Hello,

With big companies like Atari now entering the online games distribution market (see gamedev.net front page or http://www.atariondemand.com/),
and after having read those IGDA white papers last weekend (*), I am interested to know what everyone thinks about
their future and the future of the online/downloadable games market.

The thing is I just can't imagine how a small indie shop will be able to compete with large companies running staffs of hundreds of people dedicated only to e.g. marketing, and I think I'm not alone with this feeling. It seems that running a successful indie business is hard enough right now (I can't tell for sure because I have not even released my own indie games yet, no customer base), but how hard will it actually get soon?
I'd say that right now a top indie site can still easily take away tons of customers from larger guys like Real or pogo.

But am I guessing right that in the near future there's simply no other option other than focusing on development and *trying* to get a publishing deal
(just like in retail) with a RealArcade-like sites. How can self-publishing be profitable when it gets harder and harder for players to actually find your games when comps like Atari invest tons of money and man-months in naturally replacing you from the top of the search engines and whereever.
While the indie developer thinks about spending 80$ for a download.com listing, GameHouse gets sold for 35$ millions. (i can't remember the figures but whatever..)
Note that both the average indie and GH are actually in the same business selling the same type of games! (well, sorta... )


Pretty often the "Find your own Niche" argument comes up but what when most viable niches are filled? And do I as a player really care about a niche type of game when I basically just have to open my browser or log in my email to get a broad range of games, all even more professionally marketed than you will ever be able to achieve ($$$). A successful company dictates the customers what to buy, the poor company must fight to sell their stuff..

An argument often read in some articles and forums is that unlike in retail, there's no limited shelf space on the internet. But this argument cannot be true anymore soon, there's only so much websites and portals players want to visit.



All the assumptions in this post probably come from my own inexperience in the subject, so I'm eager to hear what
you think about it. Post is a bit painted in black but sorry that's the way i see the situation :(




(*) all probably old news but I'm living under a rock when it comes to business news :-)

There is a very real threat that as the big publishers all launch and market their download sites they will start to push the indies down the search rankings making it harder for customers to find them.

the market will no longer be limited by shelf space but instead will be limited by browsing time. Customers will have a set amount of internet browsing time in which to discover your site and if search results are flooded with sponsored links for large publishers they probably wont find you.

I have heard this basic argument several times (most often from experienced retail developers, but not from publishers), that the downloadable space is going to change into a similar business structure as the retail space. I don't think anyone can predict how things will turn out in a few years, but in my opinion most people are looking at it from an uninformative angle.

I think the key questions are: one if the dowloadable market will be marketing or distribution driven, and two if there are subsegments with different drivers how do these subsegements differ?

The reason why the first question is important is that distribution driven systems tend to favour economies of scale while marketing driven systems favour innovation. In short, to solve distribution problems you throw resources at them, to solve marketing problems you need a few good people. Especially in an online environment where most of the paid advertising is in electronic format you have less need for support personell. In conclusion, to win in a marketing driven system you just need to be really good.

The second question is important because the market might well segment by unit sales into, say >100k (distribution driven) and <100k (marketing driven) games. If this is the case your business needs to decide in what segment it wants to succeed and pace itself accordingly.

In general I am pretty sure big retail publishers will get into the downloadable area, in fact they already are. The reason is simply that there are very highly talented individuals working in those companies and they would be fools to ignore a rapidly growing new market. However, as an interesting twist, because an downloadable publishers migth need much less resources (basically production and marketing) there is not much stopping these individuals from forming their own start-ups. So while the people from the retail side might enter the market, their old companies might not. For example, someone mentioned the makeup of GameHouse containing a lot of retail industry top performers.

My $.02 is that the market will be innovation and talent driven, as opposed to capital driven. This would give you a fair chance if you are really good, which you should be in any case.. :)

Threats to any business are always present, but behind every threat are opportunities. From an historical perspective, those who focus on the threat die; those who focus on the opportunity flourish.

When the shift from DOS to Windows came about in the mid-90s, many shareware developers saw it as a threat and didn't adapt. They stuck with DOS, and most of them saw their businesses destroyed as a result as consumers preferred Windows. In a few short years, ASP membership went from something like 1500 members to about 400 members. But then those members who adapted to Windows began to grow, and ASP membership quickly grew again.

A similar purging came about when most BBSes failed to adapt to the reality of the internet. But some BBSes transformed themselves into major web sites and continued to flourish.

The industry is once again in the midst of many changes today. Broadband is growing. More competition is coming. But these factors are also helping to grow the market for all of us, which creates new opportunities. Shareware distribution used to be slow and tedious. Today it is fast and efficient, and there is the potential to access more customers than ever before. As new distribution nodes pop up, you can choose to see them as a threat, or you can see them as an opportunity. Those who can integrate these new opportunities into their business models are likely to flourish. Those who cannot will have a harder time competing.

