State of the industry

Discussion in 'Indie Business' started by svero, Jul 30, 2007.

  1. svero

    Moderator Original Member Indie Author

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    So... What do the people here think about the state of the industry today? I'm particularly interested to hear from people who've been making and selling games for the last 5-10 yrs or so.

    There's no doubt that the whole downloadable game biz has changed dramatically since 1998 or so when I started. The nature of distribution on the net has changed. The level of competition has changed. The quality of titles being sold has changed. A lot of new players have entered and more are soon to come. Consoles have started to add download stores. Nintendo is promising to open up the wii a bit to indie devs. Xbox live arcade has become a major source of income for many. More foreign developers are competing in the market. And so on...

    So... Are the days of writing a small game and selling it yourself directly over? Can you still make 100-200k? a million? Is it a question of finding a niche? Does it make sense today to write the next ricochet or bejeweled? Would it even be noticed in the onslaught of new titles? Can an american company compete 1 on 1 in the casual market with a Russian or other company that doesn't have the same expenses? Is writing small games and selling them online still a valid business direction? Are smaller devs forced to pair up with bigger publishers to make a good living? These are the sorts of questions I'm interested in hearing opinions on. And more specifically... If the market is changing or has changed... are you changing with it? And if so how? What new approaches or directions are you taking to evolve your business if any? Where are the small established indies that survive the next 5 yrs going to be? What will differentiate them from the companies that get lost in the rapid expansion of the industry?
     
  2. zoombapup

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    I think this rapid expansion idea is kind of false. I dont think that there will be many more developers compared to now. My reasoning is that there are only so many people with the required skills to achieve anything like a saleable product.

    As the product quality pushes up, this basically pushes the barrier to entry to the point where some businesses simply arent sustainable (which is by and large the vast majority of people on these boards, who dont run a sustainable business but do it for pocket-money or for kicks).

    If you rephrase the question to discount those that are indie, but not professionally living off thier work then it becomes a bit of a different issue.

    I think the opportunities that have been around over the last 5 years will continue for another 3 or so before things will fall off again until the next round of platform changes. Might not affect too many of the completely downloadable devs, but if youre crossing over into downloadable console dev, it might.

    Right now we can clearly see fresh opportunity on XBLA and Wiiware and WhateverSonyCallsIt.

    I saw from about 2000 onwards a clear change within the casual industry. Having them go from courting devs (because they simply didnt have enough products) to treating devs as a commodity has been an interesting change. XBLA has quickly done the same. Wiiware is likely to go the same way. So maybe right now we'll see a flurry of "indies please come to our platform" musings, then 2-3 years down the line, it will be a lockout.

    Business wise, I'm not sure. We dont fund our dev from its own profit (doing contract gigs and day jobs to do that). So I'm probably classifying myself as a hobbiest right now.

    But this all kind of suggests that its ever been any different. Businesses have always faced lots of competition and increasing costs etc. Smart people find alternatives (i.e. focus on casual rather than AAA). I do think that a lot of the trends are likely to fall flat (web 2.0 style stuff) like a dot com bubble ready to be burst. But inevitably, I think that social games and online games are a growth area. I base this on the korean experience of online games as they have greater broadband penetration, if we extrapolate similar takeup as other countries achieve similar penetration, then I see considerable room for growth, especially for "boutique" style online games.

    I've still to see an online "fashion designer" game for example. Those will come.
     
  3. Desktop Gaming

    Moderator Original Member Indie Author

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    Wow.... can o' worms....

    This is something that's bothered me for a long time now. I don't think that making a game and selling it yourself is viable any more - it simply costs too much money to market it properly and get it noticed, when increasingly bigger companies are saturating the market with one "hunt the object" and "match three" game after another. The best way to get your game noticed is to let one of the portals stick it on their site and take a cut of the proceeds. If you don't do that, people will likely not even know about you.

