The Fair Game - Part 2 : what ?

In part 1, and all through this series, my working hypothesis is that mid-to-biggish budget videogames will increasingly be funded, marketed, distributed and retailed without the involvement of classic publishers, and mostly through channels that exist already, only a bit more refined and mature than they are now. 

The distribution and sales end of the circuit is pretty much sorted out by now : indie studios can already release and retail their titles through established online app stores or run their own webstore for little to no upfront costs, and get to bite a significantly larger share of the moneypie from gross sales (currently averaging at 70% of gross in appstores, roughly the reverse of the best case scenario 30% a studio can hope from a big name publisher if they don't get screwed out over 'hidden costs').

On the funding side of things, I'm reasonably confident crowdfunding (or something very much alike) and committed investment will become the dominant channels to secure development and production funds over the next five to ten years, as traditional publishing loses relevance in all but mega-budget projects, leading to a very fertile ecosystem of specialist fundraising and financing platforms, and spawning a middlemen industry of fundraising campaign managers, transparency certificators and patrons of the arts agents.

In this section I try to outline what species of gaming studio are most likely to thrive in this new environment, and it comes as no small surprise to me (spoiler alert) that it's mostly good news for gamers and gamedevs alike.

Whether I banged my head and am hallucinating is for you to tell, because obviously, I can't. So let me paint you a picture.

No, I can't draw…

The first good news, although we'll see it's a mixed blessing, is more games will be produced.
Well, maybe just as many as today, for the recent explosion of the browser and mobile games platforms has more than compensated for the draught of offer during the mid-naughties, but the cornucopia theme is here to stay, as more studios and gamedevs try their luck, thanks to a generally dev-friendly context.

It may not all be good or interesting games necessarily, and I expect Sturgeon's Law to hit in full force, possibly cubed, during the early euphoria. Much like youtube, blogs and podcasts reduced the barrier to entry to publishing in other media, and cheap prosumer electronics have enabled anyone to start filming, recording and editing on a budget, I expect to see prosumer-grade middleware and game-building toolboxes to flourish and lead to a mudslide of terribad fan-made games to flood the various app stores in the next couple years.

The positive aspect being, from this smelly soup shall emerge actual talent, who may end up creating great games, at some point. But it will be a storm of (e)sc(h)atologic proportions in the meantime.

During that feisty period and beyond, the gamedevs and studios that are most likely to thrive will be those that properly account for three critical notions: 

• The newly opened gates of publisherless funding, promotion, distribution and retail means indies can now compete with big name companies on fairly even footing, and should go for it without fear, provided they pick their battles.
   
• Riding on the coattails of big hits is no longer a valid survival strategy : it's all about differentiating oneself and growing a loyal community of fans, customers and employees.
   
• The endgame for an indie studio should not be about hitting the jackpot, so much as to endure and keep going, slow and steady, long after competitors crash'n'burn.

Because the main challenge for indie studios in this world of plenty will be to rise above the noise in order to find and secure founding, talent and customers, that aspect of the business will become an integral, and quite large, part of a studio's operations.

That last bit was true already under the previous publisher-centric model, but once publishers are largely removed from the picture, it behooves the customer/players/fans themselves to decide the fate of games and studios from a much earlier stage than used to be customary.

Such a shift in the balance of power may very well be the best thing ever to happen to commercial videogames, because it holds the potential to benefit equally well players and gamedevs, which is only (if belatedly) fair.

Friends, seen here groped by the invisible hand of the market.

The Fair Game doctrine can be summed thusly : do right by your players and your crew, and they'll do right by you. It takes more skill and committment, and is trickier at first than the old rape and pillage trick, but it's better business in the long run, because golden goose.

Most if not all gamedevs are passionate gamers themselves, and the way they prefer to go about their business is not dissimilar to the way avid gamers go about their patronage : they're both willing to put all the time and resources they can afford to satisfy their desire for good game(s), and share the belief games ought to be judged (and succeed or fail) on their own merits.

Conversely, publishers have little incentive to care for good games, as they're not in the business of making games and keeping studios going, but in that of selling game boxes. It's common wisdom for publishing execs that there is no more proportionality between development/production costs and quality of the product than there is correlation between gameplay value and revenue generated : once bare minimal requirements are met to avoid scaring away customers, the theory goes it's all up to marketing and good luck.

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In a context of instant global grapevinery, of plethoric quantity and variety in offerings, advertising dollars will only get you so far : beyond raising awareness about the existence of your product, promotion firepower no longer has the juice to make things happen and close sales but with the least discriminative of buyers.
As the market segments into well-catered to niches, and the old blob that happily swallows anything coated in enough eyecandy shrinks accordingly, it may become increasingly difficult to justify ad-spending, except in those market segments where competition remains constrained to a few players and the Matthew effect works well enough that an initial overwhelming show of marketing force might still pay off.

My hypothesis then, is the key to financial health for self-publisher studios in the near future will be frugality in all expenses that aren't directly contributing to increased product value or to stronger customer and employee loyalty.

Profit shall no longer be expected to come from artificially pumping volume up, but from reducing overhead and the cost of closing sales, leveraging customer loyalty and word-of-mouth to supersede advertising dollars, and from cutting on the hidden costs of high turnover and burnout rates, to instead capitalize and cultivate in-house talent and assets.

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All of the above may seem self-evident, as it's nothing but conservative, common sense practical advice for small businesses, and yet, that's not the way most studios have operated to date, which is why it's worth pointing out they now can, and should, adjust their SOP to their changing circumstances.

What's happening to alter the deal so fundamentally is, once again, the end of the publishers' hegemony on mid-to-biggish budget productions. 

Unless they were lucky enough to be sitting on a fairly fat war chest, or to be savvy enough to secure funding from committed investors, studios who wanted to venture into productions that cost more than a decent car had to submit to the conditions of a publisher. This meant pretty much losing control over both treasury and calendar (and often original IP, too) to an entity whose primary goal is to ship fast'n'cheap, take the money and run, as it itself must answer to shareholders concerned only with the bottom line and quarterly profits — possibly brand and reputation of the publisher's, yet only insofar as it could impact stock value.

In any case, what publishers cared little about, and arguably couldn't much afford to, was the health and growth of the individual studios providing their wares, unless they incorporated them, and then had a vested interest in their not tanking days after release, and keep on churnin' titles out.

With their priorities at odds, publishers see studios as disposable resources, while the studios more often than not don't plan to disband the day after the wrap party, and instead hope to push onwards to the next game or ten, which in truth is not for them to decide, as they're unlikely to make enough royalties to ever fund a title on their own, or afford to concern themselves with the career development of their staff with what crumbs the publishers toss their way.

Thus studios tend to operate with the overhead and immobilization of small factories, yet the bubble'n'burst economics of movie production gigs, which goes a long way towards explaining why this industry has got into the bad habits of eating its young and burning through talent like it's crack cocaine.

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In part 3 of this series, we'll look further at talent and players as assets and partners, and how to make the most of them to run a successful silent killer of a Fair Game shop.