What I see is that having great products will be even more important in the future. During the 90s there were opportunities to make a lot of money with games that were only average. But today I think it's more important to develop quality titles. This doesn't mean you need a huge team and huge budgets, but it does mean that you need to think about how you're going to market and position your game if you want it to sell.

I might be way off with what I am about to say, but here is my take on the case. Let's say you are having plumbing issues at your house. If you never ever had plumbing problems before, don't know how to fix it yourself and you personally don't know any plumbers, what do you do?

One of the options is that you open up the phone book or go online and start searching. The problem is that there are probably zillions of plumbers in your area. How do you pick one?

This is where things get interesting. I personally got burned by randomly picking companies off the phone book (or internet) and letting them do the work. The first thing I do now is ask friends and relatives for advice. I ask them if they used anyone, how they liked the work, etc... Then I check the background of the company with BBB, online reviews if available, then I talk to the company to get a feel for them. Going through friends has proven to be a lot more productive than doing google searches.

The moral of my story is that if your game is good, then people will find you. You won't necessarily have to find them. Word of mouth is a powerful tool. Internet makes that tool even more powerful. I can't help but remember "Snood". I can't even remember how I found it. I think a friend told me about it. I never saw its website, or even remember the name of the guy/gal who wrote the game. But I did find that game somehow. It is a truely addictive, great game! :)

It is true that some customers will randomly search for places to buy games perhaps, but they will most likely shop where their friends shop. They'll get that fuzzy feeling inside that they are doing the right thing. If you do some soul searching, you will see that you do the same thing when you buy anything especially expensive things.

I'd say make a good game, make the best use of your online shelf (presentation is very important), listen to your customers' feedback and don't worry too much about the rest. You will *always* have competition, big and small.. Worrying about your competition, trying to match their moves is a complete waste of time if you ask me. What matters is what your customers are saying about you, what their experiences are with your game (and your website) and how you can improve that experience.

One last thing... The biggest favor you can do to yourself is being objective about what you produce: the game and the website. If you can't help but think they are perfect, do get some feedback from other people (family, friends or even strangers) and try to hold back your defense system from shooting people down. If your presentation isn't good, that will spread around too.

Good luck!

One other thing.. If you are completely new to the arena and you have no customers, then try the following.. Give your game out to your friends. Have them play it, get some feedback. Tell them to spread the game to their friends and get some more feedback from those people.

You are going to have to do this for free of course. So you might want to have a crippled down version.

If your game is any good, it'll spread like wild fire. People *love* to share good things they discovered. It is in our nature. We can't help it. If you need improvement, you'll do it with the guidance of the feedback you get.

Once people know you a little, your website will probably get more hits.

This is a very low-tech approach, but I think it psychologically makes sense... to me anyhow :)

I could imagine that some kind of software or website that helped facilitate that "try this" or "viral" approach to getting the word out on your game might be pretty popular. I've seen some word on the web about software that combined RSS feeds with Bittorrent -- it might be something worthwhile for indie game developers to explore.

It would be really cool to have some kind of way to see lists of recommended games from friends and friends of friends - somewhat like how you might search for music that is in the same genre that you like, based on your preferences and those of your friends... like perhaps some way to used FOAF + RSS + Bitttorrent... Sorry just thinking out loud.

But in an informal way that's how things work now. I know that when I want to play something new, I check out this board, and several other boards like over at gamemaker.nl, or indie sites like gamehippo.com. If there was some way for game developers to create some kind of metadata file -- sorta like the author/genre/info data in an mp3 that "game aggregators" could pick up, and then allow folks to apply reviews and ratings to those games, you could have a great way to distribute games, and the best games (should) rise to the top as more folks try them out and review them....

ok, ending my "what if" rant...

Napster for (indie) games?

Doesn't gamespy somehow do this? I am not very familiar with it, but I know my roommates in college used to use it to find people to play games with online, get the latest info on games and to download patches/mods etc...

Isn't this what Trymedia has been doing for a while ?
ie leveraging Kazaa, BitTorrent, etc. to virally spread legit electronic copies of games, protected in such a way that copying it reverts it to trial mode ?
Actually, their systems shares a lot of features with GG's Ignition, in that you can have multiple installs with the same key.
Zimmerman, from Trymedia, ex-Gamasutra guy, talked about it at the last IGC, and iirc, even mentioned that Temple of Elemental Evil was released exclusively through Trymedia for like the first week, ie before it hit shelves...
They are of course targetting broadband users, seeing as they focus on AAA titles, but a similar system could be made to work for indies, without spending a lot of money and resources on copy protection :)

