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How much work is needed to make a dollars worth of game?

Discussion in 'General Discussion' started by Arowx, Sep 30, 2016.

  1. GarBenjamin

    GarBenjamin

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  2. karlhulme

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    A dollars worth of game is something the market has to decide. This rarely maps onto the effort required to produce it, so some genres are better than others. Depends on many factors, but I think if you nail it down to a specific tight genre (not just indie!) then you should get a ballpark figure.

    Name some specific games that match what you'd like to create. Get the price the market has set for those games. (steamspy?) Then you need the time spent developing those games. Perhaps ask them? Or get the head count of the companies and look at their release rate to have a guess at the man-months that went into it.

    Avg Man-months required to make target type of game / Avg price of game in your genre = man-months per game dollar.

    You then have to translate an 'average man-month' for a man-month in your studio. If you're just starting out, then you'll be slower than an efficient team working on the fifth iteration of a game.

    And most importantly beware of survival bias. If you did this calculation for flappy bird you would determine that 1 man month is required to create a game dollar. (game took a month, charged a dollar). But this would ignore the many forgotten clones of that style of game which has brought the affective market rate to zero.

    I optimistic this is a very answerable question if you can nail down the genre tightly enough and get good comparative figures.
     
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  3. GarBenjamin

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  4. Arowx

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    Isn't the simple answer to my question selling a game for $1 more than it cost to make?!
     
  5. Ryiah

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    Only if you have someone willing to pay the amount.
     
  6. Arowx

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    Or N people willing to buy it at "games total cost + $1 / N".

    What if we could KickFinish a game based on the cost of making it divided by the number of people willing to buy it?
     
  7. neginfinity

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    No. Because that way you won't get your $1 because of the cuts you have to pay publisher/store, and because you'll also need to find a lunatic that will be willing to pay this kind of amount. If you factor in the time you spent, your development cost will end up in dozens of thousands of USD for pretty much anything you do.


    In this case you'll operate at loss, and wont recover your initial investment. Simply put, you'll lose money. Store at which you sell your game gets a cut. Then there's matter of taxes. There's also a high chance that you won't sell your N copies. Aaand don't forget that you'll need to support the game and release bugfixes for it after you put it onto the store. This will also cost money.
     
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  8. neginfinity

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    @Arowx: In short, it goes like this.

    Let's say your setup costs you $10k per month. It takes you a year to make a game. You support the game for two years.The store takes 30% cut. A copy is $10. Let's assume for simplicity that you due to some sort of miracle you're selling the same amount of copies every month after the release.

    So. The point where you can stop and calculate the profits you made during development of the game is the moment when you stop supporting it.

    In this scenario, the cost of developing the game is $120000. (12 months *10000$).
    However, the total cost of your operation is $360000, because you're still gonna pay while you are merely supporting the game.
    To recover that amount at first glance you'd need to sell $360000/$10 = 36000 copies, meaning 36000/24 = 1500 copies per month. If you're somehow selling 1500 copies per month, then people pay $15000 for your game. However, the store gets a 30% cut. Meaning that out of 15000$, you would receive $10500, which during the two-year support cycle would ammount to 252000$, meaning that that you'll lose $108000 at the end of the game's life.

    Which means that in order to get your money back, during the course of your support cycle, you in this idealized scheme would need to recover cost of this month's operation AND a bit of the development cost spent in the previous year during development phase. In this scenario it means that each month you'll need to recover (monthly operation cost) + (development cost) / (support duration in months). Which means that during suport phase you'll need to get $15000 per month. However, because the store gets 30% cut, it means that you actually need to get not $15000, but $15000/0.7 which is roughly 21429, alright, let's round it up to 21430. So, 2143 copies per month = 51432 copies during two year support cycle, which will bring you 360024 in revenue, meaning after 3 years you'll earn $24 in profits, while the store gets $154296 from selling your game. Also, you'll probably need to pay taxes for those $24.

    This is a fairly straightforward example, also it is quite unrealistic. In reality big games build up hype, which after release results in explosion of sales, and the number of sales per time period quickly goes down. As far as I can tell, the period of explosive sales is somewhere between one and three months. Past that point the studio will be working on the next game, while putting limited resources to the support... or they'll be looking for more ways to spark interest in their title OR to turn the game into cash (microtransactions, etc). The general idea is to recover development AND support cost during the gold rush period.

    In the end it is pretty much the same thing - there's a pile of cash, that steadily decreases due to operating costs for the studio AND the actions of the studio is continuous attempt to increase this pile beyond it's original amount.

