Friday, June 19, 2009
Indie Game Prices - The Streets Run Red
Jeff Vogel once again weighs in on the price wars that are pretty much killing the casual game developers (which includes a lot of indies):
Indie Games: Still Too Cheap, and Getting Cheaper
There's a key term he uses there which I have to agree with: "Unsustainable."
I mean, it's a pretty good deal for the portals (including consoles and iPhone). While they do have SOME costs associated with adding a new game to the library, for the most part the developer is shouldering the burden of cost, and the portal is getting it for somethig close to free. So their profit is completely independent of the content. For the big game portals, now, it's even more extreme. They don't have to convince users to even buy the games - they just gotta sign them up for a subscription, and sit back and rake in that nice, regular revenue stream.
The price-fixing screws the hell outta developers, though. Even the formerly super-successful ones. It's actually a pretty old story. The middlemen take home the cash, while the producers take home their personal belongings after clearing out their desk.
It would be another story if the developers were actually seeing at least 3x the sales for taking home 1/3rd of returns. Maybe that's happening amongst the very best-selling games, but the grumbling I'm hearing from the rank-and-file indicate that's not even close to what's happening. After a brief surge in sales with the price drop, their volume is returning to not much above the previous levels.
Ultimately, the one-size-fits-all "lunch-money" price point is unsustainable for the broader indie market. Or, put another way - there is only a limited class of games which can be made to work at those prices. If you are forced to sell a game for the price of a ringtone, then you need to be able to make a game for the same cost as making a profitable ringtone.
Good luck with that.
I think what we're seeing on the casual-portal side, at least, is a consolidation of an industry that has expanded much faster than demand can sustain. This happens in every new industry. Once upon a time, we had a dozen American automobile companies, too. But eventually, the streets have to run red, and the armies of suppliers have to duke it out until only a few are left standing. The others must die out or be absorbed.
And then, once the dust clears, things stabilize. The market re-calibrates and finds some kind of equilibrium. And yeah, prices rise, now that the supply of competing producers is no longer near-infinite.
In the meantime, since it is largely a battle between the big portals, some indies are just avoiding the fight and hoping to avoid getting caught in the crossfire. Others are making necessary adjustments to survive (like Amaranth Games, breaking their "casual" RPGs into smaller, bite-sized episodes that can be sold seperately by the portals). Unfortunately, a lot of developers - like Gamelab, which was heavily dependent on the portals - are going to disappear.
Labels: Biz, casual games
- posted by The Rampant Coyote @ 6:48 AM (Permalink)
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Things are probably going to have to change, yes... but the auto industry in the US doesn't quite match up. For most people, given the sheer size of even our cities and the utter worthlessness of most US public transit systems, a car is basically a necessity.
Video games, however, don't match that in any sense. We're talking a luxury item. I have to think that the first thing these pathetically low price points will kill is quality.
The industry isn't going to die, at least for quite a while, even in its current incarnation. People want to pay $0.99... so even if this doesn't work for real independent game developers, like yourself, who bust their asses to turn out really quality work without backing... all the portals have to do is fill their eShelfSpace with mass-produced time-wasters from the myriad penny-ante Flash shops that turn out games every five minutes (no offense to Flash devs who actually include substance; this statement is aimed at a niche, not the whole crowd).
In terms of high-quality independent games... yes, this could kill a lot of the currently-available distribution opportunities.
However, that doesn't mean the market will die. Even if it changes, what they're selling is far more likely to change before their prices increase; if anything, my bet is you'll see the portals making their money on lower-cost development, leaving people who really want quality to look somewhere else... if they know it's out there, and if they even bother.
Should this drastically change the casual game industry (or even a portion of it)? Maybe, maybe not. Maybe this will just spawn a new series of higher-price-point portals for indies -- and perhaps that's how it should be.
Video games, however, don't match that in any sense. We're talking a luxury item. I have to think that the first thing these pathetically low price points will kill is quality.
The industry isn't going to die, at least for quite a while, even in its current incarnation. People want to pay $0.99... so even if this doesn't work for real independent game developers, like yourself, who bust their asses to turn out really quality work without backing... all the portals have to do is fill their eShelfSpace with mass-produced time-wasters from the myriad penny-ante Flash shops that turn out games every five minutes (no offense to Flash devs who actually include substance; this statement is aimed at a niche, not the whole crowd).
In terms of high-quality independent games... yes, this could kill a lot of the currently-available distribution opportunities.
