October 9, 2005

Live at the IndieGamesCon (day 2)

by Andrew Stern · , 5:14 pm

Adding to yesterday’s coverage, I’m continuing to blog live today at the IndieGamesCon in Eugene, Oregon.

(Some fun news — they just announced Fa├žade has won Most Innovative Game at the IndieGamesCon’s Player’s Choice Awards. It’s gotten good play and buzz at the show-off center here this weekend. :-) Almost no one had heard of it till seeing it here.)

back to the talks…

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The Billion Dollar Indie Opportunity
Benjamin Bradley of GarageGames

only indies have the risk-taking ability to go after these 12 steps of indie success, that I’ll talk about here

We’ll also talk about China — every major game studio wants to go after China
But isn’t there no such thing as “indie” in China?

Well, over the last few months, laws are changing to make it surprisingly easy for indie developers to break in there, easier than it is for large companies

expectation mgmt — can you succeed at making a living in the game industry
Our game industry is changing so much, even major studios are going to be happy to sell 30-40K copies of a game — which are numbers that indies are thrilled to get

12 steps of indie success

1. casual downloadable opportunity, through portals
$675M in profit just for indie developers last year
you want to get your game in every portal, you want to be in front of your audience in any way you can be

2. niche online
sometimes you need to look at your game and be on all the sites that aren’t game sites in your niche (e.g., if you have a juggling game, get your game on all juggling sites)
currently $200M level for niche markets
e.g. the educational market is a huge niche market — every school has got computer labs

3. coin-op
The arcade cabinet industry makes over $200M for developers; there’s currently no game development community just for arcade — you could adapt your game for arcade!

4. this is first year that TV ad revenue is down — down 26%
it’s getting picked up in games!
advergaming is some ways the future — ways to get development funded
the biggest advergaming company is Nabisco — they have a gaming section — they have branded every game they can get their hands on — their cereals are starting to come with games in the box

5. OEM bundles — Apple is bundling 3 lesser known (indie) games — Marble Blast, Nanosaurs…
There are opportunities
e.g. joysticks come with CD’s to install drivers; there’s opportunity there to put your games or demos there
A great way to get stuff out the door
There are a lot of Linux distributions out there looking for the game that can put them over the top — it’s not a lot of money, but it’s some money! The more areas you get into, the more bits of money you get

6. serious games
most major studios can’t enter those realms — they don’t have enough control of their IP
gov’t, etc. are starting to realize gaming is a great way to make training
Biggest one we’ve seen — government military contracts
there’s a lot of money there
they don’t know how to talk their systems to each other — they may need a game engine to coordinate their systems together — e.g. tanks coordinated with infantry with helicopter
they’re not looking for polish — they’re looking for proof-of-concept

7. handheld
Tapwave has gone away, but there are others out there
You can do what you love, and get paid for it

8. massive demand for last-generation console games
Sony is one of the best doing this — promoting developers for PS1 games — there are new PS1 coming out even now! They’re sort of rentals
Not everyone buys the brand new consoles when they come out
It’s not just America who has the consoles
e.g. South Africa has a huge gaming population — but it’ll take a while for new consoles to filter down there

9. the value channel, e.g. the bargain bin
some people think of that as the graveyard
but it could be a goldmine for indies, to get your product in people’s face
there may not be much money there, but people see it, they then read about it on the web, etc. They think there’s got to be something here.
The more places you can put your product, the better off you’ll be

10. taking contract work — for indies to survive, you need to pay your bills
take contract work within your field; you’re working on your skills
army folks may need a model; guru.com; contract based projects
you end up working full time total — part time on contracts, part time on your own game

11. Windows is not the only platform out there — don’t neglect the other platforms
for PC games, there’s a 1-2% click-on to purchase ratio
for most Mac games, there’s 4-8% click-to-purchase ratio — because there aren’t that many games for the Mac
a few sales are better than no sales

12. the overseas market
we here in America forget about all the time
there are companies that literally come to you and say, I want to distribute this all through Germany
there are companies in every contrary
you just have to take that little extra step for localization
not just downloadable they may even box it for you

—-

China
I was just at China Joy — the E3 for China
MMO’s are huge there
Some Chinese male and females were playing 16hrs+ a day
Govt stepped in, and said gaming is destroying our families
now there are laws about how long you are allowed online
the software now has to boot players off

Currently there is a $2B initiative from the Chinese government to promote casual games!!
most game companies there don’t have casual game engines / titles
A big opportunity right now to port your casual game to China!

