Free to Create
I’ve been thinking a lot lately about the video game industry, because it’s dramatically different today than it was just a few years ago. Mobile games are pwning – by way of the word free – and in some ways they’re still just getting started. Publishing and distribution have re-structured themselves, and thousands of new developers have come and gone.
As a developer — in particular one who has been in the mobile gaming segment almost since the beginning — I find myself asking: How did we get to where we are now? What is it that we do these days — what is it that we’re creating? Within the structure and limitations of a marketplace, distribution channels and platform providers, we’ve always been free to create — that’s what we do. But how free are we today? How has the cost of that freedom changed? I have a few thoughts.
New World
We’ve indisputably touched down on the new world of digital distribution over large-scale, fragmented device markets. What’s left of the old retail world of physical boxes on shelves — much like video and music — are practically remnants of a bygone era, nostalgic, archaic.
Traditionally, video games have been joined at the hip to advances in graphics; medium and media have been inseparable. But while electronic games are a priori a function of the hardware and software, the medium no longer lives and dies by a 10,000 polygon sword — the heady days of multi-million dollar budgets, huge teams and deep pockets to fund them have been all but been shown the digital door.
We’ll continue to have higher-performing GPUs, smaller footprints and new display technology. We’ll get cheaper devices, more form factors, and we’ll do more and more at the shader level. So stuff like OLED, Oculus Rift VR, rogue consoles and Glass will bring on new ways to experience games. But the fundamentals — the look, feel, depth, mechanics, the gameplay — are no longer a function of technology as much as they are side effects of high-traffic, disparate platforms.
Big productions — some would say quality itself — cannot compete in the new world. While we’ll continue to see small numbers of deeply designed, cinematic-quality games, they’re already outside the general milieu.
New Problem
Where does that leave the rest of gamedom? Today it’s social (Facebook and browser) and mobile games. Tomorrow, it’s mostly mobile games, of which social has begun to be merely a category. And there’s the rub, because the biggest problem we face (also our biggest opportunity) is mobile games.
I’ve said before that the biggest problem in mobile gaming is discovery, but that’s not entirely accurate, because discovery is really a symptom of another problem, the platform. But wait — the mobile platform by itself isn’t actually the real problem either, at least it didn’t start out as a problem. The platform has, for better or worse — in fact for worse — become almost exclusively a function of two things: Free-to-play (F2P), which allows players to play without paying, and what I’ll call (for lack of a better term), Free-to-create (F2C), which is the low barrier-to-entry to mobile game creation and development.
By themselves, F2P and F2C are beneficial, desirable, worthwhile. Together, they may be eating games alive.
F2P
Similar to its grandfather (the game demo), F2P works by enabling players to optimize for a false positive: It costs players nothing to “try” a game to see if they love it; if they’re in love, they will want more, and to get more, they will pay; if they’re not in love, they don’t feel quite so duped, dumped or disappointed.
Of course F2P is more sophisticated than dear old grandpa and relies on a careful in-game monetization plan. Developers must take care to give players the right combination of “free” and “paid” experiences and/or virtual goods. Risk/reward quality, quantity and timing can be very tricky to get right and adds significant costs to development.
It’s similar to a subscription model (some of the first modern F2P games were MMO’s), except you “play as you go” rather than “pay as you go” — in other words revenue is more a function of specific events rather than time. When implemented well, F2P can create a windfall for the developer; when implemented poorly, developers miss crucial opportunities to make money or, on the flip side, players feel ripped off or manipulated.
F2C
F2C, too, is a potentially wonderful thing. The idea is that anyone, with some effort, a tiny bit of money and a reasonable amount of time, can design, develop and deploy her own games. The new developer gets to learn something exciting and rewarding (design and programming), gets the distinction of doing it, and dreams of making a bundle.
The platform gets the benefit of massive amounts of content to sell, theoretically for every conceivable taste, desire or need that billions (yes, billions) of users may have. This makes the platform more popular, draws in new customers, makes current users stickier and encourages all developers (amateur and professional) to compete for consolidation — the vertical slices that emerge from a large-scale, rapidly growing user population.
The opportunity cost is so low that, not only do novel games emerge from unlikely, would-be developers, the sheer size of the developer population greatly increases the chance of game content that more closely or clearly taps into current cultural trends and preferences. We’ve seen this numerous times on both iOS and Android already, despite the large number of games made by new developers who didn’t quite put in the effort or time.
F2C + F2P = F2CraP
In the heyday of feature phone games (2001-07), mobile games were mostly P2P (Pay-to-play), developed mainly by professional teams who sold their wares by the dollar or multiples thereof. This was also the case in the early days of smartphone games (2007-09, mostly iOS), even though free apps and games were almost always an option.
The charts were actually more volatile than they are today, because there were fewer games but also because players voted with their money up-front. Developers had to make better games, and a Minimum Viable Product was much more like a late beta than today’s MVP (at best, early alpha). They almost certainly had to do a better job not just with the game design but with copy, screen shots and website support. But they could price their games higher and had a much better chance of being noticed on the deck — they were competing against hundreds of other games in any given genre, compared to thousands today.
