Category Archives: business

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.

 

Marketing games in 2014…hmmmmm.

September 07, 2014 | Filed under: business

I’m always a bit paranoid about being out of date. I don’t want to be the guy who is putting the finishing touches to his betamax product line just before he hears about VHS. I don’t care so much about coding tech, as I think the costs ofg switching tech to the latest version outweigh the benefits. Especially if you do whatever Microsoft say is cool, which changes every year. Is silverlight still a thing? hell…I remember when VRML was the tech of the FUTURE.

But like it or not, the internet changes, gamers change, and we have to roll with it. Subscription MMO’s are dead. F2P is the default now. That’s a BIG change. iOS games went from being non-existent, to gold-rush, to a great way to lose money in just a few years. Internet ads have gone through so many fads it’s hard to keep up!

So where do we find ourselves? I’d guess we find ourselves in 2014 with these priorities:

  • Video content is king
  • Social media is king
  • Buying your way to attention is getting very expensive
  • Huge centralization of online community control.

I am not a youtube user, on the whole. I watch the odd trailer and technical video, but I never watch let’s plays. I am too impatient for that. I don’t want to hear someone talk about the main menu screen for 5 minutes, I might only *play* a game for 5 minutes. And when I’m relaxing, I’m in a room with a TV on, so I prefer text only. But like it or not, video is huge. As a result, I spent a lot more now on producing video content than I did before. I have an actual video camera (a cheap one, but at least a proper one) and a decent microphone, ready for test-driving tomorrow. I’m going to try and release more and more video content.

Social media is a big thing, but tbh I don’t mind. My twitter account seems weirdly popular, and this blog is even more popular. This has never been a strategy, it’s just me being me, so that worked out quite nicely. I’ve made a bit less use of facebook, reddit etc, because I just have so little time, but I can see they are important.

Simply sitting in a dark room without either of those and just buying advertising space is getting harder. Ad-costs are high. A lot of billion-dollar companies are throwing cash at each other in a mud-fight, and us indies can’t afford to get in the middle. Some of the CPC ads can still be worth doing, but CPM is going up and up. Anyone who thinks $5-10 CPM is ‘a good deal’ is smoking something. It absolutely isn’t, unless you are selling accident insurance.

There are very few places now to be heard. A lot of those big gamer sites you enjoy are owned by parent organizations who own three or four or more of them. Big media companies like buying other media companies. I think starting a new site these days is very very hard. You struggle so much to get the slightest attention. Right now there are probably just about enough media outlets for indie PC gaming to keep up a sense of competition, but if things consolidate more I’d start to worry that we are back to 2 or 3 companies deciding your fate as an indie games business.

Interesting times…

This is something I give a lot of thought to. Partly because I see other people talking, sometimes worrying about it quite a lot. I should put my own position and experience into perspective here, for anyone who is new to the blog. I started making indie games in 1997. Since then I worked for about 5 years in total in AAA dev, the rest of the time I’ve been part or full time indie, and I’ve been full time for a good nine years. I made Kudos Democracy and Gratuitous Space Battles.

The market for indie games has changed beyond all recognition since I started. When I started, the site you aimed to get on was not steam, but download.com. The other big site was Tucows, and later came Yahoo Games and Real Games (remember the real player?). Buying online was treated with suspicion. Online sales services paid you by a mailed check. Everyone bought direct from the developer, and normally got a code to unlock the game, which came packaged as a zip file.

a simpler time...

a simpler time…

How times have changed!

The market for games in general, but indie games in particular, has snowballed since then. The general short-term lazy answer to this is ‘because of steam’. Sure, steam helped, but selling indie games online paid off my mortgage before I even got a game on steam. Sites like Yahoo Games and Big Fish Games did very well indeed for the developer. I remember getting a $20k check for ONE MONTH from yahoo games. happy times… The reason I’m, saying this is not to boast, but to point out that the existence of online portals that market and sell indie games and make good money for developers isn’t that new. The thing that is new is the scale. Those $20k checks are no longer a big deal. You know whats cooler than $20k? $200k! or maybe even more!!!!1111.

The problem is, we have a LOT of indie developers who have joined the story in the third act, when the $200k is the norm, and $20k is nothing to write home about. Not for them the idea of coding from your spare bedroom with expectations only of meeting the bills. Now the indies expect to get that $200k a month. They cut their clothes accordingly, with rented offices, new PC’s, appearances at all the trade shows at around $10k a time after travel & marketing stuff is taken into account. The minimum team size now seems to be about 4 full time devs, plus contractors, voiceover talent etc. Budgets start at $50k and go up and up and up. But it’s fine, I hear indie games make $200k a month…

A small indie team circa 2014

A small indie team circa 2014

And the thing is…. some do, or they have done for quite a while. There are plenty of stories about the money indie devs are making. I’m not doing bad myself, and the only reason I keep quiet about the money my games make is I think it’s VERY misleading data for people starting out. I read a great article recently about devs who worry when they ‘inspire’ people to quit their job. This is indeed worrying. People suffer from enormous confirmation bias. They want to hear that they can get rich making games they love, who wouldn’t want that? I did my bit by giving two really downbeat and depressing ‘de-motivational’ talks at world of love and its follow-up where I point out the harsh business realities of selling an indie game and making a living. Generally, people don’t want to hear that.

indie attitude

indie attitude

The stories about steam and humble-generated millions, plus notches sales stats have persuaded a huge number of people to go full-time making indie games. Good luck to them, I wish them all well. I love indie games, I’d rather the next Call of Duty game was cancelled and the money spent making 200 small indie games instead. That would be great from my POV as a gamer. But…. I worry that the current setup is not sustainable, because so many people have entered the business during boom time.

