Developers Navigate Risk in a Competitive Market

A Sociotechnical Research Paper presented to the faculty of the School of Engineering and Applied Science University of Virginia

by

Jeffrey Wang

April 8, 2021

On my honor as a University student, I have neither given nor received unauthorized aid on this assignment as defined by the Honor Guidelines for Thesis-Related Assignments.

Jeffrey Wang

Sociotechnical advisor: Peter Norton, Department of Engineering and Society

Indie Game Developers Navigate Risk in a Competitive Market

Introduction

Video games are a massive entertainment industry. In 2017, the U.S. game industry directly employed over 65k employees, and added $11.7 billion to the U.S. GDP (Siwek, 2017).

As one of the biggest modern pastimes, video games are also a significant cultural expression of our time. There are many kinds of people who make games, or game developers. In the mainstream industry, game studios are paid by publishers to develop a game in exchange for a cut of the profit. Because publisher provide initial funds, and are often more experienced than the studios, the direction of the game is often heavily influenced by the publisher. Typically, the game studio makes game software, while the publisher handles distribution and marketing.

Starting in 2007, the bar to make video games was lowered with the release of low-cost game engines and online marketplaces (Huskie, 2016). This heralded an explosion of indie games – games created by independent developers with little artistic involvement from publishers or no publishers at all. Due to their funding and skill constraints, these games tend to employ lo-fi aesthetics and challenge the mainstream gaming industry in game design and in thematic ideas (Fiadotau, 2018). Over time, indie games grew as a phenomenon and the definition of ‘indie’ began to shift. Many larger studios have begun to adopt “indie sensibilities” by focusing on the aesthetic and gameplay features typical of indies, and many publishers, both from the traditional industry and new “indie publishers,” now provide funding and support for indie games. There is still no formal definition of indie. For the purposes of this paper, any game maker not working with a mid-size or major publisher (i.e. part of the AAA industry) are indie developers, but it is important to note that many diverse groups of developers with varying backgrounds, budgets, and commitments are included in this blanket label.

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Although today’s indie game scene is rife with activity, indie games are risky projects for the developers involved. Most indie games fail to produce profits, with some estimates being less than 1 in 5. So why are so many produced? What are the developers’ aspirations, expectations, and what experiences do they have? How do they react to a hostile market and the possibility of failure? It might seem baffling that so many people spend their aspirations with such little chance of success. Many game developers feel that the prospect of success is so low, they limit their game development to being a creative hobby while keeping a stable full-time job in other fields.

Through analysis of their discussions, we can observe the factors that cause some developers to take this approach to game development.

In the modern video games industry, indie developers struggle to make a living in a highly competitive market. Hopes and pessimism about success fight each other in the minds of developers, creating a spectrum of developers from those who take on an entrepreneurial mindset to those who take a hobbyist approach to game making. When these groups share the same spaces, their different perceptions and attitudes can cause conflict, but these independent developers are all striving to find personal success in game development.

Review of Research

The hobbyist game maker is one of the kinds of developer included under the indie label.

Hobbyist game makers, or amateur game makers, are distinct from the typical independent game maker in that they take an explicit non-entrepreneurial approach to game making. Many of these game makers are motivated to become hobbyists in order to avoid exploitative aspects of professional game development (Keogh, 2021). This paper aims to understand how the

2 perception of financial success in the video game industry helps the spread of this hobbyist mindset.

Another reason why many game makers may avoid the mainstream games industry is a desire for autonomy. Game workers are creative workers, but in the professional industry they are often treated as production workers not expected to exercise independent judgement or make creative contributions (Schumacher, 2007). In order to avoid this treatment, many kinds of indie developers aim to fulfill their goals on their own.

A common goal for video game developers is to reach sustainability. This applies to developers of all sizes, both in the AAA industry and outside. For indie developers in the

Australian games industry, sustainability is defined differently for different developers. Some aim for commercial success, while others wish to continue their work as a craft and hobbyist undertaking (Banks & Keogh, 2021). It is important to understand the wishes for sustainability for all kinds of people who identify as game makers – including hobbyist game makers, beginning indie developers, failed indie developers, and successful indie developers.

When performing analysis on creative works, many researchers use high theory in place of detailed empirical accounts of creative labor (Thompson et al., 2016). For example, a study on the productivity of creative workers across a variety of fields found that the majority of creative contributions are made by a minority of the contributors (Wayne, 1955), but without empirical accounts it is difficult to apply this knowledge to the games industry. This paper focuses on empirical accounts from game makers in order to understand the state of the games industry.

For many independent game makers, work is sporadic and may feature concurrent roles, which puts them in a vulnerable position that is commonly overlooked in official data collections of creative workers (Hennekam & Bennet, 2016). By analyzing the conversations of people in

3 game development spaces online, it is possible to gain more insight on this class of game devleoper.

