Category: business

I know we all have to start somewhere. I started with a game that looked like this:

But that was 1997, unity didn’t exist, steam didn’t exist and buying games online was a no-no for most people. Plus I had a fairly well-paid day job working for an exciting it company in places like this:Times have changed. The competition is more global. More people have access to the internet, to unity, to computers fast enough to actually develop on. Plus Notch made everybody think you could become a billionaire from indie game dev, and now everybody wants to do it, despite endless horror stories of how people fail and lose money doing so.

So given all that…why do people keep making so many basic, obvious mistakes such as…

MISTAKE #1: Your game idea is bland.

You are a plucky hjero who has inherited a magic sword and will claim your rightful place as the king of la-la-land by defeating the evil prince doodad who is some relation to you. Blah Blah. Why don’t you just replace your whole plot with <INSERT HEROES JOURNEY HERE> and be done with it? Perhaps you have been really radical and made a game where you build a world out of blocks? or your character runs sideways and jumps over stuff and collects other stuff? Or maybe its a space strategy game where you build an empire, mine resources and research technology? RADICAL!  Peter Thiel has the right idea when he says competition kills profits. Seriously, WHY would I buy your space 4X instead of Galactic Civilisations 3?

MISTAKE #2: Your game will market itself.

No it won’t. Do you have ANY IDEA how many emails about new games land in the inboxes of the editors of Rock Paper Shotgun or Kotaku or similar sites? ANY IDEA how many offers of free games the popular youtubers get? Do you think they ignore all of them in preference to randomly googling ‘new indie game’ to try and find your opus? hint: no.

MISTAKE #3: Listen to the wrong advice.

Do you know whether or not you should charge $10 or $5 or $25? Whether you should bother with the smaller stores or not? whether you should advertise? and if so where? Whether its worth having your own website & domain? how about if steam achievements & trading cards are worth it? or if a mac port is a good ROI, or if you need a contract with your artist? I can tell you who knows the definitive answers to all your questions: THE INTERNET! Yes it’s true! random strangers on reddit and twitter are absolute experts on all these topics and will share the fruits of the careful peer-reviewed research with you. You can be 100% sure that they have powerful insights based on multiple experiments they carried out with their own hit games. hint: this is sarcasm. Take careful note who you listen to. And when a sentence starts with ‘everybody knows that…’, its likely bullshit. Smart people know that they don’t know anything for sure.

MISTAKE #4: Make what is easy.

Most of the post-mortems and reddit threads that start with ‘I made a game and it flopped badly’ contain the words ‘mobile’ or ‘retro’ or even ‘clone’. Its just simple economics that dictates that profits will drop to zero when there is no barrier to entry. If you don’t understand this, read up on it. When its very easy to use unity to make a generic side scroller game for mobile, guess what happens? the profits drop to the level where a kid with a laptop living in Vietnam can just about pay for his computer/internet connection/food. Food is cheap, and mum probably provides it anyway. If you cannot live on the income of a vietnamese teenager, then do not make a game a vietnamese teenager is going to be able to clone. (You *might* get lucky like flappy bird, but thats what it is: LUCK. You get better odds putting a bet on a roulette wheel.) Do you know why there are not dozens of Democracy 3 clones? Because it is crushingly hard to make a game like that.

MISTAKE #5. Copy AAA.

I worked at two big AAA studios. They were good ones, widely respected, makers of quality games, not cheap knock-off studios who churned out movie tie-ins. They were profitable and successful (for a while anyway :D). I enjoyed it, I found it fascinating, and I learned a lot.

About programming.

I learned very very little about how to run a business and make a profit. I won’t bore you with my anecdote about the finance director saying ‘no cliff, we aren’t going to do what valve are doing. this steam idea of theirs wont go anywhere’, but suffice it to say I learned a lot about what not to do. Just because triple A studios rent an office doesn’t mean it makes sense for an indie. Just because they have a big team doesn’t mean you need one. They sent 6 people to every trades how in existence? that doesn’t mean you have to. Ask how successful indies do things, don’t think you can just copy AAA but do things smaller. Not everything scales down.

Obviously I don’t have all the answers. If I did, I’d be sat on a purpose-built island covered in wind turbines and shaped like the emblem of the klingon empire. I have, however been making indie games since 1997, and I’m still doing it. And I’ve done ok :D.

So everyone is talking about indiepocalypse, or however we pronounce it. Basically there is a fairly broad consensus online that about a year ago indie development was like this:

And that now it is like this:

Here is my take. Short answer: yeah, sort of, and it was pretty obviously coming.