Big players entering the market do not worry me at all. Although I'm an indie develoepr in my spare time, I work for a big company (Lionhead) in my day job, who deal with a huge publisher (Activision).
The reason I'm not worried, is that Big companies just do stuff badly. great ideas don't come from commitee, and the bigger a company gets, the more it gets bogged down in pointless beauracracy and inefficiency.
I KNOW that the GUI for my game will work well with the code and the design and the marketing, because I'm doing all of it. In a big game, whether its sold online or retail, everyone has different opinions. Will everyone agree on how the game should look / feel / play / sound?
You often end up with a horrid mishmash of ideas, pitched at the casual customer, because the cost of the game dictates that it must sell X copies. You also end up dropping / adding X or Y because of the console port, and not doing Z because the publisher doesnt like the idea.
There will ALWAYS be a market for small teams selling a good quality game online.
Big companies might want to steal our market, but they don't even begin to understand that market, so they won't win. They will try and sell everyone Doom and FIFA, and thats not what everyone wants (thank god).

Going along with what cliffski said, one of our greatest assets as Indies is efficiency.

For example, as an Indie if I need a particular software application, assuming I have the money, I can go out and purchase it the next day. Whereas when I was working at a big company, if I needed a piece of software that we didn't have a license for, I had to get approval from my manager. Sometimes I had to submit a proposal. The manager had to get approval from the purchasing department. Once approved the purchasing department eventually gets around to ordering the software. Once the software arrives at the company, it takes week for it to finally land on my desk since it goes through a pass-along game with 5-6 people in our internal mail system.

In the end, it will have taken 3-4 weeks for me to acquire the software. This is assuming there were no snags along the way. Often times, the manager/producer takes a long time to approve the request. The purchasing department may not think it's a priority. Then even when the software is ordered and shipped, it sits on someone's mail trey for over a week since they're on vacation. A software application I needed yesterday, I might not receive until nearly a couple of months later. (True story btw)

So yeah, that was just about purchasing software, but you can apply it to other areas as well. If you want to try a new gameplay idea, you have to jump through all kinds of hoops just to be able to get a quick prototype up. Which btw, marketing will probably strike it down anyway.

On the other hand, us Indies are very streamlined. We can easily put quick experiments together or make modifications to existing games. Instead of having to get approval from marketing, we have direct access to the actual customers and we can get the player's approval. Being able to adapt quickly to customer feedback is a major advantage of being an Indie. I don't think big companies will be able to rival this because there's just so much red tape they have to cut through.

Like what Steve said, we definitely shouldn't be afraid of change. We may lack certain resources, but being able to change quickly and adapt is one of the advantages of a small business. It's when we get stuck in our ways that we fall behind and possibly go extinct.

Going along with what cliffski said, one of our greatest assets as Indies is efficiency.

I'd say you're describing a flexible environment rather than an efficient one; and this flexibility is a double-edged sword. Consider a case converse to the one you mention, where the larger studio is run by competent folk, and the independent studio is run by developers new to the industry. In the former studio, a design lead might be given some discretion (and budget) to quickly experiment with new technology. In the latter studio, the developers might not have enough resources, (usu. money) or may tend to spend too much time chasing dead ends at the wrong time.

Anecdotally, in various projects, I've been reigned in, (to good effect) left to take whatever tangent I liked, (which delayed things considerably) and, later, given the opportunity to develop prototypes at the drop of a hat (to great effect). It can go either way. I don't think that the flexibility automatically confers upon independents an advantage; it needs be tempered with some discipline and experience.

thats true, but there are 2 important factors:

1) in a 100 man company, the possibility of communications failure or delay is high, you might all think each other is doing a certain thing, or be held up because person Y is away. In a 1 man company, this is never an issue.

2) in a 100 man company, each individuals gain from the companies success is relatively small, and his chance of influencing the product to sell better by his efforts quite minimla, therefore his motivation is low.
In a 1 man company you get 100% of the rewards, and are responsible for 100% of the quality of the product. therefore your motivation is extremely high.

I've worked alone, and for a company of 64,000 people (computer science corporation). I know when I've been most efficient and motivated ;)

or be held up because person Y is away. In a 1 man company, this is never an issue.

Sir, there are those who might argue that I've been away for years.

Kidding aside, my point is that these advantages exist, but that it's necessary to have some experience and discipline to take advantage of them. Surely, I'm not the only one who gets sidetracked, for lack of critial feedback?

I agree wholeheartedy with Steve. The numbers are showing that the market is only growing (by leaps and bounds) and there is huge opportunity out there, especially with the growing broadband audience.

I for one have learned not to be intimidated by the big players. I used to work for a large SEO company and you would be surprised at how marketing deficient many of the big companies are. The little guy can maneuver, adapt, and learn much quicker than the big companies in so many ways. The little guy just has to be committed to excellence in every way and constantly learn, grow and adapt.