The Allure and The Reality

Stories about indie games are inspirational. Cave Story (2004), produced over five years by a single developer in his free time, proved that a single person could leave his mark on the industry. The 3D sandbox , a project started by one person released in 2011, went on to become the best-selling video game of all time. These are stories about underdogs proving their worth – and making a lot of money in the process. Stories about success make it further than stories about failures, and media tends to depict indie development with a rosy light. Sean Han

Tani, maker of Anodyne 2, was one of the people drawn in by success stories in 2013. Flash game sponsorships, online storefront sales, and Indie Game: The Movie all perpetuated a “gold rush myth” about the indie developer life (Gordon, 2019). These myths attract people looking to make it big – telling them ‘you can make it big, too,’ even to complete newcomers in the industry.

These starry-eyed developers confront a much bleaker reality. In an answer written to a

Quora forum, Jason Huskie, a 6 year game developer and business and marketing consultant, estimates that less than 1% of developers make profits off their first game. Other estimates on the same forum range between that and 20%. The result is that many developers enter the industry as an indie dev without a safety net and are unprepared for the financial risk in store. As Jason

Roberts, maker of Gorogoa recalls, “I was able to save a few years’ worth of living expenses. I spent all of that plus all of my retirement savings… I don’t think I made good decisions. After I ran out of money, I got some more from Indie Fund, and I got some personal loans from friends

4 and family, and then finally got picked up by Annapurna [a publisher]” (Gordon, 2019).

Gorogoa released in 2017 and turned profitable, but a disaster was always looming for Roberts.

Even with years of savings, he had to hop between funding sources, take on debt, and risk his own future to complete his game.

Sean Han Tani, maker of Anodyne 2, is another example of someone who took on financial risk to complete their game. Unlike Roberts, Tani had a safety net provided by his family. He reflects that “My living, savings, and retirement costs have always been covered by game sales… [our studio] is safe for a few years.” (Gordon, 2019) Tani believes that the risk he took was worth it, but in order to sustain his studio, he still needs to carefully manage risk. In the video game industry, like other creative industries before it, financial risk is a constant concern that developers struggle against to achieve their goals.

Indie developers struggle not only with financial risk, but also in striking a healthy work- life balance. Professional game developers often take long work hours to meet deadlines, and this phenomenon also commonly manifests in indie games. In a postmortem on , the team reflected on their two-month crunch time during which the lead developers slogged through

10-12 hours of work every day. They consider this crunch their biggest mistake in the game’s development, because the rushed release was ultimately unnecessary for the game’s success

(McMillen, 2011). Indie developers are often pressured to crunch for the same reasons that their industry counterparts do, whether it be due to passion, culture, or necessity. Whether these developers take on the crunch voluntarily or involuntarily, it is a common challenge to face down that plays a role in many developers’ minds.

Each of those voices are indie developers who have completed and released a game to some success. These voices blend into a larger narrative about what the video games industry is

5 like, and newcomers interested in making games listen. The gold rush myths of the early indie scene have been replaced by tales of struggle and uncertain futures. These tales explore the choices these developers made, the risks they took, the realities they faced, but ultimately each of these developers were able to finish their game – something that not everyone achieves.

Lessons from Failed Projects

Stories of success are not the only stories out there. Most indie games fail to produce profits. Some developers pursue project after project only to meet the same fate each time. The stories of successful developers travel further than those of failed developers, but both kinds of developers have something to say. Under the question on Quora, “Why did your indie game fail?” developers recount their failed projects. The 19 answers were cross-referenced for reasons why developers believe their projects were unsuccessful. The most common reasons were poor marketing (12 times), lack of appeal (9 times), excessive project scope for the team size (8 times), badly chosen market (7 times), and lack of developer skill (6 times). Games fail when they fail to find an audience. The reasons given of poor marketing, lack of appeal, and badly chosen market; all indicate that it is difficult to attract an audience willing to try a new game in the modern industry. Meanwhile, the other reasons – project scope and lack of developer skill – focuses more on the developer’s ability to execute their ideas than on the market’s acceptance of them.

These different reasons are tied to different attitudes towards the games industry and indie games development. All the responses indicate that success in indie development is dependent on the developer’s skills and decisions. However, the answers which focus on finding the right market and audience show that the games industry is difficult to please even with a

6 decent product. This perception contributes to pessimism about financial success in the indie game scene, and ultimately, pessimistic attitudes about the probability of any financial reward from indie game development.

Attitudes Towards Indie Game Development

Perceptions about the indie game market, and the probability for financial success as an indie developer, make many developers wary of commitment to game development. In the answers to the question on Quora, “Is it still worth making indie games?” developers discuss the realities of making games independently in the aftermath of the gold rush myths. The 16 answers were cross-referenced for common attitudes on indie video game making. Of these attitudes, the most expressed were that it is worth it for developers passionate about games (7 times), that it can be financially profitable for developers with the right skills (6 times) or the right mindset (5 times), or that it is unlikely to be profitable at all (4 times). The overwhelming majority of posts do not recommend indie game development just for profit. The main conflicting groups are those who believe that financial success is possible with hard work and the right approach, and those who believe that the chances of success are so low that only a causal hobbyist commitment is rational. The group with a hard work mindset, based on this collection of responses, is larger than the group that has a more pessimistic outlook and recommends a hobbyist mindset.

