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Indie games are due for a downward correction

Why the current level of indie game development isn't sustainable, and what will cause it to falter

Edit: I use the term "indie" loosely.  "Indie developer" here refers to any self-publishing independent developer.


Although the past 5 years or so have been something of a renaissance for independent game developers, the other shoe is about to drop.  

First, the good: a wide variety of healthy digital platforms with relatively low barriers to entry have stimulated the growth of independent game development.  Small teams with big ideas have enjoyed success on the smallest gaming devices (mobile phones) and the biggest (PCs and game consoles). Revenue from digitally distributed games has increased dramatically over the past few years.  

Advanced tools, a growing base group of people possessing game creation skillsets, evolved digital platforms, alternate funding models, and booming demand for unique experiences and impulse-buy pricing have put indie games on the industry's biggest stage - literally, in the case of Telltalle's Walking Dead series at SpikeTV's annual awards show.

However, the boom, already starting to show signs of waning, is losing fuel, and cold water is coming from every direction.

1. Console slowdown

It used to be that you could put pretty much anything on Xbox Live Arcade and it would sell at least 25,000 units within a month.  These days, except for major brands, already-established franchises, and games with heavy promotion, even highly-rated games often struggle to sell that much in their release period.   Game sales on PS3 and Vita are certainly not any better.  

Will this change in the future? Enthusiasm for Wii U has been abnormally low for a new console, and despite its new developer-friendly policies, there has been relatively little indie content released or announced for the Wii U eShop.  It remains to be seen whether things will pick up there or on Microsoft and Sony's next-gen systems, or whether the decline is permanent.

2. Blockbuster competition

At first, the only games sold on digital platforms outside of PC were small in scope.  Now, however, some retail titles are launching day 1 on digital storefronts on consoles, taking up a lot of the oxygen that indie games used to have almost entirely to themselves.  Add that to the release of older retail games, large libraries of ports from previous console generations, etc., and it's not hard to see why indie games on these platforms are suffocating.  THQ Humble Bundle? This certainly isn't 2009 anymore.

The trend towards AAA games being digitally distributed isn't going away; in fact, it should only be magnified in coming years.  Likewise with legacy publishers digitally hawking their old wares at bargain prices.

3. A big Steaming mess

Once at the forefront of the indie game movement, Steam is now unreliable at best and a Waterloo at worst.  Steam Greenlight, like most policies born of populism, sounds good until you see it in action.  Sensible game approval requires experienced oversight and detailed submission materials.

The  Greenlight process involves neither, and as a result, the tribalism and groupthink that characterize low-information democracy have made a bad situation - Steam's previous arbitary and opaque approval process - even worse.  Indie developers who don't have an "in" - a prior relationship with Valve - must conduct a marketing campaign to drum up support to win a glorified popularity contest decided by a user base not prone to careful consideration or extensive research of the available choices.  And not every indie can hire David Axelrod to win those kinds of contests for them.

I'm hoping that it will be fixed eventually, but...who knows? The previous approvals administration didn't exactly have their stuff together, either. 

4. Immigration

It seems like I read a story every other day about an independent developer leaving the barren, impoverished land of consoles for endless bounty and golden streets of the App Store.

They may be in for a rude awakening once they launch a product, however, as income inequality for App Store is incredibly high, and the customer base is wildly different from that of consoles in their gaming and buying habits.  Less than half of developers who launch a product on the App Store recover their costs, and of course some fail even to get their product out.

The increased amount of product (from developers who lack expertise on the mobile market) with no corresponding increase in consumer dollars will result in lean times for all but the 1% (more like 0.01%).

5. Free to Play

And you thought 0.99 was the low water mark on the race to the bottom - nope.  Now you have to give your game away and make it fun, yet annoying.  Needless to say, encouraging people to pull out their wallets every time they play your game is not something that is going to work universally.  Just as Las Vegas was hit hard by their whales migrating as a wave of new casinos opened across the world, free-to-play games will wither as players get tired of having their wallets constantly fondled, whales become overfished and thus harder to land, and free players choose to move to the increasing supply of other F2P games rather than convert.  F2P is a legitimate business model, but it only fits naturally with certain kinds of games.  As those kinds of games get done to death, and other types of games try to shoehorn the model into games where it doesn't fit, there will be a crash.

The suits are still enamored of the F2P model, though, and will continue to chase it until Captain Hindsight points out their folly.

6. The Economy

The double-dip in Europe is surely going to crimp disposable income even further, and the U.S. may follow.  

Even the most optimistic projections show no substantial recovery for at least three years.  

7. Kickstartered

As mentioned in #3, crowdsourcing project approvals has its shortcomings.

On the plus side, crowdfunding adds the requirement that you vote with money, which encourages healthy skepticism.

However, there are a lot of wide-eyed gamers out there who don't understand the extensive risks of game development or realize how common it is for a game project to fail to reach completion.  The lack of an viable/equitable project cancellation mechanism paired with unrealistically high expectations from backers means that this funding mechanism will reap the whirlwind after a few high-profile failures and disappointments.

I still expect crowdfunding to be a viable way for indie developers to fund their games in the coming years, but those dollars will be far more difficult to coax from jaded gamers than they have been recently. 

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