Starting a Game Company the Way for Developers to Survive?

Are game designers an endangered species? Is the new breed of game developer the "Game Entrepreneur-nus Rex"?

Game development is in upheaval. It's being shaken by the seismic forces of online and mobile gaming rising up from the bottom while the imminent deep impact of crushing AAA mega-title development costs comes streaking out of the sky. The products that are relevant to the market are changing with the mid-range titles eking out an existence in a precarious niche.

Nobody really knows how many game developers there are worldwide. Partly because it's hard to pin down exactly what you mean when you say "game". Modern Warfare to Farmville, PocketGod to World of Warcraft, there's a vast range of console, PC, online, handheld, web and mobile products. The IGDA has about 14,000 paying members. Electronic Arts, Activision-Blizzard and Ubisoft have over 20,000 employees at last count. In July 2009, there were about 16,000 games on the iPhone. In June of 2010, 9 of the top 10 iPhone apps are games. Who knows how many Facebook and other social media games are out there? We do know they're attracting millions of users, millions in revenue and billions in company valuations.

And traditional game company studios are getting savaged by spiraling development costs, a changing marketplace and the forces of online. It's harder and harder for a mid-sized studio to survive. Sure, you might end up working for the giants, but even the big guys are focusing more on fewer but bigger hits. A game needs to either be a big vicious T-Rex or a nimble little critter that can thrive in the bustling ecosystem of web, mobile, handheld and social games.

Full-time, stable employment as previous generations understood it is becoming rarer in the American workforce. But this might not be such bad news for game developers who have an entrepreneurial spirit. I've had interns who published games to the iPhone. While the Zyngas are rare, there is definitely room for micro-studios to become self-sufficient and profitable. There may be a time in the not-too-distant future when "game developer" is all too commonly synonmous with being an entrepreneur, even if on a small scale. The idea of being an employee in the cozy environs of a game studio where "those business guys" worry about the niggling details like revenue and costs may become, if not a thing of the past, the exception rather than the rule. The game business might end up looking more like the model of the film world, where  some work in large studios but a vast workforce labors as independent contributors or in tiny shops. In other words, responsible for their own fate.

And if game developers become entrepreneurs by default, they'll be selling products (as opposed to contracting services). That means suddenly they're going to face issues like costs of production, cashflow, company structures, taxes, marketing strategies, etc.

So is your typical game dev ready for that business savvy?

Well, it's really a question of the dinosaur mandate.

You either either evolve or you die.

- Sean Dugan is The Boss Monster’s founding editor and all-too-frequent contributor.

image by pmiaki


  1. A great article and all too true.

  2. GOOD game designers are hard to find... arrogant ones are all over the place :D More people could find success in the gaming industry if they would just leave their egos in the car when they get to work... man I sound bitter LOL... awesome article though!

  3. While the gap between the AAA titles and "casual" games has increased (with the middle ground disappearing), I wonder how much of this is temporary. I see casual game development following the trajectory of the AAA game industry to some (relatively limited) degree. Not that long ago there was no division between game types; the limits of the technology meant that development costs had limits, regardless of whether you were doing an action game, RPG or puzzle game. Casual games are primarily browser and mobile device dependent; we're just now getting to the point where the technology in those areas allows for a higher budget to actually have an impact on the visual quality. Certainly the nature of casual games is very different from AAA games, and not centered on graphical "quality" in the same way, but part of this is player expectation - and since there hasn't been the possibility there haven't been any expectations. Browser and device games don't have the same technical headaches involved with trying to install games on a PC, which I think is a big reason why most game money is now outside the PC, in consoles and phones. Consoles, however, are mostly stuck in the "dragons and guns" ghetto as far as most people are concerned, limiting their audience, with the exception of the Wii, which has the problem that most developers don't know what the heck to do with it.

    I think Korea is an interesting case study for how a game culture can turn out differently. I recently started reading Jim Rossignol's _This Gaming Life_, and what struck me was his observation that in Korea, MMOs that would be considered "hardcore" games in the West are casual games there. The social element, the use of PC cafes (where players don't have to install the games or maintain the equipment) a variety of game genres and public recognition that this is an acceptable pastime have all contributed to this. MMO projects there range in size, and though none of the games made there are as big as WoW, there are plenty that occupy that middle ground between WoW and Farmville.

    Having said that, I think "casual" is probably a not terribly useful term. Right now there are the big budget games for tech-savy players who have unhealthy fascinations with zombies, chainmail, spaceships, and the difference between the HK P30 and P30L, and then there are "casual" games. (I exaggerate only slightly.) All those people playing Farmville may just move on to something else; it's unlikely to be Bioshock 3, but I don't know that it'll only be Farmville 2, either. I hope that what we'll start seeing is a range of game types of different sizes that try new things for audiences that have been un-or under- served by the traditional game industry, now that there is a growing and sizable audience that realizes that there are games beyond "Zombie Prostitute Eviscerator 4," which is how many people have seen the industry. Just as with the medium of moving pictures, where there's a vast, rich middle ground between "Transformers 2" and "Youtube video of funny cat." We might think of them as "Accessible Games," perhaps.

  4. Your point about the term "casual" is spot on, I think. I agree, it's really a misnomer. The "middle aged women" who spend hours on Farmville or with Pogo games are anything but casual in their gaming pursuits - they just have a different set of things which strike their fancy. I do think that we're seeing a shift in gaming that's basically who you might identify as a "gamer". It's actually pretty exciting - especially if you're a little tired of Chainsaw Evisceration 9.

    I think there's a much fuller ecosystem of gaming possibilities coming to North America and Europe (and you're right, parts of Asia are the model). I think we'd have a loooooong way to go for the overhead we see on AAA titles to trickle down to other games but that's a good thing. I love to see successes like Eve Online or Runescape or Dofus (to name just a few)