    The difference with indie dev is that an independent developer can greatly decrease financial cost off development (by sacrificing some aspects of their life, sanity, etc). Aside from sacrificing their lifetime they'll never get back, and missing on opportunites they could utilize instead of making games, independent devleoper with a pet project is essentially working for free. What indie woudl be aiming at is ultimately getting enough sales to either retire or to ascend to studio status. Or, I don't know, just getting by doing what they like.
     
  9. Kiwasi

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    If you are going to do a full economic analysis you should also take into account a discount rate. For pretty established engineering projects we typically run up around 15%. But game dev is much riskier, I would expect discount rates around 30%.
     
  10. GarBenjamin

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    Vacation and supplementary retirement fund. :)
     
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  11. MV10

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    You'd pay taxes on a lot more than that. It's called income tax, not profit tax. :)
     
  12. neginfinity

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    Quick search shows that there are significant differences in tax laws in different countries. Some tax over 3 year period. Some tax over one year period. Some tax over profit (revenue - expenses). Some tax over revenue.

    That's one of the reasons why I didn't include taxes into the example.
     
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  13. Kiwasi

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    Not if you are running a business. In most jurisdictions business expenses are tax deductible. So businesses only pay tax on profit.

    Income tax is generally for people who make a wage.

    Consult an accountant in your area for more specific advice.
     
  14. MV10

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    I consult with my accountant weekly. In the US, at least, it isn't quite that cut and dry. Unless you incorporate (in which case corporate taxes then apply), generally the income is treated as pass-through. Yes certain business expeness are deductible (though usually not fully, and then we can dissemble about deprecation and other dull matters), but my point was any real business is likely to pay taxes on a lot more than just the profit neg's hypothetical indie was pocketing. And don't get me started on insanities like personal property tax (when I found out we had to pay annual taxes on the new paint we'd just put on the walls of our building... rage... yes, my accountant is on speed-dial.)
     
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  15. Kiwasi

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    Fair enough. In Australia it works they other way. If I buy a pair of shoes for work, I can typically write it off as a work related expense and thus reduce my effective income for tax purposes.
     
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  16. Ryiah

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    What you need to do is build a game that is related to LARPing (or another hobby) so you can write off supplies for it. :p
     
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  17. leegod

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    Basically, all games are fighting with all other games. Literally hundreds games are released in one day in all platforms. People don't have time to check it out all.

    If someone release FPS game, it should fight with Destiny and Call of Duty to take position of gamer's playing time.

    There is no exception whether maker is indie or AAA studio. From gamers, it doesn't matter because they pay the money. Money is equal to indie or AAA.

    So there will be no hope for indie if make games like AAA's already made.

    Even should not close.

    At the very concept, if totally stranger gamer heard about your game from their friend, with only one sentence like, "That game is doing xxxxx things, that game is about xxxxxxx",

    It should immediately arouse that "I want to play that game, totally unique!" in that stranger mind, and
    it should make that stranger speak that "I want to check it".

    If the indie game can't make it happen, then maybe it will not sold that well.

    It doesn't matter how that game is cost. $1 or $19.99, same destiny.
     
    Last edited: Oct 2, 2016
  18. leegod

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    Problem is what game is like that then? How to find and think that? How to know?
    Well, so game designer should be first visionary or psychic supernatural.

    Anyway, maybe we should start to check as many game as possible, and play it, and feel it. Maybe game developers are doing this already, so should feel what final product I will make will be.

    Would it being fun? unique? attractive?

    Nobody knows. Nor no time to check market. But I, you will know as same gamer. Nobody can deceive himself.

    But whether the game will be fun or not, actually it is hard to know without any prototype. So indie has no other option to start based on existing games that others made. Creation should start from copy.
     
  19. Aiursrage2k

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    If you were making a first person game you would need to do something weird like ani-chamber, or different like super hot


     
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  20. GarBenjamin

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    Overall, I agree with this. Probably the best thing an Indie who is copying AAA can do is create a game that causes gamers and press to say & write things along the lines of "It's just like AAA game except [whatever makes this game special]"

    Things along those lines. Not completely unique. But unique as in either fixing something most gamers hate about the AAA game... "it's just like The Witcher 3 except it's better and the graphics aren't quite as good!" would be the generic thing. Even that would likely prompt people to check it out.

    Better would be something along the lines of "It's just like The Witcher 3 except it doesn't drag on for so long, costs less and the graphics aren't as good!"

