Game Scope – Squeezing the Middle?

Posted by Rampant Coyote on June 13, 2011

Lately, we have two extremes that people tend to see as the norm. Probably because just by being “extreme” they tend to gather attention.

On the one end, you’ve got the mainstream games, which continue to grow unsustainably bigger with higher production values, and adapt by basically become more and more generic to appeal to “everybody.” Their ravenous budgets demand more and more customer dollars. While I’ve got nothing against selling as many games as they possibly can, it seems like a dead end – especially when you get into a situation where, according to EA Games President Frank Gibeau:

“When you’re in this business now you have to be able to get to the widest possible audience. Games are so expensive to build now that you can’t have a sustainable business if you’re in the million unit seller range. You’ve got to be multi-million units.”

This boggles my mind. If you can’t make a profit selling a MILLION copies of a game, something is wrong. Your business model is broken. At least that’s my feeling – businessfolk can correct me all day long if they really want. But it feels to me like the business equivalent of “Casey at the Bat,” refusing the possibility of base hits and either going for home runs or nothing at all. I think a team made up entirely of Caseys won’t win very many games.

On the flip side, you’ve got the “race to the bottom” with indie games, chasing the extremely low price point which, perversely, requires a similar attitude: You have to sell an awful lot of games in order to be profitable if it’s only $1.99 or so. And you also have to make it very, very cheaply. I’ve met some guys making (and prospering on) iPhone games, and their rule of thumb was that the game has to go from concept to release within about a month.

What about the middle ground? What about the games that are neither big-budget titles with over $10 million budget, or the games that can be knocked out in about a month and sold for two bucks? Jeff Vogel has commented on this in the past, and it’s still an issue. There’s a middle ground in there – not just for indie games, but for smaller-budget traditional studios. Its potential may be limited – maybe it’s not possible to make the big bucks going for “mid-range” games that are neither quick-and-dirty moneymakers nor massive blockbuster productions. Vogel has managed to pull it off. For that matter, so did Minecraft – fairly spectacularly. It didn’t need to sell 2.5 million copies (and climbing), but miracles do happen. Gratuitous Space Battles is another great example, and based on anecdotal evidence has done extremely well for its creator.

We need to create more attention for the middle ground of games. Yeah, they don’t have the sexiness of having extremely high production values, or extremely low-price (and managed to succeed where thousands of other similarly-priced games failed). But this range – the area that addresses niche gamers rather than the generic “mass market” – is where the heart of gaming lies.

Filed Under: Biz - Comments: 15 Comments to Read

Menigal said,

I think there’s still a sizeable market for the middle ground games, as you call them; games made with a reasonable budget for a reasonable number of consumers. But there’s a huge hurdle in the way, and that’s the media’s demand of games needing to be either one of the extremes.

Those of us who have been playing games for a good long while usually know better than to get caught up in the hype-machines that the mainstream game review/news sites have become, but most people now waving the gamer flag don’t.

It’s something we’ve touched on here before, with the demands that a game have either the absolute best graphics possible, or very simple, and therefore retro, graphics. Gameplay and fun are secondary, or worse, to production values. If your game doesn’t look as good as the big boys’, then it must be not worth playing.

If more game sites would step back and say “actually, the $50 million Call of Warfare Creedo isn’t nearly as good as this $500,000 shooter”, or even acknowledge that they’re not really in the same category, then smaller studios with more realistic figures might stand more of a chance with the “hardcore casual” gamers who dominate the market now.
skavenhorde said,

Knights of the Chalice, Eschalon 1 & 2, Depths of Peril, Din’s Curse, Armageddon Empires, Solium Infernum and all of Jeff’s games I think are a few examples of middle ground companies that Jay is talking about. They even come with a middle ground price, $15 – $25. Which is perfect and they seem to be doing ok. At the very least they are still making sequels/new games.

