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[tametick]

Just thought I'd give you a head up on a blog post I wrote after reading a thread about it here on tigsource:

Why Bundles and Steam Sales Aren’t Good for Most Indies.

Stirred up a bit of contreversy on reddit and Hacker News.

-Ido.

[Vino]

The answer is to innovate. The market is tighter, emerging markets only ever get tighter, no news there. But there's always lots of success stories in tightening markets anyway, and it's those who stand out despite the higher competition. There's really nothing new here. Those 1% who are making all of the money are there because their innovations moved the market to where it is in the first place.

You have a fair point about what's happening, but it's not going to stop happening just because we see it going on.

[Christian Knudsen]

You have a fair point about what's happening, but it's not going to stop happening just because we see it going on.

I can't understand the meaning of this sentence at all. Of course it's not going to stop happening just because we see it going on... Why would observing it stop it?

[PompiPompi]

The answer is to innovate. The market is tighter, emerging markets only ever get tighter, no news there. But there's always lots of success stories in tightening markets anyway, and it's those who stand out despite the higher competition. There's really nothing new here. Those 1% who are making all of the money are there because their innovations moved the market to where it is in the first place.

You have a fair point about what's happening, but it's not going to stop happening just because we see it going on.

If everyone assumed succesful games are good games like you do, we wouldn't have any indie games today.

[Vino]

I can't understand the meaning of this sentence at all. Of course it's not going to stop happening just because we see it going on... Why would observing it stop it?

I meant, writing about it like this and making people aware of it won't stop it.

If everyone assumed succesful games are good games like you do, we wouldn't have any indie games today.

I was talking about indie games (surely you agree that the recent batch of successful indie games are good?) but it applies to other games as well. Regardless of what you think about Skyrim, Daggerfall was a revolutionary game. Rage may not be so hot, but Doom and Quake certainly were. The most successful games today are generally either made by people who were once game changers, or the games themselves are game changers e.g. Minecraft.

[Booger]

That's why I want to get into the 1% so that I can snub at complainers:

Sucks to be you, ain't it?  Well, you've just gotta work harder and up your game.  That's life!

(Yeah, I've been on the receiving end of that kind of sentiment in various forms over the years)

[Zaphos]

The premise seems to be that low temporary discount prices will cannibalize sales at the normal prices.  Do you have data to support this, or indicate the magnitude of the effect?  If so you should include it in the article.  If not you should at least try to get a quantitative sense of it.

[increpare]

The premise seems to be that low temporary discount prices will cannibalize sales at the normal prices.  Do you have data to support this, or indicate the magnitude of the effect?  If so you should include it in the article.  If not you should at least try to get a quantitative sense of it.

Seconded.  The article is nothing without some facts to back it up.

[PompiPompi]

I can't understand the meaning of this sentence at all. Of course it's not going to stop happening just because we see it going on... Why would observing it stop it?

I meant, writing about it like this and making people aware of it won't stop it.

If everyone assumed succesful games are good games like you do, we wouldn't have any indie games today.

I was talking about indie games (surely you agree that the recent batch of successful indie games are good?) but it applies to other games as well. Regardless of what you think about Skyrim, Daggerfall was a revolutionary game. Rage may not be so hot, but Doom and Quake certainly were. The most successful games today are generally either made by people who were once game changers, or the games themselves are game changers e.g. Minecraft.

Sure, and all Apple products are the best because Apple is the most successful compnay in the world. They are not overpriced at all.
Your attitude is bad consumerism which is one of the reasons why AAA companies make the same games over and over again. Sure, AAA companies make good games, but if everyone were satsified with their game, then people wouldn't be making indie games.
You can't even imagine that people who made successful games can also make bad games that will sell because they have connetions and channels. And you can't imagine that an unknown indie developer can make a good game that won't get much attention just because people like you ignore unknown developers.
Don't you want variety and real competition? Instead of media monopolies?
Gatekeepers are powerful monopolies, this is not fair competition. That is what you are implying, I suppose.

[GZ]

What I got from the article is that prices for indie games have been dropping historically and these bundles are just another example of them driving down price expectations even further. The App Store and other marketplaces were also listed as a reason, and this is pretty well established since around $1 is the going price for games on those services. Pricing is more about selling more copies at a lower price these days, as opposed to less sales with a higher price tag like it was common back in the day.

From what I understand, the point is that the Joe Indie of today is expected to sell his game for $2 but can't generate enough sales numbers to make money since expectations won't allow for a higher price tag. If any of you remember the uproar over the $15 price of VVVVVV, this seems like a fair argument to me. It used to be normal to buy indie games at $15.