    The other way would be adding something new... "It's just like The Witcher 3 except you can hire people to go on quests with you. I've got a wicked archer to watch my back!"
     
  21. leegod

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    Wow yes like that. If with very unique concept, we will fine with no marketing budget. They will automatically talking about the game, also youtubers.
     
  22. Arowx

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    So do different tiers of games (indie, casual, A, AA, AAA) provide different levels of ROI (return on investment)?

    Do genres provide different ROI's e.g. FPS, Racing, Sports, Strategy, Adventure, Puzzle, Platform, Simulation, Sandbox, Turn Based?

    And What about Themes e.g. Fantasy, Sci-Fi, Historic, Abstract, IP Based?

    The same titles are released on multiple platforms but are some platforms better for some types of game in terms of ROI?

    Has anyone analysed this side of things or is the data even available?

    I've noticed that it is easy to find cost and revenue (box office) information on Movies but not so easy to find it for games?
     
    Last edited: Oct 2, 2016
  23. neginfinity

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    That's because game industry is newer and making games is chasing a moving target. Technologies change too quickly, while in case of movies many things are more straightforward.
     
  24. GarBenjamin

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    I've only seen the kind of information you are looking for on specific Indie games usually in the form of postmortems or blogs.
     
  25. Aiursrage2k

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  26. HonoraryBob

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    If your purpose is to figure out how to price your game, then your best bet is probably to look at the prices for similar games (and also make note of how well they sold, although there are obviously many factors involved in that). If you're going to sell through Steam, the staff will suggest a price and you'll have to reach an agreement with them. Other than that, you'll just need to go by your "gut" or just experiment with different prices until it sells. There isn't any labor-to-price formula that would make any sense for this.
     
  27. leegod

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    @Arowx Maybe it will hard to find because no company reveal their sales info.
    And all those records is past thing. Market changes continuously. Successful game can't be mimic in the future.

    I think if I have enough money, that statistic is not that much important because I can tolerate the fail and already hired specialists.

    And if I don't have enough money, that statistic is still not important because even if I know, I can't make that game.
     
  28. Aiursrage2k

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    Last edited: Oct 3, 2016
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  29. zombiegorilla

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    Yes.

    Yes.

    Yes, but to a much lesser degree than other factors.

    Most Definitely.

    Tons. Not only studio internal analysis, but many commercial entities. AppAnnie for example specializes in this. You can gain a ton of information from their data, including decent estimates of UA and ARPU.
    Games are a huge business, and there are a lot of people looking at the numbers, and placing multimillion dollar bets based on those numbers. But even with the best data, there are a lot of other contributing factors that aren't so simple. Quality of the actual game itself is a huge factor. Also the market shifts quickly, and games take a long time to develop. What started as a hot genre/game, may be overplayed by the time it releases. Or a competitor could beat you to the punch with a game that is more attractive to the same market. Or a new piece of hardware or upgrade could draw a lot of attention before you launch. The best stats can minimize risk/maximize roi, but it is a shifting landscape at the best of times.

    Movies are easy, they are few, come from only a handful of sources and have a single distribution chain. Games are multiplatform, source, marketplace and have a wider audience. The data points are too varied for all games, but you can get good data for a single distribution point/market.
     
    Last edited: Oct 3, 2016
  30. GarBenjamin

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    This is an excellent sample of games. Looking at the games and the # of sales it seems to make a good case for success not being tied to the level of effort / amount of work.

    That "What The Box?" game looks very cool. Such a simple yet also very interesting idea.
     
  31. Carve_Online

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    But it isn´t like cars, it is more like movies. I also think people are looking at a pricing point backwards. Your price should depend on what customers are willing to pay, not how many hours of work you put into it. Think about it, a movie ticket costs the same if you are going to see Titanic or Avatar than if you are going to see some Adam Sandler movie he shot in a weekend using a camcorder.

    If you can deliver 20+ hours of quality entertainment for your players, than it doesn´t matter if it took you 30 hours or 5000 hours to make the game, the price should be about $40-$60. If it takes you 1000 hours to make a game that is 3hrs of playtime, it doesn´t matter how much you value your time spent making the game, that game is not worth $60.
     
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  32. theANMATOR2b

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    Unless you are Hello Games. :eek::oops:
     
  33. GarBenjamin

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    Ha ha. I have a feeling the NMS and HG references will show up on game dev forums for quite a while.

    I think it's important to remember though that most folks weren't spending $60 for the NMS game they received. It seems that most people were spending $60 for the NMS that existed only in their mind.

