When sales fall off a cliff.

Discussion in 'Indie Business' started by zoombapup, Oct 4, 2010.

  1. zoombapup

    Moderator Original Member

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    Been reading this:

    http://www.pcgamer.com/2010/09/30/ai-war-and-the-hidden-cost-of-indie-games/

    Very interesting stuff.

    The first thing it suggests to me is that strategy games seem to do ok if you can hit the right audience. AI War is definitely a "steam" kind of game I think.

    Second thing is that they seem to have scaled up far too quickly. In a hit-based environment, hiring on people is a huge risk factor, even if you defer payment to them in the form of royalties.

    The other thing that strikes me is that theyre paying too much tax, but then I dont know the full situation. Seems to me you could at least get something like R&D tax credits to cover some of that. Obviously might not work in their country though.
     
  2. Nutter2000

    Original Member Indie Author

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    I'm not criticising Chris but one big thing I don't see in that list is any budget for marketing.
    Sure that's expected from your distribution partners to a degree but it seems a bit lacking to have not made people aware of your latest game yourself or even to have kept your current one in peoples minds.

    Maybe I'm wrong but the impression I get from that email is that there is a reliance on his partners to publicise the game.

    Still, hope they pull through.
     
  3. Jack Norton

    Indie Author

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    I think there's nothing really he can do specifically for his game. There's a real big crisis going on right now, and while you may well say "look at minecraft" that's really an exception, by a long way.

    May and september were the worst month of this year for me too (so far). It can't be a coincidence...
    Also speaking with LOTS of developers privately, 90% of them says that sales in 2010 are the worst in ages, from -50% and up vs past years. Many in particular said that sales from US have been lowering a lot.

    When you have your game that doesn't sell much and everyone around you does, you need to think about it, what you did badly with your product and try to fix/improve.

    When you do badly and almost everyone around you does the same, then I'm not sure it's really a problem of YOUR product but rather of the market in general (too much offer vs demand comes to mind in this case).
     
  4. GDI

    GDI New Member

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    Hmmm as someone new to the commercial indie scene the timing of my first game release could be crucial -- I'd rather that it contribute to a market that has already bottomed out and is on the upward cycle, rather than be one of the pieces that makes the house of cards come crashing down.

    This isn't like 1983... many games today are actually quite good -- there's just too many of them.

    Looks like I'll have to keep my day job and stay in my bedroom longer.
     
  5. Jasmine

    Jasmine New Member

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    May is exam/revision time for many young people. I would expect game sales to dip in May.

    But I also expect there to be fluctuating interest in games, just like any commodity in the global market. It's chaotic, and cannot be understood by human minds. :D

    But what independent developers may do to the game commodity equation, is create a boom and bust cycle. So many people can make games nowadays, that when there's sign of money to be made, they can churn games out en masse. They flood the global market beyond public demand, and the bubble bursts.
     
  6. andrew

    andrew New Member

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    I'm confused. They're making $13-17K/mo in income from a released game, yet they have ongoing expenses of $18-26K *after* launch?

    Why are they still patching this thing constantly with a full staff? Generally, aren't month-to-month sales going to continually decline after launch? From the comments, it looks like they are paying most of the income out in royalties to their employees (which is where the ongoing expenses come from) -- but how is that greater than the income?

    If the problem is ongoing staff payments, he should have hired them as contractors... at least until there was enough cash to coast for a while.

    - andrew
     
  7. kglarsen

    kglarsen New Member

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  8. AlexWeldon

    AlexWeldon New Member

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    Also, if you look at his numbers for how much he assesses his own personal time investment at, he's treating his time as being worth $50/hr. Which is fine for a freelancer, but working for yourself is not the same as freelancing. If you can make $20/hr. return off time you invest into your game (including time spent marketing etc.), you're doing rather well for yourself. $50/hr. full time is $100,000 a year... given that I read a while back that the average indie game developer makes $12k a year, if you're planning on paying yourself $100k a year, of course your company is going to go bankrupt, unless you create a smash hit.
     
  9. Jasmine

    Jasmine New Member

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    You think people stay with the games they have accumulated, and are not inclined to buy new because they don't have a game shop to wander around?
     
  10. Grey Alien

    Indie Author

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    @Jack What do you think the reason for the crisis is?
     
  11. Jasmine

    Jasmine New Member

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    What about data overload as a factor?

    Upto around 2005, games came out slower, and people could all keep up. A new release per week you can keep up with. You can give that game 10 minutes of your time, to see if you like it and want to buy it.

    But now there's just too much out there to wade through, and people are thus less willing to give any game a minute of their time. It's become noise rather than information, which is something to tune out and be rid of.

    I feel that way about itunes actually. I began to dislike wading through it. One day I decided that I wasn't going to do so anymore, and I've never looked back.

    Perhaps people feel that way towards games? Society acts as a filter. The only ones you give ten minutes of your time to now are the ones you hear people talking about.

    This would explain low sales, and it would explain minecraft.


    edit: Maybe there are three filters in all: You are willing to give ten minutes of your time...

    - trying out a game you keep hearing people talk about.
    - trying out a sequel to a game you enjoyed.
    - trying out the latest game by your favourite developer. (Assuming one has managed to earn a reputation and your respect).
     