In fact, when I see the big companies at the top of the search engine results pages (serps) for instance, I get excited since I know most likely it will be real easy to outrank them. They can PPC all they want as there is still a ton of free traffic to get from search engines and other places that the big companies don't care about, overlook, or are ignorant of.

I have been really encouraged by the quality of games some of you small developers have put out. Many of those titles outsell the big dogs with huge production budgets. It isn't about big money, flashy graphics, and features...it is about delivering fun.

If I were in your shoes, I would really pay attention to what some of the small successful companies are doing, not just copying their content/ideas, but how they go about creating, developing, and marketing to their target audience. I would listen closely to guys like Steve Pavlina who are committed to perfecting all aspects of their business. Read those articles he has written and begin implementing those concepts...they work!!

If you are committed to this kind of success, you have nothing but a bright future, IMO.

>focus on the opportunities

Absolutely. One of the worst things you can do is be so focused on your competition you forget to work on your own business. Forums like this where you can get feedback from other developers is great, but also make sure you are getting plenty of feedback from those who will be your customers. Refine and improve constantly.

The little guy can maneuver, adapt, and learn much quicker than the big companies in so many ways. The little guy just has to be committed to excellence in every way and constantly learn, grow and adapt.
The little guys have plenty to gain here, for a few reasons:

A) It legitimizes the online distribution channel in the eyes of customers who have been reluctant to adopt it as a means of purchasing software. This means the pie grows. Hopefully more than our portion of it shrinks with the big guys elbowing their way in.

B) We still retain the ability to focus in on smaller audiences in a way that a big publisher cannot - even with a small team focused on cranking out 'budget' titles.

C) The technology is curve is bringing us around full circle, IMO. Twelve years ago there wasn't so much of a difference between what a couple of guys in a living room could produce compared to a corporate-sponsored team (which was often STILL a couple of guys in someone's living room). Advancing technology generated a gulf. If you wanted to compete on the whistles & bells category with the big boys, you had to generate a TON of content to fill the CD-ROM and show off the millions of polygons per second the customer's card could display.

Now we're reaching the point of diminishing returns... each generation of new technology is less impressive to the end-user compared to its predecessors than the previous one. The tools, code, and even content are catching up. Six years ago, an indie creating a game that was two generations behind the cutting edge would appear laughably quaint. Now... not so much. Enough that solid gameplay and an innovative experience can make up for the lack of technological pizazz. Five years from now, the gap will only close more.

D) With the big boys playing in the same, low-barrier-to-entry turf as EVERYBODY else, they are going to have to work harder to make themselves attractive to game developers. After all, they are going to be struggling for getting noticed in a sea of competition they haven't had to swim in before... they don't have the really nice stranglehold on the whole distribution system they enjoyed before. This MAY result in them having to be more developer-friendly than they've been able to get away with when they had a virtual monopoly on retail between them. This could mean greater opportunity for the small indie developer with a proven track record.


I'm not envisioning any kind of golden age where a tiny outfit will be able to crank out a "Half-Life-5 Killer" in six months of part-time effort. That ain't gonna happen. I don't think it's going to get much easier for even high-quality games to get noticed in the crowd. But I do see the playing field leveling somewhat, and the POTENTIAL of a smaller, independent game doing much better than ever before. There is opportunity here.

Originally posted by Coyote
C) The technology is curve is bringing us around full circle, IMO. Twelve years ago there wasn't so much of a difference between what a couple of guys in a living room could produce compared to a corporate-sponsored team (which was often STILL a couple of guys in someone's living room). Advancing technology generated a gulf. If you wanted to compete on the whistles & bells category with the big boys, you had to generate a TON of content to fill the CD-ROM and show off the millions of polygons per second the customer's card could display.

Now we're reaching the point of diminishing returns... each generation of new technology is less impressive to the end-user compared to its predecessors than the previous one. The tools, code, and even content are catching up. Six years ago, an indie creating a game that was two generations behind the cutting edge would appear laughably quaint. Now... not so much. Enough that solid gameplay and an innovative experience can make up for the lack of technological pizazz. Five years from now, the gap will only close more.
I'm not following your reasoning on this point. I agree that we are in the region of diminishing returns, I just don't see why this makes it better for small teams. The minimum level of acceptable artwork (for mainstream games) already costs a fortune to develop. The fact that nobody can tell whether you spent one fortune or ten fortunes doesn't exactly give me a warm fuzzy. I mean, if John Carmack is worried that Id is spending too much on the artwork for DOOM 3, what does that mean for us?

>The minimum level of acceptable artwork (for mainstream games) already costs a fortune to develop.

I may be totally wrong here, but I don't think games sell because they have fantastic art. There are many games with incredible graphics but really lame gameplay that totally bomb. Even indie games with great graphics don't sell nearly as well as games that are really addictive.

I think developers need to focus way more on games that are really fun, easy to start and get going, and are innovative rather than really great looking stuff that is unoriginal and boring.