Sometimes, these two groups enter direct conflict. On the forum /r/gamedev, a wider range of opinions are visible, from a wider range of users who are pseudonymous and whose levels of experience is often unknown. On this site, users reply to others’ posts more frequently, giving rise to chaotic arguments. Their attitudes readily surface under a post by user

‘aporokizzu’ about success story Eric Barone, whose game Stardew Valley grossed more than

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$30 million in its first year (Leack, 2017). Many users caution about aiming for his level of success. A user comments: “[Game development is] a goal where most people just crash and burn,” and another: “For every Eric Barone, there’s probably 10,000 people who should honestly just think of game dev as a fun hobby, and not the key to financial success.” These users claim that a hobbyist approach to game making is more rational than entrepreneurial commitment.

These comments are met with pushback from people who see those perspectives as reductionist. In one response: “Everywhere I see regarding indie dev or game dev online or irl basically non stop preaches about the indiepocalypse and how you should make a simple pong game while having a full time job. I wouldn’t say we need more of this.” Another user comments: “People don’t ‘crash and burn’. They give up”, providing an optimistic outlook on the personal value of game projects before diving into a philosophical spiel about proving one’s worth. These responses align with the hard work mindset. The different perspectives on this post provide a spectrum between enjoying game development purely for creative fulfillment, to aiming for creative and financial success with hard work. The difference in perception of the reality of the industry – whether entirely pessimistic, or more optimistic – is the driving force behind the conflict that appears in this forum.

The division between pessimism and optimism is not always clear, as the industry is complex. Established indie developers, like Tani and Roberts, know the difficulty which most independent developers face firsthand, as evidenced by their financial struggles (Gordon, 2019).

But they also know firsthand that sustainability is possible. Ryan Clark, creator of 4 Independent

Games Festival nominated games, recognizes that independent game making is hard. But he also cautions against excessive pessimism. In his article “The 5 Myths of the Indiepocalypse,” he discusses the indiepocalypse, a term which contends that oversaturation of the games market is

8 making it increasingly difficult to make a living as an indie developer. One of the driving factors behind this term’s popularity is the fact that , a large online distributor for PC games, was

“opening the floodgates” for new games on its marketplace with its Steam Greenlight program

(Caoili, 2012). Clark argues that the evidence for the indiepocalypse is a collection of misleading myths. The influx of new games to the Steam marketplace does not change the amount of new games being produced, or the amount of people playing new games, he argues. He also argues against the “Triple-I Big Budget Indie” hypothesis, which states that independent games will become more and more expensive to produce, based on trends in the AAA industry. Clark says these trends were created by AAA games’ need for graphical improvement, something that indie games are not as concerned with. Clark believes that these myths are creating a false narrative about the industry and impeding developers’ judgements, so he works to dispel them.

The indie game industry might not face an impending doom, but that does not mean that things are easy for indies. Clark believes it is getting better, yet it is still very difficult. People who recommend against entrepreneurial commitment in game development are not doing it out of spite – they want to help developers make informed decisions and avoid financial ruin. This may seem like a more rational approach compared to the “unwise career choice” that independent game development can be (Clark, 2015). But that rational approach can become overtaken by excessive pessimism according to Clark’s assessment of the indiepocalypse. His closing words to prospective developers are both words of warning and words of encouragement:

“You are insane to attempt this. But if this is really what you want to do, do not be deterred by the spectre of indiepocalypse."

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Conclusion

It is tempting to cleanly categorize the video game industry into two sectors: the large budget AAA industry, and the indie scene. While these easy definitions have some applicability, the reality of the industry is more nuanced. There are many people looking to get different things out of game development, and the differences in priorities is especially visible among indie developers.

Different perceptions about the video games market and industry contribute to the gulf between independent game makers and amateur game makers. These perceptions influence developers, creating the groups of the independent game maker, with a more positive outlook on the probability of market success, and the hobbyist game maker, who aims for fulfillment regardless of results in the market. These groups aim to fulfill their own goals in game development, but advice exchanged between these groups can be contradictory and conflicting.

Many experienced developers believe that aspects of both viewpoints are correct.

Further work can be done to find more influences on the independent-hobbyist gulf. For example, Keogh’s work (2021) indicates that labor issues, like unpaid mandatory overtime and discrimination, are a common factor for why hobbyist game developers avoid the mainstream industry. Labor issues rarely came up in the spaces that this paper investigated – in fact, most of the discussions never left the scope of indie game development, completely ignoring mainstream gaming companies. A more comprehensive method for identifying conversations about indie games, or more direct methods like the interviews used in Game Production Studies, would make it possible identify most of the factors that create hobbyist game makers. Using this knowledge, the video games industry can better provide tools and markets to all of its participants, better serving everyone involved.

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