The gold rush is over

As we say goodbye to 2014 I am again drawn to the tradition of Janus, the two-faced Roman god who gave us the name of the first month of the year.

Looking back at the year gone past, you would be forgiven for thinking that not much has changed. There are more games than ever before, there have been more downloads than ever before. What a healthy industry eh?

The trouble comes where we look at the average revenue per user. Taking the total developer revenue and dividing that by the number of games it’s been estimated that the average revenue per game is $5,250.

That’s pretty scary, but unfortunately it’s worse than that. We know that the real revenue curve isn’t a straight line; the vast majority of the revenue is concentrated in a small number of top ranking games. So we need to estimate the median revenue, which is apparently only $400. The gold rush is totally over and, looking at how little the top grossing charts have changed, it’s seems we are in a matured market.

Given the average cost of development is $25,000, why are we still making games? I don’t think it’s just a case of ego or naivety. We remain influenced by stories like Flappy Birds and Monument Valley, as well as the phenomena of Candy Crush and Clash of Clans. However, I don’t think the money is the only driver. I think many (most?) individual developers are driven by the desire to realise their game ideas and to earn enough to be able to keep making games.

The gold rush is totally over and, looking at how little the top grossing charts have changed, it’s seems we are in a matured market.

Given this winter of discontent, where can we find signs of a glorious summer to come?

There are several strategies available to us in a mature market. Normally ‘go cheaper’ is one of them. Of course, with the free-to-play model this option isn’t really possible. Or is it? One of the problems with the free-to-play model is that players are still learning about what they consider valuable (or reasonable) to buy within the game.

There is some outspoken resentment over some games – Dungeon Keeper being the most obvious example of the year. However, other titles have had no such objections, such as Hearthstone. Offering a better more trustworthy experience might be a strategy for developers. Then there is the option to make a better game.

Easier said than done, but there is no doubt that Monument Valley and The Room just ooze visceral pleasure. That takes considerable effort, innovation and talent. People confuse the idea of quality with premium games, of course, and sadly there has been less innovation in gameplay terms for F2P games, but SSI have said repeatedly that need not be the case. However, neither innovation on business model or game quality will shift the needle hugely in a mature market. That requires disruption.

Being disruptive means we have to shift expectations, to change perspectives and to get people talking about out games. Some of the best disruption right now is not happening in game design itself, but in discovery.

There is clearly a discovery problem – and it’s no surprise given the huge numbers of apps. So no wonder players and developers are seeking other media in order to reach put to each other. 

2014 was a milestone year in the impact of video. I’m not just talking about Everyplay and the way YouTube is used to capture and share gameplay videos, but the way individual personalities like PewDiePie and Syndicate and groups like Yogscast can have on games communities. We often associate these kind of elite YouTubers with PC titles like Minecraft and Call Of Duty, but some mobile content like Crossy Road and Best Fiends have deliberately reached out to gain the attention of these kind of online celebrities.

Some of the best disruption right now is not happening in game design itself, but in discovery.

It’s easy to get caught up on the numbers of the individuals. PewDiePie alone has over 32m subscribers, but what is really interesting is the long tail. Just as anyone can make a game now, anyone can create their own video channel. Not only do games now command a mass-market playing audience, watching games being played either as eSports or as context for a discussion, has become a central part of the online viewing for this generation of youth culture.

If, like me, you are over 14, you have probably missed it. Loyalty to specific people at specific timeslots is so last century. There is so much to enjoy out there that I can be watching Yogscast on one screen whilst playing my latest Steam game (in my case, Terratech) at the same time. Video has killed the radio (and podcast) for this generation.

The lesson is that we can’t treat these guys the way we used to treat journalists. They aren’t trained the same way, they want more than column inches, they want to entertain their audience, even if it’s just half-a-dozen of their own mates.

Of course, there will always be the celebrities who command huge global audiences but don’t ignore the long tail of video sharers. Making your game share-friendly, creating magical moments which players can use and interpret creatively for themselves will pay off far more than paying dollars in a brown envelope hoping no-one will find out that the video is a paid advert. You will be found out and it will damage your brand as much as it damages the authenticity of the Youtuber. By all means pay them for an advert or other form of promotion, but be upfront. That doesn’t mean you can’t be clever about how you use the medium, just don’t hide that you are paying.

We often associate YouTubers with Minecraft and Call Of Duty, but mobile content like Crossy Road and Best Fiends have reached out to gain the attention of these online celebrities.

Getting attention without paying can happen and can be much more interesting than advertising. However, it requires dedicated effort to engage. The fabulous guys at Hipster Whale decided to add PewDiePie’s dog into their homage to Frogger. But that wasn’t enough to get the Youtube king’s attention. They systematically worked their social media to encourage everyone they could to tweet/comment about the game and PewDiePie’s dog. That takes a lot of effort and focus to achieve and would have been worthless if the game hadn’t also been fabulous. 

And before all you developers try to replicate this act, don’t bother. Everyone will be sending games with his dog – do something different. Disrupt. Change expectations. Followers aren’t remembered, so be the leader.

That’s where I think we find the hope for the industry. We are already seeing an increasing professionalising of the industry in terms of marketing, and a realisation that marketing isn’t a dirty word but something we have to incorporate into our design and operations process.

This is a maturing market and will remain so as long as the app stores remain so dominant. We can choose to follow the establish models and play the lottery game, hoping our game is the one which comes up top, or we can put the odds in our favour and design into our game the potential for video, eSports, social virality, and so on.

2014 has been a hard year for a lot of developers; 2015 will be more of the same unless we decide to change things and make better games.