A game with great graphics may attract attention initially, but if there is no substance and satisfaction for the player, it just becomes a bigger disappointment.

I dont think you want to be trying to compete in technology terms anyway.

But coyote is right, technology is kind of passe now. Just look at all the tools you can get to make producing nice looking tech easy?

But Milo is right too, look at the costs of producing high quality artwork. Lots of it too.

So in general, there is no easy path, but then there never really was.

I dont think indie's have a god given right to exist and make money off of people, just as publishers dont. People buy what pushes thier buttons.

So you need to figure out which buttons you CAN push, and push em as hard and as often as possible.

(milo) The minimum level of acceptable artwork (for mainstream games) already costs a fortune to develop. The fact that nobody can tell whether you spent one fortune or ten fortunes doesn't exactly give me a warm fuzzy. I mean, if John Carmack is worried that Id is spending too much on the artwork for DOOM 3, what does that mean for us?

I think we're in a great position: Affordable middleware and content creation libraries/utilities have made my [development] life easier now than it was ten years ago. Back then, your graphics engine might have been hand-rolled in Assembly, or built with a games-centric library (www.fastgraph.com); nowadays, there are a dozen complete systems (http://www.garagegames.com/mg/snapshot/gallery.php) all vying for your attention. Some types of art asset are easier to create in professional quality than they were a decade ago, thanks to new tools (www.pandromeda.com/page/galleries/still_thumbnails.php).

There's an (aesthetics) threshold above which players are willing to say, "Not bad; I'll give it a try and see if the game's any fun." This differs by genre, (consider wargames versus first person shooters), and is not identically the threshold above players will be agog over how gorgeous something is. (As an aside, here (http://www.synthscribe.com/inago/collage05.jpg) is where I am banking that bar is at for independently-developed action games.)

(DFG) I may be totally wrong here but I don't think games sell because they have fantastic art.

I think you're half-wrong. :) Games may not sell if they rely entirely on their aesthetics, but ugliness can only hurt. Is the Elephant Man a great guy to hang around? Could be, but people are more likely to talk to someone average-looking.

There are many games with incredible graphics but really lame gameplay that totally bomb. I think developers need to focus way more on games that are really fun, easy to start and get going, and are innovative rather than really great looking stuff that is unoriginal and boring.

Surely games don't have to be either attractive or compelling. We can/must make them both attractive and compelling. (Isn't your site (www.download-free-games.com/game_downloads.htm) an example?) This doesn't mean pouring millions into art development. It means polishing just enough for people to view your work as a professional effort.

Listen to your wise uncle Steve, he hit the nail on the head.

Even with broadband, you only have so many megs to work with, so I agree that big teams really won't mean that much.

Original post by MiceHead
I think you're half-wrong. Games may not sell if they rely entirely on their aesthetics, but ugliness can only hurt. Is the Elephant Man a great guy to hang around? Could be, but people are more likely to talk to someone average-looking.

Sometimes simple, minimalist graphics are a better way to convey information - it then becomes a case of visuals _vs_ gameplay - IMO the gameplay should win every time.

I'm not following your reasoning on this point. I agree that we are in the region of diminishing returns, I just don't see why this makes it better for small teams. The minimum level of acceptable artwork (for mainstream games) already costs a fortune to develop.
A couple of reasons were already touched on. But here's my reasoning:

* Code Difficulty - When you don't need to spend all your time optimizing, coding can be much faster (A fact loudly proclaimed by a certain Java advocate around here). I remember having to write assembly-language graphics subroutines to make a Space Invaders game run at an acceptable framerate on a C-64. I spent a couple of weeks working on it. I could do the same thing today in a couple of hours. Yes, you aren't going to be bleeding-edge when you do this... but when the hardware & API capabilities are such that a user can't tell much difference between bleeding-edge technology and technology that's two generations behind (but much easier to code), what's the loss?

* Engines / APIs have caught up - off-the-shelf code is hardly a cure-all for development difficulties. But one of the biggest issues (besides learning the engine) is that these lag behind the cutting-edge game engines of the more modern titles, and the "one size fits all" emphasis of these code bases make them perform much more poorly than code developed specific for the needs of a particular game. But as the gap begins to shrink between the APPARENT quality of the games, these limitations become less of a factor. Right now, largely due to the Internet, a new game developer has access to tons of cheap / free APIs and engines for graphics, sound, networking, collision detection, pathfinding, physics, and even more general-purpose AI. This will only become more mature and complete of a choice in the near future

(Side note - GarageGames just released Dark Horizons: Lore today, and while it's not going to be able to win a beauty contest with the latest AAA offering, it's a pretty impressive example of what's possible with a cheap off-the-shelf engine nowadays).

