It’s a hot topic, since games are slowly entering the world of non-geeks, which in practice means mass market. My housemates want to buy a PS3. Granted, I will be the only one playing Modern Warfare, while they are after RockBand, Singstar and Buzz (or whatever the quiz game is called). Due to years spent on civilizations and theme hospitals I’m still miles ahead in any of the unholy, time-consuming facebook games. But the point is my friends play them at all. Geeks, hipsters and others alike (I’m using the lose generalizations just to show it’s generally group-independent). Obviously, these are people who are facebook users to begin with, I doubt they’d go out of their way to buy a farming game in their local mall, but that is also the point – it spreads through different platforms. It’s becoming main stream.
Today I’ve read a short piece by Jeremy Liew (Managing Director at Lightspeed Venture Partners) about the attraction that social games have for investors. He makes a point: making high class gaming platforms games is not unsimilar to making a big studio movie:
1. investment is huge, between 30 and 50 mln dollars,
2. distribution and promotion costs are insane; accordin to Liew “Modern Warfare 2 had a launch budget of $200 million”
3. returns are huge on hit games ($550 mln made in first 5 days of selling CoD Modern Warfare 2), but only few games become hits (and if it’s a miss you’re looking at pretty much no return),
4. development takes log, sometimes 2 to 3 years,
5. you need a big crew of specialists of all sorts working on a single title,
6. it takes a while to figure out whether the title is indeed a hit or miss,
and for all of the above reasons only big publishers, like big studios, can take the risk and pull all the resources into making several titles for one or two of them to hit the back of the net, make money and keep all involved happy and fed.
Gaming has not, as of yet, undergone the technological democratization that is currently revolutionizing the movie making industry and causing panic everywhere. The death of indie cinema was proclaimed high and wide. Whereas I personally think that it’s actually beginning of true independence and traditional movie making business is not dead either, just has to make space for the new model of production-distribution and share (sharing is death for some, apparently) – the fuss and mess is obviously present.
As we’re often told ‘anybody’ can now ‘pick up a camera for few grant and make a movie on zero budget’. This is not strictly true: few grant is no ‘zero budget’ and making a good film demands more skills than shooting your cat hanging upside down on the doors for youtube. But the technological divide is definitely smaller, it’s easier and cheaper to get a film made. I imagine shooting Clerks would now cost kevin Smith one or two maxed out credit cards less, than it did 15 years ago. However this also means that more films are made and it’s more difficult to get them distributed and seen.
Not so much in the gaming world. Yet. It’s a matter of time till coding and graphic design becomes more available to non-professionals than it is today, although the industry relations are a bit different, than in film. Camera manufacturers had obvious interests in making them more masses friendly. No such entity or obvious interest in coding. Still, I think it’s going to happen.
Until then the indie cinema of gaming world are social games start ups, such as Zynga and Playfish. Their main chance is still getting picked up by the biggies: Clerks got bought by Miramax and Playfish is now bought by EA Games. But they can do, what class A game makers can’t:
1. production costs are more in the realm of hundreds of thousands of dollars,
2. distribution through platforms like facebook is pretty much free and the power of viral spread works to game’s advantage (vide farmville); all of the facebook games have several mechanisms to encourage users to drag in friends,
4. development is short and sweet,
5. therefore a team of people can work on several titles at once (the game mechanics aren’t really that sophisticated and putting context of a farm or a restaurant or a fish tank on top of it is not much either),
6. being relatively cheap to make they’re also cheap to try out – beta tests are a universal practice and producers can quite accurately predict whether a game will hit the spot before they pull in all the resources.
Yes, the point number 3 is missing. How do social games earn? That is the question. As far as I understand:
- facebook pays application developers, as they drive in traffic. But how much?
- the in-game offer-based advertising model (go to an outside site and do/buy something to receive points you can later spend in game) has been hugely criticized and Zynga had to back out of it after its title Fishville was blocked by facebook. It’s still causing them some trouble.
- games sell in-gmae cash via micropayments - you can spend on special in-game items. But buying them is not necessary for game play. How many people actually pay for them?
- then there’s banner adds income, potentially big due to huge amount of traffic (according to the article I cited “Zynga now has more than 100 million unique visitors per month”. But banner advertising is just about now proving insufficient to sustain online news publishers, so where is it going to provide for game makers?
Similarities with indie film are not strict enough to predict future of gaming along the lines of film industry development. Also the times, as we know, the are changin’. I’m no expert, definitely not on online revenues, to be honest I hate the subject and tend to avoid it (the ‘yes, but what’s the business model?’ question is the biggest kill-joy since the Grinch, who stole Christmas). This is now biting me on the ass, because for once I find this particular case interesting. If you can shed some light on the matter – please get in touch!