“To everything there is a season, and game markets follow predictable patterns of growth, harvest and if you’ve been luckily enough, stockpiling for the coming frost.”
“Historical context matters.”
“A new game market opens when a new way of reaching eager players appears.”
“In the early 2000s, digital distribution was a technology that cracked opened an industry previously dominated by retail sales. Apple and Google enabled phones to download games. Microsoft, Sony and Nintendo enabled consoles to download games. And Steam created a cohesive and reliable ecosystem for PC players to download games.”
“Two things happened when digital distribution hit. For the first time in ages, we saw high demand and low supply.”
“With digital distribution, anyone with a computer could make a game and release it. And because they kept 70% of the revenue, they needed to sell a lot fewer copies to make ends meet. This means lots of little game companies. Call them ‘indies’.”
“Most were untrained. They didn’t understand how to run a business. Many had never made a professional game before. So they experimented, often wildly. Bizarro mutants popped up. Journey. Day Z. Tower Defense. What can you do with the internet? Or Flash? Or a touch screen. Or a one person team? Who knows; let’s just try something. Will Wright, gushed about the “Cambrian explosion”. New genres were born. That was 2008.”
“low market barriers mean new developers just keep flooding in”
“What happens to a market when demand is fixed and supply is high?”
“Competition. Here’s the traditional logic. The following sequence has played out across thousands of games and dozens of markets.”
“Standardization: Players form communities around the most popular game types. This creates a standardized demand.”
“Competition: Developers try to capture the entertainment dollars of these communities by releasing games in the same genre. For example, they might release a MOBA.”
“Winner takes all: Players gather around one or two high quality, well marketed examples within genre. Those games earn the vast majority of all revenue.”
“Escalating costs: In order to win that top spot, Developers invest heavily in art, narrative, marketing events and monetization. Maybe you can beat your competition by simply doing more.”
“Bloat: This results in larger developer team sizes. Larger teams burn more money, leaving less margin for mistakes.”
“Risk avoidance: A culture of risk avoidance dominates. You must make proven games with proven themes resting on proven mechanics for a proven audience.”
“There are three broadly successful long term strategies for independent developers in this newly competitive market.”
“Become a genre king: Have a hit game in a popular genre.”
“Dominate a niche: Find a niche that only appeal to a wealthy but passionate audience.”
“Manage a brand: There are a handful of companies that have a powerful brand they used to secure funding.”
“I don’t think we’ll ever go back to the bad old days of early 2000 where ‘breaking into the game industry’ was an actual barrier. Several trends mean the flood of new developers will not cease.”
“Tools: The cost of tools has dropped dramatically.”
“Schools: Students want to make games.”
“Open distribution: There are multiple ways to make your game available to knowledgeable players.”
“Expect a situation closer to what we see with writers, painters and musicians. Schools enable the necessary but time intensive acquisition of game making skills. The commercial market for those skills remains difficult to break into without elite level portfolios. However, there’s still a vast community of extremely low income developers making games because their passion is stronger than the need to be wealthy. In my dreams, this group of game making hobbyists regularly gets together for wine and moral support. And maybe even funds the occasional indiegogo when one of them needs a new liver.”