* Tools - these are slowly catching up to the needs of game developers. We're also getting lots of impressive abilities out of open-source tools that can speed development. While we're nowhere near where I'd like to see us in the tools department, it looks like we're winning in the long run. A lot of the tools out there now do seem to give us a lot of 'bang-for-the-buck', automating or simplifying a lot of an artists' tasks in providing some pretty high-yield user-pleasing effects.

* Content Development - It seems to ME that an inordinant amount of a modeler's time is spent working around limitations inherent in the technology. When an artist doesn't need to worry about optimizing collisions or polygon count, and can define his model in terms of curves instead of individual polygons, and programmers can algorithmically generate all kinds of wonderful bump-maps, pixel-shading and self-shadowing and inverse kinematics to take the load off the modeler... things can go much more quickly. Combine this with smarter tools, and content creation may end up getting MUCH more efficient.

* Off-the-shelf content - This may be mere wishful thinking, but it's starting to happen. When a content creator doesn't have to worry about creating every chair or scrap of wallpaper or dish in the sink, he can focus his energies & time on creating high-quality, unique, "signature" content for the game. More of this is appearing almost daily, and much of it is in the price range of an indie shop (<$100, or even free / public domain).

* Algorithmic Content Creation - Hardly a new invention (remember TELENGARD?), but we're starting to see it come down to fine levels so that it's not so annoyingly obvious. We're seeing things like automatic placement of vegetation, or modeling using curves / NURBS instead of polygons, and shader languages. I think we'll see more of this as time goes on - relieving content creation of some of the more boring "butt-in-chair" development required in game development.

All of these bits HAVE been with us for a while, but the problem has been that they've lagged the cutting-edge by a significant enough margin that they weren't too useful. I think that's changing. I think the potential is there to cut costs SIGNIFICANTLY without nearly as great a reduction in the appeal of the game as we once would have had to deal with.

But it's late, and I could just be in my own little fantasy world here.

It is true that an independent developer can optimize costs and use resources much more efficient
(that example of Chris Evans of purchasing software is a classic :)), but I wonder how much influence that really has.

See I started the thread mainly because of a certain fear of issues with marketing. When a game is released, the development phase is over and regardless who made the game and how long it took to make it, the final product is what really matters (*).
This is where the real fight for shelf-space and customers begins. My conclusion is that when you save development costs, you can use that money instead for marketing. But the big guys have tons of that money anyway, so I can see no advantage here.

Maybe it really comes down to one just having a top game with a top presentation. "if you build it they will come" ;)



(*) of course the wise developer will improve the product using customer feedback et cetera. I understand that this is probably the major advantage of an indie because he is in close touch with his customers.

Well here are my 2 cents:
1) in the next few years LOT (if not all) big companies will enter the download market, offering both BIG and small games for download.
That offer isn't only for broadband: with my humble ISDN modem, if I leave the pc connected the whole night, I download 200mb, so for a game in one cd I only need to leave it connected for 1 max 2 days, and if it's a game I'm waiting for, OR if downloading it I can save 10$ off the final price, for sure I'll do that :)
2) they'll sell well big games, but they won't have the same kind of success for small games / original games. Why? cliffiski already said it... I worked only for a small gaming company in Italy but with 4-5 people in a project there were already big discussion on what to put and what NOT to put in the games...!!
Also, small groups will want to get out of the "corporate thing". They'll prefer to do the game themselves, then maybe after they've made it, publish it using online publisher like BFG or Real.

Also, people are willing to earn 150k$ year as programmers for BIG games, but how many will be interested in developing "small shareware games"? I know many persons that laugh at me when I show my games ( well, maybe they're right, but every time I see a sale I'm tempted to forward the email to all of them ;))

So, I guess that nothing will really threat us. On the opposite, the expanding market will benefit us all :)

Course we also have the other opportunity and that is to sell out to one of these big guys :)

Seriously though, they may be able to call on economies of scale, but we can call on economies of cost.

So what are we talking about? I mean, ok, you might get atari or activision in on the game.

How are they going to win?

1) They'll use thier licenses - no brainer there.. but how much is that going to sell thier games?

2) They'll use small teams of 6 or so people? - we could and maybe should do the same?

3) They'll use a huge advertising budget - they can only sustain this for as long as they are making huge amounts of money from the marketplace. As soon as they dont, they'll be gone.

So they wont have any of the possible strengths indies can leverage:

1) Customer retention - we can target specific customers and service them again and again.

2) Originality and innovation - they still have the green light process, we can skip that whole thing.

3) Agility - they are bound to be working to a fixed model of income, development etc. We can change and adopt whatever practice we need to find the market that will sustain us.

4) Critical mass - they need to sustain a high profit margin for thier shareholders, so they will "cherry pick" thier projects to match what they see as the low hanging fruit. We can basically just go for whatever markets we see available. We dont have to play safe.