In order to get the big sales numbers, you need a lot of attention. Making a name for yourself is tough simply because there are so many games out there, and that gatekeepers are the ones who decide the winners. Places like Steam or some successful bundle are among the few. As the article puts it:

Saying “just get on Steam/Humble Indie Bundle” is about as helpful as suggesting that you should win the lottery.  It’s not a valid business plan and no one (except maybe the people in Indie Game: The Movie) can guarantee your number will come up.

Do I agree with this conclusion? To some degree. However, I think there are enough opportunities out there right now that indies just need to look and branch out if they want to be successful. Some indies will get success fairly quickly while others need to spend several years or more before they finally get on their feet. I think in any industry you get this situation where 1% are making 90% of the revenue, and I'm not really sure if anything can be done about that.

[mcc]

I feel like I'm very lucky when I can get someone to buy something of mine for $1 or $2. Most of my stuff is given away for free and I'm not sure I've gotten the hang of convincing people to download it, even then. My big worry is that I'm limiting my audience by charging money at all, while not likely in the process making all that much money back.

I'm very proud of my work but it's also all very small-scale and short. It's unclear to me why I deserve better than app store or steam-bundle prices for what I made. The game I put on the iPhone app store for $2.99-- let's say someone else had made it, and sold it to me for $9.99. I think I'd enjoy it, but I'd roll my eyes and feel like $9.99 was a ripoff.

Meanwhile-- I'm not really sure you (tametick) are correct you're "the 99%". If I'm not mistaken, you're successfully selling a game at all. I would estimate "the 99%" are those of us making RPG maker games and Ludum Dare projects and Flash games on Newgrounds and not successfully making any money period. Which leads to a question. If knowing that a lot of indie games eventually suddenly drop from $10 to $1 (gotta save that price of a big mac value meal!) dilutes the value of the $10 games or makes people less willing to buy at that price-- then shouldn't the enormous, teeming mass of free indie games, facebook F2P shit, NES ROMs, and $1 games on Wii Virtual Console similarly dilute the market? If there's someone out there who absolutely OMG won't pay $10 for a game if they have an alternative, then it seems to me there is so much opportunity to obtain entertainment without paying that extra $9 that the battle is already lost even if the app stores shut down and the humble bundle / steam bundle stuff halted. Like:

5 or 6 years ago, you’d remember that the price for a desktop indie game used to be about $15-20.  A cheap “casual” game would cost you maybe $10

Actually, I don't remember this. What I remember is 5 or 6 years ago is playing Cave Story and Knytt and Punishment and paying $0. At that time I wasn't buying indie games at all (unlike today) because no one was making games for mac back then. I also remember people complaining $15 for Braid on XBLA was too much back around that time (but buying it anyway). Meanwhile, when I look at today-- I do see people charging $10 or $15 for games, and I see $10 games on the app store. So actually, I don't think I see much of a difference between today and then in terms of the upper and lower bounds of pricing and how people react to those poles. What I do feel like is different now vs then is that back then there was a whole lot less. Fewer games for sale and fewer games for free download. Perhaps if there is downward economic pressure on prices now vs 4-5 years ago, it's due to the increased amount of games competing for eyeballs-- not changes in the way people buy things?

The "gatekeeper" aspects of Steam / Humble Indie Bundle seem like a different problem.

--
tl;dr if I actually got a chance to participate in a bundle where I got 50¢ per download instead of 0¢ per download I'd jump at it and it would be objectively for my purposes the best business move I'd ever made. I expect that the people making other indie games are adults (or at least reasonably astute 16 year olds) and that if they participate in a bundle it is similarly because they think it is a good business decision. If they think selling to me for <$2 is not a good business decision they are free to charge $10 and then make a case to me I should pay that.

[PompiPompi]

I feel like I'm very lucky when I can get someone to buy something of mine for $1 or $2. Most of my stuff is given away for free and I'm not sure I've gotten the hang of convincing people to download it, even then. My big worry is that I'm limiting my audience by charging money at all, while not likely in the process making all that much money back.

I'm very proud of my work but it's also all very small-scale and short. It's unclear to me why I deserve better than app store or steam-bundle prices for what I made. The game I put on the iPhone app store for $2.99-- let's say someone else had made it, and sold it to me for $9.99. I think I'd enjoy it, but I'd roll my eyes and feel like $9.99 was a ripoff.

