Category: business

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.

 

 

So here I am, sleepless in seattle. Actually its more like sleeping well, but with a nosebleed in seattle, but that isn’t as catchy.

I’m here for a meeting with valve and some other indies, so I have lots to talk about. I am no expert at knowing exactly what I am and am not allowed to say, so here are vague impressions rather than a news-dump on steams plans. For a while, a lot of indies have been panicking about steam. There are more and more indie games being released though greenlight and people are worrying that the ‘average’ indie game on steam is making less money. The phrases you hear are ‘floodgates are opening’ and ‘race to the bottom’.

I’ve seen what valve have planned and I really do not think anyone has to worry. Actually I do. If your plan is to dump your first unity hobby game on steam and then retire rich, and that game is a clone or unpolished, or incredibly unoriginal, then yeah, you are so fucked, but frankly I don’t care.

Valve are approaching the ‘floodgates’ problem in exactly the right way. The steam experience for everyone is going to get so much better. I can’t fault their plans in any way. I’d love to attract loads of web traffic with a clickbait ‘valve are about to wreck steam’ blog post, but that would be complete bullshit.

My advice to indies uncertain about steam’s future is just to make a really cool game and don’t worry. That sounds like PR bullshit but it’s actually true for once.

While I was at valve I got their VR demo. I fail AGAIN here in any attempt to be contrary or scandalous, because I’m just going to echo what other have said. Fuck yeah. This is so cool. I never thought it would even work on a stereoblind person, but it is amazing. It isn’t perfect, it isn’t suitable for everything, but it *is* amazing. A whole new experience. I never thought we would be this close to a proper star trek holodeck so quickly.

I met some really nice people here. It’s always awkward mentioning anyone specific because then you feel like you might not mention everyone and my Englishness thinks I am probably offending someone, but hey, I’m not intending to. Anna & Augusta from valve were very cool to meet, I suspect Alden now sleeps safer knowing that I’ll safeguard his job when I own valve, and it was amazing how much in common I seem to have with the amazingly cool Tommy refenes, including a love of l33t electric cars. Also always good to bump into chet again. Whenever a bunch of games geeks get together, we always end up talking about cats. I also got to meet Jamie Cheng, another real friendly and cool guy.

I should also pay respects to the legendary Ichiro lambe, who has proven that Americans can actually be just as deadpan and sarcastic as English people.

 

 

 

I guess we live in attention deficit times. I’m guessing roughly 95% of people commenting on the various sites that ran my last blog post, most of which had a bucketful of abuse and hatred for me, didnt actually read the article at all. They skimmed it, eager to whine and moan and hurl insults at a game developer, as is the trend, and assumed it said “Sales are a bad thing because I make less money”.

Which it didn’t. it didn’t even come fucking CLOSE to saying that. Sales make me, and many devs a lot of money. I’m not moaning about money, my games sell very very well, but as 95% of people just wanted to hurl abuse at a game developer to deal with whatever issues they have in their lives, then thats what people wanted to read, and thats what people moaned about.

Why bother?

If you won’t read an article, why comment?

The vast, vast majority of insightful, interesting and well-thought out commentary on the games industry I have read has been on invite-only private mailing lists and forums that you will not find or be able to read. Why? because it shuts out the foghorn of internet abuse from anonymous angry kids. I try, in this blog to write stuff of some interest, from a point of view most people do not have (indie game dev) because I feel it might be something other devs and gamers like to read. Quite why people who hate me, and want to insult me even read my blog is beyond me. I think Jeremy Clarkson is a dick, so amazingly, I don’t follow him on twitter!

Let’s try again…

I studied economics at university. One of the things you learn is about maximising market utility. This is basically trying to achieve a situation where everyone is paying for something what it is worth to them (not what they ‘think’ it is worth). That means people who LOVE a game pay more than people who play it for 20 seconds. PWYW bundles kind of achieve this, but only if people are 100% honest about what a game is worth, and because they probably haven’t played it yet, it’s kind of backwards.  F2P kind of achieves it, but it doesn’t take into account different income levels. $100 to me is different to $100 to you.

The reason we want everyone to pay what something is worth, is that this leads to the absolute perfect allocation of resources. Really good games do really well. Really bad games tank entirely and the developer goes bankrupt. That’s the free market, and in theory it works great. it means we get more good games and less bad ones. If you don’t agree with me that this is a good thing, then stop reading.

Given that we want everyone to pay what something is worth, two things come to mind:

1) If you pay less than the value of something to you, then this is a market distortion, the developer is not rewarded in proportion to the products quality, and thus the important market-signal is not sent, so less games like that get made. THIS IS A VALID POINT BUT NOT THE ONE I WAS MAKING.

2) If you buy something you don’t like at all, and do not even actually EVER play, then a developer is potentially rewarded for making a bad game. A NEGATIVE market signal is sent, encouraging the production of more bad games, and taking resources away from making good games. This is the point I was making. Sales of 90% off where people grab 20 supposedly 20 hour games that they will never play lead to this problem.

If you don’t see how 2) is bad for Gamers, then I give up. If you don’t see that the mass phenomena of people buying games they never play leads to 2), then I give up.

More upbeat posts about Democracy 3 coming next :D