Predictions about future indie game markets by Daniel Cook

edited in General
This is a very sobering and I think informative article about the future of indie game markets by Daniel Cook. (Daniel Cook is the designer of games at Spry Fox studios like "Triple Town", and is well known for his articles on business and game design)

The article has a winter-is-coming-kind-of-vibe, so here is a picture of Leeroy to help:

image

"If anyone fears winter it's Leeroy" - A thing that is self-evident.

The article essentially predicts that on average, conditions for indie development are going to get tougher (which might come as no surprise), there's a couple strategies there for how to sidestep this.

For myself, I've been proposing these ideas for the last 6 years or so (that the forces that killed indie developers in the late nineteen nineties will conspire to make conditions tougher for indie development once more over the next decade), which is why Free Lives has been gradually growing larger (in order to stay a bit ahead of the market).

http://www.gamasutra.com/blogs/DanielCook/20161121/285971/Autumn_of_Indie_Game_Markets.php

I think for South Africans, we have a few advantages that might make us resistant to these forces. The cost of living is low in South Africa, so we can (generally) work on games for longer for the same costs, or for that matter sustain a studio for much longer with the same amount of money.

It might also mean South African game developers can be market leaders in creativity as the rest of the industry feels the pinch much harder and are forced to make fewer adventurous decisions, possibly leaving a gap for relatively experimental South African games.

Comments

  • The cost of living is low in South Africa
    As compared to?
  • edited
    dammit said:
    The cost of living is low in South Africa
    As compared to?
    Compared to gamedev central hubs around the world like the US, Europe. Are we cheaper than India and Thailand and China and such? I don't know about that, but if you simply compare rent and property prices you'll see how we are really a lot cheaper than those economic centres.

    Numbers I do know - China's middle class experienced a 70% growth in annual income in recent years, which is very enviable. But that 70% growth got them an average of USD8000 p/a. Whereas in average salary in the US is about USD45000 p/a (I'm not talking specifically about the gamedev industry, this is overall). So I know I earn nowhere NEAR USD45000 p/a and I'm not starving, so yeah, our cost of living is lower.
  • If you like pouring through lots of numbers, Numbeo has a great cost of living comparison tool: https://www.numbeo.com/cost-of-living/comparison.jsp

    Here is an example comparing Cape Town and Raleigh, NC: https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=South+Africa&country2=United+States&city1=Cape+Town&city2=Raleigh%2C+NC

    Consumer Prices in Raleigh, NC are 52.19% higher than in Cape Town
    Consumer Prices Including Rent in Raleigh, NC are 45.72% higher than in Cape Town
    Rent Prices in Raleigh, NC are 33.66% higher than in Cape Town
    Restaurant Prices in Raleigh, NC are 61.03% higher than in Cape Town
    Groceries Prices in Raleigh, NC are 92.04% higher than in Cape Town
    Local Purchasing Power in Raleigh, NC is 84.14% higher than in Cape Town
    Thanked by 1Mexicanopiumdog
  • Consumer Prices in Raleigh, NC are 52.19% higher than in Cape Town
    Consumer Prices Including Rent in Raleigh, NC are 45.72% higher than in Cape Town
    Rent Prices in Raleigh, NC are 33.66% higher than in Cape Town
    Restaurant Prices in Raleigh, NC are 61.03% higher than in Cape Town
    Groceries Prices in Raleigh, NC are 92.04% higher than in Cape Town
    Local Purchasing Power in Raleigh, NC is 84.14% higher than in Cape Town
    And don't I know it. :(

    --
    I've generally heard it argued that SA's not in a bad spot because of sharing a time zone with Europe (which can help with doing contract/service work), and because many people here speak English as a first language, so that there are fewer issues with communication and understanding the western market, which helps to keep us somewhat competitive compared to countries with lower living costs than us. I can imagine that advantage shrinking as globalization reduces the cultural barriers to working from China or India, and if our internet stays spotty or prohibitively expensive.