Sure they haven’t had the kind of insane success as Minecraft, but as far as I know they are sticking around and making a profit. Wish I had harder figures to back this up, but the only actual sales numbers I’ve seen have come from Vic Davis’ Armageddon Empires which were very good.
Jaes said,

Yes, more middle ground games would be perfect, and it seems it’s fortunately slowly starting to happen. Companies I’ve come across that are focusing on middle ground games:

Hothead (DeathSpank, On the Rain-Slick Precipice of Darkness)
Telltale (Tales of Monkey Island, Wallace & Gromit)
Double Fine (Stacking, Costume Quest)
Frictional Games (Penumbra, Amnesia: The Dark Descent)

I wish more RPG developers could afford to go that route. Dead State and Age of Decadence are probably middle ground games, though. And it could probably be argued that the middle ground is quite large…
Jaes said,

By large I meant wide 🙂
Ben Sizer said,

In game theory terms this is a classic ‘arms race’ game, where the players (the publishers, in this analogy) have to outspend the opposition to survive, and even those who lose still have to pay the cost. Another way to view it is to consider it an auction where even the losing bidders pay up. It gets worse as it goes on and isn’t sustainable.

In the real world, people saw the futility and danger of this ion the case of the superpowers and the sides were forced to come together to reduce the expenditure for everybody’s benefit. But I don’t think anybody will do that for AAA game development – either someone will discover cheaper ways of making the same amount and quantity of content, or this will continue to get worse, perhaps to the point of a crash where nobody has the funds to make games that content-heavy any more.

It could be the very act of drawing attention to these middle-ground games that causes the crash. Imagine if all the people waiting for Modern Warfare 3 and Battlefield 3 realised they could get better gameplay for half the price and deserted those titles – both EA and Activision would lose millions.
Jennifer Snow said,

Have you read the book The Long Tail? It addresses precisely this issue and why it’s now possible to step outside that blockbuster mentality. Being primarily an RPG gamer, I’m happy enough with lower-end graphics and fairly simple combat, and I hate to see studios like Bioware chasing games like God of War and Call of Duty. Those games rely heavily on their gameplay, and this has NEVER been Bioware’s strong suit.

I think, at present, that the mid-range game is being dominated by MMO’s. An MMO doesn’t need super-excellent graphics. It doesn’t need fantastic story writing. It does need fun gameplay. Frequent updates help, too.

People need a strategy apart from “make tons of money”.
MalcolmM said,

I would agree that mid priced games are getting squeezed out.
When I look at the Steam top sellers list, it is usually dominated by full priced, mainstream games, plus a few indie titles that are usually priced at no more than $10. I rarely see new releases of non mainstream games that are priced in the $20 to $40 price range, doing very well.
It seems that for the full price, mainstream games, they can sell well because they have a lot of buyers who feel that they must buy the game immediately upon release. The under $10 games can do well, mostly I guess because $10 isn’t much money, they are impulse purchases. For the games between these, I think many people (unfortunately often including me) figure they will just wait for the inevitable Steam sale, when the price will eventually go down to $10 or less.
I love Steam, but I would hate to be a game developer facing the pricing expectations of a typical Steam customer.
LateWhiteRabbit said,

Ben Sizer is right. It is an arms race that will eventually destroy the mainstream industry or at the very least the superpowers involved.

And Rampant – I am businessfolk, or at least I have a degree in business, so I think that counts – and the business model IS broken. The big publishers have to know it too. Game production costs have increased at a nearly EXPONENTIAL rate. But as the saying goes, “they are in too deep” to pull out. They are like a gambler indebted to the house, always having to double back down on their bets to cover previous losses. As long as they keep playing, they can keep rolling over those losses, but if they ever stop, the loss of capital will be sudden and devastating.

But it is all creating a bubble. And bubbles can’t help but burst when they get to big. The only question is how big can the bubble get?

The financial arms race is a side-effect of the technological arms race. The latter will HAVE to end or be ignored to fix the former problem without a crash.

