I’m sat in an airport lounge sipping tea and typing business strategy on a laptop. I am a walking cliche. Having said that… it might be helpful to share my brain dump on the future risks and opportunities I see for my company. First the risks (I am, after all a pessimistic brit).

Risk 1. Price war and collapse for PC games.

This would change things dramatically, not only because I might just earn a lot less, but because many of my strategies are price-point-dependent. You cannot break even advertising a one-time $5 purchase. Probably not a $10 one either. I have to make games that command a $20+ full price tag. I actually am not too worried about this happening. Not for original, interesting, polished high quality games with marketing. For shovelware sure, but that’s not me. Risk: 5%

Risk 2. Royalty collapse / publishers go evil.

Steam could demand 80% royalties, and everyone could copy them. That would be pretty crushing. I find this incredibly unlikely. Steams market share is big, but there are enough other players ready to take over the minute something like this happened. Plus, the more people at steam I meet, the less likely this seems. Risk 5%

Risk 3. Everything shifts to Mac / Linux / Tablets / VR.

This seems much more likely. It’s mitigated by Microsoft getting a new boss, so maybe they will stop fucking up. On the other hand the rise of the tablet/phone seems unstoppable. I now know that VR is awesome and not far off. The upside here is that I can cope if this happened. Learning OpenGL wouldn’t kill me. I reckon I could make games that are designed for tablet first if I needed to. Risk 20%

Risk 4. I am out-competed.

There are a lot of smart young developers in India / Russia / Brazil / China who are going to kick our asses. I live in one of the priciest countries in the world. I am 45 years old and need sleep now and then. The only thing I have that lets me compete with a 17 year old kid in Vietnam is my experience, but as they age, and senility kicks in for me, plus I’m stuck in a C++ era, that will be less effective. I can compensate by actually hiring people from these countries, but that still leaves a big risk of competition. Risk 25%

Risk 5. Critical employee.

If I get hit by a bus Positech is dead. I pretty much *am* the company at a strategic sense. My eyesight could fail, I could have health problems etc. This is obviously a different kind of risk. I can at least mitigate this with a healthy diet and exercise. Theoretically. Risk 1%

So there is the doom and gloom. How about exciting future stuff?

Opportunity 1.  New countries.

For the first time I have a game where I actually own 100% of the translated versions (Democracy 3 in German and French). I think they have made money, and also more importantly acted as a first step to understanding how to do this right, as I did EVERYTHING wrong. In an ideal world, every future game of mine has built in language support and unicode. This is unlikely but I’m heading there. Is piracy rife in some of the biggest markets out there? Yup, but the numbers are huge. Opportunity: 35%

Opportunity 2. Expansion.

I find this so difficult, but my current system is to expand by publishing games. I tried this with redshirt, and for a first attempt at this idea, if worked pretty well. Enough that I’m doing another one (details to come…). This is a very simple way for me to expand. I may eventually get an actual employee, and if I didn’t have such a nice home working environment I’d likely already have done this and had an office. Opportunity: 30%

Opportunity 3. Investment/ Diversification.

I don’t have to expand in games. I thought long and hard about starting a solar farm business. Positech even SOUNDS like an energy company. I lack expertise here, so at the moment I’m just content to have invested in existing solar farms. Maybe eventually I’ll make the leap to setting one up. Opportunity: 20%

Opportunity 4. Education / Biz software.

I think the education market is under-served. Democracy 3 is a great teaching tool, and there is vast potential here. I sometimes toy with the idea of hiring someone full time to push Democracy 3 into schools and to further develop it as a proper teaching tool, or also as a business tool. I can make a very convincing argument here. The problem is I’m not massively into spending my time talking to school district managers and big business committees. Plus there is the problem of getting people to take a games company seriously. Opportunity: 20%

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If I was 25 years old, I’d probably be hiring a bunch of people to expand on all those fronts right now. I’d have some trendy office in some trendy part of a big city and be high-fiving fellow entrepreneurs over lunch in whatever sushi bar has the best wifi. I’d actually know how to use uber. I’d have google glass.

As it happens, I find myself to be a relatively quiet tea-sipping forty-something, keen to get back home to his cats and the English countryside, and to shave. (One thing I learned this trip is that security people confiscate shaving foam.) I balance this out knowing I’m happy, have a good life and really love what I’m working on. Ultimately that surely is the goal.

 

 

13 Responses to “Strategic risks and opportunities”

  1. Sjors Jansen says:

    Extra kudos for opportunities 3 & 4.
    I had a flirt with the dutch government regarding education, but they were more interested in building and growing businesses than in educating people. Prepare for a big time investment if you want to co-operate with them, or find the right contact that can get things done.
    Educational games often get stuck between a rock and a hard place. Too educational for gamers, too gamey for educators.

    Perhaps you know of:
    http://wheredoesmymoneygo.org/bubbletree-map.html#/~/total
    and of Hermann Scheer’s books (one of the people behind the electricity buy-back system):
    http://en.wikipedia.org/wiki/Hermann_Scheer

    The trendy use of uber is wrong pretty much everywhere. At least if people mean the german word which is generally spelled über or ueber.

  2. Arowx says:

    Now VR and Education I think this could be massive.

    Solar farm, why waste land, just rent roof / road / parking space and use some of the electricity generated to pay for the rental and repay the construction.

    You should also think about automation, at the moment it’s only on the fringes but I imagine it won’t be long before someone comes out with a game creation engine, that game developers just steer towards their target product.

    As for expansion, has anyone tried setting up a co-operative style indie company?

  3. Alex says:

    For diversifying into education –

    You wouldn’t need to talk to the big business committees right away. There’s a whole subculture of media-literate young teachers who might be interested, and know where to point you.

