market (2006). I'm willing to bet that many (not just a few) of us could sit down and start on a hefty project now, spend a one - two year dev cycle and turn a hefty profit for a decently polished product.
     
  2. svero

    Moderator Original Member Indie Author

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    I think it's probably correct to say that as the technology advances so will the opportunity. For instance it's probably fair to say that more and higher speed internet access means more potential downloaders/buyers for different kinds of games. But I think you have to take the whole picture into account.

    As the number of users increases and the market matures so does competition, and so does the cost of distribution etc... So these sorts of things provide a balancing effect that could *potentially* leave us in a position where while the market of downloadable games itself is doing better the little guy no longer has access to it and is doing worse.

    The market growing and technology evolving in our favor doesnt necessarily mean good times for the average indie.
     
  3. Mike Boeh

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    I think the boom has already happened... Now comes the bust...
     
  4. svero

    Moderator Original Member Indie Author

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    Hehe..nothing like a board full of seasoned cynics to inspire new and upcoming indies! :)
     
  5. gmcbay

    Indie Author

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    Boom or bust, I don't think the initial idea of battling the retail publishers on their own turf has much merit. It isn't like AAA games cost $500 a pop. The price difference between $50 for an AAA title and $20 or so for an indie game is very minor in the grand scheme of things, and while people do like lower prices, there isn't enough room under $50 to make price a significant differentiating factor.

    Whether the indie market grows or shrinks from here, your best bet is still to cater to gamers that the mainstream industry is ignoring or underserving. Trying to compete with the AAA FPSes and RTS will still be a losing proposition, IMO.
     
  6. DavidRM

    Indie Author

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    I wrote my book with the notion that the availability of tools, talent, content, and distribution methods make it possible to be a successful independent game developer in a way that had never been seen before.

    I still hold to that.

    We're still pretty close to the beginning of the indie game movement, though.

    However...to comment on Retro64's post: We did see a boom, starting about 3 years ago, in the casual game market. That's a market that was all but *created* by the indies. And like all new markets that show a disproportionat profit margin, it attracted lots more indies and, eventually, the big publishers. In a sense, that boom built a publisher or two.

    Go back 15 years in the film industry, and you find a similar occurrence, beginning with the success of sex, lies, & videotape. Suddenly you had major studios creating "fake indie" films to capitalize on a profitable new niche. The nature of independent film changed then, as it has several times in the past (go back further and you get The Texas Chainsaw Massacre, Evil Dead and Night of the Living Dead; go even further and you get Faster, Pussycat! Kill! Kill!; and so on).

    Indie development will come and go as the Hot New Thing, and there will be booms and busts that follow on that status. In the late 1980's, you had independent games that were mostly platformers. In the 1990's, the shift to casual games happened. The 2K's have seen a blend of 3D and casual that has produced some interesting titles.

    The indie scene will always be in flux. Learn to love it. :)

    -David
     
  7. Kai Backman

    Original Member Indie Author IGF Finalist

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    I would think most agree that the boom with short supply, especially in the casual games market, is definetly over. We have a lot of products on the market and a lot of competition for the customers. That boom probably started busting 1-2 years ago. It was a very temporary situation anyway, the profit margins achieved by several key players were so astronomic that it shouted for competiton. So easy fruits are definetly out.

    What are we left with? Here are some pretty safe bets:

    - Downloading as a form of distribution is here to stay, and will probably marginalize retail distribution at some point in the future. This keeps lowering the physical barrier for entry into the market and also making the market more heterogenous. Downloading will also gain bandwidth limiting further physical barriers for content and moving the bottleneck to production.

    - Where big revenue streams are present the development investments used to capture those revenue streams will inevitably rise. More difficult is to say if the rise will be through single developers investing more or more developers competing for the same slice of the market. In any case currently liquid publishers (read EA et al.) will push investments into the market as the total size grows.

    - The removal of artificial barriers will probably push for a situation where companies of a specific size (10k$ 100k$ 1M$ >10M$) are optimal for a specific market segment. As the market grows, more and more of these niches to dominate will open up.