However, that doesn't mean the market will die. Even if it changes, what they're selling is far more likely to change before their prices increase; if anything, my bet is you'll see the portals making their money on lower-cost development, leaving people who really want quality to look somewhere else... if they know it's out there, and if they even bother.
Should this drastically change the casual game industry (or even a portion of it)? Maybe, maybe not. Maybe this will just spawn a new series of higher-price-point portals for indies -- and perhaps that's how it should be.
Man, I read Jeff's post and I read yours. Not exactly encouraging news especially since a friend and I have decided to make our own indie (old school) CRPG.
IMHO these low price points are just conditioning potential customers for low prices when it comes to all indie games. If I were to wear a tinfoil hat I'd say that it's a push by the major developers to dilute the indie waters as not to compete directly with them but then that would be silly. Wouldn't it?
Anyway, my friend and I are making the game more for the fun of making a game we'd like to play rather than trying to "make-boat-loads-o-money" but we'd still like to be compensated by the time and effort put in to making games. I believe this is something the average consumer doesn't think about.
I also believe that the niche market is more important now than ever before and that people who do believe in your product and what you are trying to do will pay a fair price for your game.
Oh well, it gets depressing when you read stuff like this and are trying to break into the biz.
Alas, I ramble.
IMHO these low price points are just conditioning potential customers for low prices when it comes to all indie games. If I were to wear a tinfoil hat I'd say that it's a push by the major developers to dilute the indie waters as not to compete directly with them but then that would be silly. Wouldn't it?
Anyway, my friend and I are making the game more for the fun of making a game we'd like to play rather than trying to "make-boat-loads-o-money" but we'd still like to be compensated by the time and effort put in to making games. I believe this is something the average consumer doesn't think about.
I also believe that the niche market is more important now than ever before and that people who do believe in your product and what you are trying to do will pay a fair price for your game.
Oh well, it gets depressing when you read stuff like this and are trying to break into the biz.
Alas, I ramble.
In my defense, the industry lifecycle applies to all industries, really, so it's not just cars.
But I love the way you put things, Phu. :)
Otto - I don't think it's just your need of a tinfoil hat. In the case of XBox Community Games (soon to be "indie games"), the maximum price is only half the maximum price of an XBLA title. I'm sure that those are set to try and limit cost creep between "tiers" of games. But 800 points is fairly generous. In all honesty, I'd be willing to shoot for that price point. Maybe I'd do what Amanda's doing with Aveyond 3 and make smaller RPGs, but I'd be willing to go there.
If I had the time.
Frayed Knights for the XBox, anybody? ;)
Anyway - the worst news of all is really for the casual game developers who are depending upon the portals, and who are finding the rug pulled out from under them a little bit. It's gonna be rough out there for a while.
I really don't get why iPhone customers scream that a *game* which costs less than a meal at McDonalds is horrendously overpriced.
Granted - it's not how much time and effort was put into it, but how much the player gets out of it. Maybe iPhone gamers don't expect to put more than 2 hours into anything they download, so anything over $2 sounds like a horrible value. Which tells me that, as a game developer, any iPhone app I make shouldn't have more than 2 hours of gameplay.
But I love the way you put things, Phu. :)
Otto - I don't think it's just your need of a tinfoil hat. In the case of XBox Community Games (soon to be "indie games"), the maximum price is only half the maximum price of an XBLA title. I'm sure that those are set to try and limit cost creep between "tiers" of games. But 800 points is fairly generous. In all honesty, I'd be willing to shoot for that price point. Maybe I'd do what Amanda's doing with Aveyond 3 and make smaller RPGs, but I'd be willing to go there.
If I had the time.
Frayed Knights for the XBox, anybody? ;)
Anyway - the worst news of all is really for the casual game developers who are depending upon the portals, and who are finding the rug pulled out from under them a little bit. It's gonna be rough out there for a while.
I really don't get why iPhone customers scream that a *game* which costs less than a meal at McDonalds is horrendously overpriced.
Granted - it's not how much time and effort was put into it, but how much the player gets out of it. Maybe iPhone gamers don't expect to put more than 2 hours into anything they download, so anything over $2 sounds like a horrible value. Which tells me that, as a game developer, any iPhone app I make shouldn't have more than 2 hours of gameplay.