Meanwhile-- I'm not really sure you (tametick) are correct you're "the 99%". If I'm not mistaken, you're successfully selling a game at all. I would estimate "the 99%" are those of us making RPG maker games and Ludum Dare projects and Flash games on Newgrounds and not successfully making any money period. Which leads to a question. If knowing that a lot of indie games eventually suddenly drop from $10 to $1 (gotta save that price of a big mac value meal!) dilutes the value of the $10 games or makes people less willing to buy at that price-- then shouldn't the enormous, teeming mass of free indie games, facebook F2P shit, NES ROMs, and $1 games on Wii Virtual Console similarly dilute the market? If there's someone out there who absolutely OMG won't pay $10 for a game if they have an alternative, then it seems to me there is so much opportunity to obtain entertainment without paying that extra $9 that the battle is already lost even if the app stores shut down and the humble bundle / steam bundle stuff halted. Like:

5 or 6 years ago, you’d remember that the price for a desktop indie game used to be about $15-20.  A cheap “casual” game would cost you maybe $10

Actually, I don't remember this. What I remember is 5 or 6 years ago is playing Cave Story and Knytt and Punishment and paying $0. At that time I wasn't buying indie games at all (unlike today) because no one was making games for mac back then. I also remember people complaining $15 for Braid on XBLA was too much back around that time (but buying it anyway). Meanwhile, when I look at today-- I do see people charging $10 or $15 for games, and I see $10 games on the app store. So actually, I don't think I see much of a difference between today and then in terms of the upper and lower bounds of pricing and how people react to those poles. What I do feel like is different now vs then is that back then there was a whole lot less. Fewer games for sale and fewer games for free download. Perhaps if there is downward economic pressure on prices now vs 4-5 years ago, it's due to the increased amount of games competing for eyeballs-- not changes in the way people buy things?

The "gatekeeper" aspects of Steam / Humble Indie Bundle seem like a different problem.

--
tl;dr if I actually got a chance to participate in a bundle where I got 50¢ per download instead of 0¢ per download I'd jump at it and it would be objectively for my purposes the best business move I'd ever made. I expect that the people making other indie games are adults (or at least reasonably astute 16 year olds) and that if they participate in a bundle it is similarly because they think it is a good business decision. If they think selling to me for <$2 is not a good business decision they are free to charge $10 and then make a case to me I should pay that.

I think the point is, what people expect to pay. Not what they are willing to pay.
When people buy an AAA title they would consider $40 cheap. When they buy an Android game, they would consider $4 expensive.
It's not that they can't afford a $40 game, it's what they expect to pay. That is the problem.
Lowering the prices means people expect to pay X for category Y of games. And that is the problem. The bundles lowered peoples' expectations on the price of indie games.
Sure, for the lucky guys who get into a bundle, they make a big profit at selling a game at $2. But for the rest of us who don't get into a bundle, a gamer might not pay $5 for a game, because "It's expensive".
It's like my brother saw Minecraft on the Android market and said "This game is expensive!", and it was $6.
It's not that he doesn't have money, he got enough money. It's just that his expectation of the price of a game is very low. Not because heis a cheapskate, because that is what he is familiar with.
He really doesn't play that many games, but from his point of view, $6 for an Android game is expensive. Why? Because those are the prices he is used to, from his limited perspective.

[Evan Balster]

I think it's also worth noting that as people in the same industry, those of us who want to make a living here are in competition with one another, capitalist-like.  It's easy to forget this, because as indie games are more or less taking table scraps from AAA games we've generally got no problem giving other indie developers a leg up whenever we can, and that makes ours an awesome community.

Regarding gatekeepers, this is where the one true misfortune lies:  to escape the "lottery" effect you need to be "connected" one way or another.  Shitty though that is, our community is still a meritocracy, and you can earn your way there (either to connectedness or through the gate proper) with an insightful, avant-garde or popular work.

For instance, making Infinite Blank (for its own sake) got me into Sense of Wonder Night in the Tokyo Game Show, where I met Tyrone Rodriguez (through friend Ted Martens from my hometown) who ended up offering me the work of porting Cave Story Wii to PC/Mac.  I did the port because it was a damned cool thing to work on and I'd burned myself out on Infinite Blank.  It's on Steam now, and having had correspondence with those folks, I now have contacts there (of a sort) and experience with their SDK.  None of this was done in the name of "networking" or "resume-building", though those were side effects.

