The financial turbulence that hit middleware firms last year shows that the entire sector is in a precarious position, a highly-placed Trinigy exec has warned.
Trinigy general manger Felix Roeken believes that, in the wake of InstantAction’s collapse and Emergent’s escape from closure, developers need to be particularly cautious in choosing a game engine partner.
“Growing a middleware company is challenging, especially in the face of a video games market that is evolving so rapidly,” he wrote in a new Develop Blog post.
“New platforms and genres, more casual and indie developers, fewer AAA titles, new business models, more middleware competition – with all of these shifts going on simultaneously, middleware providers face the increasingly demanding task of staying focused as they grow.”
Roeken believes that both Emergent and InstantAction “fell prey to the problem of focus”.
He added: “InstantAction’s problems seem to have arisen when the company shifted resources away from Torque and its large customer base, and into what it believed to be a profitable space – web games and digital distribution.
“Emergent had a similar problem, only it started earlier in the company’s lifecycle. Emergent’s plan was to develop a huge development platform consisting of Emergent Metrics, Emergent Server, Emergent Gamebryo and other technologies.
“To get this platform off the ground, the company took in a number of large investments. The plan failed. The company burned through cash trying to get its platform developed and launched. It re-focused efforts on its core competency – Gamebryo – but by then, it was too late.”
“The company cut back on its development resources, and Gamebryo’s quality – the very thing it needed to have to continue funding the company’s existence – faltered.”
Trinigy, formed in 2003, has remained profitable each year, Roeke said.
InstantAction collapsed at the end of 2010 and its Torque engine is still up for sale. Develop understands that talks in selling the tech have been positive.
Emergent has undergone radical changes, with a new CEO, as the firm sold its assets off to investment to Korean firm Gamebase.
Roeken went on to say that middleware firms should be particularly careful when widening their remit to include different systems, technologies and price structurez.
“The more a company tries to grow, the greater the tendency to shift development efforts to the flavor of the day in order to secure more revenue to fund that growth,” he wrote.
“Sometimes, these shifts turn companies away from customers who made them successful in the first place. The trick is to grow without losing sight of what makes your offerings unique and your company special.”
He also urged caution in jumping in the growing space of ‘freemium’ game engines – offered by the likes of Unity and Epic Games.
“Companies can hedge against unknowns with deep price discounts and free versions of their software, but just how long can they survive at those price points?” he asked.
Roeken’s core message is that the best way to survive in a shifting industry is to stay close to customers.
“It seems simple, but with so many competing forces working against each other, sometimes companies lose sight of the simplest things. Customers can tell you what they’re working on and why. They can tell you about their financing models and the shifts they’re seeing in the industry. And they will most certainly tell you when you’re doing a good job or a poor one. As a result, middleware can and should shift their strategies accordingly.”