I'm glad to see Proun got an honorable mention at the least. Loved that game

Okay, I see what you're saying. I'll try to use more moderate language in the future.

Semantically speaking, the situation you describe is what I would consider being "doomed" - having to exit a market for 10 years sounds pretty gloomy to me! That's where I was coming from. That being said, the miscommunication on my part makes sense.

Now that we're more or less on the same page with semantics/tone/exaggeration, do you think there's anything to the rest of my argument?

I'm not responding to just the article, I'm responding to things people have said since, since this is a group-discussion, being a forum and all.

I said, these are theses people have brought up in this discussion, not things the author brought up in the article (he mainly just said thesis #1).

If I stated things a little too strongly, then I apologize. You did say that you generally feel we are doomed and downward pricing pressure is killing us, and that's generally what I'd like to discuss - whether we can succeed without having to be the next minecraft (ie, is there repeatable success that doesn't depend on 'winning the lottery').

If you read the article by Jeff, he's actually saying two things:

1) He's selling them for MORE on his site than on steam
2) He's making MORE money now at lower prices than before.

So yeah, he's lowering his price, but he's making MORE money.

[1) Hib / Steam benefit 1% of indies, AND also harm the remaining 99% (ie, us).]

So, interesting comments. I'm willing to concede any points that anyone can provide convincing evidence and/or arguments for. I'm not so much interested in being right here so much as I just want to learn and explore solutions to this potentially scary problem.

I'll take this as an opportunity to step back and re-evaluate everything I've said so far.

Here's various theses that have been posited by different people:

1) Hib / Steam benefit 1% of indies, AND also harm the remaining 99% (ie, us).
2) To succeed, you MUST be "hand-picked" by a gate-keeper
3) Gate-keepers include Steam/Hib/Super-Indies
4) Gate-keepers include the media and blogs
5) Current downward pricing pressure is comparable to the 80's video game crash
6) There is no solution. We're screwed

My current stances:

1) Partially agree - see below
2) Disagree
3) Agree
4) Disagree - simply because it is waaaaaay easier to get a blog or even major news site to write about your game then to get on Steam or HIB.

5) Disagree - the market is much larger, more diversified, and is not nearly as concentrated into one platform. Secondly, we're dealing with digital goods rather than physical, and the principal cause of the crash was the dumping of large numbers of discount cartridges that were purchased en-masse from failed studios and then dumped on the market below cost, a pretty much guaranteed nuclear economic bomb. There's some useful comparisons for sure, but it's not apples-to-apples by any stretch of the imagination.

6) Completely disagree

#1 was the original thesis that started this whole thread, so lets start there:

Hib / Steam benefit 1% of indies, AND also harm the remaining 99% (ie, us)

First, I think it's undeniable the first half is true. A small number of indies are doing super well and making out like gangbusters. Decent evidence has been presented that the second half is true - there's clearly downward pricing pressure, and some people using a fixed-priced pricing strategy right now are suffering. Paul is right that hosting costs, etc, are still part of your fixed costs and it's still possible to lose money on low-priced sales to fixed overhead and transaction fees.

That being said, there are a few questions I have in regards to #1:

1.A) Is the downward pricing pressure inevitable, or is it a distortion because of Steam/Hib's effect on consumer expectations?

1.B) Does the increased attention to the Indie space benefit the rest of us?

1.C) Are we forced to charge rock-bottom prices because of Hib/Steam?

Paul says 1.A is irrelevant, which is fair enough if all we're concerned with is how to deal with things and continue to make a living. My estimation is that it's an inevitable effect for digital goods. The fact that AAA games are still priced at $60 is due to price fixing on the part of the major publishers and console manufacturers. In fact, there's now a "AA" space on XBLA and PSN where studios are releasing games for $10-$40, so I think this counters Paul's point that downward pricing pressure is only affecting indies. It's affecting all games, though the big dogs are fighting it with price-fixing. Paul is right, however, that WHY this is happening isn't as important as whether we're screwed and what we can do about it.

As far as 1.B is concerned, I'll say right now I'm no fan of so-called "trickle-down" economics so I'm not making that argument. I will say there's the potential for people to be introduced to Indie Games through Hib/Steam, but also the potential for Steam and Hib to capture that consumer loyalty for themselves without transferring it to us, as Dan Cook explores in his game of platform power article. I don't have any numbers on either of those effects so I have no answer to 1.B.

