The PROBLEM with CHEAP GAMES

Oh here we go again.

 

OMG! Random tubers are spouting their opinion on the state of the game industry! Panic! Run around screaming!

Oh wait, since making youtube videos are about a million times simpler than making even a basic game, we should be sure to give them exactly the credit and value they deserve. Nada.

 

My only problem with cheap games is that I end up with a library of games that grows faster than I'm capable of playing.

 

Actually, if you watched the video - the youtubers were arguing that there was no reason to panic. That it was game industry people who were arguing that there was a problem.

 

I did not watch the video. I won't watch. Though, having not watched the video, I am 100% confident that I have absolutely no interest what a tuber / non-developer has to say on any subject related to the industry.

 

Here you go again. I see no point in game channel youtubers in general regarding the game industry. They're by large just people who know nothing at all of value to me.

 

Fair enough. But this video is more a consumer talking about pricing, which is a bit different.

Basically, they argue that games under the tip top AAA (Battlefield, GTA, AC, the blockbusters), need to reconsider the $60 price tag because there's too much good stuff coming out at lower price points.

Steam especially has some pretty wild issues at the moment. Between humble bundle, sale pricing and indies, it's kind of hard to deny that game prices need to come down.

 

Nope. New products of high production value command high prices, and will eventually go to the lower prices. This has been the way since shopping began.

 

Sure, and if a product is truly at top tier, it can command top dollar (absolute top of the line AAA).

But in practice, a lot of 'second tier AAA' have also tried to command the $60 price point, and have since the dawn of home games.

These projects need to recalibrate to the market.

 

The problem with YouTube's that comment on the industry is that, in general, they don't have a clue how games are actually made and what it takes. They consistently misuse terms and ideas. There's a great Reddit post on the Star Citizen sub about this kind of misuse (trying to describe the face-weighted normal technique Star citizen employs), and it's the kind of stuff these YouTubers spout constantly. If they can't understand how games are made on the most basic level I struggle to see their opinions on these issues as valid.

 

I'm not sure why I'm playing the role of 'defender of gaming youtubers' but really - this is much less a gamers opinion on the internals of game production or the internals of the industry, and much more about how games are priced to the consumer.

And yes, youtubers, and average gamers input here is actually valuable.

 

It's not though. It is one youtuber providing their opinion or pretend business analysis on something they don't have experience or knowledge off. They don't represent players as whole, or any segment. Any developer (who cares to), has access to vast amount of actual consumer feedback data that is specific, valuable and actionable.

I listen to music. I have the minimal amount skills required to voice my opinion of the music industry on social media. There is no reason for anybody any the the music industry to pay any attention what I would say about the music industry, my buying habits and those of hundreds of millions of others is much more valuable and accurate.

 

Seems like a reasonable thing they are saying. Actually was just talking about this in another thread. I thought their point in the video was the AAA companies were saying they are finding it harder and harder to compete because people will make an Indie game that overlaps with their (the AAA) audience and the Indie game is priced at only $10 instead of $60? Or maybe they had multiple points (never good for a video I think... should have a clear focus).

If that is really true then it could actually cause some change... maybe in time AAA will start reusing content much more and spend less on pushing presentation forward so they can reduce development cost. It's at least a somewhat interesting topic. I'd have to watch it again to be sure but I thought the whole point was they were just presenting what some AAA devs were saying. Admittedly I only skimmed it.

 

It's one of the reasons community managers / analysts have become so valuable and (smart) developers avoid direct interaction with players (at least in business related topics). A loud voice isn't representative of the player base or community, especially given the size of the market. There is hard statistical data and provable actionable data on things like pricing, and as hippo pointed out, it has been something tracked and looked at since craftsmen have been trading arrowheads for meat with hunters. Everyone has an opinion, and today everyone can share it. Doesn't mean it has any value.

 

That's super true, and I've seen a lot of games become worse from overly bowing to gaming feedback (especially during EA or betas). The loudest voices are usually the most extreme players and overly catering to them can warp a game.

But it can also go the other way, that by ignoring your players too much (or disrespecting them too much) games can dramatically miss the mark. Diablo 3 is still a fantastic example of overly disrespecting your player base.

