With the explosive growth of mobile gaming, it’s no surprise that indie game development is all the rage right now. In a survey of 2,500 developers polled in the Game Developers’ Conference 2013 “State of the Industry”, more than half of the respondents identified themselves as indie developers. This represents an exciting trend when you take into account that 51 percent of these developers have been indie for less than two years. As the media paints a rosy picture of the future of indie game development, what’s lacking is sufficient coverage around the challenges that are inherent with any growth story. For example, the usual narrative leaves out the fact that many developers still can’t successfully market and distribute their games. That said, the democratization of game development is a promising trend which merits a closer look at its driving factors, most notably, the growing ubiquity of smartphones, the presence of indie success stories, and new funding opportunities like crowdfunding.
Mobile is a big deal right now. This is especially exciting for mobile gaming, as the industry is expected to reach $54 billion by 2015. Both qualitative and quantitative evidence supports this optimism. In the same GDC survey mentioned previously, 38 percent of developers are planning to release at least one title on mobile. In addition, Samsung – the world’s largest mobile phone maker – recently paired up with Chillingo, a division of Electronic Arts, to try and get a piece of the action by spearheading the “100% Indie” initiative that allows mobile developers to submit games for a chance to get a sales profit of 100% through the first six months of the game’s listing. (In contrast, popular market places such as the Google Play Store, Amazon Appstore, and Apple App Store tend to take anywhere between 20% and 30% off the top.) With lower barriers to entry and mass market appeal, it’s not hard to see why mobile has become the preferred choice for many developers. After all, most big title console game studios still maintain budgets around $80 – $100 million, while most small to mid-size mobile gaming studios have budgets closer to $200,000 – $400,000 or less. Regardless of budget, game developers of all sizes will be looking to make their mobile game a success, whether it’s garnering a small cult following or releasing the next Angry Birds, Temple Run, or Draw Something.
Speaking of Temple Run, the indie game development ecosystem has been reinvigorated by the presence of “indie rockstars.” One example is the husband and wife duo who founded Imangi Studios and went on to create one of the most popular mobile games. The smash hit now has 70+ million users with revenue well over $1 million. To this day, they remain a 3 person company that works out of home, (Take that Yahoo!) while partnering with giants like Disney to release Temple Run: Brave and Temple Run: Oz. Another example is James Vaughan, the 25-year-old indie developer who created a global disease simulation game last year called Plague Inc with a shoestring budget, and is now reported to be a millionaire. Although these breakthroughs are rare, small development studios are attracting more talent than ever for a shot at being one of these exceptions. Even veteran game designers such as Peter Molyneux made the jump from an established Microsoft-owned studio, Lionhead, to join an indie startup studio called 22Cans. Success stories like these provide inspiration for other indie developers to bypass standing on the shoulders of giants altogether and follow in their predecessors’ footsteps instead.
Crowdfunding: Silver Bullet?
Alongside mobile adoption and notable indie winners, another trend is spearheading the shift to indie: crowdfunding. Sites such as Kickstarter, Indiegogo, 8-Bit Funding, and the newly launched Gambitious enable developers to bypass more traditional funding methods by tapping into a network of excited gamers who collectively fund ambitious projects. What is particularly revealing is the enthusiasm that developers have for trying this solution. While only 8% of developers in the GDC survey have worked on a project that was crowdfunded, 44% plan to do so in the future. We can still count with our fingers the number of major crowdfunding successes, such as Tim Schafer and Double Fine getting $3.4 million and Planetary Annihilation pulling in $2.2 million. However, crowdfunding offers additional benefits by raising more awareness for indie games as well as being a potent market research tool into the minds of customers, providing real-time feedback on what they will play and for what they will pay. Crowdfunding is an exciting development that will clearly benefit game developers. But before we think that indie devs are on cruise control towards a creative and commercial renaissance, some serious obstacles remain.
The numbers show that an increasing number of indie game developers are working to build awesome games but the state of the industry is not as frictionless as many would have you believe. For instance, marketing and distribution remains a serious obstacle for most indie developers. According to AppPromo, 52 percent of game developers set aside $0 for marketing despite 91 percent of them believing that it was crucial to their app’s success. In terms of distribution, getting approval from the Apple store is never without a few headaches while oversaturation of the app store is a serious concern. (To date, the stores run by Apple and Google now offer over 700,000 apps each.) The chance for indie developers to make it big has been strongly contested, with some calling it a myth in 2013 due to amount of competition in the market and the relatively short attention span of gamers. Cited in support of this “myth” was Apple’s recently released list of the most profitable apps of 2012 which consists mostly of games from established developers. Monetization for indie developers is particularly troubling as the tools for revenue remain limited to in-app purchases and advertising. Super Meat Boy developer Edmund McMillen pretty much sums it up with this quote: “A large number of mobile and social gaming companies treat their customers with a complete lack of respect, with business tactics that are “a slap in the face to actual game design.” The question on everyone’s minds remains: how can indie developers leverage the opportunities that mobile gaming offers and effectively monetize?
The Elephant in the Room
Not every indie game developer sets out to achieve huge commercial success and that’s perfectly fine. What’s exciting is that today, 68 percent of game sessions globally on mobile devices are made by indie developers. There’s been a lot of talk in the past decade about a thriving indie game economy, but frankly, this has not happened yet. The trends seem to show that we’re only starting to see mobile games help foster this development but the jury is still out. New monetization tools need to surface which enable gamers to play without running up against an “offer” wall and provide sustainable revenue for developers. Lookout Gaming is working on what we think is one solution to the monetization problem and we’ll be attending this year’s GDC conference to talk to as many indie game developers as we can.