Mid-tier companies need to slim down to indie size or face an uncertain future, warned Digi-Capital founder and MD Tim Merel during a GDC panel.
He argued that the games industry is putting increasing pressure on companies that occupy the space between indies and corporates, saying "stable growth is putting the big squeeze on mid-tier companies."
While large corporations like Supercell and King can use their hit IPs to enjoy large userbases and complete infrastructures, neither indies or mid-tier companies can boast the same.
Slimming pills can be bitter to swallow
However, Merel argues that indie companies make up for this by operating at low cost with the potential to generate hit IPs of the future.
He believes mid-tier companies, meanwhile, may have hit IP potential, but it is hampered by higher production costs, low cashflow and smaller userbases than their corporate counterparts.
To remedy this, he reccomends that mid-tier companies "slim down to be nimble like an indie," while corporate firms can "cut costs by acquiring indies with hit IP potential."
Consequently indie developers can leapfrog the mid-tier altogether and get acquired by a larger company.