Actually I wouldn't mind Frayed Knights on the Xbox as I think the control scheme could work pretty well. Do they make a version of TGE that would run on the Xbox or is it going to be a rewrite using C# and XNA? (if you were to do it).
BTW, since I got it to work on my computer (stupid ATI) I've been enjoying the pilot ep. I've yet to finish it though but it does tug at the ol' nostalgia strings which I really enjoy. :)
I've looked at the whole xbox dev thing and have downloaded C# express and XNA. Both are 'fairly' easy to get into and the whole framework seems to be pretty powerful. That being said I don't know if my programming skills are good enough to do a port to C#.
I agree that it seems silly that people will blow $6 - $10 on a McDonalds meal but will scream when they have to spend more than a few bucks on an iPhone app or any other indie product. I'd like to develop for the iPhone but I'm not going to sell stuff for $.99 each. Maybe I'll buck the trend and have the only iPhone app that costs $20 (if Apple allows it) for my 20 hours of gameplay. Might not make many sales but I'd sure get noticed and probably a brow beating or three about charging too much for something that takes a lot of time and effort to build.
BTW, since I got it to work on my computer (stupid ATI) I've been enjoying the pilot ep. I've yet to finish it though but it does tug at the ol' nostalgia strings which I really enjoy. :)
I've looked at the whole xbox dev thing and have downloaded C# express and XNA. Both are 'fairly' easy to get into and the whole framework seems to be pretty powerful. That being said I don't know if my programming skills are good enough to do a port to C#.
I agree that it seems silly that people will blow $6 - $10 on a McDonalds meal but will scream when they have to spend more than a few bucks on an iPhone app or any other indie product. I'd like to develop for the iPhone but I'm not going to sell stuff for $.99 each. Maybe I'll buck the trend and have the only iPhone app that costs $20 (if Apple allows it) for my 20 hours of gameplay. Might not make many sales but I'd sure get noticed and probably a brow beating or three about charging too much for something that takes a lot of time and effort to build.
I agree with you and Jeff! This pricing war is killing indie game developers. I think people just assume that all indie games are made by some guy with a job and he paid $10 to make the game... either way this issue isn't something too many consumers give a hoot about and the portals know that so I don't see this changing for awhile.
Also I want to point out something you said in your post which I really liked and thought was epic “If you are forced to sell a game for the price of a ringtone, then you need to be able to make a game for the same cost as making a profitable ringtone.” This speaks for itself!
Also I want to point out something you said in your post which I really liked and thought was epic “If you are forced to sell a game for the price of a ringtone, then you need to be able to make a game for the same cost as making a profitable ringtone.” This speaks for itself!
What is causing the drop in price here? Is it that indies still suck at business and don't know how to calculate a break-even point? Is it that they're too used to working with portals and don't know how to say "no" or find a better publishing deal? Is it that customers can't bear to spend more than about $7 on any game that isn't found in Walmart?
I don't deal with portals for my games, so I don't have a first-hand view here. Quite a few years ago, I wrote about some of issue of being 'indie' on my blog: Being indie sucks: what can we do about it? One thing I thought we should try to do is a marketing campaign similar to "Got milk?" where we try to raise awareness of indie games. I think people don't really understand what it takes to make a game, and don't understand the value. Why should a great indie game be $7 if the same gameplay with prettier graphics is $60 at retail?
The idea never seemed to catch on. Perhaps now it's time to think about this type of idea again.
I don't deal with portals for my games, so I don't have a first-hand view here. Quite a few years ago, I wrote about some of issue of being 'indie' on my blog: Being indie sucks: what can we do about it? One thing I thought we should try to do is a marketing campaign similar to "Got milk?" where we try to raise awareness of indie games. I think people don't really understand what it takes to make a game, and don't understand the value. Why should a great indie game be $7 if the same gameplay with prettier graphics is $60 at retail?
The idea never seemed to catch on. Perhaps now it's time to think about this type of idea again.
How price-conscious are game players, really? How much does that influence your purchasing decisions, especially considering that your computer is the big expense. I buy fewer games than I used to, not because of their cost, but because I can't find as many games that appeal to me.
Admittedly, I'm older - much older - than the normal demographic for games, I imagine. But I'm very price-conscious on most things, just not games. If you create a game I really want to play, I'll buy it. I won't even consider the price.
True, while I'm waiting for a game I really want to play, I'm likely to patronize Good Old Games. For the most part - except for those I already own - their games aren't exactly what I want, but I try them anyway for such a cheap price.