Bluntly put, Boom time is where the middlemen get rich selling services to the suckers who just joined in before the crash. Do I think there is a crash coming? Yes. Why? Well it’s got nothing to do with steam ‘opening the floodgates’, which is firstly just exposing the reality of the market (and hopefully calming the boom) but secondly going to be fixed by them soon anyway…

The guys selling shovels got rich...

The guys selling shovels got rich…

The simple problem is a lot of indies are running at a huge loss and they don’t even realise it. Their expectations are sky high and their experience of the business is zero. Your first game will probably LOSE money. Mine did, and my second, third, fourth and fifth. The good news is, I made them all part time and had no kids to support anyway,m and the budgets were tiny. I used coder art for them all. Once I finally worked out how to do things I did my first full-time games, then my first with non-coder art, and so on. At each stage, I spent another 25% or more than the last game, and expected maybe 25% or more sales. I NEVER assumed the next game would make the same as the last, let alone more, and I certainly never required it to in order to pay my bills. I was slow-and-steady, and cautious.

And I’m still here.

But I strongly suspect a lot of indie devs won’t be in 2017. The ratio of developers who will earn $100,000 next year to the percentage who think they will is…probably quite scary. If you are new to the business, and are making your first game, and expect it to make money, don’t forget that many of those devs you read about are like me, with 17 years experience selling indie games (and in my case 34 years of programming). Keep your confirmation bias in check and look out for developers with the same experience and background as you to draw real conclusions about expected sales.

the average indie biz plan

the average indie biz plan

I encourage people to reach for the stars and follow your dreams. I do, but I also make damn sure I’m prepared. I always like to be assured of victory and guard against any possible failure.  You *can* be ambitious AND cautious. I think there *is* a crash coming, when all those ‘first indie projects’ finally ship….to not *that* much in sales, and a whole swathe of developers realise that they need to go work for a bank programming stuff they hate for a while as they build up the experience.

I don’t like to be the prophet of Doom, but I do see a lot of business plans and projections from indies that are frankly terrifying. Do your homework.

Behold, it is announcement time! You know I’ve been blogging a bit about my indie game site at www.showmethegames.com, maybe mentioning all the new articles on there written by the talented Dan? Well that was just part of the SMTG world domination plan. Behold phase II!

It’s time for the SMTG Dirty Dozen Discount week:

ddd

So what’s all this about then? It’s a dozen high quality indie games you should know about, that all have the option to buy direct from the developer, and all of which are on sale for the next week. Some of them have huge stonking great discounts, like a political strategy game I’ve read *great* things about. You should go check out the page right now. And of course, you all know this, but it is extremely helpful if you can share the news on social media, twitter, reddit, facebook and so on. I feel a bit stupid asking people to do that, but then most people complain about paid advertising, and most people complain about self-promotion on social media, and it just ends up as an arms race to see whose readers are the most likely to retweet things, which I guess is inevitable but seems a bit weird. Anyway…. all such promotional help is hugely appreciated. Now… why should you care?

  • This isn’t a bundle. you can buy 1 game or all dozen, which makes a change
  • This is another place offering game discounts and offers, and variety is always good for the consumer in a free market.
  • 100% of the money goes to the developers. I run SMTG out of my own pocket. the site doesn’t take a single penny.
  • Did I mention 100% of the money goes to the developers?

So there you go…hopefully it gets noticed, generates some sales for the developers involved (including me, I’m one of the 12), and it justifies doing it again some time.

 

Show me the long term

August 17, 2014 | Filed under: business | showmethegames

It was a long time ago that I set up www.showmethegames. It was done out of exasperation with a conversation I’d seen 100 times in private lists and forums and email conversations that goes like this:

indie #1: we should set up a site that encourages people to visit each others indie websites
indie#2: thats a cool idea. It should have forums and a blog
indie3: ...yeah! and it should have regularly updated content...
indie4:..not only that, there should be embedded video, and also devlogs, and listings for all our games
indie1: Excellent, who is going to set up the site?
....sound of tumbleweed....

So I thought ‘fuck it’ and set one up myself. I got a lot of indie games listed on there, paid a web designer to do a logo and initial site design, and spent some time talking to other indies, even recording video from conferences to post content…

And it did ok. We ran a sale once, and that got very good traffic. But then I got busy. VERY busy, and getting anyone to write content for it was like pulling teeth. I should know better, because I was fighting against…

THE TRAGEDY OF THE COMMONS

Which is basically why nobody had ever done this before. So about three months ago I changed my strategy. I’d left the site neglected for a while, but now I had a new outlook, and it was this…

“I am going to invest in building up SMTG as a decent traffic generator for indie game developers. It doesn’t matter that I do it alone, or that others are benefiting from my work and financial investment. In the long term I’m building up an asset. It’s not worth much yet, but it will be, and in two years time I’ll be glad I did it.”

So I hired a proper game journalist to write cool articles each week for the site which are now online. I also re-engineered the back-end a little bit to support me updating it more often without a lot of legwork by me. I also have other plans, to be revealed soon. I’m spending a few thousand dollars here and there. Not a lot, but not totally insignificant. Many indie games sites die through lack of traffic and interest. I’m prepared to do what it takes to keep this site running.

To that end…it needs more games. It needs recent games. HIGH QUALITY indie games that sell direct (through humble widget is fine), and that are finished (not early access). Do you know any? If so email em at cliff AT positech…. etc.