The balance of power in the games industry is shifting.
I donít think the future of the games industry has ever looked so unclear as it does right now, and part of this uncertainty stems from the resurgence of the indie developer on big-name consoles.
This isnít a new trend of course, and Iíve seen many people suggest that it received widespread notoriety thanks to the success of Jonathan Blowís XBLA hit Braid. Iíd have to agree.
Things quickly picked up speed from there, and here we are today in an industry where indie developers no longer need the backing of big entities to release products and make money. Itíd be crazy to propose a future where publishers are suddenly irrelevant but a change in attitude is required to adapt to whatever comes next.
Itís refreshing to see that most of the big stables have taken a positive view to supporting new talent lately, and several top-flight execs have spoken about the need to approach indies as equals, instead of a threat or irrelevancy. It seems everyoneís slowly coming around to the idea.
I can see both sides of the coin here. Why would indies pay a lot of their own money to a platform holder or publisher when they could follow Mojangís example and fund their game through an iterative paid-alpha model? Similarly, why not take the project to Kickstarter and try to fund it there?
You would own 100% of the IP rights and keep the profits for yourself. Best of all you wouldnít have publishers leaning over your shoulder telling you that what youíre doing is wrong because some focus-testing group said so.
It all sounds very lovely doesnít it? The harsh reality is that Kickstarters can fail, submitting games on iTunes without featured placement is like entering a lottery, and paid alphas take months of work without any guaranteed income. In the end big publishers or format holders really can give indies a leg-up. They can be a useful asset.
This isnít always about the big corporate guy pissing on the little players, because any success enjoyed is mutually beneficial. If an indie game does well on a digital platform like XBLA, both Microsoft and the indie team benefit. Both sides can happily co-exist and reap great rewards, and Sony has recognised this full-well with PS4.
Jonathan Blowís next game The Witness is a PS4-timed exclusive. No money changed hands. He just prefers the way Sony is treating him and his vision. Case and point.
The signs are all around you. I keep using this example, but when Square-Enix calls the high-selling, critically-acclaimed Tomb Raider a failure then itís not a stretch to say that these large-scale operations are staring down a crisis waiting to happen.
If I were a Crystal Dynamics employee Iíd take having my hard work being branded a ďfailureĒ as a slap in the face with a heavy chain-mail glove. The game hasnít been out long, clearly had a high production cost and will most likely enjoy long-tail sales for many months to come.
Whatís really happening is that production costs are rising to meet expectations. You neednít be a maths whizz to understand that if a game costs a lot to make, it will need to sell exceptionally well to recoup the spend. Veteran game analyst Bill Pidgeon recently estimated that games with production cost of around $100 million need to sell between five and ten million units to break even.
That is poor economics if ever I saw it and some have also called out Pidgeonís equations on the matter, but the sentiment stands that triple-a game budgets are through the roof. When you factor in marketing budgets, staff salaries, raw development cost, engine licensing, shipping, needlessly extravagant press events and showing face at expos like E3, TGS and gamescom, you may start to ask yourself if much of this is fat just begging to be trimmed.
After Braid showed the world that indies could succeed on big publishing platforms we started to see something of a gold rush. The amount of independently-created, low cost-high return games appearing on Xbox Live and PSN began to swell. Did every indie game released on both formats see the same success? No, of course not.
These platforms were Ė depending on who you ask Ė monstrously expensive to publish on. Some teams have claimed they were charged thousands of dollars to re-submit their game every time an update was required. I spoke with Prison Architect dev Introversion about this last year and they were more than happy to put Microsoftís practice to the sword.
I realise that one studio canít speak for every developer on Xbox Live Arcade, but in this one instance I was a little taken aback. If this really is true across the board then it seems like Microsoft is charging these teams a lot for the privilege of being tucked away, several button presses under the dashboard.
Introversionís QA bill for Darwinia+ under Microsoft was $30,000. It was a financial flop compared to Prison Architectís paid alpha model.
The teamís experience of Xbox Live with Darwinia+ showed them just how financially unsound Microsoftís marketplace could be. Sure Braid sold well, but that was before the rush to make your millions through digital channels became a widespread wind-pissing contest. Everyone got very wet and only a handful of lucky teams saw success while staying relatively dry.
Now, Iím sorry to have to do this again but Iíll type this next bit in big bold letters so you understand me clearly:
I am neither a fanboy of PS3 or Xbox 360. I own both formats and think they are both superb. Iím focusing on PS4 here because Ė obviously Ė the next Xbox hasnít been announced yet. For all I know Microsoft has made the best indie platform ever seen, but I canít say that because I havenít seen it yet.
Sony has really impressed me lately. Someone high up the executive food chain has realised that PS4 needed to embrace the indie community with open arms or it risked being the last console the company ever produced. Give that person a raise Sony, seriously theyíve earned it.
They seem to be doing everything correctly so far, and I think unless Microsoft can match or surpass Sonyís efforts then thereís a very real danger that the new Xbox could struggle to meet the lofty financials it needs to survive. Again, Iím talking theoretically as I havenít seen the new Xbox yet.
Sony created the PS4 in close collaboration with developers and asked them what they wanted it to do, rather than creating it internally with blinkers on. This extended to indie developers like Double Fine, who were asked to play around with dev kits to see how they might use it in future. That is positively refreshing.
The end result of collaboration, open dialogue and frank discussion between developer and platform holder. Such an open forum is surely the future.
We heard recently that PS4, PS3 and PS Vita will support Unity, which is fast becoming the Ďgo-toí engine of choice for cash-poor indies or teams looking for a flexible, open and relatively easy-to-use engine.
Compare that to the Sony of old, which released a console so restrictively punishing to code for at the outset, that Square-Enix had to develop its own set of programming tools for its then-PS3 exclusive Final Fantasy 13. That is absolutely insane and should never have happened in the first place.
But much like the indie scene, this is an iterative process and PS4 has been tweaked, refined and made better because of Sonyís transparent approach to the consoleís creation. One of the PS4′s designers Mark Cerny has called the process ďdeveloper-centricĒ.
Now, that might seem obvious to say, but consider this: selling consoles is one thing but what sells hardware? Games. How do you get more games? You make the platform easier to publish on and offer the best potential return on investment to the developer.
You may then ask yourself why it has taken Sony and Microsoft so long to reach this conclusion, but in reality this has always been the case. Theyíre not stupid, itís just that the nature of games has changed.
The indie scene wasnít as lucrative back ten years ago as it is now, Kickstarter didnít exist, among other factors. Now seems like the perfect time to grab the bull by the horns and itís smart that Sony is using the coming of the next cycle to change tact.
Not a minute too soon either it seems, as things were looking pretty hairy for a while out there in triple-a land. THQ collapsed, many big players posted negative figures this financial year and several multi-million releases failed to break even. The change has to happen now for some companies. It really is do or die time.
Sony made clear that it was supporting the indie scene at GDC last month, along with an initial list of titles on the release slate. The response from the development scene and from readers here seems to suggest that this is the correct answer to many difficult questions.
Console indie games are going to explode even further in the next five years. If you donít believe that then you need to start looking closer at the way the industry is going. This cannot be escaped or denied and in the end we, the gamers, will become richer for the experience.
The question is: which of todayís big players will still be around by then to reap the rewards?
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