blogrium

In 2002 I wrote an article just to get into the Game Developers Conference that was published in a little online newsletter called Digital Times. Today I got a request from the Institute of Chartered Financial Analysts of India to reprint that article in an “Executive Reference Book” tentatively titled Online Gaming Industry. The ICFAI is a non-profit organization that publishes books and reports to “impart quality education in management and finance.”

I gave them permission, but I think it’s kind of funny. It also makes me want to write more. Reading the article again, which isn’t very long, sort of makes me laugh. It sounds like a very younger me. I think had just turned 17 when I wrote it. It’s a slight rant touting the hardships of indie game devs and what I would now say as how there’s very little indie infrastructure in the game industry. Back then I was trying to establish Progrium Software as an independent developer of online games, so I had looked into it all.

I’ll repost it here for easy access. Keep in mind, the only point of writing this was to get into the GDC, so it’s not the greatest piece of writing. It’s just amusing to me that it’s getting reprinted.

Developers’ Dilemma
November 2002

Since its infancy, nearly a quarter-century past, the electronic entertainment industry has grown by leaps and bounds. Blossoming from 1980s children’s video games to today’s professional online tournaments and sophisticated military simulation tools, this fast-paced realm of evolving media has exploded into a multi-billion dollar industry. In 2001, the U.S. electronic entertainment industry had its most successful year. The software side of the industry alone hit $6 billion in sales, up from $5.4 billion in 2000. As a benchmark, the U.S. box office receipts for Hollywood movies in 2001 amounted to $8.4 billion.

Once upon a time, though, the leaders of this industry were people who worked in garages for next to nothing. They made games because they wanted to build something that entertained themselves and their friends, and because they loved gaming. They were the market, and phrases like “publicly traded” had very little meaning to the game industry then. It was definitely a much simpler time in the early 90’s, and starting a new game company was easy. If you had a game that was anywhere near commercial standards (which were very low at the time), all you had to do was send your game to every major publisher and the chances of getting your game published were staggeringly good. Publishers were always looking for new products to push.

Today, the chance of a newcomer getting a publishing deal with a completed game in their hands is already pretty slim, but actually making a game worth publishing is probably a more difficult task. Production costs for today’s titles are well beyond $1 million, sometimes three times that. The industry has grown up, and is beginning to be dominated by giant corporations. Just recently it’s become obvious that the industry is going to be going through major consolidation, leaving small independent developers that may have had previous successes to go out of business. With all this going on, it will be next to impossible for new developers to enter the market.

As the consolidation continues, surviving independent developers will constantly face shutting down without a continuous publisher working with them. Those that are sucked up by large publishers or larger companies will usually lose their freedom to develop what they want and how they want to develop it. There’s a large list why independent developers choose to stay independent, but most will have to give that up to stay in business.

It’s a given that a new development company will need a substantial amount of money to get started, just to develop their first title. With no track record, there’s no way any publisher will want to invest in the company or fund the project. New companies will be on there own and will have to fight an uphill battle until they’ve had a number of successes. One doesn’t do it in this industry; most companies will be unable to earn back the costs of their first title from its sales.

While it seems near impossible for a new company to make it in this still maturing industry, it can be done. It takes a passion for game development and dedicated team of talented people to pull it off, on top of a real sense of business and the industry. There won’t be many, and those that make it will have fought through very tough times. These companies and the people that make them up are the ones that will remind the industry where it came from and how it came to be…

This entry was posted on Thursday, April 13th, 2006 at 10:13 pm and is filed under Personal, Games, Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.