The Rise of the Mid-Tier

I guess I just heard it one too many times. “The mid-tier developers are going to disappear”;  “you can be either small indie or big AAA, everything else is doomed”;“ People are not looking for mid-tier any more, you either give them bite sized chunks of gameplay or the grand epic”. I'm sure we've all heard it several times, most of them in a the-end-is-nigh tone of voice. However I don't agree; in fact, if I may, you could say I vigorously disagree.

            Sure mid-tier developers, those that lie between small indies and big-budgeted AAA, have been through some tough times; and sure, many studios that specialized in them have closed their doors; yet this does not mean they're gone for good. On the contrary, they are poised to make a strong comeback.  As to why, we should start by analyzing why they're in a hole right now.

            A few a years ago, the video game universe was rocked senseless. Few predicted the enormous market explosion that was about to happen. What was once considered a niche started to grow and grow and grow, until it became mainstream. People who would have never touched a video game before came in droves. This had many causes, the ageing of the 80's gamer demographic started to change the perception of games as toys; game capable technology (handhelds, mobile phones, social networks) became more pervasive; there hadn't been any mayor global economic downturns for a while, so people wanted to spend. New platforms and distribution methods (like the Wii, iPhone, Facebook) emerged that catered to these new markets, presenting small, endearing games that they ate up. This was the casual revolution, and just because of the shear force of numbers, the games industry took notice.

            They grew afraid, the boat was rocking and many were left wondering what just happened. The big business, which was quite comfortable up to that point, didn't know how to react to this new shift and so stuck to what they did best. “We need more graphics, more power”, they said, and so they started to spend and spend on the technology to make this happen. This raised the costs of development, which also made the companies more risk-averse. The more you gamble, the more you need a hit.  At the same time, several seasoned developers were growing wary of this money-first, no-experimentation work style.  They were fed up of the big corporation style of business, and saw in the new platforms a way out. First a trickle, then a tidal wave of veterans moved on to these new platforms, which were cheap to develop for and gave them tremendous freedom. This was the rise of the indie.

            Mid-tier developers didn't have the resources to compete with the big AAA, and didn't give the same freedom as indie games. Faced against a hit-or-sink market and a veteran talent bleed, the mid-developer met its match, and began to decline.

            However, this is not the end of this story. Right now, change is brewing once more. As the market continues to expand, we are witnessing a myriad of changes. Some indie developers are finding massive success, and boy are they enjoying the windfall.  Today we can already see a split between small indie (garage developers and really small companies) and big indie (established, professional indie developers). As the big indies gain more and more resources, they'll start tackling bigger and bigger projects, expanding to even more platforms. At the same time the large AAA companies have taken notice of the new market, and have decided to stop competing. Using their massive resources, they're dipping their toes on the new platforms. They are creating new, more flexible divisions, trained to understand and handle the new market. Finally, as the market starts to expand, the taste of players is becoming ever more diverse. This, coupled with the spread of the new platforms, is bringing players of similar tastes together. The nichefication (yeah, I just made that up) of the market is allowing companies to survive based on a very focused player base, but of global scale. They don't need massive budgets, and in their specific niche they are kings. 

            And so will the new mid-tier rise. As the big indies become more established, as the AAA enters new arenas and as specialist developers continue to reach their target players, they will become mid-tier. Notice this is all an effect of a continuously growing market and of the pervasiveness of new games platforms. Both of these trends are here for the long haul, and show no signs of slowing down. So, don't believe people who say the mid-tier developer is down and out; they hit a bump, but their era is just about to begin. You just wait.