    I've also noticed a gradual decline in the quality of the games these monopolising companies peddle. It appears that the 'quality over quantity' rule no longer applies, and the goal is to release as many games as possible regardless of standard. Its this train of thought that's going to be the undoing of the lot of us. Casual games will acquire a reputation for being poor, and the customers will eventually stop coming.

    Anyway, I feel a slight rant coming on, so I think I'll leave this one alone for now.
     
  4. cliffski

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    I've been going exactly 10 years.
    I think it's easier now.
    It's still very hard, but you can make $100k a year, definitely, although the vast majority do not make that. A million a year? not as a lone wolf, but are games making a million a year? certainly, but spread between many developers and publishers taking their cut.

    Why is it easier now?

    1) Tools and technologies are better.
    You can buy PTK or FMOD, or whatever. just much more choice in this area now. Java is widespread, or you can maybe use C#.

    2)PCs are faster
    You can be a more lazy coder. You don't need to write a software renderer using assembly language. Unless you are doing envelope-pushing 3D, you can code at a higher level now, and forget about limited CPU, VRAM and memory (mostly).

    3)More people on the web.

    There are more potential customers, and more of them have broadband than ever before. They are more relaxed about downloading games, and using their credit card online. Ebay and paypal have done the work for you, regarding persuading people online buying is safe.

    4)Indiegamer and similar sites
    You can tap into a community full of people doing small games, who help each other out, and sometimes share very vital data

    5)Online marketing infrastructure.
    We now have google adwords, and established systems like alexa, softpressrelease, ymlp, PAD files etc etc. It's not unusual to sell on-line, and there are lots of people with experience of helping small web start-ups market and make money.

    Yes portals take a lot of money, but you don't have to rely on them. never be 100% reliant on retail or portals, that's asking for trouble. Ask yourself how the portals got to where they are, and try and get to the same place. Don't be afraid of advertising.

    Its' really hard to make money doing this. I think it used to be even harder. If you are new, it's easy to assume a lot of what I described has been true forever. It hasn't.
     
  5. Sysiphus

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    Very interesting thread. My own curiosity goes in guessing if developers will keep needing artists' hands of the indy kind, or this all is going to be eaten by whole companies specialized in making graphics.. (instead of working with "bedroom artists") ... or the artists will be inhouse, fewer or no freelancers, as a result of companies with 5 - 15 people covering all the gap, eliminating the individual developers, being those companies almost the only thing to survive,(for casual games being more and more complex), getting a bit of the internal feel of what has allways been in retail market companies. (which I admit I suffered)

    I still hope there will allways be room for an artist and coder, friends, do their 50% profit share game... ;)
     
  6. Jack Norton

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    I wasn't there 10 years ago, but one thing I've learnt: if you save on marketing you can't hope to get more visitors/sales. I now re-invest 30% of my monthly income on marketing :eek:
     
  7. Sirrus

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    The industry is surely a different place than when a lot of us started in the late 90s/early 2000s.

    Are the days of writing a small game and selling it yourself directly over?

    I don't believe so. I think there is still room in the market to really dig in a niche. I think Cliff has been very successful in this strategy.

    Can you still make 100-200k? a million?

    Sure! But it is indeed unlikely these days.

    Does it make sense today to write the next ricochet or bejeweled?

    It ONLY makes sense to do this. If you want to sustain yourself, you must be different, you must have the next killer. I say that with complete sincerity. I'm not talking different in the indie sense either. We must evolve the industry - but practically. Think about your audience, think about pop culture. See trends in the real world and apply them. Innovation does not mean strange or cool really. Its just about pushing the boundaries of acceptable resistence. The next Bejeweled will spawn sequels, spinoffs. The day of sustainable one-offs are over.

    Can an american company compete 1 on 1 in the casual market with a Russian or other company that doesn't have the same expenses?

    There is a huge advantage in cost reduction of countries outside of the US and the UK obviously. Its getting more difficult.

    Is writing small games and selling them online still a valid business direction?