    #11 Jasmine, Oct 5, 2010
    Last edited: Oct 5, 2010
  12. Jack Norton

    Indie Author

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    In this specific moment I think is really a money factor. I know in the US in particular the crisis is pretty bad.
    However is obvious that the whole online world is moving to a closed system. We have:
    - appstore (I've read an article where many gamers moved from the Mac to the iphone/ipad as their main gaming platform, because of the insanely low prices there)
    - casual portals for casual downloads/flash
    - FB for social games / webgames
    - Steam for mainstream/hardcore downloadables

    how many people are still searching in google for certain game types? I think this is going to be hurting very soon also all those affiliate sites, especially when the Google Chrome appstore is out too.

    You can still make money with a hit, but we're for sure going towards the same model of music industry (1% of people making 99% of the money) while before it was much more open and even with an average niche 2d game but good marketing you could still make decent money (10-15k/year is my definition of decent money for a 3-4 months game).

    Now those times seems definitely gone! Indeed next year I'm trying to make a full3d game and a webgame :D
     
  13. GDI

    GDI New Member

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    Add to the fact gamers often say

    "I'm only gonna buy it if it's on Steam".

    or

    "I wouldn't have taken a chance on it if it weren't featured on RockPaperShotgun."

    Wow, why do people put so much trust in internet sources to tell them what they should like? They don't want to take the responsibility of filtering content for themselves? It's data overload like Jasmine said, but by golly, with the little window provided earlier this decade where most information sources were still equal, people should already have found their favorite niche. So while they only sample the cream of the crop in the mainstream, they can still master every game in their favorite genre. (except FPS, since it's all mainstream now :)

    I don't want to be guilt-tripped into trying something just because everyone else is playing it. I can say this since I like JRPGs which are always trashed on most game review sites. (At least with slim pickings this gen, I do save plenty, and what I do take out of my wallet pretty much goes to NIS America who pretty much cornered the niche)

    Guess there's no choice but dust off that Blue Ocean Strategy handbook...
     
  14. meds

    meds New Member

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    They feel cooler and smarter when they fulfill conformist roles.
     
  15. Jasmine

    Jasmine New Member

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    Based on what I said above, the strategy should be:

    - You want to make games that people will talk about. Not just 'same old' with more eye candy.

    - You want to make sequels of your most successful games. Add detail to the game universe, making it feel rich and alluring. Make game characters charismatic and fashionable. Think of Sonic or Mario, and how players could follow their adventures from one game to another. Think of Warcraft, and how the game universe has been expanded over the years from its primitive starting point in Humans vs Orcs.

    - You want to make only good games. Don't aim for mediocrity; aim higher than everyone else. Earn respect and a following. Your customers are your power base. Once you have them on your side, you've made it.
     
  16. Chris England

    Chris England New Member

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    To tie back to the original post, AI War did a lot of post-release development for free. They continued updating their original game after release, and they released an expansion pack for which the majority (or all) of the profits went to charity. Basically, they seem thoroughly nice guys but not particularly good businessmen. Or, rather, they made some very generous plans when times were good and then when the midden hit the windmill they didn't pull the plug on them, which has left them in the position they are in.

    To the general industry state at the moment; I've not got hard sales figures but I will in a few months. I can see what people are saying about information overload, and I agree with it to an extent. People need sites like Rock Paper Shotgun to filter the wheat from the chaff, but the advantage here is that such sites become an extremely effective way of getting a lot of people interested in your product. So take advantage of them and get your product mentioned on them. PR isn't easy, but it's definitely a necessary evil.
     
  17. jrjellybeans

    jrjellybeans New Member

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    I think it doesn't really solve anything to say "make better games." I would figure that that's what everyone is doing already - trying to make the best game they can.

    As for the AI War team, I do think it was unrealistic of them to have expected to pay themselves 50 / hr. That's a ridiculous amount. I would have also been leery of paying people FULL TIME until there was a stable stream of profit. You might argue that it was a necessary thing and I would respond that they shouldn't have been making those sorts of games if that's the amount of effort / time required to finish a game.

    Isn't there an idea that you generally want to have a year's worth of money without profit when running a company? It's just not smart to rely on deferred payments when running a company...

    But, I am amazed at the fact that they got to be so successful in the first place. There are a lot of indie teams that never reach this point at all, so congrats to them.

    Interestingly enough, I recently spoke about this topic on my blog. There does seem to be quite a number of indie devs going under...
     
  18. Jasmine

    Jasmine New Member

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    As long as one's games are actually wheat and not chaff. (People will always be biased about their own product.)

    If too much chaff is aggressively pushed onto RPS, it would just become something else to ignore.
     
  19. Chris England

    Chris England New Member

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    The filter lies not in the people pushing the games towards RPS but in the journalists that work there themselves. They get dozens of emails every day and only write about the ones they think are worthwhile.

    As the market gets more and more saturated I'm sure it'll get harder and harder to get mentioned on sites like that, but I don't necessarily think that that is a bad thing. Harsh, yes, but still necessary.

    To me they represent the marker of the quality of game I need to produce to rise above the masses and be successful; and give me a helpful point to aim at - ie, good enough that I can get journalists to write about my game. Without the journalists acting as filters, the business would just be an immense sea of undifferentiated games that no sane consumer could ever navigate through and purchase a title.
     
  20. Jasmine

    Jasmine New Member

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    From another point of view, relying on RPS is just placing another obstacle between developer and success. If all developers do that, then nobody is any better off.

    If you work on your reputation, and attract a following, "We love every game that xYz has made. We can't wait for their next game!", then you have no obstacles. The customers will be on your side, eager and waiting. :)

    Developing games is not like developing packaged products. This is the entertainment industry, and we're the entertainers. It's all about the image, and holding an audience. It's about being fashionable, like musicians and singers, and people should want to be part of your scene.
     

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