Predictions about future indie game markets by Daniel Cook
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:
"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.
The article has a winter-is-coming-kind-of-vibe, so here is a picture of Leeroy to help:
"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
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.
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
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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.
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.
#justsaying
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).
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.
http://www.gamasutra.com/blogs/JeffVogel/20170330/294808/Writing_Indie_Games_Is_Like_Being_a_Musician_In_the_Bad_Way.php
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.
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)
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.
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?
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.
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)
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.