Thursday, July 31, 2014

The Indie Game Bubble Is Popping

Jeff Vogel:

Because this flood of games is so unmanageable, Steam has been doing everything it can to throw open the gates and get out of the messy, stressful business of curation. This is absolutely inevitable. It’s also going to winnow out a lot of small developers, who don’t have the PR juice to get noticed in the crowd. (Think iTunes app store.)

With so much product, supply and demand kicks in. Indies now do a huge chunk (if not most) of their business through sales and bundles, elbowing each other out of the way for the chance to sell their game for a dollar or less. Making quick money by strip-mining their products, glutting game collections and making it more difficult for the developers who come after to make a sale. (I am NOT making a moral judgment here. It is the simple consequence of a long series of calm, rational business decisions.)

[…]

Suppose you are a super low-budget micro-developer like me. It’s not super-hard to survive, because I can get enough sales to get by with a little cheap marketing and word of mouth advertising. I’ll be all right.

Suppose, alternately, you are a huge AAA developer with massive budgets. You can afford the massive marketing necessary to generate the big sales you need to pay for your expensive games. You’ll be all right, until you’re not.

But suppose you’re a mid-tier (sometimes called AAA Indie) developer, with $500K-$2 million budgets. You have a problem. You need advertising to get sales, as word-of-mouth won’t cover it. But you can’t afford a big campaign. The only way you will turn a profit is if you get huge free marketing from Steam/iTunes placement and press articles.

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