    Also from what @Arowx mentioned earlier he is not looking at these kinds of games. Rather the minimal games needed to make money. Games much more along the lines of the games made by the devs @Aiursrage2k linked to above.

    Of course, it still fluctuates wildly. A couple of those games clearly had a larger scope and would take much more work yet they were not as well-received (sales) and as good of ROI (based on perceived effort) as the games that appear to be much simpler to create.

    That "What The Box?" game stands out. I am sure the dev wrestled with multiplayer but the core game content and play look very easy to create (compared to some of the other games). Yet the game is also quite unique.

    Where else can you be a living box and hide among other normal boxes and battle with your friends? It combines the core of what many people seem to love about multiplayer FPS with a unique (very simple) concept. Enough of the "old" to be easy to understand and just enough new to stand out.

    So for sure time in cannot predict money out. Level of effort in cannot predict money out. It could be linked to it sure if dev has a blog posting updates while they struggle to create the game. I see that more as a link between marketing / fanbase building activities and money generated than I do as level of effort and money generated.
     
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  34. Arowx

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    What about procedural games No Man's Sky and Elite: Dangerous in theory can provide endless 'play time'?

    And what about F2P (Free 2 Play) games they have no direct price as they use mechanics or adverts to provide income.
     
  35. Ryiah

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    Procedural content by itself isn't sufficient. I have fewer hours clocked in No Man's Sky than I do in Skyrim. The game just stopped being enjoyable around the two-hundred hours mark. That said I have hundreds of hours invested in roguelikes like Ancient Domains of Mystery because while the procedural world isn't that deep the gameplay mechanics are.
     
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  36. HonoraryBob

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    Only if 1) the procedural algorithms create enough compelling variety for people to keep playing rather than becoming repetitive; and 2) the gameplay is also compelling. I've made "infinite" procedural worlds but they tend to be rather repetitive, and might not work very well for a game. My impression of No Man's Sky is that it just repeats variations of the same stuff, varying the color, size, some aspects of shape, etc. But in the end, the pricing just depends on what people are willing to pay. You could write a great game, but if hardly anyone is willing to buy it then a successful price is going to have to be fairly low.
     
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  37. Arowx

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    OK I'll take the Ludum Dare October Challenge and try and make, finish and release a game and make > $48 dollars.

    Tools Unity / Blender / MS Paint / Inkscape / PC Dev platform

    What advice would you give me now on platform/genre/theme/features/marketing/production?

    Hopefully no one will read this! ;)
     
  38. GarBenjamin

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    Good luck! I'll ramble more later I am sure.
     
    Last edited: Oct 3, 2016
  39. Ryiah

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    You're allowed to use a previously developed non-LD title. Do you have any games that would be sellable if polished?

    You may want to pick one you enjoy yourself so you can more easily stay motivated. A game that allows you to largely skimp on one aspect (artwork for a roguelike) wouldn't be a bad idea either.

    You're doomed. Everyone will see it now. :p
     
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  40. theANMATOR2b

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    Yeah - I agree @Arowx I've checked out our games before and even made a note to return again to find some 'inspiration'.
    I think you could use one of your previous games - put a story behind it, add some stylized or higher quality art, characters, fx,, lighting, add in some mechanics that you may have considered when developing them the first time, and depending upon scope, input method, and complexity - that may give direction as to which platform to publish to first.
     
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  41. Aiursrage2k

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    Binding of issac only took 3 months dev time, sold over 2 million units. Whereas axiom verge took 6 years part time solo dev, people dont care how much time you put into it (except when they do IE "asset flipping"), they only care about the quality of the product.
     
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  42. Aiursrage2k

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    I am going to go with that zelda 64 game he was working on. A zelda 64 rouge like would work I think
     
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  43. Arowx

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    Well if you follow my sig to itch.io -> https://arowx.itch.io/

    I have 33 games there and that's not all of my LD games and unpublished works.
     
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  44. Arowx

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    Unity is now gathering a lot of data with it's cloud services could Unity provide game play and IAP statistics*?

    Covering platforms/themes/genres/IAP/units sold and even development times?

    *With agreement from the games developer.
     
  45. Ryiah

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    Does that include the snowglobe and cube mark? :p
     
  46. Arowx

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    No only the games.
     
  47. derf

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    No one has sat down and tried to craft a formula to explain the monetary value of time too an entertainment value to the consumer expectation. One reason it is not even possible. The monetary value of time is different between people. Look at the cost per hour between a doctor, a lawyer and a car mechanic.

