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February 24, 2009

(Indie) Business is Business

Generally speaking, this is a good time to be an indie game developer. There are scores of inexpensive development tools and environments to choose from, many potential opportunities and channels for marketing and sales, and a number of great online communities for discussion and support. It's tough to make it as a full-time job, though. A few individuals or groups have done consistently well over the years, and of course there are the recent stories like Braid making everyone drool over the possibility of big-time success even for small developer groups. But for the most part, it's incredibly tough to find that sweet spot of just enough critical and financial success.

Take the story of Mousechief's Dangerous High School Girls in Trouble, for instance.

Mousechief has been at it for some time, with a pretty nice track record -- a finalist at the first IGF in 1999 (Flagship Champion), and another finalist at the 2006 IGF (The Witch's Yarn). Then, last year, they released DHSGiT, a casual game set in the 1920's from the "teen romantic comedy" genre. I've only played the demo, and briefly at that, but clearly they did a nice job with the game and they've received a great deal of attention and acclaim for it: it was GameTunnel's 2008 Innovation and Adventure Game of the Year (loosely defining "adventure"); it was on GameTunnel's Top 10 Games of 2008 and a finalist at IndieCade 2008; and it was recently nominated for the 2009 Writers Guild Awards for videogame writing. That's the kind of recognition an indie developer would slobber over.

However, an interview with lead writer Keith Nemitz popped up recently on GameTopius.com, in which I noticed this little nugget:

TC: Has the success of Dangerous High School Girls (critically and financially) changed the way Mousechief plans on approaching games? Does it give you more leeway and confidence going into your next project?

KN: I'd say is been pretty successful since people are still talking about it, eight months after its release. Metacritic-style of the eight reviews so far it's holding a > 80% average. Only two are recognized as official Metacritic reviews. (both at 80%) More are on the way. Financially, especially after catching an arrow from BFG, it has yet to recoup its measly $30,000 budget. But it's still being release on new portals. I'll just have to tighten my belt a couple more notches. I'm not yet at the point where I'll have to cut new notches. However, if it doesn't make a profit this year I won't be able to fund a new game.


A few interesting points to note here.

First, you don't often hear about how much it costs to develop a game, so it's nice to see some actual numbers. $30 grand is a tiny amount of money as far as the games industry is concerned, but for small indie developers, of course, that can be a prohibitive (and perhaps scary) amount as Nemitz suggests -- especially if you're trying to develop more than one game at a time as part of your business plan.

Second, I think it's notable that a game that has received so much critical acclaim has yet to break even. It's been only eight months since its release, yes, but given all of that recognition I would have thought its earnings had surpassed the $30,000 level. There are many potential reasons for this, of course, the most probable of which is the fact that the game got yanked from Big Fish Games just as it was kicking in, due to some content that was deemed "questionable" by a few vocal opponents. And yes, we all know that critical success does not necessarily guarantee financial success, but still. At $20 a pop, they would need 1500 unit sales to break even. If someone had asked me, I would've guessed that they sold that many some time ago, BFG snub notwithstanding.

But that's the thing; 1500 unit sales doesn't sound like a lot, but almost any amount can be a lot for small developers. It's easy to look at that number and think it should be simple to achieve, certainly not too much to ask for a game with as much critical success as they had. But without a dedicated marketing department it is far from an easy task, and in a case like Mousechief's it might mean all the difference between one project and multiple projects. I think it highlights what a lot of small indie developers are up against, whether they know it yet or not.

This is not a criticism of Mousechief, mind you, nor am I trying to implicate that they somehow failed to do everything they could have done to sell more copies. It's a complicated business and this is certainly how it goes sometimes, despite best efforts. Plus, it's still an ongoing process, and more recognition and exposure is likely to come. I admire them for the work they've done, and their recognition is well-deserved.

I do think that DHSGiT will surpass the break even point and be financially successful, eventually. But it's still a battle, even when you've got a solid, innovative game on your hands.

2 comments:

Mike Rozak said...

The usual estimate is that 1% of all downloads results in a sale.

I've been watching the numbers, and looking at my own unfinished game (with no sales), and come up with the following rough guestimate:

- About 10% of the people that visit my web site (and watch the videos) download my game.

- Only about 10% of them play for any amount of time. (Which tells me that my game isn't good enough yet.)

- From Runescape's numbers, only about 10% of the people that play for any amount of time will actually pay.

So, as a rough guestimate, you need 1000 people to visit your site for every paying customers.

IF you manage to develop a really good game, you might get 20% numbers at each stage (instead of 10%), and only need 125 visits per paying customer.

This 125:1 ratio is low enough that recommendations will create a positive-feedback recommend-to-friends cycle. At 1000:1, recommend-to-friends is insignificant, and you have to spend so much in advertising that it costs more to acquire a customer than they pay back.

Rubes said...

That sounds like a pretty good summary, or at least a fair estimate. So in that sense, 1500 unit sales would amount to somewhere around 150,000 visitors, which can certainly be a lot.

Coyote also pointed out that portals like BFG also take a pretty hefty cut of the sales, such that you would need plenty more than 1500 unit sales to break even.