As for 1.C, I think this depends. If we aren't connecting directly and personally with fans in significant numbers, not getting attention from the press, etc, then we risk being relegated to  commodity status, and then we are in the price War and "Prisoner's Dilemma" that Pompi referred to. Our games are just another anonymous title among hundreds, we have little to compete on other than price, the audience doesn't particularly care about us or our success, and the effect of downward pricing pressure, regardless of why it is happening, is going to be negative. This circumstance well and truly sucks, but I don't think we're all doomed to it.

The strong evidence is not Gabe's rant, so much as the numbers provided by Proun, Spiderweb Software, and Gratuitous Space Battles. Yes, Spiderweb and GSB are both on steam, but they also sell on their own storefronts and brought in decent money apart from Steam in part by offering discounted prices.

Links:
Jeff Vogel
Gratuitous Space Battles
Proun Sales Data

Here's the key - I am NOT saying we should all be selling our games for the fixed price of $1.00! In that I am in COMPLETE agreement with everybody here (Jeff Vogel says the same in the above link, a great read). That's insane. If that's the only avenue open to us then yes, we are screwed. But I don't think that's the situation.

My point is that we should lower the floor, and raise the ceiling on price. Let people simultaneously pay less AND more. There are various ways to do this - promotions and sales, pay-what-you-want, sell ancilliary things, free2play w/ microtransactions, pick-a-price, etc.

Gratuitous Space Battles found that by offering two prices for their DLC, it did NOT result in a larger number of people just buying it for the cheaper price - the majority paid the high price, but they got extra sales at the lower price. I imagine this is largely in part because they are a niche title with a devoted fanbase, and so the decision to pay more or less is not simply a cynical "maximize value for money" that we humans do when we don't care about the vendor we're purchasing from.  Things like emotions, good feelings, loyalty, service-with-a-smile, etc, are all things people have shown a willingness to pay a premium for, and it's a potential thing we can use to fight downward pricing pressure.

So, at the very least it seems that the following strategy seems to work, at least for some people, and is not destroyed by the recent downward pricing pressure:

1) Work in a niche market
2) Raise the ceiling / lower the floor (promotions, sales, pay-what-you-want, etc).
3) Forge a strong connection with a small but devoted audience rather than a distant connection with a dispersed large audience

There might be other strategies, too. I'm not saying this is the only way to do things, or that it works for everyone. But it is A solution.

Recent comments by Hanako seem to be following the above strategy. Anybody else? Are we doomed, or is there a way out?

Again, we're mostly just throwing anecdotes back and forth at eachother so I don't pretend the above evidence I've provided is super rigorous or anything. If you've got better numbers, and better evidence, and better arguments, and can prove me wrong on any of these points, I'm completely prepared to changed my stance.

What say you guys?

I'd agree that whenever your product becomes a commodity, it's a suicide-pact and then a race to the bottom.  The key is to avoid being seen as a commodity.

The 80's crash is similar, but different in a few key respects. Most notably, there was a marginal manufacturing cost for each copy of the game. Then, as well as now, there's still a FIXED cost (you gotta make the game and not starve to death while doing that), but the lack of a marginal cost now means you still make money each time you sell a copy. If you had to lower your prices in the 80's you were actually LOSING money with each copy you sold below your manufacturing cost.

My earlier critiques were based on pretty strong skepticism that the era between 1995-2005 was some golden age of shareware. If someone has data to refute that, I'll gladly retract those statements.

The 1000 true fans strategy is a good solution for small operations who are willing and able to spend the time building and connecting with an audience, and a way to get around market prices driving your value to zero.

Long-tail doesn't work for people who can't drive in people by the boatload (like Steam can), sure, but there's pretty strong evidence that selling at a high fixed price leaves a lot of money on the table and excludes large swathes of your audience.

On a related note, gratuitous space battle did really well with their 50% discount for the same content. Yeah, they're on steam, too, but this was done just through their own site.

I know you guys aren't suggesting that we engage in communal price-fixing, but what solutions do you have in mind?

Paul, you yourself sell Immortal Defense on a perpetual pay-what-you-want model. Was this a response to this downward pricing pressure, is it something you did for philosophical reasons, is it something you wouldn't do if you didn't have to, etc?

I was mostly responding to Pompi's assertions that making use of media somehow means you're just leveraging "gatekeepers."  I'm sympathetic to many of the other statements but I feel that one was kind of ridiculous.

Paul:

If I'm wrong on a factual matter (number of portals, etc), then I'm more than willing to revise my statements.