[larsiusprime]

A note on competition -

Before I was an indie video game developer, I was a wannabee-board game designer and I went to GenCon to pitch some board game ideas. I was 100% unsuccessful, but I did have an interesting conversation with the head of Rio Grande games. I asked him what he thought about his 'competition', ie, the other small board game companies like Mayfair, Steve Jackson, etc. Here's what he said:

"I don't spend one second worrying about them, because none of them are my competition. In fact, I'm GLAD whenever someone buys a game from Mayfair or Steve Jackson, because it means they're buying board games, and it makes them more likely to buy from me next. My real competition is Time Warner - ie, people watching TV, instead of playing board games."

I think this is a really good way to look at it. The more people buy indie games at any price, the more likely they are to buy yours, because now they've entered this market at all. Now they know what indie games are, and they might develop a habit for it.  So, people have this extreme loyalty to Steam that is somewhat detrimental, but where did that come from? Steam didn't exist a few years ago. They got it with good service. If someone else comes along with equally good service, they will get that loyalty too and customers will be willing to try that platform, too.

I think the downward pressure on games from the iPhone and from Steam/HIB are two different things. In the case of the iPhone, the downward pressure comes from the horribly broken discovery system that forces you to use rock-bottom prices as an artificial mechanism for getting on the charts. Eventually this forces nearly everyone to go free-to-play.

With Steam and HIB, it has more to do with natural market forces - ie, they sold games for cheaper and suddenly LOTS OF PEOPLE STARTED BUYING THEM, so others started following suit. This has more to do with the fact that there's ~0 marginal cost to producing a digital download. A cartridge costs me X to manufacture/ship/package/sell, so I have to charge at least X+1 to make any money. CD's cost even less, but customers are used to paying X+1, so I keep the same price and make higher margin, but players grumble they're getting ripped off.

Digital downloads come along and someone realizes that selling for any amount above $0 brings in profit, and customers reward them generously. So, naturally this is going to bring prices down. Indie games used to be considered "cheap" compared to $60 games, but now I feel like honestly those $60 games should cost maybe $30 at most.

So, you can say Steam and HIB control some big parts of the market, but they're also pretty recent forces in the market, HIB especially. They came out of nowhere and fulfilled a need that people were craving, and were rewarded with financial success. Now, plenty of other portals and bundles are opening up, giving developers plenty of choice with where to publish. There's still gatekeepers, of course, and I'd never ever plan a business strategy around expecting to get into Steam or a bundle.

So, the situation isn't 100% roses and daises, but it's a hell of a lot better than 10 years ago where your choices were basically find a publisher and get laughed at or exploited, or put your hopes on the shareware model and build your own e-business platform and hoped people would trust you.

If someone can provide some actual figures that Once Upon a Time back in the glory days of 1995-2005 that a greater number of Indie Game Developers were supporting themselves than today by selling games for $15 a pop, then maybe I'll reconsider these thoughts, but the (informal) evidence I've seen so far points in the other direction - MORE developers now are supporting themselves, MORE are selling games for lower prices, MORE players are buying indie games, and this includes people who aren't on Steam/HIB.

MOST developers definitely aren't succeeding, but that's always been the case. And who do we consider "MOST", anyway? 12-year olds? Casual hobbyists? Students? Adults? Contractors making indie games on the side? 'Professional' Indies who quit their day job to do this?


Summary:

I think Apple has artificial downward pressure that is bad for the industry because it's not a true price signal, but I think Steam/HIB merely tapped into gamer's frustration with fixed high prices on low-to-zero-marginal-cost digital goods, and the downward pressure is a natural market force correction to inflated prices. Gatekeepers exist and it sucks that we can't all be let in, but there's more opportunities now than there were before and it's easier to succeed now then it used to be.

[Leroy Binks]

I think in any industry you get this situation where 1% are making 90% of the revenue, and I'm not really sure if anything can be done about that.

Let's Occupy Steam!! j/k

[PompiPompi]

It sound like you make sense, only... where exactly are those people buying Indie games on Steam and on HIB are going to find other Indie games?
The uneducated game consumer who don't know much about Indie games, only knows about HIB\Steam and all the websites that a select few "Super-Indies" control.
You won't see those masses come to TIGSource or other website looking for more Indie games. They will just return to the same place. The gate keepers are those who have channels to the consumers. The rest of us don't.
There are more opportunities because there are more gate keepers selling Indie games. But there is no single place that is not run like a corporate business "money comes first" for indies to sell their games with a large audience.
So sure, Gate Keepers are letting some indie devs to get a share from their pie.
However, even though there are more indie devs selling their games and making their money, the power concentration and control of media and channels to the consumers is more tightly held by a select few people. More than before.
So, your theory is interesting, but the bottom line most indies' success depend on the generosity of those gate keepers.
Of course you can compete with the gate keepers, but then it becomes a competition on platforms and not competition on games. Not what most indies want to do.