 

I often find Indie games to be overpriced (e.g. Gone Home, Her Story). Many Indie games are nice experiments in my opinion, but don't offer me enough for the money. If I, being a consumer and all, made a YouTube video about my opinion would it suddenly be interesting for the industry?
Don't confuse the opinion of some customers with the data the big studios have. It's the same with DLC and Microtransactions. On the internet everyone seems to hate them but in reality many people are spending money on these things.

EDIT: @GarBenjamin: I'm not really sure why I quoted you. This was supposed to be more of a general answer.

 

I would agree with that also. But this video specifically is not making a lot of the generic gamer arguments. They're talking about the value in gaming - one doller per one hour of gameplay. Value for money, etc.

"Indie games are doing the market a service here by offering ... more competitive prices and giving options to the consumer"

This is a fine argument to make, and a reasonable one. They're arguing in the consumer side of the subject, as the consumer.

I think people are responding to the title of this thread (clickbait) and the title of the video (also kinda clickbait) without actually responding to the content (actually surprisingly reasonable argument on a controversial subject).

 

No problem. Well in this case from my quick review of the video it is not so much about their opinions as it is they are covering an article written by someone else that focuses on the creators of Metal Gear Solid and other games. That company is struggling because of the pricing of Indie games (certain games that overlap with their target audience) being much cheaper than the studio can afford to sell theirs for. I think that is the gist of it with plenty of details left out.

Speaking only about the concept I think that makes sense and if it isn't a problem yet it will be one day. Most people I think don't really care if the $60 game is much more polished has those fancy cut scenes, voice acting and so forth. Not if they can get the same basic play experience for $50 less. I think that is the ultimate point this is all about.

And I agree as some has said basically this is just business. But then if we take that view then ultimately all games should be made by China, India and so forth because they can (or will be able to sooner or later) make these big AAA style productions for a fraction of the cost and sell them all for $10 to $15. Much like an Indie in the USA or Europe may charge $5 or $10 for a game and someone in China etc may charge 99 cents for the same thing.

But... IPs will help save the companies a lot. And I suppose in time we'll see Indies start showing PROUDLY MADE IN THE USA on their games. Because there has to be a reason for gamers to pay $5 instead of $1 and to pay $60 instead of $10.

Yeah I am rambling now. And ramble is done.

 

Totally. It's a balance. It's best not to be reactionary and to listen to players as a whole. At least as much as possible. It's impossible to please everyone.

 

It's really a lesson I've seen indies struggle with. Most recently Darkest Dungeon and Battle Brothers, both of which had fanatic level hardcore fans. During EA, both games started tuning way too hard toward their hardcore fan base because they were by far the most vocal.

Both reversed course before release because their actual customer reviews started to suffer, but there's a real lesson there.

 

This ^^^.

Science trumps speculation. Every time.

 

I think it's reasonably harmful left unchecked though. We are saying "We are happy to let this ignorance continue without care for the consequences" by doing nothing. I doubt my occasional tweets and forum posts make any measurable difference and I'd have to run a series of high production value youtube videos with experts presenting.

Even then nobody would care because being irresponsible with facts, and spreading drama is far more important. I loathe people like that, they have no purpose.

 

I love the irony

Complaining about how "cheap" games are hurting or at least changing the game industry and posting it on a cheap video service such as Youtube, even though AAA shows like Game of Thrones somehow still exist and continue to roll in the cash for their creators.

 

That analogy really doesn't work though because they're entirely different services and markets

 

For those of you that didn't watch the video:

In an article gamesindustry .biz, author Rob Fahey, writes that indie games are undercutting the marked for quality niche games. " ...is a core audience that's started to get used to paying five bucks, rather than fifty, for a game"

In the youtube video, in question, the Youtubers argues that Indie games are doing the industry a service by balancing cost versus product, instead of doing a fixed price point.
"What needs to happen is AAA need to get creative instead of staying in a $60 bracket"

 

I think competition in the market is generally a good thing. Of course it will upset the established producers, but things will settle eventually into a new normal for a little while before being upset again by some new technology.

 

They already got creative: see microtransations, DLC, etc.

Jokes aside, AAA games are incredibly expensive. They've been getting more expensive per year. And yet, the cost of games hasn't really gone up at all - it's still $60 for a new AAA game. So they've had to adapt with these things.

However, at the same time they have huge markets, so they make buckets of money. Sell millions of copies.