My main question is, is the downward pressure on prices something that HiB and Steam are solely (or mostly) responsible for, or is it the result of a market force on digital goods which have ~0 marginal cost of production?

With the Apple Store, I can definitely accept the case that it's intentional pressure, as Apple completely controls entry to that entire market, and intentionally breaks discovery so you have to lower price just to get on the charts, which is a prerequisite for success.

As for the PC, my view is the prices have gone down mostly because it was just a matter of time before someone realized that it didn't cost them anything to sell for less, since the product doesn't have a marginal manufacturing cost. If it wasn't Steam/Hib, it would have been someone else. My point isn't really about whether Steam/Hib are at fault or not, so much as it is to explore what the nature of the price pressure is and how it differs from Apple's. Regardless of that, the bridge is now crossed and we have to figure out what to do about it.

So, I'll agree that it's more difficult to succeed today using yesterday's pricing strategies as the landscape has changed, but there's been successful people who HAVEN'T gotten on Steam/Hib, etc. Jason Rohrer seems to do alright (combined with a super-specially designed lifestyle), Proun was pretty successful, too. These are just anecdotes, sure, but it's a starting point to explore the issue with some real case studies.

Proun was an interesting case, to me. They didn't make out like bandits, but they did moderately well, and with a few key marketing tweaks (have a free demo and full version rather than a full version and bonus track, minimum price $1.00), could have done even better. It looks like a repeatable business strategy that others could leverage that takes into account the modern pricing pressures.

I have never been to any jams or indie events, never been to GDC, etc, have never met any of the people in the "gatekeepers" group in person, and have made plenty of friends and acquaintances despite these so-called "limitations."  It's harder I'll admit if you're not from US/UK and there's a cultural barrier, but English isn't my first language, either.

In short - yes there are obstacles, but you CAN make friends and the so-called "gatekeepers" absolutely do NOT have a stranglehold on success.

I will buy the argument that it is hard to succeed without attracting the attention of the media. To that I say - learn how to write a press release! Learn how to contact the media! There are TONS of websites that will cover Indie games and if you have something interesting and can think of a unique angle and invest some effort you can probably get someone to write an article or two about you.

[IGF/Gamasutra/IndieGames.com/IndieRoyale]

Ah, gotcha, just misunderstood you then. Sorry I read more into what you wrote than what you meant.

So, you're talking about a perceived "in-group" of people who control Indie Gaming? Ie, if you're not friends with the in-crowd then you can't succeed?

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..

Now I understand what you're saying.

Okay, so let's look at this objectively:

IGF/Gamasutra/IndieGames.com/IndieRoyale - all under the CMP Media Group, Simon Carless/Brandon Sheffield and friends.  1 entity so far.

Desura/ModDB/IndieDB - not sure, but it's not the previous crowd. 2 entities.

JayisGames/Casualgameplay.com - 3 entities.

Kongregate.com - Greg McClanahan, Jim Greer, owned by gamestop, Impulse is part of same group, 4 entities.

Newgrounds.com - Tom Fulp and friends, 5 entities.

Joystiq.com - WebBlogs inc, network, 6 entities.

Kotaku.com - Gawker network, 7 entities.

RockPaperShotgun.com - Independent company, 8 entities.

DIYGamer - same company as 8-bit funding, 9 entities.

Humble Indie Bundle - wolfire games, 10 entities.

TIGSource - 11 entities.

XBLA/XBLIG - 12 entities

"The Super Indies:"

Jonathan Blow - 13 entities
Edmund McMillen - 14 entities
World of Goo Guys - 15 entities
Thatgamecompany - 16 entities
QCF design - 17 entities
Carpe Fulgur - 18 entities
Zeboyd Games - 19 entities

And I could go on and on.

The core of your argument seems to be that all these people are a small group. However, from where I'm standing it looks like this number of entities is only increasing, not decreasing. With each new "super indie" or games blog, it's more people who can help you, its more competition for the core gatekeepers, and its more options, which reduces the power of centralized gate-keepers. If you have another choice, you can negotiate more favorable terms or find somebody else.

So, with apologies for misinterpreting you earlier, let me see if I understand you now:

"Success without gatekeepers" is defined as succeeding without using games journalists or portals. It consists of simply making a game, putting up a website, and promoting it yourself without having any special friends or making any special contacts?

First off, I think that's an especially narrow view of things. It's not hard to make friends and contacts, and I disagree that a tiny number of people control the whole market.