    - Knowing human nature, this market will end up being cyclical with investments lagging the actual performance by one or two years. When times are booming cash and developers flow in and after a flash and bust a lot of people find safer havens. Thus there will always be under or overcapacity (maybe with a slight emphasis on overcapacity due to the image of game development).

    --

    So what's the big picture. The indie who came into the market cashing in on the boom will probably make some losses during a year or two and leave for greener pastures. Some indies will stay doggedly and pick a wrong section to dominate (super casual games like Bejeweled but better) or the wrong opponent (EA in big title sports games) and thus fail withing the next few years. Some few will pick a piece of the market where they can outperform their competition (including EA) and thus slowly dominate their turf.

    Aim for the last group! :D

    --

    As a second tought, all through the E-Business years there has been this notion that E-Business is somehow different than traditional business and thus followed totally different rules (like unlimited exponential growth before 2001..). These same toughts seem to echo in the halls of Indies from time to time. I can personally see just similarities between games publishing and most other types of business.

    The key question for us is economies of scale. Where economies of scale dominate you get large busines units (Wal-Mart in retailing) and where they don't you get small ones (your local antique shop). Can game development gain from economies of scale? Centralized tool development might push in both directions (EA's proprietary tools or open source toolchains for Indies). Same with learning (peer learning from physical proximity, online forums as distributed exchange of ideas). Content creation is more and more the bottleneck and here individual performance can vary by several magnitudes. A tough question, my bet is still that Games will stay clear from either extreme with a slight slant towards smaller business units.

    --

    As for Aldacrons original bet, yes you are probably right that some people would be able to do that. But there are also other people who will be just as profitable with much smaller projects.
     
  8. Jack Norton

    Indie Author

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    Just a word about the game sizes... maybe in USA not, but talking around I noticed that a lot of areas still have modem or at most ISDN connection.
    Downloading a 50mb demo with a ISDN isn't really a nice thing, I can assure you ;)

    So first the DSL need to be more spread (or maybe satellite connections) before that boom happens... I think we need at least 5 more years.

    (for example I live in Italy, just 30km south of a medium city in which they have cable connection, and still I can have only ISDN)
     
  9. Jim Buck

    Indie Author

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    It's the same in the U.S. as well. I saw an article around a year ago that put the % of broadband internet users at an astonishingly low figure (I can't remember it now, but for some reason 26% sounds familiar). It's the people that have broadband that don't realize this, though, and tend to think that most people access the internet also with broadband. Dial-up will "die" out very slowly still (and it will never 100% be gone).
     
  10. EpicBoy

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    Yep, just got back from my girlfriend's parents house and they have ... dial up. It's still very much in use, all around the world.
     
  11. ^cyer

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  12. Aldacron

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    I'm not talking about price points or competing with AAA titles. What I'm getting at is that the segment of the market the mainstream industry ignores will increase as minimum system requirements get higher. To me, this says that more serious gamers will be looking for alternatives in the indie market, thereby driving demand for a variety of games. An indie FPS won't be competing with AAA FPSes. The mainstream and indie markets will be separated based upon mininum system requirements, not costs.
     
  13. Aldacron

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    Yes, I understand that. But I think more people who already have broadband connections, people who would normally prefer to buy AAA titles, will turn toward the indie market as they grow weary of upgrading their systems to meet minimum requirements. That's what I was trying to get at in the original post.
     
  14. Mark Sheeky

    Indie Author

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    Hmm, I think the downloadable game market is saturated. Quality is increasing which only makes things harder for new developers and most people still go to a shop when they want to buy a game, even if it means paying more. I don't think a boom is here or imminent.

    Mark
    Cornutopia Games
    http://www.cornutopia.net
     
  15. HairyTroll

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    An Indie will be competing with AAA FPSs - not the AAA titles of today, but the AAA titles from 4 years ago.

