PR and the 3 tiers of game developers

September 19, 2014 | Filed under: business

Things are pretty tough in the mid-tier, as an indie game developer. I see a huge disparity between those devs that have been called ‘triple I’ indies (sorry paul!) and new entrants making their first game in unity. I also see a big gap between those III indies and the AAA developers. It seems game development is collecting into several bands, and I suspect a lot of it is PR related.

tier1

At the bottom (financially speaking) you have those indies making their first game, and selling a  few hundred, maybe a thousand copies. They have zero PR budget and Zero marketing. They probably have coder art, and are doing literally everything themselves. They make up the majority of games still stuck in steams Greenlight pages, or have an app on the app store. A lot of them may be working on their games part-time, or are students, or very young. their living costs are young, they are idealistic, and presume their game is about to take off and make money. Statistically speaking, they probably wont, but a combination of youthful optimism and relentless confirmation bias means they are still working at it and are still assuming they will stay in the industry. The only PR they do is on twitter and reddit personally, trying to get people to play their game. The ROI is zero. These people lose money.

tier2

In the middle (again, only speaking financially) are the established ‘III’ indies with a few titles under their belts, or the ones who had a proper art and PR budget. They are probably migrants from Triple-A studios, with years of coding experience. They are aged 25+. They may have a small team, be working full-time, and are probably self-funded. They have some actual advertising budget, might hire a PR agency now and then, they attend trade shows with proper booths (not a laptop and a self-printed poster stuck to the wall), and have professional looking trailers. Their games sell 20-200,000 copies. Some of them are millionaires. A lot of them make a pretty decent living, and are likely to weather any coming game-crash or storms. They use google ads, reddit/twitter/facebook promotions etc. The ROI is pretty good, 200-300%? My company is in this tier.

tier3

At the top (purely financially :D) are the AAA developers. Their games cost millions to make, and sell millions of copies. They have full-time PR companies, with print-media ads, huge booths with people dressed up as game characters. They have massive site-takeover ads and streaming video ads. They have billboards in the streets, on buses, ads on TV, and their PR people guarantee these are the games that get written about in national newspapers and magazines. They get mentioned on TV in geeky segments in the news. The owners are multimillionaires. The staff are paid whatever they can get away with. The ROI is very good here, maybe 400%?  Activision is in this tier.

Ok, so what’s my point?

My point is that it’s getting hard to move from one to the other. Yeah, minecraft is the mega-exception that proves the rule. I know a lot of people in the middle tier, and I’ve yet to see any of them break out of it in a big way. The gap between them and the AAA is huge. Maybe it’s just that the sheer money involved requires a different mindset? Rather than spend $100-200,000 on a game (I’m calling that mid-tier) then you have to spend $2,000,000, and the likelihood is you don’t have that cash sat there (some do…). That means borrowing, which means proper big investors, VCs, people wearing suits… proper accountancy rules & board meetings blah blah. Maybe it’s too much hassle, or not what those devs want to do.

The good news is that going from bottom to middle isn’t as hard. I think it can be done by angel-investor style funding, or the real plucky confident people who remortgage their house or sell everything they own. I think you probably need to spend $100-200k to make a game that pushes you to mid tier. That either sounds like a good deal, or terrifying depending on your risk-attitude. The good news is there are some indie devs who can fund games to that level, if you make a very good pitch.

It’s hard but I think middle->top is harder still. I pretty much know why I’m stuck in the middle. it’s manpower. I need to find people I’m prepared to hire full-time, or at least on long term full-time contracts. I haven’t done that. Yet.

 

15 Responses to “PR and the 3 tiers of game developers”

  1. Charles says:

    The question is, will ya keep the interesting personal blog posts going when you’ve got millions invested in games and tens of millions in the bank? :-D

  2. Quote:
    “… then you have to spend $2,000,000 …”
    I think that you’re missing a zero there, and that’s not including the advertising budget. ;)

  3. cliffski says:

    Maybe, but then I’m not just suggesting just Call of Duty / Destiny, but also stuff like Anno 2070. I’ve no idea what their budget was, but probably not $20 million. I may google for it…

  4. Alberto Cairo says:

    What about word of mouth?
    Back in the day, a few shareware companies made it big with virtually no marketing budget at all.