Even so, it seems to me that that is MORE possible now than it has ever been to succeed even with this narrow definition, and even though some "indie corps" might indeed arise to capitalize on indie games, this will be merely one more entity among the many and it seems that the general direction is more options, not less, and the group of "gatekeepers", though they may indeed be gatekeepers, is growing and the choices, and therefore power and options, to us individual developers is increasing as well.

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?

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.

Looking great! Thanks so much! 

["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."]

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.

@rivon, fair enough.

Java's main problem is that it's compatibility and install base is fragmented and you never know if your applet is going to work with the user's security settings.

All in all, though, it's probably the best alternative to Flash out there. It's good enough for Minecraft!

[1) It's slow]

Gonna chime in with everyone else on the cost thing. Although newbies often think they're supposed to use the timeline to make flash games, in my opinion this is the WRONG way to do it. If you want a high-performance flash game you need to wean yourself off the timeline and do things in pure AS3. If you want to make some movieclip assets in the Flash IDE, that's fine - just compile them into swf's or swc's to include in your project.

But if you're doing the old "Create a big bloated fla file with all my assets and nested content" and then associating an as file with the document class - you're doing it wrong. I switched to compiling with FlashDevelop and just using the IDE to make assets, and - oh my gosh, everything is so much better. Cleaner code, cleaner assets, better organization and FASTER COMPILE TIMES.

You can do without the Flash IDE quite nicely. The Flixel community is made almost entirely of flashdevelop users who don't spend a dime in upfront costs to get started.

Finally, all the complaints you can make against Flash can be made against HTML5+JS, in fact a stronger case can be made against HTML5+JS.

1) It's slow
JS is slow as butt.

2) The language sucks
I will take as3 ANY day over Javascript. With HTML5+JS you are mixing 4 or 5 different technologies just to get things to run. HTML, CSS, JS, don't get me started on webgl, canvas, and the enormous unsolved audio problem, not to mention video. Once upon a time Actionscript sucked about as much as Javascript (no strong typing, etc), but they've fixed most of these issues in AS, but Javascript is still as bad as it ever was.

3) It's not compatible with (fill in the blank)
Flash runs on more hardware more consistently than HTML5.

4) It sucks on mobile
When I see HTML5+JS mobile apps running super fast and NOT sucking down battery juice, then I'll give it a shot. So far, nothing has delivered on this mark. Yeah, flash sucks on mobile, but so does HTML5+JS. Mobile devices are underpowered - if you want to make a game for them, do it natively!

The only thing you can really say about flash is that it's proprietary - okay, fair enough. There ain't any open source flash players and it requires a proprietary plugin. That's the heart of the argument against flash. Every other thing you can say about it, HTML5+JS is just as bad, or worse. Honestly, the problem is that on mobile you are NOT going to get good performance out of running something:

1) In a browser
2) With interpreted code in a crappy cobbled-together VM

Which apply equally to Flash and HTML5+JS.

[JAVASCRIPT]

Everytime someone says HTML5 I want to do this:

HTML5 will fix everything!
HTML5 JAVASCRIPT will fix everything!

There, fixed that for you! 

Seriously, when HTML5 can deliver cross-platform functionality with decent performance and reliability, I'll be sold! Until then, native apps, or flash (on the desktop), etc.

I'll still be developing stuff in flash, but perhaps I'll move to HaXe so I can compile native binaries for various platforms.

Posting on Tigsource is like Christmas. Code snippets for all! I'll definitely be making use of some of these techniques in my next project.

So you call it once for every color range you want to replace. Man, wish I'd known about this a few months ago!

Does the threshold method let you specify arbitrary colors, or is it something that only tints stuff, so you basically would assemble things out of monochromatic parts?

EDIT:
Nevermind - just looked it up in the API. Threshold seems pretty powerful, letting you specify a range of colors and swapping them out! Has anyone done any benchmarks to see how fast it is? I'd agree my pixelbender method is probably overkill given the existence of this method, but now that I've gone to all the trouble of implementing it I'd be interested in knowing which is faster...

Can you tell us a little bit more about what final effect you're trying to achieve?

If you're basically just pasting single-color bits together, then your best bet is to use this palleteMap / threshold technique where you basically recolor the whole thing at once, and then assemble stuff quickly.

My main question is - exactly what are you pasting together to assemble?

If you're trying to do a classic in-place whole-sprite pallete swap, you might take a look at the technique I mentioned. You've got a lot of options here.