    I suppose if we're using Cook's seasons analogy, the hope I suppose is that we'd be able to harvest as much as we can now to stave off the winter, and potentially even learn, grow and skill up to be prepared for the next spring.
  • edited
    If you like pouring through lots of numbers, Numbeo has a great cost of living comparison tool: https://www.numbeo.com/cost-of-living/comparison.jsp

    Here is an example comparing Cape Town and Raleigh, NC: https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=South+Africa&country2=United+States&city1=Cape+Town&city2=Raleigh%2C+NC

    Consumer Prices in Raleigh, NC are 52.19% higher than in Cape Town
    Consumer Prices Including Rent in Raleigh, NC are 45.72% higher than in Cape Town
    Rent Prices in Raleigh, NC are 33.66% higher than in Cape Town
    Restaurant Prices in Raleigh, NC are 61.03% higher than in Cape Town
    Groceries Prices in Raleigh, NC are 92.04% higher than in Cape Town
    Local Purchasing Power in Raleigh, NC is 84.14% higher than in Cape Town
    But these just compare costs - what people are capable of earning has a big impact on whether something is relatively affordable. It's not about how much buying power rands have.

    Edit: I see the last line talks about purchasing power. So...yeah, rent prices might be 33.66% higher but your purchasing power is 84% higher... so yeah.
  • edited
    dammit said:

    But these just compare costs - what people are capable of earning has a big impact on whether something is relatively affordable. It's not about how much buying power rands have.

    Edit: I see the last line talks about purchasing power. So...yeah, rent prices might be 33.66% higher but your purchasing power is 84% higher... so yeah.
    Remember we're talking about lower COST OF LIVING, which, if we assume that we're earning foreign currency, which gamedevs should be, would make the purchasing power question irrelevant. As income is not locally hinged. The assumption is that that gamedevs are actually making and selling into the world like they should be and not selling locally only.
  • Well, I wouldn't go as far as to say that indie game devs should be selling internationally, I think there's opportunities here as well, but if a person or company is selling overseas then a person in South Africa has a significant advantage over most of their European and American counterparts because of South Africa's relatively low cost of living (compared to those places).

    There's another effect I think is interesting, in that, in places like England most of the indies aren't in London. I suspect that because London is so expensive compared to the rest of England (as Cape Town is more expensive than most of South Africa), the high living costs in London mean that indies are scattered throughout England (so they can afford to work on their games longer, or just live more comfortable lives).

    But because South Africa is relatively cheap to begin with (when compared to England), and there is comparable earning potential as an indie in South Africa as in England, there is a higher proportion of indies gathered in Cape Town (and other city centres). And I think there is a slight competitive advantage in being surrounded by other indies and sharing ideas in person instead of being scattered long distances apart and being more isolated geographically. I think it's also a lifestyle advantage in getting to hangout with other indies (assuming you like doing that kind of thing).

    Thanked by 1SUGBOERIE
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    In general I agree with this, it is exactly the reason I was living in Cape Town whilst working on my indie project and why now that I am in London I'm full time employed. Whilst big tech centres are prohibitively expensive, they also tend to unlock larger talent pools. Not to say that there is a lack of local talent, but there is definitely is a deeper supply in a city like London, with numerous AAA, mobile and mid tier indies (especially if you include commutable centres like Guildford and Brighton).

    If you're working in a small team it doesn't matter so much, but seems relevant to Free Lives growth strategy. I imagine Fuzzy Logic similarly struggles being in George.
    Thanked by 1EvanGreenwood
  • @Elyaradine Graet article, and really really realistic and poignant, I totally agree with it. It's the natural cycle of the creative side of things.

    Whatsonsteam.com is a good look at the firehose: There's all kinds of things getting released daily, and most of them I haven't even heard of, and a couple of them actually look interesting, as in, it wasn't just a ripoff copy of something.
    Thanked by 1EvanGreenwood
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    I think some of Jeff's articles previously (I think he popularized the term "Indiepocalypse") were at bit more dramatic. I can agree with all the points he brings up.

    Though I worry about his strategy. In the end he decided to make the cheapest games he can going forward (while obviously still being as good as he can achieve given that constraint). That to me seems the wrong thing to focus on, because as there is a glut of games and the best games receive exponentially more money, then cutting costs makes less sense than trying to stand out against the competition and rank higher up that exponentially climbing curve.

