Why indie mobile game development is no longer a worthwhile commercial prospect
Nicholas Lister on learning to become your bank manager
Nicholas Lister is an independent game developer from London and the founder of Playhouse Games. His first game, Imp Paired, was released on 30 July.
Running a business as an independent game developer is a pretty personal process. It's often very difficult to dissociate your desire for an idea to succeed from a rational analysis of whether it actually will.
I recently came to a decision that, rationally speaking, it would be foolhardy to continue to pursue independent game development as a stand-alone commercial prospect.
I am still making games independently, but I am no longer doing so in a way that holds the sustainability of that endeavour up as a predominant aim. The question is, why?
Becoming a banker
There's a little thought tool I use when coming up with a business idea.
I imagine I am a bank manager and someone is coming to me with this idea looking for a loan to fund it. It is my job to make sure that the bank doesn't lose money on its investments.
I am indifferent to the plight of the individual in front of me and I have a day filled with other loan decisions, mostly safe prospects granting capital for equipment to already established businesses; lending start-up capital for a catering company might be about as risky as it gets.
The question is whether I would countenance the notion of lending money to fund this idea in front of me.
Since starting to do this, whenever I have put the idea of independently making and selling mobile games in front of myself-as-bank-manager, I find myself suggesting to the imaginary unfortunate in front of me that I could better invest my money by putting it all on Lucky Lad in the 3:20 at Chepstow.
There are some notable exceptions, of course. A mobile version of a recent and very popular game from another platform, for instance, given the right arrangements, is about as close to a surefire yes as you are likely to get.
However, the point is that if my bank manager self isn't willing to consider the plan as a commercial prospect, then neither should I.
Meddling with myths
It's a simple tool, but when I apply it I start to unravel some of the most common fantasies that mobile indie developers use to drive their work.
Applying a clever monetisation model looks risky; even if it's tried and tested, the niche it's exploiting may well be saturated around the time you get there.
Spreading the bet by making more, smaller games using these tried and tested techniques is a sensible option, but it's still not enough to convince me that on average they will perform well enough to match the risk-reward balance of the catering start-up I just saw or the carpenter I've got coming in next.
Lister's first iOS release Imp Paired
I have met a lot of mobile indie developers who spend their working days turning out commercial games that aren't even, by the bank manager test, that commercial.
Some of them have always been chasing the big payout - looking at the likes of Angry Birds, for instance, and thinking they wanted a slice of that.
Some of them started out just wanting to make games, discovered they weren't making money so jumped on to more and more commercial strategies to keep themselves going until they get to a point where they're only making games that are commercial strategies.
Now that's fine. Those people may all be happy with what they're doing. They may well have managed to make some money, even if continuing market saturation has meant that the days of the big payout are fading and that their commercial strategies are becoming less and less effective. But the thought of going down that route scares the hell out of me.
It seems to me that the landscape of games is huge and beautiful and full of wonderful things and that the games industry's commercial mines excavate, at a very great pace, a relatively narrow vein that runs down the middle.
That's not to say that prospectors don't find success elsewhere. They do. They discover rich mineral deposits in unlikely places. Some people have a better knack for finding them out than others and a serious find usually attracts a gold rush.
However, I got into making games to explore the huge and beautiful landscape, so scraping a living working in the commercial mines seems like a pretty dismal prospect to me. I think I would rather have a ranch that generates enough yield to allow me, every once in a while, to go on an exploratory expedition into the wilderness.
What I am trying to say via what's admittedly and over elaborate metaphor is that, in the general case, reconciling running a mobile game development business with the desire to make independently minded games is untenable, and if I have to choose one I am going to choose to be independently minded.
So where does that leave me? It leaves me with an independent game development habit that is almost certainly going to lose money.
Supporting this loss requires a commercial venture, and by that I mean an actual commercial venture that my bank manager would certainly entertain.
It could be any realistic prospect. In my case it is been founding Playhouse, a company that designs and implements physical and digital games for use within other organisations, helping them address intra-organisational issues in a playful and humane way.
That business draws on the skills I have developed as a game developer, as well as those from my architectural background. As a bonus, it continues to inform my thinking about games, but more importantly than that, running this enterprise allows me to make games outside of that core business.
Games that are allowed to lose money. Games that are allowed, in fact, to recoup not a single penny.