The whole structure of game production now in the mainstream is unsustainable. Ballooning costs, ballooning team sizes to meet demand for cutting-edge graphics, expectations are raised, and it happens again in a continuous destructive cycle.

According to what I have read, the movie industry is in the same spot, with movie costs increasing by movie attendance down. They have been able to offset this slightly with increased cost of tickets, but they are also stuck in the destructive “blockbuster” cycle started with Star Wars. “Bankbusters” would be a more appropriate title, both for games and movies.

I cannot agree with you more Rampant that you have a MAJOR freaking problem when you can sell over a million of ANYTHING and not make a profit. That’s because games and movies are now costing more to make than the GDP of some countries! I also have the same incredulous disbelief of TV shows that get 3.5 million viewers a week and aren’t profitable. I would love to see the books of these companies.

Are they paying catering $200 per ham sandwich? I’m positive you could go through their budgets with a pair of scissors and cut out massive amounts of money. Take Waterworld for instance, the infamous Kevin Costner movie – they BUILT an atoll to shoot on, but DIDN’T build bathrooms on it, so they FERRIED actors by speedboat MILES back to the mainland to use the bathroom and then MILES back to get back to set. What the *&#@?! And they couldn’t shoot on an existing atoll?

I’ll say this – if you have 3.5 million guaranteed viewers a week, or 1 million guaranteed customers for your game, and you CAN’T make a profit? You’re a shitty businessman. Of course, the big problem isn’t making a profit for them, is it? It’s that the profit isn’t big enough.

I’ve said it before, but profit needs to be calculated by percentages, not actual figures. A $1 million profit sounds better than a $10 thousand dollar profit, but what if the first was earned off spending $20 million and the second earned off spending $20 thousand? One is a 5% profit, and the other is a 33% profit.
Kdansky said,

Cliff also wrote about that. And you’re both very much correct. If you can sell a million units at 10$, you can still spend about 5 million on production. But

http://positech.co.uk/cliffsblog/2011/06/06/lets-kill-the-cheap-and-begging-myth-right-now-ok/
LateWhiteRabbit said,

Just saw this article on Cracked.com and it is oddly extremely relevant to the discussion at hand – apparently everyone is thinking the same thing after this year’s “mediocre at best” E3:

http://www.cracked.com/blog/the-6-most-ominous-trends-in-video-games/
Menigal said,

I was going to link to that when I got home from work, LWR. You beat me to it!
Calibrator said,

The article in the last link pretty much sums up the disgusting state of affairs quite nicely.

As for selling a million units of a game not turning in enough profit:
Kaos Studios, who developed the first person shooter “Homefront”, was shut down yesterday. Apparently 2.4 million units weren’t enough…

http://www.joystiq.com/2011/06/13/thq-shutters-homefront-dev-kaos-studios-and-thq-digital-warringt/
Wither the mid-sized game? » Systemic Babble said,

[…] Rampant Games is concerned about the hyper-polarization of the gaming industry: On the one end, you’ve got the mainstream games, which continue to grow unsustainably bigger with higher production values, and adapt by basically become more and more generic to appeal to “everybody.” Their ravenous budgets demand more and more customer dollars. […]
Ayrik said,

I think that Xbox Live Arcade fills in the middle pretty well, but I’m sure it takes quite a bit to get something on there.

But, I feel the exact same about the budget to profit issue. Frankly, I have been getting just as much enjoyment out of SyFy Original Movies as I have most blockbuster titles, with a few exceptions. It is even more extreme with video games, I haven’t been able to play any mainstream games for a while. I’d much rather play Torchlight, Terraria, and Minecraft.
Daniel said,

You should take a look at Section 8 Prejudice. Mainstream, AAA style game that costs $15. The point earlier about the books is a good one. If a game made the same way and priced at $15 works, then why are studios having trouble if they sell 1 million $60 games?