    To me it seems like he's doubling down on his current strategy, and in the article he pointed out that his strategy is providing diminishing returns, so I'd say the trend is against him.

    (Obviously I'm not advocating making unnecessarily expensive games, and I think being able to make games affordably is a big advantage, and I think there's other viable strategies rather than outspending the competition... But I do think focusing on cutting costs is a losing strategy in a game where the best produced products receive nearly all the money)
    Thanked by 2Elyaradine pieter
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    I like the comparison of the game industry with that of music as a tool for speculating what the game industry's future might look like.

    But I also think he's quite pessimistic. I'm not very in-the-know about the contemporary music business, but I think the music industry for independent artists who cross a certain barrier (quality/popularity) is pretty good. I think they've finally come on board with offering services that make it easier to discover new music, and to listen to whatever you feel like, at a (fairly low?) monthly fee. I believe that as an artist you get paid according to how many people listen to your tracks each month. http://www.billboard.com/articles/business/7744268/riaa-us-music-industry-2016-revenue-double-digit-growth

    I can kind of imagine games adopting a similar sort of service later on (particularly if streaming gameplay is possible). Pay a set monthly fee, and have access to practically any game you want to play. The developers are paid according to some metric (how many times people started/played/how long they spent playing the game) per month, and there's some discoverability based on recommendations based on folks who've enjoyed similar games.
  • @elyaradine there are already services for games that are heading that direction. EA Access on Xbox allows you to play a range of older EA titles with a $5 monthly sub.
    And more interestingly http://news.xbox.com/2017/02/28/introducing-xbox-game-pass/ Xbox Game Pass will do the same but for games published by anyone (and indie).
    I think the worry with these though, is that if someone already has a sub and has access to more games that they can play, why would they spend an extra $15 on your single game?
  • Yep, I think I saw/heard that Vive is also planning to go that way with VR subscription service that lets you play 5 games a month with a sub.

    If it takes hold, then of course monetisation would have to shift again. You will always get people who don't think the subscription is worth it, what the proportion is, who knows. The monetisation would shift to heavier IAPs, or games that refuse to enter into the subscription market that stands on their own and is able to stand on their own due to whatever reason (developer clout, whatever).

    I think hanging on to the default notion of I MUST MAKE PREMIUM GAMES for whatever notions is not a good way of thinking going forward into a shifting landscape.
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    From what I understand of subscription services, they're a lot worse for creators than digital downloads.

    Like the way Netflix doesn't tell its creators how many people watch their shows so that Netflix has a strong negotiating position. And Netflix pays creators flat fees (so it's very unlikely the Stranger Things creators have done especially well financially despite the considerable success of their series).

    Subscription services for games are definitely increasing, like the Humble Monthly, though I don't think they'll eclipse digital downloads anytime soon. But if subscription services were to eclipse digital downloads then that would mean we would be making games for the executives who choose games for their subscription services. It would heavily discourage developing games that aren't able to convince an executive at a subscription service of their worth, which means games creators would be even more heavily encouraged to following games that are already successful.

    In any case, set monthly fees are likely to become more of a thing, and I don't think we have any influence in this regard (if it's a model consumer's want then they'll get it), Set monthly fees put way more power in the hands of the distribution platforms than what is currently the case in the indie games market (so it would be a lot more like making games for clients than what is currently possible for digital downloads).

    In a future where monthly subscriptions dominate that will mean that making a hit indie game will be a big financial win for the subscription distributor and you'll have earned the right to make more money for the distributors slightly easier in the future (and bargain for a slightly better deal).

    (Of course streaming services, where users pay per play and some of that goes to the creator, isn't the same as a subscription model)
  • Yeah I totally agree that subscription models disadvantage developers. But if that's how the market goes, and that's pretty much a function of consumer choice going towards whatever they feel like is the better deal for them (also remembering that it's seldom a one-size-for-everyone thing, there'll still be different people who want different things), then devs pretty much have to adapt.

    Whether that adaptation means "unionising" or whatever you call making an agreement as a collective and sticking with "let's not go into bundles" (which is mostly unrealistic) or finding new financial models or whatever, that's just what it has to be.
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