It allows me to make those games not because they will ship copies, but because they are interesting games to make.
Having this split in a studio between making games for clients and making games for yourself is far from unusual, but I think the tone in which I'm doing it here represents a small part of a shift in thinking that I see reflected among other independent developers.
When I first entered the games industry the dominant message was that studios were running a commercial arm until the games division could take over. Here, though, there's a will to run a commercial arm so that the games division doesn't have to take over.
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[x]cube GAMES | 08:35 - 10 September 2013
As an individual game developer, the makers of Temple Run are pretty successful... They started with two persons and they are doing big now. Its the right game concept you need to have for a successful game.
Keith Andrew | 15:35 - 6 September 2013
J. 'Hammer' Helmer - Guest posts are chosen by industry experience and their ability to say something of interest - two areas where Nicholas is utterly qualified.
Also, bringing someone's personal life into the debate is not on. Consider that a warning.
J.'Hammer' Helmer | 15:17 - 6 September 2013
For Kevin - your post begins with, "It's a crying shame when any mobile games developer is able to craft a genuinely good game but can get market traction....even to the extent of 'just' being able to pay their bills and keep doing what they love doing. "
I say no it is not. That is why there are PUBLISHERS. Just because it has gotten easy for any geek off the street to toss a game in the store doesn't make them a publisher. If any quality game designer/developer wants to talk about being able to pay their bills and keep doing what they love doing - talk to me about a job at my game studio. ;)
J.'Hammer' Helmer | 15:14 - 6 September 2013
I'm not sure why this is a feature article. A guest author writes about an "indie developer" who has put his first game in the store, has no marketing, no pr, no budget, no staff, and frankly NO CLUE - and he's treated like an expert as he says it's a doomed industry.
Yes, getting found in the store is hard. So is getting any other product in the world found. That's where the business comes in, and this IS a business. Instead of reading this article, I suggest readers to read some of the stuff that a poster in the comments, Nicholas Lovell, has written that actually applies to this industry.
I don't want to be overly harsh, but as a true entrepreneur across a few different industries, I scratch my head at the creative types who have no idea how business works (seriously, you think a caterer is a good risk?) constantly crying how this industry doesn't just make them successful by plugging a game into the store.
Keith Andrew | 12:17 - 6 September 2013
I think we're splitting hairs a little here. :)
Nicholas Lovell | 11:54 - 6 September 2013
Yes, but my point is that it's deeply flawed. if you think like a bank manager, there is no possibility of ever making a game, ever.
But not if you think like a financier.
Keith Andrew | 10:38 - 6 September 2013
Nicholas - I can't speak for (the other) Nicholas, but I don't imagine he was intending to be quite that literal with his bank manager analogy. I think he's just suggesting developers view their projects with a little financial responsibility.
Kevin Corti | 09:30 - 6 September 2013
If you are a mobile games developer and user acquisition/app store visibility is a big concern, I have a short survey online that I'd hugely appreciate you filling in.
http://tinyurl.com/losnmt5 - 45 seconds (literally)
It's to inform an early-stage business idea. I don't capture name, email address etc and no slimy sales guy will call - I promise.
Igor McBell | 22:42 - 5 September 2013
Nicholas Lovell | 20:12 - 5 September 2013
The bank manager analogy is both flawed and dangerous.
A bank manager is looking at a DEBT risk. In this scenario, his financial return is an interest rate, say 5%. His risk is that all the loan does not get repaid. Downside risk = 100% of his investment; Upside risk = he gets his money back +5%. No wonder a bank manager is completely focused on reducing downside risk: there is no possibility of him benefiting from the upside.
But games are an EQUITY risk. An equity investor's financial return can be many multiples of the initial investment. You could make a 20% return, or a 200% or a 2,000% return. Downside risk is again 100% of your investment, but the upside is unlimited.
If you consider a game the way that your bank manager would, there is no possible way that it would make a good investment. None at all. Ever. For anyone. It's just not the way that financial returns in games work.
More broadly, go and read the Black Swan, by Nassim Taleb, to get more insight into the issue you are addressing. For what it's worth, taking a contract job to pay the bills while working on "unlimited upside" projects, which is what you are doing, is exactly the strategy that Taleb would recommend.
But it's got nothing to do with bank managers.
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