[larsiusprime]

Well, there are new sites coming all the time, like Desura, Indievania, etc.

Beyond that, nobody's really out there dedicated to making your dreams come true. You have to make it happen yourself. My personal strategy is to just get the word out myself and connect with a highly motivated niche market and hope to get some word of mouth going. So far I've gotten a pretty good response, a lot of people signing up for my game's newsletter, etc. A lot of this involves keeping in touch with journalists who cover indie games, maintaining a website, blogging semi-regularly, and having a good public demo out that people can try before they buy (it helps a LOT of it that demo is playable in a browser).

All of those "super indies" were nobody's at one point in time. If they can do it, it suggests that others can do it, too, to the extent that their business models are repeatable and based in sound principles. Derek Yu was a nobody once, so was Alec Holowka, Edmund McMillen, etc. They all did pretty well for themselves both before AND after Steam.

So, if Steam or HIB comes knocking at my door, awesome. If not, I'll try to succeed without them, which I think is definitely possible, but we'll see how it goes.

In any case, I don't see Steam or HIB making things MORE difficult for me than if they didn't exist.

[PompiPompi]

Well, there are new sites coming all the time, like Desura, Indievania, etc.

Beyond that, nobody's really out there dedicated to making your dreams come true. You have to make it happen yourself. My personal strategy is to just get the word out myself and connect with a highly motivated niche market and hope to get some word of mouth going. So far I've gotten a pretty good response, a lot of people signing up for my game's newsletter, etc. A lot of this involves keeping in touch with journalists who cover indie games, maintaining a website, blogging semi-regularly, and having a good public demo out that people can try before they buy (it helps a LOT of it that demo is playable in a browser).

All of those "super indies" were nobody's at one point in time. If they can do it, it suggests that others can do it, too, to the extent that their business models are repeatable and based in sound principles. Derek Yu was a nobody once, so was Alec Holowka, Edmund McMillen, etc. They all did pretty well for themselves both before AND after Steam.

So, if Steam or HIB comes knocking at my door, awesome. If not, I'll try to succeed without them, which I think is definitely possible, but we'll see how it goes.

In any case, I don't see Steam or HIB making things MORE difficult for me than if they didn't exist.

Well, Desura isn't exactly new. ModDB have been around for a long time. They are also related to the Royal Bundle.
I havn't checked Indievania for quite a time. Is it big as Desura right now? I don't think so. And just because there are many new websites, doesn't mean they will have success.
Just as a note, examples are no proof of the general.
Indie Journalists are related to the same people who make the bundles.
What I am trying to say is, the people making the bundles, the people with high profile games, the journalists, the people running the IGF, as far as I know, they are intersecting groups.
I agree that if you get the favour of a journalist, a gatekeeper or anyone from that small group who influence the indie scene, you can become successful.
Many veteran indie developers that were succesful on their own, said they couldn't be succesful on their own today like they did 5 years ago.
You can't be a successful indie today without the favour of one of these people, as far as I know. You need their channels, they are called gate keepers because you can only pass to the other side through the gate. Everything else is surrounded by walls.
Unless you have a crazy portal idea, but then you are not game deving, you just portal deving so you could game dev eventually, which sound ridiculous.

[larsiusprime]

Just as a note, examples are no proof of the general.

Fair enough. Who are the "Many veteran indie developers" you cite?

You go on to say that journalists, bloggers, portals, etc, are all "gate-keepers." I mean, if your definition of "success without gatekeepers" excludes using any of the following:

-google / twitter / facebook
-games journalists / blogs
-portals / bundles / online stores (steam,desura,etc)

Then I agree it's impossible, but all you're saying is that you can't succeed making games on the internet without using the internet to promote your work.

What's the alternative you propose, or did I misunderstand you?

[PompiPompi]

I only exclude a small group of people who happen to control most indie portals\bundles\ and jounrnalist websites.
I didn't say you can't use google\twitter\facebook, where did you come up with that?
I didn't say you can't use blogs, unless they belong to the same Group.
My point is, you will find that most of the big places you can sell and get exposure of your game to specific Indie audience, are controlled by a select few people.
It's hard to successed without those people. You can successed with other means, but that's one in a million.
And even with those "Junta" people, only a few Indies get passed the gate keeper filters.
But, it's not so bad right now. But I fear it might get even worse. You will have like, Indie Corps or something.