In fact, the Chinese govt wants games without player killing in it!

—-

Identifying the niche that you can market to

A lot of indies just rely on word of mouth
As an indie developer, you can’t just leave it up to other people — you have to promote yourself

—-

The biggest takeaways:

a) there’s a broader market than the US

b) indies take too much time polishing their code — not polishing their game, but their code
so much time perfecting the coding
But as indies, getting it done and getting it out should be your goal — not perfecting your code

c) do more networking
indies do this well, but could do more
never throw away a business card, phone number or name
don’t be afraid to ask questions, ask their name again, ask do you know anybody else interested in this
people like to network, to tell you names
Linkedin.com — get in there!

d) as an indie game developer, you’d better love what you do
otherwise it’s pointless
if you really want to make a living from it, there’s a lot you’ve got to do
you have to be committed

Getting out there, getting seen, getting networked, getting money

Chances are you’ll probably have to look to some of these other opportunities I mentioned above
Don’t be afraid of the word “no”
The 12 areas listed above, the big guys can’t touch — but you guys can
If you add all that up, that’s over $1B slice of the pie, that only indies can go after
the porting companies for int’l distribution can’t approach EA, but they want to get games out there; they want a business, they want to make money

Q: I’m a music distributor, I’ll looking for games to put in record stores…

Yes! A perfect example of a great opportunity. Talk to indie bands, get soundtracks from them, and they’ll take your game around to every club they stop at
I haven’t heard of many indie developers taking advantage of the music out there

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Starting your own indie studio: Legal issues
Thomas Buscaglia (Lawyer and Game Industry Evangelist)

Deer Hunter — was a huge success, but the game sucked
Business and marketing people love that game — they are of a different mindset than developers

Nightmare for a business person dealing with a game developer: their game was absolutely brilliant, but they were so unsophisticated in terms of their business practices, I couldn’t deal with them

1. Can’t sell what you don’t own
game is comprised of code, art, assets, words
most governed by copyright law

With other folks making code/assets for you, if they’re not a fulltime employee, there needs to be contract that you will own what they make

Even if you’re the 100% owner of the company, you still have to assign ownership of the game to the company
Form a company (register with secretary of state), get an EIN (tax id number)
Work-for-hire agreements — they’re a little dicey — I wouldn’t recommend generic ones you find on the internet (ie, buy my forms)

2. Confidentiality agreements — mutual NDAs
can’t copyright ideas — only protected by trade secret laws
if person you’re talking to isn’t bringing their own ideas, unilateral (one-way) NDA can work
Always offer a unilateral NDA first; it’s not your job to protect their interests
Read them and be careful — I saw a scary one from Microsoft…

Most publishers are reluctant to steal IP from you
(Instead they may try to screw you — make a deal with you, and then attempt to say you’re in breach of contract in some way, and not pay you! knowing you’re probably not going to have the funds to sue them or even set up a racketeering lawsuit…)

Q: Most disputes in the game industry seem to focus around milestones, right?

Any times there’s 3rd party funded, you’ll have to deal with milestones, with financial advances at each milestones
Problem is — let’s be serious — game production needs iteration — can’t easily conform to milestones — milestone deliverable becomes sort of like a joke — but it’s a cool joke, the publisher is okay with it
But contracts can be terminated by cause or convenience; only the latter gets the developer paid, and developer can retain the IP
But termination for cause based on material breach, generally they don’t pay you and they keep the IP
So if you treat the milestone process like a shared joke, you’re vulnerable to termination by cause
Publishers are nice, but they can be snakes and can bite
How do you get around this? (I’m writing a whitepaper for the IDGA on this) Contracts need to actually reflect the way we do business — eg iterative design. Need flexible milestones in contracts. Iterative milestones.

You need to ask publishers for such a contract; they’ll never offer it themselves, but surprisingly they may agree to something like this

If you get a contract, exercise your auto-rights
You have the right to send an independent accountant to audit your publisher’s books to find out revenues of the game, to make sure they’re paying you properly — e.g. one developer once got $6M in lost revenue