    As an example, lately I’ve been trying to spread as much as possible the word about an indie project I backed on IndieGoGo:

    https://www.indiegogo.com/projects/dungeon-kingdom-sign-of-the-moon

    One of the reason I became interested in it is because they apparently don’t fall neatly in one of the three categories you mentioned: yes, the programmer has over a decade of experience at writing engines, yet he has switched to Unity, willing to spend more time on the game itself, rather than the underlying “infrastructure”. Now, that sounds a pretty difficult step: engine programmers are notoriously affected by the most vicious form of NIH syndrome! I guess these guys would fall in the III category IFF their crowdfunding succeeds…

    However it’s a bit of a chicken-and-egg situation: you have the potential to be an III – as far as experience is concerned. However, to make, among the other things, a “proper” marketing budget you need to succeed at raising funds – which is quite difficult without such a “proper” marketing budget…

  5. I suppose using terms like Triple A, Double A, etc are a little misleading because in development they are not absolute terms in the same way that they are in finance and national debt ratings. There’s quite a contrast between $2m and $50m.

    A long time ago (in a galaxy far, far away) I had an interview to work on CoD (5 I think, know idea what the current number is) and asked the producer/leads about budget. Staff was around 70 or 90 for an 18 month initial development schedule (not including followup patches, dlc, etc) but can’t remember the rough quote they said (pretty sure > 20m). It didn’t including advertising or a lot of extra ingame stuff like the cost of Hollywood voice actors. They said the more successful they were the more leeway they got and more revenue % would come back to them so the studio wasn’t always flat broke and soley reliant on the publisher for day-to-day costs, and that gave them a limited security blanket financially. It was a long time ago so beyond flaking out with jetlag and swimming in the Pacific my memory is a little hazy …

    • Alberto Cairo says:

      It’s funny that you mention finance and national debt ratings. Days ago I was commenting about Mojang acquisition on another website…
      I don’t know if it’s all that cheap money central banks keep pumping into the system, however if Mojang is considered worth 2+ billions by (hopefully) financially-savvy people, I can’t help but wonder how much would EA be worth. And they have countless, valuable IPs, R&D departments, uber programmers…
      Another staggering acquisition is Facebook-WhatsApp – again, I fail to see WhatsApp as a business worth 19 billions…
      Oh, well.

  6. Or we could just call it the “AAA Studios”, the “Made It Studios,” and the “Not Yet Made It Studios.”

    I see more strata than this, but for the purpose of this discussion, I’m not sure how useful they are. But there’s a huge difference between – for example – the hobbyists / total beginners, and the struggling small studios. Even some of the struggling ones that started with money, but can’t – or haven’t yet – made enough to match their burn rate. It’s tough. It seems like the most likely way to get to that mid-tier is to have plenty of experience and a deep back-catalog. But you can’t get there without a lot of time spent at that lower tier.

    I could almost break it down to “hobbyist,” “Semi-Pro”, “Struggling Pro”, “Successful Pro” – your “middle tier” – with the possibility of leapfrogging some (but rarely all) of those stages.

    Things have been stacking up against the growth from the middle-tier to AAA for a very long time. Nowadays, almost the only way to do it is to get bought out – at which point, you are no longer indie. (But really – when you are AAA, are you really “indie” or just ‘independent,’ anyway?). The publishers have been stacking the deck against the independent studios for a long time. I saw a lot of it in the 90s with decreasing royalty rates, bigger advances (which have to be paid back at the royalty rate, not recouped as an expense). And then of course, the definition of AAA – which was always hazy – has escalated to something like 10x to 20x what it was back in the mid-90s, where a million-dollar game (which would cost about 1.6 million adjusted for inflation) could easily be considered AAA production costs. Now you can’t even think about it if your budget isn’t in the tens of millions, often pushing (or exceeding) nine figures.