I don't know how easy this would be unless one works at a(n?!) AAA company, but I imagine the best way to determine how productive AAA games are would be to get a profit (profit I think, not income) to expenses ratio. Is it very much higher than indie games? Or is it lower?

 

Although I agree with you here, to effect change - the pocket book need to be effected and unfortunately Blizzard did not experience any loss in revenue from the player base not buying.
A lot of times fanatics (vocal core players) are extremely loud on the internet about something they really dislike about the game, and then when the game comes out without changes, they buy the game. To effect change a VERY large group would need to choose not to purchase the products they care so much about if the developer chooses not to change direction. Blizzard DID disrespect the core player base, by not changing to a darker themed game and other smaller gripes, and when the game dropped - everyone bought it, even the complainers, who are still the vocal minority in this instance.

 

The last stats I remember reading were that AAA operate on an extremely low profit margin. They push a lot of units and they need to or they won't survive. I doubt many, if any, of them could survive if they had two back-to-back flops.

The number I remember seeing somewhere was a 3% profit margin. And that may be gross not net. All I know is these AAA games are just so damn expensive to develop and market. It is why it is crazy for Indies (unless they are a huge team nobody would see as an Indie) to even think about making such games.

 

Well it was a AAA indie dev complaining his games cant sell enough units because of cheap inides. Calling a company that has 222 employees indie is redunc

 

Yeah there are those two very different meanings of "indie". The more corporate-minded see it as literally any company regardless of resources that is independent of a publisher... meaning they have full control (as much as anyone can have full control) over what they do and how they do it. This meaning really means nothing except that which really means... nothing to the majority of people.

Then we have the gamers view of Indies which is nearly always seen as meaning solo to very tiny team, no to very low budget using creativity to complete somewhat unique games. That is how I see it too. Indie to me doesn't bring a vision of 15 or more people sitting around in suits and a million bucks in an account for them to develop with.

I think of a solo or tiny team using duct tape and bubble gum to build games they are passionate about. Of course that is an ideal but it is this latter meaning that had the public embracing Indies. These are the people almost always being referred to when a gamer says I love to support Indies! Basically they are saying "I want to support the little guy (and gal)"... the underdogs.

 

I still think the market is the best indicator of value. If cheap indie games are hurting higher production value games, then that's kind of a clue that people aren't sold on those high production values.

And equating hurting a company with hurting the whole market, is just rubbish. The market is fine, it's your game that isn't.

 

At the same time, the fact that DLC and microtransactions and season passes are quite common might be considered a clue that people really are sold on the high production values. Which stance should one go with?

 

Well one of my points is that I don't think you can draw useful general conclusions that easily. There are a lot of segments within the broader game market, and companies/games within that. By useful I mean conclusions you can draw towards some end goal/purpose. Like how should I change the design of my game based on it's niche and the competition.

 

The p&l raito doesn't show much when you are talking about such vastly different scales. An tiny game that makes 10x its cost doesn't compare to a massive game that makes 2x its cost. Economies of scale.

Also, AAAs aren't competing with indies even remotely. In fact they are barely competing with each over, at least in the direct sense. There is an abstract level of competition based on evolution of expectations, and some level of competition on the iap/dlc side. But ultimately the are competing against themselves and what the player want. People don't choose either madden or battlefront, they get both or just the one that they play. Ea isn't trying to sell madden to battlefront players, the are trying to sell it to last years players of madden.

Likely, console prices will go up again, it has been a while, and scale is stilll increasing.

 

And the profit margins are very high on big titles. Even ones that "tank". Even in the mobile market, big mobile games make insane money. Anything in the top grossing 500 is complete bank. Commander is still in the top 200 after 4 yeas, and it is running on a skeleton team. On that game we recouped our full development expense in the second week of ww release. But by the same token, large studios have games that fail to launch, we were about 1 in 5, so the hits have to pay for the fails, but still it is a very wide margin.

 

I think that's an excellent point. The fact that the market can support multiple titles that are similar combined with a well known IP, and it's just a completely game at that level.

I remember well the biggest game I worked on, our company was bought out by a company that had an interest in Marvel. So we made a Marvel game (social game) and it got awards and made piles of cash. And that never would have happened without Marvel attached to it, it was a good game but nothing spectacular.

