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A games business model for the rest of us?

Posted by Shawn Hendriks, 29 April 2009 11:53 pm

There was a time not long ago when games development was young and scrappy. You could get a couple buddies together and quickly put together a game that would (if you were lucky) make you a million dollars. It doesn't feel so easy any more.

The game industry is now big business and with that comes large games conglomerates that control a lot of the content that comes out just like the big players do in the film and tv market. In just a few short years the cost of creating your average game has skyrocketed into the tens of millions and dev teams have ballooned into the hundreds. So whats a gamer with an idea to do short of marrying really big money?

I just read an article in the wall street journal that covers some great examples of how artists and developers are dealing with this. The central concept though really comes down to a very old idea in the world of artistry. Patronage. In a patronage system an artist would develop a small following of absolutely devoted fans who would follow everything they did and pay good money for their works. This small group of patrons would essentially finance the artists life allowing them to do work anyway they wished as often as they wished as long as they kept enough patrons interested to cover their lifestyle.

Based on this idea a game doesn't need huge teams and huge market share. It needs enough fans(patrons) to keep the developers in the lifestyle they are accustomed to. As the article state this could be as few as 5000 people worldwide to support a small dev team. iphone apps and such are an example of this at work. Don't get me wrong you still need talent. Won't you don't necessarily need is a deep pockets publisher and 10 million dollars to put out a "successful" game.

3 Comments

Cheesestraws

Posted 30 April 2009 12:58 am

I saw you post this on your twitter and found it to be a very interesting article.

LoganCDN

Posted 30 April 2009 10:41 pm

This is very similar to what the 'indie' games market is doing now. Small teams (1 to 10 guys), a dream and limited resources, but they producing some very fun games making not just successful 'casual' game titles for online portals and the AppStore, but also awesome AAA like games that get rid of the fluff and clutter that perpetuates today's realm of sequel releases and just returns to what made a game fun to play. Much like your article says, its not hard to get a great Return on Investment going with even 1000 or 2000 sales producing enough to make the next title viable and in the process creating a fanbase and name for yourself.

As an example my team is completing an open-beta of a MechWarrior like game called Lore Aftermath (which is electronicly distributed and played through the browser on instantaction.com) , we are all huge fans of mech games and don't necessarily think that the genre deserves the cold-shoulder that the AAA market is giving it. There are plenty of other games on the site like this as well. Another great example is a company called Flashbang studios who produce about 5 or 6 great AAA type games a year for their site.

So there are lots of examples of this business model working and succeeding. Its successfully employed me for the past 7 years and I have no complaints about it (and of course we rely on Autodesk based software to do our work).

Shawn Hendriks

Posted 30 April 2009 11:02 pm

Thanks for the Comment LoganCDN. I agree that this is something that has been working at some level since games began. I have a few friends that have made great money creating mods for AAA games as yet another business model. I find I have an affinity to those people like you, that decide to make content this way and have decided bigger isn't necessarily better. We also see this in film. A favorite example of mine is the Saw movie franchise. The first movie was made for about 1.2 million dollars total and made about 103 million. Hard to argue with a hundred fold return. I don't think you'll ever see that from a hundred million dollar movie. I certainly don't think the bigger budgets of the sequels made for better films. In the end being lean and mean usually means you can make a living off of a much more moderate success. It all just seems to go wrong when people decide that throwing more money and resources at something automatically makes it better.

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