No reason to panic!

Stay calm!

Originally posted by zoombapup


No reason to panic!

Stay calm!

No panic at all, just a high dose of paranoia (which is a good thing IMO) :D

4) Critical mass - they need to sustain a high profit margin for thier shareholders, so they will "cherry pick" thier projects to match what they see as the low hanging fruit. We can basically just go for whatever markets we see available. We dont have to play safe.
I think that's the key piece right there. 75,000 sales for most of us would be a goldmine. For a big publisher, it's a failure. I think they might try dabbling with the smaller, more focused titles - and they have in the past - but they never stay there. Ultimately, they have only so many resources to devote to any title launch, big OR small, and have to deal with their own titles competing with each other. They ultimately keep coming back to spending those 'zots' on only top-tier, AAA titles.

But those games HAVE to appeal to the lowest common denominator, which means more specialty genres or risky, experimental gameplay is going to HAVE to come from the smaller indies as a general rule.

I think your points #1 and #2 derive directly from this point. And I completely agree.

3) Agility - they are bound to be working to a fixed model of income, development etc. We can change and adopt whatever practice we need to find the market that will sustain us.
I don't think we can count on this one. Sometimes that level of agility requires MONEY to pull off. Note how Atari has just launched a program to allow players to subscribe to a service to allow them access to their back-catalog of games. I don't understand the details of this one, but it sounds sort of like a subscription service for "free game rental".

So our 'agility' only grants us a few weeks or months of head-start time, which we may not have the money or manpower to convert into a sustainable advantage. Maybe if we're fast enough, the market is lucrative enough, and the competition is slow enough, yeah. But that's a lot of 'ifs'.

Hmm, I view the whole downloadable puzzle game market as an example of the agility thing.

Basically, the pubs are getting involved NOW because theyve seen Real and GameHouse and rest making big ROI. But its taken them plenty of time to find thier feet.

We can and hopefully will, see the emerging marketplaces that publishers simply cannot take a punt on, like say, mobile dev, or PDA dev, or something like tapwave.

Point is, we have flexibilty to target whatever we want, wether thats an aging market that no publisher in thier right mind is touching, or an advancing market where no-one is clear how to make money.

We do have to be prepared for plenty of failures though. And yes, it costs, which is another drawback. But if the costs are low, taking a few punts wont bring us down.

Originally posted by Coyote
I think that's the key piece right there. 75,000 sales for most of us would be a goldmine. For a big publisher, it's a failure. I think they might try dabbling with the smaller, more focused titles - and they have in the past - but they never stay there. Ultimately, they have only so many resources to devote to any title launch, big OR small, and have to deal with their own titles competing with each other. They ultimately keep coming back to spending those 'zots' on only top-tier, AAA titles.

AKA, the "Innovator's Dilemma", or "the profits available in emerging markets will not help the market leaders meet their quarterly growth targets".

At the GDC, I attended the IGDA Business Summit, and sat at the same table as a guy from Microsoft Games. He said that unless a game exceeds 750,000 units sold it's considered a failure. Even 550,000 units sold just isn't enough.

So a game with a relatively small market is unlikely to ever be of interest to a major publisher. The soft underbelly of the industry, maybe?

Another advantage of small, independent developers is: We don't have to hit a homerun our first time at bat. We can keep swinging until we get a hit or just get tired and go home to try again tomorrow.

A retail title generally has a very short span of time to prove that it is a hit before its taken off the shelf. If sales start out slow, the game is yanked and tossed into the bargain bin (assuming its not forgotten entirely). Compare that to some indie games that have been online for years and are still making money, and have even continued to grow over the years.

Hell, our game Artifact (http://www.samugames.com/artifact) has hardly been a runaway success, but it has outlasted several of EA's (very expensive) online offerings. Why? Because we don't have to have to a quarter-million subscribers to justify the cost of development.

-David

Im curious, Ive seen artifact up and running for a few years now, more than 4 I think... how successful has it been and what size of a team you working with?

its obviously been putting food on your table because you are still supporting it :P and I still see ads for it all over the place

Originally posted by DavidRM
At the GDC, I attended the IGDA Business Summit, and sat at the same table as a guy from Microsoft Games. He said that unless a game exceeds 750,000 units sold it's considered a failure. Even 550,000 units sold just isn't enough.
Really? Are those figures for a single platform? I though that break-even point for a PC release was way lower than 0.5M. Sheesh.

[edit] Ahem, either make that "most PC releases" or remove "way". ;)

At the GDC, I attended the IGDA Business Summit, and sat at the same table as a guy from Microsoft Games. He said that unless a game exceeds 750,000 units sold it's considered a failure. Even 550,000 units sold just isn't enough.
PC or console?