    Debatable.

    Are smaller devs forced to pair up with bigger publishers to make a good living?

    Well, it helps in a lot of ways. We offer not only funding and advances, but a really top notch design and production team, as well as in depth QA and a massive distribution network, including other platforms. Sometimes a publisher can offer resources that a smaller dev could unfortunately never afford the luxury of.
    If you do decide to pair up with a publisher though, make sure to find one that will really create a relationship with you - not just milk your product and let you go.



    The industry is changing rapidly. Smaller devs just can't keep up at this pace. We've all seen the massive consolidation that is occuring. On the other hand, things are very exciting right now. New consoles are opening up, distribution offerings are increasing rapidly, and production quality is going sky high. We've got to remember that this how now become Big Business.

    Multiplayer and social gaming is definitely on the rise. Storytelling is becoming vital. There will always be room for a quick, pure gameplay experience but the market is wanting more and more of an experience.
     
    #7 Sirrus, Jul 30, 2007
    Last edited: Jul 30, 2007
  8. Spore Man

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    Add into the mix discussed above: Isn't there also an impact from AAA console and PC people getting out of the commercial industry (the EAs, Take 2, etc) and moving into indie & casual scene with their "AAA" skill sets?
     
  9. KNau

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    Wake-up call!

    When was the last time anyone independent created a truly remarkable "must have" game?

    There's a pretty obvious reason why 99% of indies make less than $1,000 a month, let alone $100,000 a year and it's not marketing or distribution related.
     
  10. svero

    Moderator Original Member Indie Author

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    Lets hope for their sake, they leave the "AAA skill set"'s behind, and learn a thing or two from the good casual companies. I don't think endless bug patches, ludicrously high end system specs, and badly conceived DRM targeted squarely at legit customers, are going to fly in the try before you buy market.
     
  11. svero

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    This thread isn't really about that. It's about people who HAVE been making 10's of thousands or hundreds of thousands a year and how market changes are affecting their outlook of the industry and how they will move forward. Obviously lousy games won't sell in any market.
     
  12. zoombapup

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    Just an anecdote, but I was talking to my old boss at Team17 last week and he said that since they started thinking about the online console business and actually moving in that direction, theyve been a LOT more profitable than they used to be dealing with the likes of Activision, Hasbro etc.

    In fact, they did amazingly well with Worms, which was essentially an indie project (and to me will always be). Of course, having a proven 10 million+ selling "hit" game helps, but frankly, anyone with any decent development skill could knock out a worms quality game. So clearly it was the idea rather than the execution that held the value. Not that the executions didnt work pretty well.

    Clearly, for a relatively small developer (by small I'm talking circa 100 bodies) it definitely makes a LOT of sense these days. Targetting downloadable console sales definitely works. Of course they self-funded much of the development of the game on XBLA and clearly that pushed up thier %age, but it seems to have worked out really very well.

    That and they finally figured out Martyn's best place was selling the games to publishers rather than trying to run a studio (which honestly I think he'll agree wasnt his best :))

    Actually, thats kind of how I see real professional indie development working in the next 5 years. Basically, the ones who have the capacity to sell will be the ones who are still around in 5 years. Development is only a tiny part of the equation now (where as 5 years back, even development wasnt assured), I guess maybe Cliff has a point about the development being easier.

    I think introversion is a good case in point actually. If you look at thier company makeup, they have way more bus dev people than they do developers. I think this actually makes a lot of sense. Must suck to be the only developer, but sure means your products get "out there" a lot more.

    Honestly, I kind of wish I could partner with another dev in many ways, because sometimes I really enjoy the schmoozing, then I think about having to do it for my own single product and it feels kind of lame. If I could find a solid partner who did similar games, I'd definitely consider it (if you look at something like the remedy/3drealms partnership, or the valve/everyoneelse partnership as an example of mutually beneficial partnerships).

    Why dont indies do that more? Or do they and I'm just missing something?
     
