It has been a very interesting and busy few weeks recently with more ups and downs than a Rollercoaster.
I’m updating a piece I wrote several weeks ago but never published, in what I’d say was one of the worse periods in my career to date. So this is basically a big post about Icon and a bit of a rant too!
Running a game studio is an incredible thing; I love doing it and can’t imagine ever wanting to do anything else. It is bloody tough at times though. Let me start with an overview of Icon and details of what we’ve done recently.
Icon has a core team of three people, comprising of two programmers and myself (I handle art, audio and game design). We also use freelance artists and programmers from time to time as we need to.
Since 2010 we have developed and self-published 10 games over 17 different SKUs and have 4 other titles at an advance stage of development. So that’s 14 games over 21 SKUs.
So a lot of titles for a small studio, which I am extremely proud of – especially given the size and financial restrictions/limitations we face.
We have developed our own game development engine – which we call ICON/TECH. This allows for a single program to be developed on any platform (our usual base platform is PC) and then ported and compiled on any other platform that is supported.
This is one big on-going R&D project, and is probably our single biggest development cost as it is ever evolving to support new features and platforms. However, right now given the incredible amount of hassle and unpredictability maintaining your own cross-platform engine can be, I am looking at other options for the future to remove some of the risk of development – particularly for other platforms like iOS, HTML5, Android, etc. We are currently exploring Unity, Monkey Coder, Game Salad and other game development IDEs, particularly for smaller casual titles.
Our recent move to Vita has been very stressful indeed and has taken so much longer than we anticipated getting things up to the level of performance we needed. With the very limited resources we have, at times it feels like we are biting off more than we can chew.
One plan we have now though, which if we can do it would be a huge time saver long term, is to move to a script based engine with more built-in editors for stuff like GUIs. This way we won’t have to deal with multiple versions of the same ‘game specific’ code that we do now. We should have done this long ago, but as ever time and resources stop us. It would also allow the art/design team to do a lot more of a project without needing coder input.
Our ‘Base’ Game Projects
We now have a number of ‘base’ game projects we can use as the foundation to create new titles. In general these save a lot of time and allow us to prototype quickly – we just need to fold some of the code completely into the engine. If we do this we don’t then have so many elements unique to each game project.
Right now we have the following base projects – Air Hockey, Ball Rolling/Balance (Monkey Ball/Marble Madness style), Board Games (such as Battleships, Connect 4, Hangman, Draughts), Bowling, Breakout/Arkanoid, Crazy Golf, Darts, Motor Racing (with in-game track creation functionality), Pool & Snooker.
Past Quality Issues
Tough to face up to, but I have to admit some of our older titles had some flaws – primarily our WiiWare titles. We never really handled the Wii controller well, and the titles didn’t play as well as I had hoped. We took our eye off the ball and didn’t do anywhere near enough final gameplay testing and balancing. Typical excuse – too busy focusing on other projects to the detriment of the titles we were finishing off at the time.
I have always believed you need to learn from past mistakes, so I read the reviews in detail to see where we went wrong and since then with each new game we have tried to consistently improve on the quality and balancing.
As a result our recent review scores have been much stronger and I feel far happier with our output now than at any time in the past. Regardless of team size/lack of resources, extra TLC at the end of a project can make all the difference. I also love getting player feedback – and although I don’t get as much as I would like, feedback from people actually buying and playing your games is worth its weight in gold.
Vicious Financial Cycle
Every few months we run out of money. Completely and utterly broke type of running out of money. Usually the cycle is as follows:
- New product development uses our cash reserves (this includes the peripheral costs such as age ratings & translations).
- Game(s) launch
- Revenue comes in
Somewhere between B and C we run out of money – especially when we move onto a new platform such as PS Vita. The time/resources needed to complete a game for a new platform often go over budget (unforeseen technical issues, etc.). Also there are risks when publishing on a new platform – our initial iOS titles performed very badly and we lost a lot of money on those.
We do have on-going royalty revenue, which is great, but this diminishes over time the longer a product is out there – so we need to keep up a relatively high volume of output as unfortunately we’ve never had a big hit.
This is something I am trying to weigh up going forward – I have come to the conclusion that complete reliance on self-publishing revenue is just too risky. We also need a steady stream of revenue from third-party funded titles; we’ve had a couple of projects like this recently and it has been (literally) a life saver.
Marketing & PR
We have always handled marketing and PR ourselves as we have never really had the budget to pay for professionals. We aren’t massively good at it though, and I have always believed a good marketing person/team would have seen significantly higher sales for our games, particularly on iOS.
Recent experiences though have cast this into doubt. We have tried a couple of PR companies (Reverb and Indigo Pearl) and the results were far below our expectations. It may well be that our titles weren’t sexy enough to generate much interest, but the fact is the results we experienced fell short even of what we were doing ourselves, which was incredibly disappointing.
It is fair to say though our budgets were very limited, so perhaps you should only really consider professional PR if you have a good solid monthly budget of at least £2,000? We won’t be in a hurry to try again, so it is a case that we need to improve our own internal PR as much as we can.
I have been vocally pro-TIGA recently since joining, but recent experiences have changed my mind. I am struggling to really see any benefits of membership for a small studio such as ours – there aren’t enough networking events, or information/benefits given to members.
The ‘members only’ section of the TIGA site (Access online resources on the TIGA website) has pretty much nothing there, the mentoring services don’t really work, the financial discounts are minimal, the PR help is non-existent, and so on.
For me the biggest failing is there is no direct way to communicate with other members, shout about your services, chat, ask advice – in fact it is really hard to even find out who the members are, let alone get contacts. It is almost as if it is all a bit of a secret!
I would say TIGA really need to open up; with a little work it could be a brilliant organisation, but it falls down badly right now, particularly for smaller studios.
Tricky one – I am very worried about how our Vita titles will do when we finally release them, given the small numbers of Vita users out there. My gut feeling is that we may make a big loss on them.
SCEE are brilliant though – they really couldn’t be more helpful and are so far beyond Microsoft andNintendo in terms of looking after their developers. We are working on content for PlayStation Mobile, which is exciting although a little daunting.
We are also working on some HTML5 titles, although I have no idea how you make money from HTML5!? Plus getting back into iOS and dipping our toes onto Android.
The big issue though - will we make any money? I am tired of constantly running at a loss and I must admit just lately it has seemed like there is no end in sight. We have achieved a lot, but we need more stability and personally I need less worry!
Small entry this – but a handy one.
For an Indie developer, especially one that owns its own IP, make sure you include the basic legal text to cover your IP and copyright.
Every game should carry certain legal text which should be shown in the following places:
- First Boot Screen
- End of the game Credits
In addition to this it is recommended to also include the following on the Title Screen:
©[CurrentYear] [CompanyName]. ALL RIGHTS RESERVED
Legal Text Template
Below is a template showing how the legal text should be displayed in the game:
©[CurrentYear] [CompanyName], [GameName], its logo and all related logos and slogans are copyright [CompanyName].
All other logos are copyright of their respective owners.
ALL RIGHTS RESERVED
If your game name is a registered trademark replace the © symbols with the relevant mark.
UPDATED May 2012
One of the easier ways to get information out there about your game is to use a press distribution service. Generally, for a fee, these services will target your release to a number of different industry press contacts.
One exception to the fee rule is the wonderful GamesPress:
Games Press is the definitive one-stop PR resource for the games industry. The site is updated daily with press releases and artwork from publishers, developers, distributors and PR agencies, and we send out an e-mail digest of new material each day.
The following list includes the fee charging distribution services, and details of their fees:
GameRelease.net is a press release distribution service for game developers to promote their own products. You may use the service by joining to GameProducer.net Insiders.
Create & distribute PR stories for a low price of $9.97 per month (or $99.70 per year). You may release several press releases per month and promote your own products. Press releases are emailed to over a hundred game specific contacts.
Carry out press release distribution to the gaming media including PC game magazines (PC Gamer, PC Zone, Game Informer) and websites (GameSpy, GameSpot). Depending on the target audience of your news, press releases can be also sent out among lifestyle, family & parenting, education or whatever media.
More expensive this one – with fees for a single release from $140.
Use the service to distribute your game press release to over top 200+ computer games publications. All of the contacts have a strong online presence. Most are game news and reviews sites. Some are Gaming magazine sites etc.
Indie Budget Pricing is (1) Game press release distribution and a quick quality check for $59.95 or (2) Game press release distribution and co-writing for $89.95.
One for Apple developers – Macs/iPhone. Each press release is sent to a different media list depending on its channel. They review every release and provide feedback on changes to make to enhance its effectiveness.
Services are – a free distribution service, an extended distribution for $18.75 or a press release writing services for $70.00 (which includes extended distribution).
MailChimp helps you design email newsletters, share them on social networks, integrate with services you already use, and track your results. It’s like your own personal publishing platform.
Tier One Services
The next level up, both in the number of contacts you can reach and the costs, are the Tier One services. These can be several hundred dollars per release, but their coverage can be exceptional.
The Tier One Distribution Companies are:
Sending press releases is a key way to promote your game, company or services. Even just using a free service like GamesPress will typically get you some good coverage.
It has to be said you can’t really go wrong with gamerelease.net either, it is very low cost and they cover a decent number of game press contacts.
Beyond this it really depends on your resources, but there are plenty of options out there, so you can easily tailor a package to suit your budget.
UPDATED May 2012
Late 2010 we (Icon Games Entertainment) made a move into self-publishing for PC – we had done a couple of PC SKUs for a publisher funded title, and it seemed the right time to try it ourselves.
At this point we knew very little about the process; it is a very easy task with a publisher – they just send you over their installer and DRM software, you implement – then they sell. Minimal involvement for the developer, so you don’t learn much.
We had four games pretty much complete and ready to roll – luckily for us we’d already done compatibility testing previously, so we knew our SDK was ready to go with minimal problems on most typical PC systems. We tested the games to death internally; I’d like to have got some external testing done but didn’t have the budget – certainly this can be a very good idea.
The other thing I wanted to do was functionality testing; I was chatting to the guys at Player Research (email@example.com), but alas we didn’t have the budget for that either – but certainly something for the future. I’d recommend a round or two of functionality testing whatever the platform you are releasing on.
So what is functionality testing?
Generally it focuses on improving the quality of video games from the player’s viewpoint. Typically this involves players being observed, recorded and analyzed interacting with the game, thus allowing games to be tweaked and improved both in terms of review scores and the player experience.
So with the games all tested and ready to go, the next thing needed was an installer – we researched a number of different solutions including Nullsoft Scriptable Install System, WiX and Astrum Install Wizard. We went with Astrum (Professional edition – cost $89) in the end as it was the easiest and quickest to implement and there were a few skins available, so it was simple to customise the look without spending hours with something like SkinCrafter. It has to be said though, after going through dozens of indie titles and seeing what installer they used, the most popular choice was Nullsoft.
Next up the thorny issue of DRM – again we looked into this to see what the popular options were, and there seemed to be three main ways to go about this:
- None – very much the consumer choice, and favoured by a lot of indie developers. Very easy to implement but certainly the most open to piracy.
- Demo and full version – completely separate builds with the demo freely available to download, often with features and content cut so it can’t be hacked to run the full version. The full version is then available to download from a password protected site once purchased, with the download details emailed to the customer. We decided this was too much hassle and time intensive, especially the issue of having to maintain two separate builds.
- Off-the-shelf DRM – buy a package and with a bit of faffing around you can set it up to control licensing and activation and the terms of the trial (i.e. 60 minutes free play, x number of free plays, x days and so on). This appealed to us given the time constraints we had, combined with the number of games we were releasing (4 titles in the first batch).
We researched Software Passport, ExeShield and Win License, and ultimately went with Software Passport (cost $300) – more as a way to control the licensing and trial terms with minimal hassle rather than an anti-piracy measure. One point of note is to check with your planned e-commerce provider to see which DRM packages they support.
So that’s the software, installer and DRM sorted, the next thing was to look at selling the games.
How and Where to Sell
The first option, and one that can be run alongside other sales outlets, is to sell directly via your own website. What you do need to decide on is an e-commerce partner – we looked into Plimus, Digital River, BMT Micro and PayPal. Ultimately we chose BMT Micro as their commission rate was competitive and they come highly recommended by many indie developers. They also support Software Passport, which was another plus. Oh – and they are open when it comes to negotiating the commission rates.
The process was very simple to set-up, they even customised our e-commerce page (which is hosted on their site) to match the look of our website.
We looked into the various portals – including:
- Amazon US (http://www.amazon.com/)
- Steam (http://store.steampowered.com/)
- Impulse (http://www.impulsedriven.com/)
- Direct2Drive (http://www.direct2drive.co.uk/)
- Big Fish Games (http://www.bigfishgames.com/)
- Big Pond (http://www.gamearena.com.au/)
- Boonty (http://uk.boonty.com/index.php)
- Club Casual (http://www.clubcasualgames.com/home/download)
- Desura – (http://www.desura.com/)
- GameHouse (http://www.gamehouse.com/)
- Gamers Gate (http://www.gamersgate.co.uk/)
- Game Streamer (http://games.gs1.net/)
- Game Trove (http://gametrove.net/)
- Get Games (http://www.getgamesgo.com/)
- I-play (http://www.iplay.com/)
- iWin (http://www.iwin.com/)
- Play First (http://www.playfirst.com/)
- Pogo (http://uk.pogo.com/)
- Shockwave (http://www.shockwave.com/)
- Try Games (http://www.trygames.com/)
- Wild Tangent (http://www.wildtangent.com/)
- Yahoo Games (http://games.yahoo.com/)
I have included a few email contacts below. PLEASE help fill in the gaps and send over any missing ones!
- Amazon – firstname.lastname@example.org
- Big Fish Games – email@example.com
- Boonty – firstname.lastname@example.org
- Club Casual – email@example.com
- Desura – firstname.lastname@example.org
- Direct2Drive – email@example.com
- Gamers Gate – firstname.lastname@example.org
- Get Games – email@example.com
- Impulse – firstname.lastname@example.org
- Shockwave – email@example.com
- Steam – firstname.lastname@example.org
- Try Games – email@example.com
- Wild Tangent – firstname.lastname@example.org
Unfortunately many of the portals do not reply at first, so persistence was required. Even now, several weeks later there are still several we have never heard back from at all – despite a few follow-ups.
ESRB DETAILS NOW UPDATED!
For the home console downloadable services you will need to obtain age ratings for each of your games.
It is a very straight-forward process, the only hassle being that it costs money!
First off you need to register and set-up an account for your company with each of the ratings boards:
To do this just drop them an email and they will send the necessary forms. Once that is done you will have access to the publisher areas on their sites.
From here you can submit a product for rating - I shall use a WiiWare 3+ title as an example, and address each ratings board in turn.
Complete the online submission form, you must then send a copy of the game along with the fee (in this case the 3+ casual game fee of €250). You should also include a 10-minute gameplay video, a selection of screen-shots along with the game manual to cover all bases.
Within a couple of weeks you should receive your rating.
Download and print the submission form, you must then send a copy of the game along with the fee (typically €1000). You should also include a 10-minute gameplay video, a selection of screen-shots along with the game manual.
Turnaround time: 10 working days.
Download and print the submission form, you must then send a copy of the game along with the fee (typically AUS$1150). You should also include a 10-minute gameplay video, a selection of screen-shots along with the game manual.
Turnaround time: 20 working days.
A lot has changed over at the ESRB recently – so the old ratings details no longer apply.
There is now a new Short Form Submission process – which is only for products that are solely distributed via download directly from console or handheld devices manufactured by Microsoft, Nintendo, or Sony Computer Entertainment.
Note: Products that do not qualify for Short Form submissions must be submitted using the Long Form submission, which is much more expensive:
Short Form Submissions – $500, 1-2 day turnaround after receipt of physical materials
Long Form Submissions – $10,000 Standard Processing, 5-7 day turnaround after receipt of physical materials; $20,000 Priority Processing, 1-2 day turnaround after receipt of physical materials
The ESRB have detailed some examples:
- A game released exclusively on Xbox Live Arcade – use the Short Form
- A game released on WiiWare and PSN’s Playstation Store – use the Short Form
- A game released for download on the PC – use the Long Form
- A retail game available for Nintendo DSi – use the Long Form
- A game available on the Playstation Network and available at retail for PC – use the Long Form
So the good news is that the Short Form is cheaper than the old $800 ratings, the bad news is that it no longer covers downloadable PC titles or multiple platforms.
There is also no longer a requirement to send copies of the released product to the ESRB, which is good as I got caught out once for forgetting to do this and got a penalty point – too many of those and the ESRB will fine you. Also you no longer need to submit 3 copies of the submission DVD; just the one copy will do.
Effective April 1, 2012, ESRB will be instituting a new Rating Fee Schedule for Long Form1 submissions:
Current Fee Schedule
New Fee Schedule
(As of April 1, 2012)
|Short Form||Downloadable Console/Handheld Games Only||
|* Eligibility for the Value tier requires that a game’s development costs not exceed $1 million.|
The table below highlights some key differences between Short Form and Long Form submissions:
Long Form Submissions
Short Form Submissions
Value: $4,000, Standard: $10,000, Priority: $20,000
Days to Process
Standard: 5-7, Priority: 1-2
Final Product Required
3 Copies of each SKU
[Note that payment in full must be made before the submission process begins.]
Another sting in the tail is the Product Tiers:
1. The platforms to be combined MUST be within the same tier, as outlined below.
a. Tier 1 – Xbox 360, PlayStation 3, PlayStation Vita
b. Tier 2 – PlayStation 2, PlayStation Portable, Nintendo Wii
c. Tier 3 – Nintendo 3DS
d. Tier 4 – Nintendo DS
e. Tier 5 – Mobile
Any platform not listed above (including PC) may be combined with other platforms so long as they meet the following two additional criteria.
So, as an example a Downloadable Game on PSP Minis and WiiWare would require two separate Downloadable Game submissions, each costing $500. The reason being is that Minis support Playstation 3 and Playstation Vita – so spans Tiers 1 and 2.
UPDATED May 2012
This is an on-going list of websites to contact when issuing press releases, game information, etc… Please help us fill in the blanks!
Forums only – Join to post.
Contact – Robin.Alway@futurenet.com
Contact – email@example.com
Indie Events and Orgs
Nintendo Official Magaine
Contact – firstname.lastname@example.org
Contact – email@example.com
Contact – TBC
Playstation Official Magaine (UK)
Contact – firstname.lastname@example.org
Playstation Official Magaine (US)
Contact – Gary.Steinman@futurenet.com
Contact – email@example.com
Xbox Official Magaine
Contact – firstname.lastname@example.org
Contact – Tim.Weaver@futurenet.com
Contact – email@example.com
Self-publishing is a wonderful, exciting prospect for any developer but you need to ensure you are fully aware of the various extra costs and responsibilities before you begin.
- Marketing time & costs (what form, how much) – in my opinion by far the hardest aspect of self-publishing. Many developers have next to no experience in this area and it is bloody hard to get your game noticed, especially on the more crowded platforms like iOS. I think the golden rule is to put together a plan as early as possible in the development cycle and build as much hype as you possibly can throughout development.
- PR – you also need to raise your studio profile in addition to promoting your games. Sites like Gamespress are a big help, and if your budget allows a dedicated PR company can expand your reach perhaps beyond what you could realistically achieve yourself.
- Advertising – will you have a dedicated advertising budget, how much, where will you advertise; you will also hear lots of conflicting reports on the benefits of advertising. It is a bit of a minefield and the best advice is to ask around and get recommendations for specific advertising targets that have worked well for other developers.
- Localisation (In-game texts, E-Manuals, Metadata and so on) – make sure you find a good, low cost translation company you can go to that you know provides a fast turnaround and a reliable service. I’ve had a few occasions where I have needed translations done for a promotion within a couple of days.
- Bug testing – without publisher QA departments you will have to cover all of the testing yourself. There are QA companies out there who can assist, but they can be expensive. Shop around and find a good one to work with that won’t break the bank or consider hiring an in-house tester. You really can’t skimp on QA, and in-house testers can be worth their weight in gold.
- Age ratings – depending on the platform you may be required to get ESRB (US), PEGI (Europe), USK (Germany) and OFLC (Australia) ratings. Budget approx. Euro 2,500 for the set.
- End-user support – you can handle this with email support initially, so nothing too scary. Sites like GetSatisfaction can also help, allowing you to quickly set-up an online support community.
- Withholding taxes (i.e. for royalties) – don’t let this one bite you! For example royalties paid from the US to a foreign company; you would need to complete form W-8BEN or you will be hit with a 30% withholding tax.
- Insurance - full indemnity insurance is often required to satisfy the platform holders.
- Focus testing – can often be worth a round or two of focus testing to ensure you don’t overlook some of the basic functionality issues that can make or break a game.
Providing you plan from the offset and build up the required contacts at outsource companies early on, it can all run very smoothly. Always be aware of the costs for everything, and when using outsource companies shop around for the best deal and service.
Don’t be afraid to speak to other developers to ask advice – many will share and it is my belief that if we as developers share our knowledge, it benefits us all.
We released our first self-published PSP Mini, Arcade Darts in July 2010.
The PSP Minis program was a joy to work with. Sony promotes the service well and you can update your product at will, reduce the price permanently or in timed sales promotions and best of all – you get nice regular cash-flow saving monthly payments.
Sony were very approachable and very developer friendly and Minis, while not a platform to make a developer rich, certainly help to maintain some regular monthly revenue in a far lower risk environment than say iOS.
The sales split so far is higher for PAL regions than NTSC; roughly speaking the split is 2:1 in favour of PAL sales. Our biggest seller is Arcade Darts, so far selling over 11,000 PAL units and 5,000 NTSC units. This far exceeded our expectations (we actually only expected to make around 2,500 sales!).
Our next Mini, Arcade Air Hockey & Bowling was released in September 2010 and has so far sold over 12,000 PAL units. This was also our biggest US hit on Minis with sales totals so far in excess of 12,000 units.
Next up we released two titles in January 2011; Family Games and Bashi Blocks. Unfortunately Bashi has been a big failure; so far selling less than 2,500 units worldwide. The losses we’ve made with this are frightening! I think our biggest mistake there was the name and branding – we didn’t get it right and people were confused by what the game was about.
Family Games has fared a little better at 4,500 PAL sales, and 3,500 NTSC sales.
We’ve also recently (July’11) released a new PAL Mini called Arcade Pool & Snooker, which so far has shifted just under 3,500 units.
Bundles & Promotions
In addition to the regular store sales, you can also bundle products together to create special promotions and you can also release on the PS Plus service – so there is a lot of flexibility to keep earning revenue per title.
We have just released our final Mini – Golf Mania. Looking forward we are hoping to get started on a series of titles for the upcoming Playstation Suite, which certainly looks like the spiritual successor to Minis and an exciting prospect from Sony. More details as we have them…
Phil Harrison made a very interesting speech at the Games Invest 2011 event in London recently, where he predicted the major trends that would dominate gaming over the coming years.
Harrison, who is now general partner at London Venture Partners, spoke to members of the industry about what venture capitalist investors are looking for, how to pitch to them, and about the importance of using metrics and looking to future trends.
“Try and extrapolate forward, think about what’s happening in the market in the future, think about the way the market is changing, and what are the next big disruptive trends.”
Harrison identified five distinct areas:
Flash 11/Molehill “I think Flash 11, Molehill technology is impacting strongly 3D in the browser. The browser is becoming a console quality place to enjoy content, and there are some very powerful companies that are helping to enable that. Not just Adobe, but companies like Unity, Microsoft is thinking about it, Google is thinking about it. So think about that rising tide and how you could benefit from it. That’s a very short term opportunity.”
HTML 5 “Longer term we see HTML 5 as being a very important set of technologies for the simple reason that it gets you around the App Stores and it gets you around an application that has to be downloaded and that you will get functionality in the browser which is close enough to an App, that will allow you to deliver some very innovative experiences to your customers. Now you won’t be able to do Call Of Duty in HTML 5 yet, but it will get there eventually, so I think it’s worth thinking about the long term impact of that.”
We think social, on mobile, with location is a big macro that is going to be a game changer. No pun intended.
Location based mobile games “Another big macro trend is social, on mobile, with the addition of location. We’ve invested in a company called Grey Area for that reason, because we think this is a big macro that is going to be a game changer, no pun intended. Just recently a company called Red Robot Labs has come out of hiding with their Life Is Crime product, which is another example of it. And this I think is a big rising tide and its going to be an exciting consumer space as well.”
Tablets “The irresistible rise of iPad/Android touch tablets, I think this is going to become an enormous, multi hundreds of millions of units platform for games. Just look at the rate at which Apple is installing iPads into the world. Go into an Apple Store and just watch who comes to the store to play on the iPad. It’s kids. And over time the prices will come down and will propagate to everybody.”
“I’m not going to make any wild predictions about how its going replace existing consoles but its definitely a console for the future that’s a very exciting trend. And don’t ignore Windows 8, I think Microsoft is going to come back strongly with Windows 8 in the touch and tablets area. I think that’s going to be a stalking horse that could come up and be an interesting one.”
Smart TVs and cloud gaming “And then finally, Smart TV and the cloud, hundreds of millions of televisions being sold every year with internet connections in them with, increasingly, processors which are akin to an Atom notebook, notepad type functionality. This is going to disintermediate a lot of consoles from the space, which is not necessarily a good thing but it creates a new channels for consumers to enjoy certain types of games directly on their television.”
Next January most high end TV remote controls are going to have Wii-like functionality in them.
“If you watch what happens at CES in January, that’s when all the big consumer electronics companies show their big trends, there was a little glimmer of it last year but next January most high end TV remote controls are going to have Wii-like functionality in them. And so that makes a user interface for games straight away.”
“So think about that as a big space, and then obviously the cloud as a space for delivering content. I’m on the advisory board for Gaikai, and I’m privileged on information on some of the things that they’re doing, and seeing the speed at which consumer electronics companies are adopting cloud technologies into their devices, it’s going to make it a massive platform for games and a very efficient platform for games as well.”
I recently read a Gamasutra article in which XBLA Portfolio Director Chris Charla explains that “With XBLA, we’ve consciously developed a curated portfolio” and that “The net result is that our customers know that every XBLA game is measured to the same bar – that the quality of games that indies like Signal Studios [Toy Soldiers] or Haunted Temple Studios [Skulls of the Shogun] bring us continues to get better and better, so the bar is always getting higher to get on the platform. I think that’s ultimately beneficial to our customers. We want the best, most innovative, coolest games on XBLA.”
I think striving to have the best games is very important for the long term health of a platform. The data I’ve collected, however, suggests that XBLA’s health is actually flagging. The elements to which Chris attributes XBLA’s ongoing improvement (a curated portfolio and a rising quality bar) are some of the elements that I believe are the biggest obstacles for XBLA’s continued prosperity.
To be clear, I’m not finding fault with Chris. XBLA’s take on content selection has been this way long before Chris joined as Portfolio Manager. I don’t even know if it’s within the Portfolio Manager’s jurisdiction to change how content selection is handled, much less push for the changes that I will discuss later in this article.
I’m not finding fault with anyone else at Microsoft, either. Their content selection approach made a lot of sense when XBLA was launched 7 years ago. In the early days of digital distribution, there wasn’t the abundance of high quality downloadable games that we have now, so weeding out the chaff was critical to creating a positive image for digital distribution in general, and XBLA in particular.
But things have changed quite a bit in the last few years and it might be a good time to reexamine some of the assumptions and reasoning behind how XBLA is managed. Newer, more successful business models have emerged, the number of talented game creators leaving their jobs to do their own thing is on the rise, and both the quality and quantity of games produced by small teams has increased dramatically.
I’m writing this article because I believe XBLA’s popularity among independent developers peaked last year (2010) and Microsoft is not yet aware of this. I’d like to discuss why this is happening, what effect I think it will have, and what changes Microsoft can make in order to ensure that XBLA keeps getting the best possible games. As a developer I’d like to see as many healthy and prosperous digital distribution channels as possible, and I believe XBLA has not yet come close to fulfilling its potential.
Are Independent Developers Really Moving Away From XBLA?
Yes. In August of 2010, as part of my research for a talk I was preparing, I sent out a kind of “indie census” to about 200 independent developers. One of the questions I asked was which platforms they were developing for at the time (2010), and which platforms they had developed for in the previous two years (2008-2009). For this article, I sent out another survey to the same group, asking again which platforms they are currently (2011) developing for and which platforms they intend to develop for in 2012. It’s important to note that only about half of the developers I sent the survey to responded, so while the results do have meaning and suggest certain trends, they are not definitive. I’m open (and wouldn’t be shocked) to seeing data that suggests a different trend.
First, let’s take a look at the number of these developers making games for PS3 vs the 360 over the last few years:
As you can see, in 2008-2009 Microsoft had more developers making games for XBLA than Sony had for PSN. The gap narrowed in 2010, and this year more of these developers are making PSN games than XBLA games. Next year, the number of games this group makes for XBLA will drop again, and PSN’s lead will widen as the number of developers making PSN games rise to double what it was in 2008-2009.
Should Microsoft care about this relatively small group of developers? I think so. It includes the developers of many high profile, critically acclaimed, and commercially successful games.
To better understand what kind of games this group of developers represent, I took the list of XBLA games from Wikipedia and looked up each game’s Metascore. I then split the games into two categories: games made by the group of developers I sent the survey to, and all the rest. Of the 400 or so XBLA games listed on Wikipedia, 33 were made by this group of developers. Here are some interesting facts:
- Average Metascore for an XBLA game made by this group: 78
- Average Metascore for all other XBLA games: 66
- 3 of the top 5rated XBLA games were made by developers from this group
- 76%of XBLA games made by these developers scored 75 or higher
- 31% of all other XBLA games scored 75 or higher
It becomes apparent that this group of developers makes much higher quality games than the average XBLA game, and represents a significant part of XBLA’s star talent. It’s unlikely, therefore, that the decline in the number of XBLA developers among this group is due to Microsoft turning them down because of a rising quality bar. It’s much more likely that they simply choose, for whatever reason, to no longer develop games for XBLA.
You might say that quality is important but bottom line is what really counts. Microsoft, after all, is a public company and has a responsibility to its shareholders to maximize profits. So I reached out to Ryan Langley who periodically compiles sales estimates for XBLA games based on leaderboard data. Ryan was kind enough to share his estimates with me for 2010. It’s okay that they’re just estimates because we are only interested in a relative measure of one group of games against another, we don’t care about absolute numbers. We are comparing how well games made by this group of developers sold relative to how well all the other games sold. With a reasonably sized data set, and assuming the results are dramatic enough, the fact that the estimates are imperfect shouldn’t really matter. Well, the results are pretty dramatic:
- Average # of copies a game developed by this group sold in 2010: 137,010
- Average # of copies all other games sold in 2010: 46,281
So on average, a game from these developers sells 3 times the number copies than the average game made by all other developers.
- Median # of copies a game developed by this group sold in 2010: 63,480
- Median # of copies all other games sold in 2010: 13,899
The median number of copies sold by a game from these developers is 4.6 times greater than games from other developers.
As a side note, if we calculated the averages and medians based on cumulative sales figures from the games’ launch through the end of 2010 (instead of sales just from 2010) the multiplier for average sales is 2.4 and the multiplier for median sales is 4.2, suggesting that these developers are even more important to XBLA’s bottom line now than they have been in the past.
So these developers not only make much higher quality games, but they also generate a lot more revenue for Microsoft relative to the average XBLA developer.
But departure of star talent is not the only obstacle XBLA is facing right now. This survey data makes it clear that both 360 and PS3 are, at the moment, second tier platforms in terms of popularity among these developers. Windows, Mac, and iOS are getting far more attention, a very positive indicator for their longer term health. The chart below shows what percentage of developers have been making games for each platform over the last few years. It also includes reported plans for 2012:
Why Is This Happening?
I asked these developers to rate the importance of certain factors in choosing which platforms they will develop games for. The most influential factor was ease of working with the platform owner, with 69% of developers rating it Very Important. In 2nd and 3rd place were the platform’s install base (63%) and how well the platform’s controls match the game (58%).
Since ease of working with the platform owner was voted the most important factor in choosing a platform, I sent out a followup survey to ask how easy each platform owner has been to work with. Here are the results:
Almost half of those who worked with Microsoft described the experience as “excruciating”.
Given that ease of working with the platform owner was voted the most important factor in choice of platforms, it becomes perfectly clear why XBLA, despite being a very strong channel with a large audience and huge earning potential, is dropping in popularity among these developers.
What Does This Mean For The Future of XBLA?
At the moment, people are still lining up for XBLA slots. I’ve heard of developers giving publishers 15% of their revenue for the privilege of using their XBLA slots (publishers who make a certain number of 360 retail games per year are allotted a number of XBLA slots to do with as they please). So XBLA is not going to be hurting for content in the immediate future.
But if things keep going the way they are, and XBLA keeps losing talented developers, I believe the diversity of games available on XBLA will diminish, quality will suffer, and revenue numbers will drop as players start to move away from an unremarkable portfolio of games. We will see a lot more “genrefication” and big publisher franchises.
After a few years, XBLA might start to look like Big Fish Games, which is in an advanced state of genrefication. With XBLA, the genres would be different, but the overall effect would be similar.
Once players start to leave in large numbers it will be too late to turn things around. Given that it takes at least a year or two to make an XBLA game, no developer would want to start working on one knowing that XBLA is declining in popularity and could be significantly weaker by the time the game is ready. There’s data suggesting this player migration is already happening, but my gut says this is a local adjustment forced by the arrival of social games, not a trend. I suspect a larger scale migration is still a few years away and that there’s more than enough time for XBLA to change course.
The more open platforms, like Windows, Mac, iOS, and Android, are very attractive to developers. Take iOS, for example. Top hits on XBLA/PSN earn their developers millions of dollars. iOS hits earn tens of millions. When World of Goo was briefly the #1 top grossing iPad app it was earning upwards of $50k a day. Angry Birds HD has been hovering in the top 10 for about a year and a half. But that’s not all, there’s Angry Birds Seasons HD, Angry Birds Rio HD, and all three of these games have non-HD iPhone versions as well. That’s six Angry Bird games in a top ten position. For a long time. Then, there’s the Mighty Eagle you can buy with an in-app purchase. You do the math.
These hits are beyond rare though, and not a good reason to develop games for a platform. For that reason it’s important to ignore the sales numbers of the top games on any channel and instead look at the sales/revenue of top 100, or 200, or even 400, a position that a good game is much more likely to hold than #1 or #5.
A couple of months after the release of World of Goo on the iPad, I wrote an analysis of the game’s iPad launch, and among other things, created a scatter plot of the relationship between rank on the iPad top grossing chart and the amount of money the developer earns in a given day.
As you can see, the top 10 games earn tens of thousands of dollars every day. Better yet, the dropoff from #10 (around $15k a day) to #60 (around $6k a day) is slow and gradual. Recently World of Goo HD’s rank on the iPad’s top grossing chart has been floating between #225 and #250 and it still nets us around $2,000 a day. That’s what a healthy channel looks like. It can support an incredibly large number of developers and games, including some niche / strange / avant garde games like #sworcery, Game Dev Story, Enviro-bear 3000, and Eliss.
That the App Store can sustain such a large and diverse set of developers means there’s something for everyone on iOS and developers feel more comfortable trying to innovate and take risks. This creates a positive feedback cycle, drawing more players, and in turn more developers.
Having unlimited shelf space is, after all, one of the great benefits of digital distribution, and consoles have failed to take full advantage of this.
10 Things Microsoft Can Do To Improve XBLA
It’s extremely difficult to make big changes in large organizations. It takes a strong leader with a lot of organizational clout, and time. That’s probably the biggest obstacle Microsoft would have to face if they’re going to try to make XBLA as popular with developers as Windows and iOS.
For this reason, I’d like to divide these ten suggestions into two categories, a more easily achievable set I believe is required in order for XBLA to survive, and a more challenging set that I believe would make XBLA thrive, by drawing in large number of talented developers, a lot of great games, and new audiences.
- Create a fair contract that doesn’t require negotiation. Everyone I know who’s been handed Microsoft’s boilerplate distribution contract for XBLA was angered and offended. It’s the most exploitative, one-sided distribution contract I’ve seen. I suspect it’s a holdover from the days where Microsoft only dealt with large publishers/developers and contracts were handled by teams of lawyers on both sides. Lawyers are probably used to conducting this kind of adversarial negotiation that begins with an unreasonably one-sided version. Smaller developers that don’t have a legal department are not used to this sort of thing. We each waste months of our time and Microsoft’s time negotiating the same stuff out of the contract, over, and over again. All that time, and in some cases money, would be much better spent making the game better. Efficiency aside, it’s a terrible way to begin a business relationship.
- Solve the content discovery problem. This issue has three components. First, is bringing as many 360s online as possible. Microsoft is already doing a good job here. Last I heard the 360 has the highest online connectivity rate among consoles. Second, making it obvious to players that they can buy and download games. Too many people still don’t know what XBLA is, or that you can download games directly onto your 360. The dashboard should be designed in a way that makes it obvious that this is a possibility, and make it super easy to get into. Third, It’s important to put the best content in front of the player so that they have a positive experience purchasing games and would want to do it again. There are many approaches to this: Steam’s discounted promotions, the App Store’s Featured section, Kongregate’s top rated games list (top rated new games, all time top rated games, etc). The platform owner needs to make it SUPER easy for their users to buy software. This is how Apple, intentionally or not, solved the so called “piracy issue” (don’t get me started on how wrongheaded it is to think of those that download a game for free as “pirates”). The purchase process is so simple, smooth and painless that it’s easier to pay for an app than to “pirate” it.
- Stop requiring independent developers to publish through MGS. All you’re doing is adding overhead to the process by assigning a producer to the game and making developers unhappy by giving them a lower rev share (to cover MGS’ added overhead costs). For the most part, everyone I know who has worked with Microsoft said it was not only unhelpful to have a producer, it actually became yet another thing that needed to be managed and took focus away from developing the game. I’d like to note that Kevin Hathaway seems to be an exception. I keep hearing developers say positive things about him. Every other distribution channel allows independent developers to self publish, without a producer, and I see no evidence that having a producer on a game makes it better.
- Drop the TCRs, make updating easy. TCRs add months to a game’s development time that could be better used polishing the game. Many of these requirements hardly ever come up or could be dealt with behind the scenes by Microsoft instead of requiring every developer to write their own solution. I don’t see any evidence that enforcing these TCRs results in better games. PC games are of comparable quality despite the much wider range of hardware they run on and there’s no TCR list. Instead of enforcing time consuming and expensive compliance testing, Microsoft could make it trivial for developers to release updates so that whatever issues come up after launch can be easily and quickly addressed by the developer. This model is working wonderfully on both Steam and the App Store.
- Get rid of the exclusivity requirement for independent developers. This is really an aspect of creating a fair contract, but it’s important enough that I thought it should be mentioned separately. XBLA is no longer the king it used to be. Microsoft is no longer in a position to demand exclusivity now that PSN has more developers and is growing, while XBLA is losing developers. Exclusivity was very popular among casual game portals in the mid 2000’s. If you put your game on Yahoo Games, Big Fish Games wouldn’t touch you. For whatever reason, this practice has since disappeared in the casual space. Those who believe requiring exclusivity is a good business strategy might want to ask the casual portals why they no longer do it. I’m sure there’s a good reason, and I’m sure it’s somehow connected to the fact that exclusivity requirements are not good for developers or players.
- Drop the greenlight process and open up development to everyone. Is the quality of the average game on XBLA higher than the average game on the App Store? Probably. There’s a ton of crap on the App Store, but the App Store has hundreds of thousands of games, compared to mere hundreds on XBLA. There are many, many more great games on the App Store than there are on XBLA. If done right, the curated approach may result in higher average quality, but it definitely results in fewer good games because of the overhead involved with bringing in each game. Players judge the quality of a platform by the quality and quantity of the BEST games available on it, not by the AVERAGE quality of all games.Even if you disagree with this assertion, Microsoft’s current approach to a curated portfolio is broken in two ways: First, it’s very difficult to know which games will be good based on what the people at Microsoft see when they greenlight the game. Second, 360 retail publishers are allowed to put whatever games they want on XBLA. That’s how you end up with XBLA games like Yaris, NBA Unrivaled, Crazy Mouse, and Beat’n Groovy, which have Metacritic scores of 17, 25, 28, and 29 respectively.You might ask, then, why Steam has done so well despite its curated portfolio? Other than being the easiest distribution channel to work with (see above), Steam is just one distribution channel on an open platform (Windows / Mac). Developers can make PC games without permission from Valve, they can distribute them directly to an audience they build up or via other distribution channels. World of Goo generated as much revenue via direct sales as it did via Steam. Minecraft generated pretty much all its revenue via direct sales. Open platforms also create room for innovative distribution models like the Humble Bundle.
- Make every console a dev kit. Windows and Mac, by their nature, have always been that way. Apple and Google have done a good job of it with iPhone and Android. It may require a lot of work, but there is nothing stopping Microsoft from doing this as well. This is actually one of the reasons Microsoft is the console maker best-poised to undergo this transformation. XNA Creators Club already allows people to make games and run them on their 360 at home. There are a few things that need to change though. First, signing up for the Creators Club has an awful user experience. It took me a while to figure out where to sign up and how. Second, the followup identity verification process was so complex and invasive that I actually couldn’t bring myself to get all the way through it. Third, developers are restricted to using XNA for developing 360 games as part of the Creators Club. With iOS, Objective C presents a similar obstacle, but it’s easy to compile C++ code along with some minimal Objective C to create iOS apps. This makes porting games to iOS a lot easier. Rewriting a game in a different language is a much more daunting task.
- Automate everything. Automation has to be utilized in order to handle the high volume of games being added to an open distribution channel. With the App Store, everything is automated and a developer can release a game without ever talking to a human. The registration process, distribution agreement, game submission, financial reporting, releasing updates, setting prices (as well as temporary promotional prices), and setting release dates and regional availability are all done via a simple web interface.
- Drop the ESRB in favor of a self administered rating system. This is another advantage the App Store has over consoles. It takes weeks, and thousands of dollars, to get a game rated by all the domestic and international ratings agencies needed to launch a game globally. The ESRB in particular is a nightmare to deal with (If you Google around, it’s easy to find people speaking out about the ESRB behaving like a bully — and I’ve had personal experience with that). If consoles switch to a self administered rating system similar to Apple’s system it will save developers a significant amount of time and money.
- Make avatar related requirements optional. I don’t know a single developer who wants to make toys for avatars. It’s not fun and it inflates the game’s budget. If Microsoft wants to keep adding new toys to avatars, they might want to hire people to do it in-house, or offer incentives for developers to do it. Kongregate, for example, gives developers a larger share of ad revenue if they integrate with their APIs. They’d have a lot fewer games if they required developers to do this instead of providing incentives for them to do so.
A Final Thought…
XBLA played a pivotal role in the popularization of independent games. Most of the early indie hits were XBLA games, starting with N+, then Castle Crashers and Braid, and continuing with Limbo, Super Meat Boy and others.
Microsoft proved that indie games can be million sellers on consoles, and then sat on its laurels for half a decade as more nimble and innovative companies like Valve and Apple took the lead.
I would love to see Microsoft rise to the challenge of adapting to new digital distribution landscapes. More healthy platforms means more interesting, creative games that push the limits of our medium.
For players and developers this is an end in itself. For the industry as whole, it means growth through the discovery of new audiences.