I also wonder if those are REAL numbers, or simply bluster the publishers use to try and keep their developers in line. I can see publishers inflating their demands, while their real requirements might be somewhere along half those numbers. But it depends. With game development budgets exceeding $5 million now even without the marketing campaign, that's a lot of minimum sales needed to turn a profit even for the publisher (who tends to make a tidy profit LONG before the developer makes 1 cent over their advance). So while I think the numbers might be inflated, I don't think its by THAT much.

That explains why the PC market is being almost abandoned, though. You just can't predict the sales of a title beyond around 250,000 on the PC. There's too many random factors between a "runaway" PC hit that sells in excess of 1 million, and a fairly modest hit of one fourth that number. The exception being (ahem!) sequels, which tend to do as well or better than their predecessor.

I'd say Davids figures were right on the money. I would guess medium size studios (probably around 50-100 people) would have around 100k a month cash burn.

You have to remember that we're talking about maybe 2 or 3 projects, usually with a turnover of between 0.5 and 1 products delivered per year. Essentially the one product has to support itself AND another title for a good year of slack.

Basically, the scale of things for a medium to large studio kind of require good sales. Hence the dumping of the PC marketplace by most devs, especially those in europe.

Its all good though, from our perspective.

Phil, how do you come up with a team of 100, or for that matter, even just a team of 50 for only 100k a month ?
That would be 2k per employee per month, which ain't a whole lot, even as an average, and that's not going into the overhead, the social benefits, UI payments by the employer, etc.

Just wondering what made you choose those numbers :)

i wasnt thinking a team of 50, I was thinking a company of 50. But yeah, its probably on the low end.

You could probably stiff some of your staff and get away with less. Remember this is uk currency though :)

Americans pay a lot more.

But it still stands, devs and publishers have VERY HIGH profit margin requirements, because of thier huge overheads. As everyone at GG says, right size your life, get rid of huge demands on your lifestyle and you can make a good living.

If you make a hit, you might even be able to live it up every once in a while!

I'm sure we had over 100k cash burn on W3D btw. But Ive no figured to back it up. 100k a month down the drain scares the crap out of me..

It is not hard at ALL do develop a burn rate of 100K a month. A read a report once that said (in the U.S.) that the average cost of a programmer was about US $100K a year - a little less for artists (like around $70K) That includes salary, benefits, office space, hardware and software licenses, etc. That assumes a good mix of senior and junior people.

Office space is NOT cheap.

I was at one company that had dropped down to a total of around 12 people - the CEO was drawing no salary - and they still had a burn rate of $100K per month. Part of this was because in wealthier days, flush with investor money, they'd gotten into some pricey contracts and some primo real estate for our office. And of course keeping the lights on and the computers humming. Getting OUT of those obligations can cost more than staying with them. But the bulk of the money was still in people - salaries and benefits.

the whole money thing is insane. It amazes me how many people are employed and how much money gets wsted at big studios, for a game that might be three times as good as an indie game, but 100 times as good? no way.
I spent longer playing Pax Solaris than I did playing Daikatana, one of which took about 6 months for 1 guy, another took what 5 years? for 30 odd people?
When I read statements that "a game is a failure if it doesnt shift 500,000 units" it just makes me laugh. I read it as
"we are too stupid to see the huge potential in small games". This is fine by me, because without such ignorance on the part of the suits, I wouldn't be driving my shiny new car. hurrah!

Ive got to believe that having a small studio with no staff turnover and very high workrate has GOT to be at least 2x as efficient as a normal studio.

Not only does the normal studio have loads of different things that distract from day to day developments, but they also have huge overheads in office, expenses, "management" etc.

I certainly dont see how they can hope to compete against studios producing smaller games.

So in theory, this would suggest that a publisher using lots of smaller companies to produce games on royalty deals (i.e. like real) are in a way better situation than companies who will try and produce thier own small games internally.

At the GDC I heard many comparisons to this industry and Hollywood. Much like movies, some of the best entertainment I have seen has come from independent studios.

We design our games with the player in mind, and while the 3 games we are working on are still in development my goal is not to sell 750,000 copies of it in 6 months. I would rather have a solid following of fans that appreciate what we have produced and want to come back for more.

While competing with a company such as Atari is quite an interesting concept considering my office is in my apartment, I still welcome the challenge. I look at this as more of an opportunity to run a business the way I want and make entertaining games at the same time. Producing good gameplay and keeping your customer in the front of your mind will always win in the end.

Just my $0.02!

It is not hard at ALL do develop a burn rate of 100K a month.
It sure isn't. Especially if you are located some place expensive like California. We are nearly at that point already. For a while, when we were developing a Retail RPG for a publisher, our burn rate was well above 100k per month. Now that we are once again focused on nothing but downloadable games we are a bit under 100k. It's not cheap to run a business that hires professionals, pays them a competitive salary, and provides decent benefits.