  13. datxcod

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    Not really adding to the thread but I just wanted to mention:
    I think the only profitable option for a indie company (1 or 2 persons) to sustain itself with casual games (for PC) would be to become a publisher/portal. You can see that that's the path most companies today are taking, they start small releasing games until they have a big hit, then they become publishers/portals. I've seen quite a few games released that made a few thousand D's, yes the money it's nice for 1 person or two but it would be really hard to pay your employees with that money.

    Is someone here in these boards making more than 100Ks a year off games ? not including advertising, just selling games ?
     
  14. Applewood

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    I think the only way a tiny company can make real money is by selling subscription games or stuff where the user has/ought to keep spending money.

    I'm not talking about WoW scale stuff either - there's plenty of 30 somethings just gagging to spend cash on their hobby, so give em one. Look at MTGO for an example of how to bilk players for millions selling them binary digits week after week. (I was one of them for a long time. I'm now waiting out my 4x foil playsets of IPA/OTJ to hit a 100K$ and I'm selling :)

    I have a couple of ideas for this kind of thing, and one of them would even work on XBLA with its micropayments, but I'd need a lot of funding to make it happen. And there's the rub. Same old a classic - you need to have money to make money.

    There must be smaller stuff that's doable though. TCG strategy games etc. RTS games where you can actually buy better/different tanks and base units.

    If this gives anyone an epiphany, I want a kickback! :)

    Could you get us some funding for this Phil?, maybe we could team up :)
     
  15. Sybixsus

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    It's strange. Whenever I read these sort of threads - threads about the state of the industry, broad picture stuff - I always get a bit glazed and can't help thinking that good or bad, big or small, it kind of doesn't apply to me. And now that it's happened again, I've suddenly found myself wondering..

    Is this what it's like to be Cas?
     
  16. datxcod

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    Not sure what you mean but unless you are doing pretty well selling your stuff I would say it applies to you as well.
     
  17. Sybixsus

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    Of course it applies to me. I just never feel like it does. I always wind up ploughing my own furrow and ignoring the good advice on offer on these broad issue. On narrow issues, I'm fine, but on broad issues like the state of the industry, no. I could analyze why, but since it probably won't change anything, I've yet to see any point in doing so.
     
  18. svero

    Moderator Original Member Indie Author

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    Well I'm not sure it's so much about advice. There is no real correct answer here. I'm just thinking for myself... what should I be doing next year after my next game is done? Just create another? Or should I be looking into a change. Successful companies change with the market. I sorta feel the market is dictating that I change what and how I do business, and I've had some of the same sorts of ideas a few people expressed in this thread. Moving to a subscription model, targeting consoles instead etc... So I got curious what others were thinking.

    >Honestly, I kind of wish I could partner with another dev in many ways,
    >because sometimes I really enjoy the schmoozing, then I think about having
    >to do it for my own single product and it feels kind of lame. If I could find a
    >solid partner who did similar games, I'd definitely consider it (if you look at
    >something like the remedy/3drealms partnership, or the valve/everyoneelse
    >partnership as an example of mutually beneficial partnerships).
    >Why dont indies do that more? Or do they and I'm just missing something?

    I like talking to other indies... There are a few who I'm in regular, almost daily contact with trying eachothers betas and so on... and even a few semi collaborative things going on from time to time. I think maybe you can achieve a lot of what you're talking about here without actually forming a solid business partnership. Just like minded invidivuals sharing day to day info, helping with code, offering advice etc... It can be motivating. Can require a thick skin too if the other fellows are honest :)
     
  19. Chris Evans

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    Well I got started right in middle of the transition period (2003 - 2004). Download sites were dying, but not completely dead. There were a couple of major portals, but they didn't have a hold on the casual market as they do today. Things definitely changed fast in that time though. I remember talking with a few portals in early 2004 and by early 2005 they were looking for completely different games (or rather what they were looking for became a lot more rigid).