    Quake III was released on 30 Nov, 1999. Here are the mimimum system requirements:

    Code:
    [b]Minimum Requirements (PC):[/b]
    - 3-D Hardware Accelerator with full OpenGL support 
    - Pentium II 300 Mhz or AMD 350 Mhz K6-2 processor or Athlon processor 
    - Windows 95/98/ME/NT 4.0/2000 operating system 
    - 64 MB RAM 
    - 16 MB video card 
    
    A 'serious' gamer then, who may not be as hardcore now and therefore has not upgraded his hardware, would expect at least a Quake III quality title if he were to purchase an FPS from an Indie today, correct ?

    Say that Quake III cost $5,000,000 to develop back in '99. How much do you think it would cost an Indie to develop the same quality title today? There are more options today, I'm sure the Quake III engine would only cost a $100k or so to license seeing as it is 4 years old. The Tribes engine from GarageGames for $100 is also an option. However the Indie has all the content to create and that does not come cheap.

    I agree with you that if more gamers refuse to upgrade then there will be a large percentage of the population with average hardware - however this is todays hardware.

    The AAA FPS games of yesteryear cost millions to develop. Gamers with vintage hardware still expect their gaming experience to be the equivalent to the games they played 4 years ago ( I don't believe an OpenGL version of Bejeweled qualifies as a replacement for Quake III or Unreal ).

    So my question is, what Indie today has the means to create an AAA title of 4 years ago? And extrapolating from this... what Indie in 4 years could create the AAA FPS's of today?
     
  16. Coyote

    Indie Author

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    The key advantage a small, lightweight independent studio has over the big publishers is just that: it's small and lightweight. It can move and change direction quickly, and can afford to take risks.

    Eventually, if you find a highly profitable niche, the 800-pound gorilla will arrive and squat in the territory that you discovered. There's an expression for that (kinda) that is popular in business: "The race to be second." Anyway --- you have a few options:

    #1 - If you can settle in that niche long enough and be profitable enough before the gorilla sets up residence there, you may have enough power to fight them over the turf.

    #2 - You find some way to co-exist with the gorilla: Maybe a partnership. Or a buy-out. Or some other mutually advantageous position.

    #3 - You relocate to discover the next big thing.

    #4 - Some sort of combination of the above.
     
  17. HairyTroll

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    If you define "small, lightweight" as not having much cash then I'm not sure I agree. How often can an independent studio change direction before it goes under?

    I agree with your statement concerning Indies taking risks - however I feel that that risk taking is due to necessity as all non-risky paths are blocked by the 800 pound gorilla. (I'm 6"1 and 230 pounds..... what that make me? Fat, I think)
     
    #17 HairyTroll, Aug 15, 2004
    Last edited: Aug 15, 2004
  18. princec

    Indie Author

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    That's why I got busted as a mod on Dex remember ;)?

    Cas :)
     
  19. princec

    Indie Author

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    I notice that development of games has become much, much faster lately. Rather than having to spend a large proportion of development time on fine tuning and assembly optimization of blitting routines we're able to just throw stuff together and rely on the hardware to take care of everything.

    Case in point: I use Java and OpenGL. Five years ago this wasn't an option but now all machines are capable of absorbing the VM overhead, and even the scabbiest 5-year old rig has something like a TNT in it which has exceedingly powerful hardware blitting in it. The end result is that I've simply not had to worry about drawing sprites or fart around finding pointer bugs and memory leaks and random inexplicable crashes.

    Twenty years ago a developer would take 3-4 months to write something like Dropzone. By today's standards it's got laughably simple gameplay and almost no content. But it still took all that time to make! I could write Dropzone now in less than a week (seriously! Toroidal Cave Fighter coming soon). And for me, that's what the technological advances have enabled. I can write pretty much anything in next to no time and not have to think too hard, because even the low end machines are stupendously powerful.

    Cas :)
     
  20. Mark Sheeky

    Indie Author

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    True, in some ways. Getting any 'bobs' moving on the Amiga took me ages and scrolling was a nightmare. Still, building up a bank of decent C classes and an engine and stuff will always take a newbie a good few months. After that, development does speed up. My fastest game took 10 days, Outliner, but on Amiga that only took 14 so there's not too much difference. Content is what takes time otherwise AAA title developer would also get faster, when it seems to get slower with new hardware :)

    Mark
    Cornutopia Games
    http://www.cornutopia.net
     

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