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Video Game Marketing

Indie Game Marketing from the author of the Game Marketing book, The Indie Developer's Guide to Selling Games. Video Game Marketing made simple... or at least as simple as I can make it.

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Location: Philomath, Oregon, United States

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Monday, December 18, 2006

The Future of Indie Games

I've given a lot of thought as to the ways the indie game "bubble" can progress into the future. It is some people's opinion that making predictions like this are foolish. As they say, better to say nothing and have people think you the fool than open your mouth and remove all doubt.

Lucky for me that in this case I don't care what people think- I'd rather say it now and be called foolish later than stay quiet and see even one person suffer when they don't respond to a changing environment fast enough.

So here is the scoop.

Rising production costs have been ongoing and will continue on into the future. The newest item entering our market space is agents. Agents represent your products, getting you better deals with the portals (and taking a cut for themselves).

The agents are going to be aided by two facts early on. One, they can actually make you more money than they cost. Two, CERTAIN portals require the use of approved agents to get your games on their site.

Ok, the cutting edge background is set here's the way things are going to come down:

As the number of games rise the need for agents will increase. Other portals will begin adopting agent-only policies. Eventually game makers will be forced to have an agent, and as the agent will require that only they may make the deals, even portals that do NOT require agents will end up dealing mostly with them.

As the number of agents grows the individual power of agents decreases. Eventually, since game developers are going to be forced to use them, agents will end up taking more than they are able to negotiate. The "confused" masses will say things like "Well, without the agent I would have gotten nothing." - And they are right of course.

This percent loss is going to come out of developer pockets. As rising production value = rising cost, the 'break even' point on indie games is going to get harder and harder to maintain. Eventually, most indie developers will be forced out of development; being unable to either get the capital needed to produce a competitive indie game and turn a profit when they are now getting LESS than 20% of a sale. Further, certain clauses in portal contracts are bound to exacerbate this bad percentage.

Probably on top of that some larger portals are bound to be acquired by other portals. Thus reducing competitiveness and further empowering those larger portals to give worse deals to indie developers.

When will this happen? It could be a year, it could be a decade. I don't know, but this is my current leading theory on the method that will cause the collapse of the indie developed games- though I have a seperate theory on something that could cause the collapse of the downloadable game market as a whole. But that requires game consoles to become household objects used by the entire family for entertainment in place of their PC.... Hey did you know what Nintendo's Wii's goal is? Hmmm...

I'm not saying we're all doomed, because frankly some people are going to make out like bandits. Just be aware of the potential path and hazard and recognize it when you see it coming.

Finally, a side note: So long as I am with ArcadeTown I plan on stressing to the upper management (read: Brian) we never require our developers use agents. Using them will be up to you guys. Sadly, that is all I can do to stem this potential endemic.

I hope this indie bubble lasts decades rather than years though, because I'm sure having a good time!


Blogger cliff said...

developers need to have the guts to say *no* now and then. If the terms of the deal suck, then say *no*, and sell your game direct. It's good for the market if some portals end up WITHOUT the latest hit game, and they know it happened because their terms were far too restrictive.
Sadly most devs are too keen to get that extra $50 a month so they seem to ok everything.

2:13 AM  
Anonymous gregj said...

I don't share your vision of gloom. What you're describing sounds much like the *start* of the current indie upswell, when the mainstream game industry began to get out of control, and folks reacted by flocking to indie games.

If indie games start to walk like, quack like and swim like little mainstream games, people are going to conclude that they *are* little mainstream games, and a new "indie" upswell will occur.

Especially today, the middle man model will only work as long as the middle man adds value. Once that is no longer true, people will begin to realize that the model is broken, and use another.

This has happened many times, in many markets, especially publishing markets.

Not that the whole process won't be a PITA, mind you. I just don't see it as being the big deal you seem to make it out to be.

[Sorry this got so long. I should probably just make the jump and start my own blog or something.]

2:20 PM  
Blogger VGsmart said...

Greg- That is a very long term view you're taking. The last indie "growndswell" was practically a decade ago.

It wasn't a sheer cliff drop off, and there were certainly indies who made money even in the worst of times.

I think its a very big deal to be aware that the market model is heading for change. If you're caught off guard it can devastate your business just as much as making crappy games.

Seems to me there's two ways to ride through the tough times. Act life cliff (see above) and focus-focus-focus on building your brand image or accept the change and be on the cusp of it- reaping as much reward, making as many deals, and moving as fast as possible to secure your company's outlets for the rough times ahead.

It's the "go with the flow, react to the current market" indies who are going to get hosed... this was their warning :)


10:26 AM  
Anonymous Jake Birkett said...

hmm, bleak, interesting and hopefully not true (re: Agents), although Oberon fit this bill right now.

I certainly agree that with games needing high and higher production values, they will cost more to make, and due to increased competition it will become harder to actually make a profit. So then maybe only a few well established Indie developers (perhaps banding together) will continue making successful games and all others will fail (except for the odd fluke) ...

4:00 PM  

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