  7. Colm Larkin says:

    Double Fine might be a good example? Making games in the $1-15 million budget range

  8. lololololo says:

    Skip the singleplayer crap. What modern gamers really want is an engaging online multiplayer experience. Not that starcraft crap either tho, the game needs to be fun, easy to learn, but rewarding for those who spend time on it.

    i’m obviously biased, but a game like renegade x is perfect example of game that is “engaging” and “fun”. There’s plenty of different stradegies to winning a map, either by working with a team or going solo. The latter however requires very good knowledge of the game, especially so if you happen to be playing against skilled players on the opposing team.

    And that’s only the player versus player situation. What about games where you actually don’t play against other players, but instead work with them against the AI or the game? Games such as tactical shooter SWAT 4, Ghost Recon games, Rainbow Six co-op? Game where enemies can spawn different locations on different playthroughs, and game where the players will have to be careful not to get shot by the AI. I believe this element of co-op could be one reason why minecraft is popular.

    Too many games out there are either singleplayers trying to tell you a story, or multiplayer games where the gameplay is all about “you”. What the industry lacks is n64/dreamcast/xbox 1 era console games, where you can play the games with 2-4 friends, and complete the objectives together against the game’s AI. FPS games like Perfect Dark with it’s stimulants (bots), multiple gamemodes, maps and weapons for preference, are a dying breed of video gaming.

  9. Hi, I’m Volker and part of an organization called the Buffalo Game Space. This article really gets to the core of something we’re trying to address with our organization, the gap between the tiers.

    I noticed this awhile ago, that even with good success and a good income, it’s really difficult to move past those successes. A small part of it is community, but as you point out, a bigger part is access to resources(VC funding, etc). Most of that funding goes towards labor, but a sizable chunk of it goes towards accessing equipment, software, and other non-cash resources you previously didn’t have access to.

    Something we’re trying to do is over-come that second part of the barrier, by building what is for all intents and purposes a community studio where people can have access to professional office equipment, workspace, software, sound equipment, motion capture, backend services, etc etc.

    Our hope is that by doing this, we’ll allow small 1-10 person teams to be able to raise their level of quality dramatically well simultaneously increasing their productivity. That way we can spin-off more larger studios over time.

  10. John says:

    Is there any market at all for lower end libraries, tools, utilities etc?

    I’m assuming probably not, because it’s been squeezed out between free/open libraries and the big professional tools.
    Which is a pity because although I can’t see myself making a game that is good enough to sell part time due to the required levels of art, and user interaction polish and not find that as much “fun” as making the code side I could certainly see myself making tools that were of some value.

    Not as a career but a (well planned) part time thing, maybe a little more than a hobby, and mostly for fun but making a little money from it would be nice.

    But sadly I think the market is too small, and the low end has been squeezed out between free tools and big tools. You either have to do it as free/open software or via a big company which seems a shame!

    • Alberto Cairo says:

      Short answer: yes, there’s such a market.
      Long answer: most of the tools I’m using in the development of my own game are NOT free. Not all of those tools are expensive, though.
      I know that there are certain free softwares that have as much functionalities as their commercial counterparts, however they often lack ease of use…
      Anyway, here’s a brief list of ALL the applications/libraries I’m using, either free or commercial.
      N.B: I’m still using the demo version of a couple of things – when it expires, I’m going to buy the full version, though.

      Libraries:
      BASS (commercial)
      JUCE (dual licensing model)
      Win32 (part of platform SDK)

      Applications:
      ArtRage (commercial)
      Carrara Pro (commercial)
      cppcheck (free)
      Git (free)
      Photoshop (commercial)
      ShaderMap (commercial)
      Silo (commercial)
      Visual Studio (express – I’m a command line die hard, really)

      • Yeah, same here. I use SOME free tools, but for art and game development specifically, even the cheaper tools tend to be superior to many of the free/OSS options at specific tasks.

    • Alberto Cairo says:

      Furthermore, not every tool should be designed with professionals in mind.
      A modern, inexpensive MilkShape 3D “clone”, with more functionalities – shader support, etc – would still be able to attract many hobbyists, I think…

  11. Sniper Sheep says:

    IMHO you didn’t use the “Exception proves the rule” properly here. Minecraft as an exception weakens the rule. The only thing it proves that individuals still can make a big impact however of course you need lots of things to come together but it’s possible. Otherwise fully agree with the rest.

    Great read as always!