Why indie mobile game development is no longer a worthwhile commercial prospect

Nicholas Lister on learning to become your bank manager

Why indie mobile game development is no longer a worthwhile commercial prospect
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.

Getting real

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.

PocketGamer.biz regularly posts content from a variety of guest writers across the games industry. These encompass a wide range of topics and people from different backgrounds and diversities, sharing their opinion on the hottest trending topics, undiscovered gems and what the future of the business holds.


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Kenny Lingus
2016- I just found this article.

Why in the FUCK did a guy like this get to feature an article?

Big shock, 3 years later, his Playhouse Games is another ZERO to add to his resume.

In be more discriminating, rather than letting any old Tom Dick or Harry throw in his 2 cents after bombing out on his first and only game.
[x]cube GAMES
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
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
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
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
I think we're splitting hairs a little here. :)
Nicholas Lovell
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
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 Chief Evil Officer at Evil27 Games Limited
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
great comment.
Nicholas Lovell
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.
Kevin Corti Chief Evil Officer at Evil27 Games Limited
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.

The way I see it is that the mobile games discovery process is fundamentally broken for both developers and consumers.

• App charts are crudely based on installs or ‘top grossing’ sales revenues neither of which correlates at all well with quality or personalized targeting and thus leads often to very high user attrition.
• Chart positioning is crucial for ‘organic’ (free) user acquisition as only then is a game visible to prospective players. Yet chart positioning can be effectively bought by large publishers through incentivised installs, heavy advertising campaigns, by leveraging existing audiences or expensive licensed IP. Currently, after initial expenditure on the MVP version of a game, developers need to spend anything up to $100k just on initial user acquisition in order to gain sufficient time and user analytics data to optimise the commercial performance of the game (early/latter stage retention, engagement, monetisation)…which, of course, may not happen.
• Curated consumer web sites are unscientific, being influenced by advertising spend, PR budgets, industry/cultural favouritism and, in any case, cannot cater for the scale of games being released across different territories.
• Cross-promotion tools do not work for developers who lack significant existing user numbers.
• The Android market is highly fractured with hundreds of individual stores.
• Platform owners have no commercial incentive to help players find the very best games and existing recommendation solutions have so far failed.
As a result:
• All but the largest (or luckiest) game developers suffer as good games do not get the visibility they need to be commercially viable.
• Consumers trying to find games they like face frequent frustration, wasted time and sometimes money.

It's an area I'm personally looking at - www.everyonesplaying.com - but a tough nut to crack for sure.
You lot make some interesting points

I think if I were wearing my bank manager hat I might point out that there is no shortage of intellectual property being created and if you want your intellectual property to garner worth you have to treat it like any property developer would when in a buyer's market.

That doesn't necessarily mean that what you're making has to be junk. Nor is it to say that being a property developer in such a tight market is something people should necessarily walk away from. What I am saying is that I don't think focussing on that struggle is something that is going to benefit me personally in my ongoing practice as a game maker.
Tim Wicksteed
We released games at a similar time Nick so I'm interested to read your viewpoint. I don't agree that somehow interesting, self-rewarding titles are by definition uncommercial but I did enjoy reading about your strategy to continue making the games you want to, whilst still paying the bills, by going the in-house title route.

For me there's more to it than just wanting to make the games I want to though. My goal is to have an IP based business, as opposed to a service based one, where it's revenue is not directly tied to the hours worked.

Of course in the mean time, I can totally sympathize. I'm also scheduling in some contract work over the next few months but ill continue with the original games in the medium term.
Phil M

Exactly right, and that's the problem with contract work, which is you can end up in a situation, where you work your ass off each month making games for other people, just to cover your own living expenses and nothing more, i'e you are not moving forward yourself in any meaningful way. Regardless of what you do to bring in regular money, you have to look to the long term and work on your own IP in some fashion, even if it's only a few hours a week.
Jake Birkett
Yeah I agree with Phil. It is possible to make games are commercially successful that you also want to make and will have fun playing/testing. I've been doing that for years and it funds my free indie game "habit" like doing #onegameamonth However, it's not easy and doing contract work may well be easier (someone else can lose money instead of you). I've certainly done some contract work before and at the time it seemed useful (to get me out of a financial hole) but in hindsight I wished I'd found a way to survive whilst I made more of my own IP. Also, you definitely have to be happy working for someone else (not everyone likes this) plus not get stuck in a contract work rut if your ultimate aim is to make your own projects. Even if those projects are non-commercial you may still want to lavish some love and attention on them - and that takes time... lots of time.

Phil M
Lots of good points, but I'm not sure if I see the difference between what you are doing to bring in regular money, which is using games still in a strictly commercial sense even if they are being used indirectly, compared to say just doing more commercial type games for the games market? If you are going down the contract route you might as well just do work for hire game dev work.

I like your analogy to a bank manager as a judge on any new gaming venture, what I would say though is that you can do games which are enjoyable to work on and games that you yourself would want to play, and at the same time make them "commercial" in the sense that they should make a return for your time and energy spent on them, it doesn't necessarily have to be one or the other.