 

Ya we were shutting down games that were profitable enough for an indie to retire on. The economics at scale are just so different. And a couple of those games were made when we were still a 4 person studio. They were still making money just not viable once we were at 100 people.

 

I don't remember where I read that article about the 3% it was a few years or so ago. Maybe at polygon or gamasutra. I'm sure though what you're saying makes sense. The big hits will do very well. I think they were talking about AAA games on average. Basically those (there are many articles on that kind of thing out there) articles are just talking about how in many cases a AAA has to sell 3 million or more units just to break even due to the expense of developing & marketing them. So when people see millions of sales they assume the companies are pulling in much more money than they likely are in reality.

Definitely the scales make a huge difference. An Indie sells 10,000 units and makes a profit of $10 per game compared to a AAA selling 5 million units even at $2 per game clearly the AAA title is much more. I agree that is silly even to compare. Other than... again... just to make sure people realize the expense of those $60 AAA titles is much much higher than those $5 to $10 Indie games are.

 

TinyCo?

 

Totally. Being on a smaller team now, our threshold for profitability is so low. What is profitable for us now would have been an utter fail at Disney.

 

So you don't think cable TV services have been feeling the same impact of online services like Youtube that they themselves claim to be facing? ok.....

 

Avengers Alliance, we were one of the studios under Playdom.

 

Do you think that would make a good entry in one of those steam store page feature lists between number of levels and key selling points?

 

I'd call Netflix style services their real competitors, not YouTube

 

No S***. Wow. I worked on the original pitch for that game. And was subsequently really annoyed when the development went north. . I did however get to build the mobile version of MMA. In fact at my current studio we have 2 guys from the Seattle studio. It's often odd how small the industry is at times if you are in it long enough.

 

The OP video argument is a little strange. It basically amounts to: Indies are making small niche games, and selling them cheap. This is putting people making expensive niche games out of business.

If an 'indie' can offer me the same experience as a more expensive game, of course I'll take the cheaper game. That's a no brainier. If you are going to charge me $100 to buy a game, it better be an awesome one.

Ultimately it seems to be an extension of the same flooded market argument. 'There is so much garbage available that noone will buy my garbage'.

These sorts of numbers always fascinate me. When I was in ag chemicals the ratio was about 200 in discovery, 20 in development, and 1 in launch. The whole process took about seven years. A significant amount of budget went to cover molecules that never made it to customers.

On the other hand in paint we can turn around an entirely new product from R&D to full scale manufacturing in about ten days.

 

Yeah although AAA garbage has million dollar ad campaigns to kind of help that, while the little guy has no such luxury. There quite a few indie games that would deserve better advertising than the big games.

But you know, life isn't fair. There is merit to what indies are saying about the garbage. It's not necessarily they have garbage, some have great games, just you do not in any shape or form have a level playing field.

Garbage is the wrong word. We could use a raw food analogy. These WIP titles, unpolished games and so on probably do need to be kept clear from finished and polished titles, regardless of the source.

Steam makes it easy to lump the whole lot together for some reason, and thinks that's OK. I do not.

Most indies will never have the ad budget or reach of AAA so they will try several strategies. Sometimes production cost has no relation to price.

 

Well, not quite. I've said this somewhere before, but I'm too lazy to look it up. The great titles will rise to the top and sell well, since they'll most probably get some sort of exposure (even just by word of mouth, if they're really great).

The ones hurt by the flooded market are the good but not great or the really niche titles. Because the "that was pretty good" reaction, doesn't really spread like "OMG THAT WAS AMAZING" reactions. And these kind of titles are hurt by the flooded market. Because, they have no marketing budget and they don't shine bright enough to easily stand out in the sea of games in Steam.

And that's a problem because, in a healthy market, a good but not great product should ideally make the creator good enough money to be able to sustain him and create a potentially great game.

Right now, if you don't have a significant marketing budget, if you create something good that falls short of a masterpiece, your chances of success are roughly the same as most of the low effort games, even though you're risking that much more*.

*We are not quite there yet, I'm exaggerating to get my point across, but I do think we are slowly but surely moving towards that.

 

I mean, nobody's ingesting your paints, right?

Plus the chemical makeup of a chromophore is a heck of a lot more straightforward (theoretically anyway - conjugation combined with whatever your mordant is) than bio-chemicals, especially ones that need to work for a diverse set of organisms.