    For example (from my teaching days), check out dy/dan – he’s a former maths teacher who’s worked for Google and Pearsons (a textbook & school media company), and is very well-known in educational circles for looking at new ways to deliver lessons, often using tech. If you reach out, he might be willing to have a chat with you.

    http://blog.mrmeyer.com/about/

  4. Trevor TIernan says:

    What is the risk with 5 other than legacy?
    I wouldn’t be so much concerned about 1 & 2 except how it relates to 3. And even then I don’t see the ‘going evil’ you even have humble bundle & showmethegames.
    India is a DRIVING force. I consider that a requirement to scale up what you’re doing (C#?)
    As far as OpenGL and the like.Are you planning to make Xbox games? If you create a cross MICROSOFT platform game you might want to use DirectX, also there’s tools like Xamarin (don’t know how it works exactly) if you want mobile. I would focus on the short term except in ‘business’ decisions like employees.My 2 microbits.

  5. Hoody says:

    No point starting a Solar farm as the subsidies have just been nuked?

    http://www.telegraph.co.uk/earth/energy/solarpower/10827019/End-to-solar-farm-blight-as-subsidy-scheme-to-be-scrapped.html

    May make investments a little risky as well?

  6. Alejandro says:

    About education, why you don’t create a business simulator like Democracy? Instead of control a country the user control a company… A game company, for example. You have a lot of experience in that front

  7. Trevor TIernan says:

    There is perhaps a less ‘educational’ version of that by an indie ‘game dev tycoon’ it’s on the windows store (and I think steam).

    There is a game
    http://www.capitalismlab.com/ (hope that’s the correct url)

  8. Robert Wm Ruedisueli says:

    I’m thinking that 3 isn’t that big a problem so long as nice multi-platform dev environments come with the change. If this is the case, then you actually get a larger customer base.

    Now, without multi-platform dev environments, this will drive up costs to insane levels, and that is a problem.

    OpenGL may be superior to Direct3D in performance, but it makes for having to directly confront hardware limitations, and generally operates at a lower level. Without a nice easy to use abstraction layer, OpenGL is far more difficult to program for, and far more prone to hardware-specific and platform-specific issues.

    Valve has found some interesting solutions to this Direct3D/OpenGL issue for their dev kits. They have developed a lot of nice stuff so that game developers don’t have to worry about the gritty details of OpenGL. If other dev kit producers follow suit, this could be very useful.

    What’s particularly nice about Android and Linux is that they use C++ natively, which should be a big plus for you, if you can find something to help you get around the OpenGL issue.

    I would appraise that the biggest risk to your development carreer is that the transition to new platforms happens before companies produce these nice dev kits. This could create a nasty time-period where older developers are crippled compared to their younger counterparts.

  9. Iain says:

    I don’t believe Risks 3 and 4 are as bad as you think (and I’m a pessimistic Brit too).

    re:Risk 3 Tablet/Phone are rapidly expanding markets true, but not necessarily the strategy game market (ok tablets maybe but not phone) and besides crossplatform c++ engines, such as Marmalade, are quite mature these days plus obj-c & java aren’t that dissimilar so you have options to migrate to these platforms should you choose.

    Your biggest problem would be letting go of the roll your own mentality imho, to go crossplatform you really need to spend your time wisely and that would be best focusing on game development not engine development.

    re:Risk 4: I still believe that it takes far more than technical ability to make a successful game regardless of how cheap you can make it.
    There’s a creative talent factor to consider plus a lot of luck, otherwise some kids in the western world have put us all out of business by now, there’s no shortage of people trying.

    I think spot on with the opportunities though, I think there are more opportunities than ever despite the increased competition.

  10. John Doe says:

    As noted in a previous comment, risk #5 is not actually a business risk at all. Why would you care about your business when you’re dead?

    You won’t. Not even a little.

    Are you concerned about what would happen to employees? But you don’t have any yet. Customers? Not a business issue…

    The other interesting thing about risk #5 is that, while you rate it the lowest concern at a mere 1% probability of occurrence, it is actually the only one in the list that is guaranteed to happen. 1% only makes sense if you restrict the time frame to the next twelve months or so, maybe. I don’t think you restricted yourself to a one year horizon on any of your other risks/opportunities…

    One might say that we tend not to take a rational approach to our own deaths, but that ain’t even scratching the surface of what really goes on…

  11. Trevor TIernan says:

    John Doe makes a good point.

  12. ac says:

    Is RSI a risk? I suppose not if as these guys speculate it’s all about whether you can avoid interference of circulation to wrists. I used ordinary mouse resting my wrist on the gel mouse pad and I started getting symptoms of poor circulation. I just bought a vertical mouse and am now using the mouse mats to pad the edges of the table. Together these measures ensure that should I accidentally rest my wrist somewhere, atleast it won’t be a hard edge. Only had the new mouse for a day so too early to say anything for sure but today is the first day in months I haven’t had a cold right hand, so adding the observations of : (too large regular mouse resulting in constantly straightened fingers + resting wrists on a gel mouse bad = bad for wrist circulation) together will hopefully hold over time. I just hope I didn’t get some permanent issue there, right hand is still a bit tingly after having endured that issue for couple months intermittently.

    http://geekhack.org/index.php?topic=47010.0

    • ac says:

      (Or perhaps having a hard edge is good – ensures you won’t be resting anything there if it hurts enough – I don’t have any issue in my left hand which haven’t had a padding… I just started using a mouse mat below the keyboard to make it quieter and thought softening the table edge would be good, but perhaps it’s ergonomically best to have measures or technique that make sure you don’t rest any part of hand with veins near surface anywhere)