    For video game development, as a indie developer you will find you have to decide your price point before you even begin to write code or review assets.

    You will have to decide on a budget, whether it is $0 dollars or $10,000 dollars.

    Finally you will have to gauge your own ability and knowledge on what you can possibly accomplish as a full release product and whether it is on mobile, PC or both.

    These will obviously influence your own price point for your work.

    My personal decisions on price point are influenced mostly by the budget I use on it, the amount of elements/features/assets I use on it and finally my target audience.

    Mobile consumers seems to like cheap/low price IAP, but PC consumers seem to expect their version be a slightly higher value compared to a mobile counterpart with no IAP.

    So I stick to small budgets (largest budget was about $500 bucks) and the game play is tight and focused. I do not spend too much time trying to incorporate multiple game play elements, especially if they do not add to the gaming experience.

    The most expensive game I have in development would be about $8 bucks, and the cheapest are free with a couple 0.99 cents or $1.99. I have decided to shy away from the IAP model for mobile.
     
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  48. Carve_Online

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    I said quality playtime. Which was one of the criticism of NMS.. Even people who liked the game realized that the pattern of ´progression´ wasn´t really even progression, just do the exact same thing over and over until you march your way to the center of the universe where ´spoiler alert´ you are magically reset and do it all again.
     
  49. gian-reto-alig

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    Takeaway point for that is to plan accordingly and
    1) prototype a lot. Don't theorycraft what could be fun and what could sell. Prototype and test it, as quick and dirty as possible. Do a game jam, throw the rough output in front of people to play, run kickstarter for projects that seem to be fun to see if there is an actual demand.
    2) Don't try to run after trends, or overanalyze the market. Trends change quickly, if the trend is established enough for you to read about it, its most probably too late (no point in being Zombieshooter #999). The Market is fickle, and unless you are a professional analyst, and spend most of your time analyzing the market, don't even try.
    3) Don't ever copy/paste. You cannot compete with established devs and brands anyway, so copycatting is a sureway to failure. Sure, taking out successfull parts of other games can speed up your own design process. And a design to alien from existing ideas can be a bad thing for SOME players.
    But if you do not spend time on finding the fun in YOUR game concept, or if you have NO game concept of your own to start with... you are basically doing a "me too" business. And that only works if a) demand is higher than supply, which in case of games is nonsense (people might want more games of a certain type, but they don't need a straight copy of an existing game), or b) if you manage to overpower the original game with your marketing (which is out of the reach for most Indies, unless you are "fighting" against an Indie game with non-existing marketing).


    That is my opinion of course. If you approach bottom-feeder Indie dev in a to "businessy way", and try to apply formulas the AAA devs do, you will certainly fail hard.
    You have no brand to build upon. Thus wisdom #1 for the AAA big corporation dev goes out of the window with that.
    You don't have a big budget to spend on a traditional marketing campaign. That is wisdom #2 gone.
    You cannot pay for professional analysts to scour the market and find trends before they happen, or smaller fishes to prey upon with a copy/paste attack. Wisdom #3 gone.

    You need to operate differently, scale differently, and expect different results. Then you might be fine.


    The whole "how much work is needed for..." sound wrong to me in the world of Indie development. If you gotta ask, you most probably lack the expierience yet to expect to make your money back anyway.
    And obviously, you are misunderstanding the market you are working in... this Gamasutra blog post sums it up well: http://www.gamasutra.com/blogs/DaveToulouse/20160929/282349/Why_is_selling_good_games_so_hard.php

    You are not really "investing"... you are buying a lottery ticket with your hard work and hope to win more than you put in. Nobody, not even the most expierienced dev can tell you "yeah, that should be enough..." or "yeah, that should work". Fact is, you only find out once you try.
    Before that, its all theorycrafting and wishful thinking. If you want more than that, try a Kickstarter campaign. Its the closest you can get to selling the real game afterwards, as people have to plonk down their own hard earned money for the Kickstarter to be a success. If your game fails a well executed Kickstarter campaign, it will most probably also fail in the market.
     
    theANMATOR2b and MV10 like this.
  50. leegod

    leegod

    Joined:
    May 5, 2010
    Posts:
    1,945
    @gian-reto-alig Thanks for good column link. Kickstarter compaign currently seems being way more problem of marketing. Too many projects launched in one day, easily buried even if well made project presentation. I only get tons of message from promoter scammers.
     
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