    It was then in early 2005 that I decided I didn't want to enter the rat race of trying to score a top ten portal hit. Partly because I didn't think I had enough experience to deliver a hit-worthy casual game that could top all the charts. Anything less would mean living hand-to-mouth. I had no real existing customer base or strong website presence to fall back on, so if I went with portals at that point I probably would have to always rely on them unless I scored a huge hit.

    So about that time I decided to shift into online/multiplayer games. They're not easy to do, but it's still possible for small devs/lone wolfs to make money and be profitable on their own terms and grow their own customer base. With web games in particular, it's also a lot easier to get eyeballs compared to downloadables. In the first 3 days of my Mini-Golf web game being live, more game sessions had been played (over 100K) than the amount of downloads my platformer had received in its entire lifetime.

    In early 2005 I began work on an ambitious subscription/micropayment-based online social game while doing smaller games in between to get my experience up. Ironically, two years later I seem to be perfectly positioned where the market is heading.

    It's always hard to know where you should be when there's a market change. But my guiding principle has been to build roots for my business, so it can have longevity and hopefully survive future market changes. If a particular path or business strategy doesn't build a solid root in the ground, then I try to avoid it. It's why I haven't submitted a game to a portal in over 2 years. I wanted to build strong enough roots where I can survive without them before I got too involved. In my mind Cliffski has struck a great balance where portals provide great auxiliary income, but he can survive without them.

    Going forward, I think this has to be the way to go if you want to be a successful independent 1-3 man shop. This might mean moving away from general genres like shooters, puzzlers, and arcade games and more into niche genres that are conducive to building a community.

    If I can make one observation at the risk of stepping on a few toes, one major mistake I noticed from a few guys who started 5-10 years ago is that they didn't update their websites with the changing times. They kept the "store-front" style website for far too long instead of gradually adding community features and connecting with their customer base. When the portals came along, players had no need to go back to the smaller "store-front" websites because they didn't offer anything the portals didn't. No forums, no cheats, no hint guides, no blogs, no walkthrus, no additional or custom user made levels. Nothing. These websites basically just had a text link, thumb nail screen shot, and a buy button for a given game. Looking ahead, maintaining and building website presence has to stay high on the priority list at all times I think. Once you lose traffic, it's really hard to get it back.

    One of my mid/long term goals is to get off the "network". Meaning that I have a defined audience or customer-base that is fairly independent of the current market conditions. I would say Goodsol and Spiderweb Software are good examples of devs who have achieved this. They both dabble in retail and portal deals but they have a strong enough customer base and target audience that they get through the market changes unscathed and profit from the new opportunities.

    Console/handheld gaming definitely seems like one of the cooler opportunities opening up for Indies. But it could very easily mirror the online portal situation in just a couple of years or less (if it hasn't already), so again I wouldn't put all my eggs in one basket hoping for the big payoff. Working with an outsource company and publisher on existing popular PC game seems like the best option to me. After everyone takes their cut, you probably won't be filthy rich but it could give a nice income boost in a given year.
     
  20. datxcod

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    I think you hit the nail on head. For quite some time I've been seeing that the most successful indie companies (2 or 3 persons) have a nice active community. All of those casual arcade and puzzle games can give you a nice income in the beginning but they won't help your company in the long run. A simple check to the company forum will give you an idea of the community. I've visited some of those forums and they're PACKED with threads and posts (thousands), and the games that are talked about in those forums are not your typical casual game, I'd post some links but I think anyone could easily find those companies I'm talking about. And as you say, multiplayer games definitely build big communities, but I don't think that's the only way to achieve that. As I said I've seen some "offline" indie games with HUGE communities, but they are not your "tipical" casual game in the sense that they can't be easily cloned. Cliffski's games for example are like that but they are more of a single player experience than a social experience. It's definitely possible to make an offline game that makes people want to talk about it and share their experiences (a AAA example would be The Sims).
     

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