Game Design, Programming and running a one-man games business…

Avoiding confirmation bias in business

cliffski

I occasionally read a fairly insane and crappy web blog about investments in silicon valley. It’s quite amusing in some ways, the way people think everyone on earth has an ipad and a smartphone, and is a venture capitalist or runs a dotcom startup. Businesses are either the next google, or totally doomed, and that can flip completely from one day to the next.

It’s silly, but the flipside is, if acts to put my own world in perspective. I hang out (virtaully) with quite a few indie developers like me. I’ve met a lot of them, and we tend to agree on a lot of stuff. Selling direct is good, finding reliable artists is a pain, selling games too cheap is bad etc…The problem with just hanging out with people who think like you, and are like you, is that it narrows your focus and you suffer from serious confirmation bias. If everyone you know charges $20 for their games, is a sole employee and all make $50k a year, you are very likely to conclude that ‘this is what people do’, and follow suit, in both strategy and outcome.

I try very hard to avoid this. This is why I sometimes to chat to guys like Nicholas Lovell, who disagrees with almost every aspect of my business strategy :D. It’s why I take a huge interest in the economics of MMOs and facebook games, despite not making one. I was always interested in the business side of gaming. I would LOVE to be able to look through the bank statements of zynga, or activision :D

One business decision that I really struggle with is the idea of re-investment in my ongoing business. It makes sense for me to spend a huge chunk of the profits from GSB into growing the business. I should probably have 1 or 2 full time employees right now, and I don’t. I have (at the moment)  3 contractors working on my next game, plus me. There will be at least 2 others working on it before it ships. But this is small fry. I could make a legit business case for a much bigger investment.

To that end, I *do* have a little side project in development, which I won’t talk about for a while, and I am also trying to persuade myself that I should invest a whole months profits in advertising one month. I’ve never, EVER done that. Jeff Bezos would think I’m an idiot. In the last year, my google adwords budget was £27,000. It sounds a lot, but it should probably have been a lot higher, given that it’s such a major chunk of my expenses.

Anyone who thinks it’s easy to know the correct business strategy for making indie games hasn’t really thought about it.

4 thoughts on Avoiding confirmation bias in business

  1. Seriously… I wish I could spent that amount of money on my graphic assets :) I’ve been working in the games industry for almost 14 years and I always wondered how people manage to get their money together to fund a complete game with all the assets, the programming, the marketing, and the sales.

    I saw quite some people fail… not just fail but FAIL. I tried it once and failed too (small fail)… but that was mostly being me focused on the technical side (engine development) and not spending time on the assets, etc.

    Lessons learned and fresh insight from outside the gaming industry (where marketing sometimes is the sole driving force on board), I’ve set up a new plan to gain a major part of my income from game development.

    Indie games seem to go the same way game development has taken mid-90 with exploding budgets etc. It doesn’t make sense anymore to try and develop a game intended for the large gamers market without spending a huge amount of money (>100.000€) on all aspects of the game (development, assets, marketing, etc).

    More and more often people say that most independent game developers have crossed the line being “indie” when a certain amount of money is in the game. And even I start to think like that when I read that one can spent more money on marketing than others earn within a year… and yet they complain that it probably isn’t even enough money spend ;)

  2. Why oh why spend more money on advertisement? Why not on content? Do you have hard numbers which prove ads generating considerable amount of revenue?

    What was the last successful indie project that advertised heavily?

  3. If spending more money on advertising game A makes it sell more than the spend, it means there will be more money to spend on content of game B coming next. Just plain heavy advertisement I doubt will work for an indie, but spending more in a smart way might.

  4. Igor – there may be few successful indie projects that advertised heavily, but I expect there are many, many more failed ones that didn’t advertise much. Adding content is not likely to raise revenues significantly, because the number of people who are thinking, “hmm, I’d really like a new Positech game, but the amount of content is too little” are small compared to the people who would probably enjoy the next Positech game but who don’t even know Positech exists yet.

Comments are currently closed.