I think it is MUCH harder now than it was a few years ago, at least for indies, but I don’t blame (as many people do) all of this on steam ‘opening the floodgates’. It wasn’t like it was *illegal* to sell games on the PC without being on steam. I managed quite fine (even bought my house) before I ever managed to get a game on steam. The opening of steam to thousands of new indie devs made it much ‘easier’ to sell online…and that is the core thing here.

Basic classical economics tells us that corporations in a working market will earn ‘normal’ profit. That is, given the chances of failure and thus the risks of investment, the return of investment in a market will equate to the general market rate of interest. In other words, if I can get 2% on my savings in a bank, then the normal profit for a low-risk occupation is likely to be about 3-4%, with that extra earnings level added in because self-employment is more risky. Basically whenever you see a ROI earned by a company thats really high, the market has either failed, or an adjustment is under way.

There were a lot of indie Games making a lot of money a few years ago, such as Minecraft, Prison Architect and all of the Indie Game:the Movie hits. Suddenly the idea that indie gmers could make not just the same but MORE money from indie dev than a ‘normal’ coding job was accepted. This generates factor 1:

ATTRACTION FACTOR 1: Perception of riches from indie game development.

In a perfect market, everyone then quits their AAA job and makes indie games, until the likes of Mojang and Introversion make less of a profit. Thats a market correction. However, it was not an immediate correction due to three drag factors:

DRAG FACTOR 1: Making indie games with a small team/solo is FUCKING HARD.

DRAG FACTOR 2: Production costs for even an indie game are out of the reach of the average person.

DRAG FACTOR 3: Access to the market is difficult. (Hard to get on steam).

So the apocalypse has happened because (in my opinion), these drag factors have stopped acting as a block. Why? Well 3 is obvious, steam introduced greenlight, then lowered the requirements to get through it. A lot of indies couldn’t even be bothered to read a handy article on how to sell their games before greenlight. Thats no longer a problem.

Factor 2 has almost vanished for 2 reasons. Firstly kickstarter/early-access is so prevalent that raising money to make a game is no longer impossible (Plus there are now indie publishers like Positech and Indie Fund). Secondly, the production costs have come thundering down due to my controversial opinion that…. drumroll…

…People have started going fucking gaga over ‘retro’ pixel art graphics in a silly way…

Not in a cool, stylish, re-interpretation of such graphics bought up to date in the style of puppygames, or in a ‘amazing twist on the old look whilst still paying homage to it like Fez. Nope. I mean like this:

Now, I’m not saying its a good or bad game (shower with your dad simulator), I haven’t spent any of my precious waking life playing it. All I’m saying is that if you look at that screenshot and then look at this:

Thats $63,000 gross in 2 weeks. Thats pretty good. Thats not an *indie hit*, but its GOOD. That is probably $200,000 for the developer this year, maybe $250-300k lifetime. Lets be clear, this game did NOT have a high art budget. I’m not sure it had an art budget. Or an artist. But it *doesn’t matter*, because people are quite happy to see through that and thus buy it. Lets be even more clear, I’m not criticizing the game or people who bought it. I’m saying… Costs of development for a game people will buy seem to be insanely low right now…

So it turns out nowadays we can get funding for our art budget easily, if we even need one…we may not do. So that leaves the final factor… Making games is fucking hard.

But wait! Look at the screenshot above. Maybe it isn’t? There wasn’t a lot of complex shader optimization going on there I suspect. Maybe this love of retro games makes the whole argument that ‘games are hard to make’ moot? And even if it does not… Then we have the rise and rise and rise of unity and stuff like it. Plus lets remember that simpler tool like gamemaker can now churn out stuff that runs reasonably well because we all have astonishingly fast video cards these days.

So what do I conclude?

Well conclusion 1) is that none of this is steams fault. Or at least…very little. Its more a shift in tastes and technology than anything else. If greenlight had never been invented, maybe we would have a ‘unity app store’ that was going great-guns right now.

Conclusion 2) is that profits are going to go down…down..down for indie development. These are not the same glory days. This is a market correction, arguably a much needed one.

Conclusion 3) is that there is no ‘solution’ to this other than making great, original games. Even that may not be a solution. Game development is like being an actor or a musician, there are more people that want to do it than there is a market big enough to sustain all of them in jobs. Don’t assume the market equilibrium always happens at a level where you can eat.

Sorry I don’t have happier news. here is a picture i took that amused me instead: