Continuing with my weekly obsession in trying to understand what the heck is going on with gaming, I continue with . . . more of the same. After all there’s a chance gaming is part of your career plans, and even if it isn’t, it might whether you like it or not.
Up this week, how the hell will anyone make money in video game?
The video game industry always involved gambles, and as some pretty big stinkers and unexpected hits can tell you, some gambles can get pretty odd. Some series seem to be able to do no wrong, unexpected hits come, guaranteed ideas fail. Some of this seems to be despite the actual quality of the games themselves.
Of course that’s the way it is, but in the disrupted world of gaming, I’m trying to get a handle on just how people and companies are going to handle the gamble – and make money. Here’s my theories – with a caveat.
I am trying to piece things together here from a lot of data, information, trends, experience, and gut checks. I may be totally wrong here, so call me out and explain why, because I really want to get a handle on this.
So on to what I’ve seen. Let’s start with the big names . . .
The sale of THQ’s various properties provides a few insights into what the people with money want.. Few sales are surprising (I mean who wouldn’t want the South park Property?), Vigil didn’t sell (Darksiders it seems is not quite the name people would expect), and THQ’s long affiliation with Wrestling is gone. People got the sure stuff.
Also on the high end we have EA, and their $45 million dollar loss. EA is still releasing Madden titles for reasons that remain obvious, even if they ditched their NBA Live game – let’s face it, Madden pays the bills. They’re hoping for – and scaling back to – reliable properties, and are of course working on digital. Sure stuff.
So on the high end we see – reliable properties that people know, some focus, and of course, digital (where everyone and their brother is going). So, yes, I think their future is making money with sequelitis crossed with digitial distribution, lowered costs, and smaller properties on the digital end.
I also see success with large-portfolio companies like Nexon who may not have the revenue of, say, an EA, but have a diverse international group of properties. Also I’m biased towards Dungeon Fighter, but that’s another story entirely.
On the lower end . . .wow.
Once you get beyond the big names we enter a world of failures, successes, Kickstarters, free-to-play insanity and imagination, and more. It seems every few days we get a story of some new game, new success, or neat project. of course we also get tales of failure, but that’s kind of to be expected.
I’m not sure how to measure success on the mid-to-low end because there’s so much to measure. The point is that on the lower end, it’s harder to find patterns because there’s so much to study. Still . . .
As I try to make sense of all of this, a few patterns emerge:
The Big Companies are going to basically go for the franchise model, creating big titles and big tie-ins because that seems to be the safe bet – of course keeping fingers in digital and other areas because that’s safe and smart. Frankly for them I see less originality, more big projects.
Career-wise, big companies may offer the most stable employment options if you can make it to a studio that isn’t laid off after a big launch. However, with franchising and DLC we might see that possibility decline, there may actually be more stability.
The danger I see is that I am not sure these companies do know what they’re doing, if they can move with the times, and if they even think like game companies anymore. You could find a sure thing cut off due to some bad bureaucratic decision.
The middle-range companies, those who may not be the big names but have clout, have to make some hard decisions about how they do things. Going to create a new big-name property may sound nice, but it’s hard and expensive, and a risk. Going for an effective, diverse portfolio (and perhaps taking advantage of distribution systems), is probably the best bet. The biggest danger for mid-rangers will be trying to ape the success of others, and failing (or facing a saturated market). I’m concerned especially about MMOs.
Mid-range companies seem to be more unpredictable to me, though those with diverse portfolios may be stable if you can latch onto working on a good property. Networking is probably key to getting into mid-range properties.
This is an area where I’m not sure of. A company with a good portfolio balance versus size and profit could make itself unshakable if run right. But in the viciously changing games market, there could be a lot of vulnerability. Still, seeing how some companies who are smaller have niched or made themselves survivable gives me hope.
Still, I see mid-rangers being in danger of being squeezed out.
Small Companies And Indie Gamers:
Well, here we go . . . this is where it gets hard. Harder.
See there’s a huge grouping of game developers and companies that don’t fit a lot of the other models. The part-timers, the independents, the single-titlers, etc. From Minecraft to Fruit Ninja, there’s all these smaller groups and individuals with success stories – and dismal failures.
The thing is there’s almost no barrier to writing and distributing a game now, except getting it into the distribution services. You could stop reading this article right now and decide to code something.
That being said, it’s making sure it makes money, and that’s where things get crazy. There’s plenty of success stories, but many are different.
However I do see the following patterns:
- One hit can make a company or a person (Minecraft, Angry Birds) and be a radical game-changer.
- There’s a superstar effect out there that can quickly squeeze people out if they don’t get the big hits. You might never duplicate that One Big Hit as they just made sure there’s no market space.
- Persistence is key (Rovio after all didn’t start with Angry Birds). You have to keep at it.
- Established personalities and properties help – look at Kickstarters where a legacy gets people all riled up. Not that it always works, but when some known property or person is involved, I see it fly across gaming sites.
- Putting out copies, tests, and building community relations helps. In short gaming . . . is becoming like writing at least on the lower end.
- There will be endless guides to surviving as an indie gamer or using kickstarter. I am pretty sure many will be bullshit.
Thats where I see about making money. Or in short:
* Big named companies may provide you some stability but a restricted series of opportunities.
* Mid-range companies show promise, and my limited experience is that networking is the way to get into them and their properties.
* Smaller companies and indie games . . . well knock yourself out. There’s many options, all of them confusing, and you’ll need to be pretty savvy to make it work.
There’s my takes. Now I want to hear yours.
No, really, because this is still bloody confusing.
Steven Savage is a Geek 2.0 writer, speaker, blogger, and job coach. He blogs on careers at http://www.fantopro.com/, nerd and geek culture at http://www.nerdcaliber.com/, and does a site of creative tools at http://www.seventhsanctum.com/. He can be reached at https://www.stevensavage.com/.