Back then, developers watched mobile markets monthly, perhaps daily at launch — much as they had done on other platforms. They tended to use more traditional means of marketing and P&R where possible and affordable, and did their best to score first-party deals with device manufacturers and platform providers. Most developers also had publishing partners who were ready and willing to fund development. The platforms were new and the distribution all-digital, but the old model of publisher-developer worked as it always had.
It’s a complex history and worthy of a much longer post, but suffice to say that both F2P and F2C began to dance. As a few professional developers early on saw the potential for massive amounts of traffic via F2P, their successes attracted more would-be developers into the ecosystem — something that was only possible because of the low barrier-to-entry — F2C.
Amateur game developers and small teams of semi-professional devs flooded the mobile markets with new games (and apps, of course), the large majority of which were, shall we say, less than exemplary. This quickly had the effect of cramming the digital shelves so full that legit P2P game revenue (with few exceptions — most notably Angry Birds and Infinity Blade on iOS) fell off dramatically. So many legit devs fired the only weapon they had at the time: F2P.
And in fact there was a period — practically all of 2010 — when there was an explosion of very good games that would have otherwise been P2P, “for free”. Again in turn and fueled by the lottery winners — a small handful of developers who gathered massive traction through F2P, bolstered by the new mobile gaming press online — players responded en masse to F2P over P2P. The platform essentially trained players to expect — no, demand — free games, while at the same time it trained new developers to expect — no, demand — an F2P (or an F2P/P2P combo) monetization model.
Fast-forward to 2013, where, as of this blog post, we’re a few games shy of 140,000 in the iOS App Store alone (more on Google Play), growing at rate of over 50 games per day, most of which are F2P or have an F2P companion in addition to P2P. It’s an exceedingly large zoo.
The net result of all of this is that, unlike the traditional game industry in which developers must get better to succeed, developers in the mobile ecosystem are more strictly content providers, where the quality of a game is much less important than its random chance of success. While the old world was hit-driven, the new world is more like a lottery. This is similar to what has happened in the video and music industries, who got there faster. The end result is the same: Massive markets have been flooded with massive amounts of sub-par entertainment, and consumers have been trained to expect it.
Where’s the Value? Where’s the Fun? Where’s the Magic?
So where’s the value? For players, it’s an almost endless sea of games streaming to their devices, free to play. It’s a dollar here and a dollar there, and occasionally $29.99 for that special purchase after a dozen hours of casual “commitment” to the game.
It’s hard to tell just how much fun players are having — one remarkable aspect of the ecosystem seems to be the high level of expectations players have in player reviews. Perceived value frequently makes no sense to developers, as players often expect hours of gameplay for a dollar, yet a reliable (small, but reliable) percentage will spend far more money on a mobile game than the $60 they were willing to spend on a triple-A boxed console title that a world-class dev team spent three years making.
As for the magic, it’s difficult to find high-quality mobile games that care much about classic game design — out of such a huge number of titles, few seem to bother with the tenets of good design: Meaning, mastery, skill/learning, flow, risk/reward balance and so on. Whether this is good or bad is yet to be seen — “magic” may be changing its meaning.
For developers — professional or otherwise — the value is hard to peg. While it’s most certainly a race to the bottom, it’s starting to converge toward a crossroad between Big Scale/Big Data and Little Production. Publishers rarely fund anything that isn’t a sure bet, trendy, or derivative (this is not uncommon in traditional games, either, but’s it’s far more prevalent in mobile); not surprisingly, it’s been reported that the large majority of mobile developers make one game and go out of business within a few months.
For the exceptions — the lottery winners and those in it for the long haul — they’re having to completely re-think not only game design but how they fundamentally run their businesses. As Trip Hawkins said in Dean’s recent article, “There really ought to be an institute for studying virtual economies… It’s about thinking about your game like you’re the merchandising manager at Bloomingdale’s. Once you have made a game that has good lifetime value, then you can afford to buy marketing.”
Well into my second decade in the industry, I haven’t met anyone yet who I think could picture themselves as a merchandising manager at Bloomingdale’s, any more than I can. No offense to merchandising managers, but the image doesn’t quite lend itself to fun, or magic, to the kind of people who write shaders, master 3D modeling or lie awake at night creating puzzles in their heads for a living.
I hope I’m wrong, and I see the potential for a return to high-quality games as well as new ways of discovering games. If we can solve the discovery problem, understand the scale much better and reset player expectations a bit, we may see a return to an industry that enables developers to really create, and players to really play.
In fact we must solve these problems. Nothing is F2P forever, and the irony of F2C – that thousands of game developers who were free to create just a few years ago probably are working at Bloomingdale’s these days, maybe as merchandising managers — is unbearable.
I couldn’t get 