But right now, I'm anxiously awaiting the release of The Age of Decadence. I don't know what it will be like, but it sure sounds good. So when I get out my credit card, I probably won't even notice what they're charging me for it.
I'm not sure that game developers should panic just yet. And if I were you, I certainly wouldn't low-ball the price of your game. Price it at the high end. After all, you can always have a sale, if that doesn't work.
Admittedly, I'm older - much older - than the normal demographic for games, I imagine. But I'm very price-conscious on most things, just not games. If you create a game I really want to play, I'll buy it. I won't even consider the price.
True, while I'm waiting for a game I really want to play, I'm likely to patronize Good Old Games. For the most part - except for those I already own - their games aren't exactly what I want, but I try them anyway for such a cheap price.
But right now, I'm anxiously awaiting the release of The Age of Decadence. I don't know what it will be like, but it sure sounds good. So when I get out my credit card, I probably won't even notice what they're charging me for it.
I'm not sure that game developers should panic just yet. And if I were you, I certainly wouldn't low-ball the price of your game. Price it at the high end. After all, you can always have a sale, if that doesn't work.
I really don't think either Jeff or you are doing their arguments any favours (in the eyes of people who actually know both markets) by conflating "indie" and "casual" like that. As if they were the same thing. Can you seriously tell me that you have even for a single second ever considered Frayed Knights up on Big Fish? Come on.
You need to go to places like Gamezebo and hang out for a couple days... you'll see that those people, the "casual" audience, are more than happy with their mass-produced match3's, hidden objects and time managements. Sure, they like something new every now and again, but they are nowhere close to needing it or searching for it. They people who are completely separate and distinct from the people who would buy something like FK or Avernum. Nothing to do with one another.
You need to go to places like Gamezebo and hang out for a couple days... you'll see that those people, the "casual" audience, are more than happy with their mass-produced match3's, hidden objects and time managements. Sure, they like something new every now and again, but they are nowhere close to needing it or searching for it. They people who are completely separate and distinct from the people who would buy something like FK or Avernum. Nothing to do with one another.
# posted by 
: June 20, 2009 1:26 PM
: June 20, 2009 1:26 PM
One of the issues is - as Otto was saying - this does end up driving expectations in certain directions. But there's spillover / overlap. And, in the past, Jeff's games have been on the portals. Amanda's games and some of Hanako's games have been as well. And those games are very much a part of the geography of the indie RPG world.
But yeah - for the most part, I'm planning on releasing Frayed Knights for a price that I think the market will be happy with. Some may think it's too cheap. Some may be unhappy with the prospect of paying money for it at all. But at least I know that the price is something that is negotiated (on some scale) between my customers and me. Not by some third party that doesn't have a vested interest in the game.
But a lot of indies, far more dependent upon portals, aren't so lucky.
Brian - I like your idea. I'm just not sure where to take it. Indie is kind of a "catch all" category, and kinda hard to define. But if we can throw some ideas around for a campaign of some kind, with a solid message, let's do it! I'm game.
But yeah - for the most part, I'm planning on releasing Frayed Knights for a price that I think the market will be happy with. Some may think it's too cheap. Some may be unhappy with the prospect of paying money for it at all. But at least I know that the price is something that is negotiated (on some scale) between my customers and me. Not by some third party that doesn't have a vested interest in the game.
But a lot of indies, far more dependent upon portals, aren't so lucky.
Brian - I like your idea. I'm just not sure where to take it. Indie is kind of a "catch all" category, and kinda hard to define. But if we can throw some ideas around for a campaign of some kind, with a solid message, let's do it! I'm game.
I definitely *do* want my games on BFG - as long as they're doing a decent job of promoting them. Because I fail at marketing, and the portals are better at providing an audience. But just being chucked into the back catalog is worse than useless, and I certainly don't want to stop selling games from my own site and rely totally on the portals!
Posters on gamezebo, etc, don't represent the whole of the casual market... they represent the section interested enough to actually go and search for websites about it. And they DO complain that they want more variety. However, they tend to blame the developers and say that no one is MAKING games other than clones, rather than blame the portals for putting clones at the front of the line.
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Posters on gamezebo, etc, don't represent the whole of the casual market... they represent the section interested enough to actually go and search for websites about it. And they DO complain that they want more variety. However, they tend to blame the developers and say that no one is MAKING games other than clones, rather than blame the portals for putting clones at the front of the line.
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