Anything you can do, we can do cheaper; Indie developers take over.

Posted: February 14, 2013 by ryanlecocq in Features, Technology

For the last several years, analysts and industry investors have said that casual and indie games would take over.  In 2008-9, it didn’t seem very likely with Call of Duty and Gears of War topping the charts.  2012 was the year when the success of indie games became a direct threat to big-budget games.  While there are a multitude of examples, the clearest that most are aware of is Diablo 3 and Torchlight 2.  Both are fantastic dungeon crawlers, most would say they are fairly close in overall entertainment content.  The difference is that Torchlight 2 was developed in 2 years by a handful of people and costs only $20.  Diablo 3 took an army, a fortune and an eternity to develop and costs $60.  With consumers able to get basically the same quality of experience from both products, it’s difficult for big software development to justify itself on those terms.

We’re seeing a similar effect with Android expanding on all fronts.  While Windows and Mac OS are struggling to catch up, Android is already inside everything from phones to USB dongles that make any TV “smart.”  Unlike the other two, Android is not struggling to implement cross platform features.  Like Linux from which it draws some DNA, Android is a community supported and fed beast.  It grows and improves as it’s customers want it to because it’s totally open to the market and free to use.  This means any company wanting to market an Android device can customize both the device and the OS to suit the desired result.  You can get a tablet or phone that runs the most current version of Android for a small fraction of what an i or Windows phone costs.  On that inexpensive device, you will be able to play all common media, the most popular games and access thousands of free apps.  All out of the box, no updates or special tweaks required.  So what exactly are Apple and Microsoft charging for?  The ability not to play Flash videos or access your cross-platform apps easily?

This is pretty much the state of software development right now.  If you don’t have an office with any employees besides programmers and the internet provides all of the merchandising and publicity those other employees would provide, the result is an obvious win.  Outlets like the Android Marketplace or the Steam Forums give new games and apps all the advertising they need.  If your game gets high reviews and offers a free trial, you’ll start to get lots of downloads.  If it’s fairly priced and people like what they try, you start to sell a lot of copies, without any production or advertising cost.  You can conduct interviews with popular blogs like Kotaku from your home armchair, still having plenty of time to reply to fans on the forums, which means your fanbase loves you.  The viability of this new market model is quickly eclipsing the whole “big office, lots of middle-men, ads on 7-11 cups” mentality.

Another new trend you may be familiar with is Kickstarter.  Kickstarter is a website that promotes pretty much anything you want people to invest money and interest in.  While the site is somewhat clogged with ideas of dubious merit, it removes several barriers between the consumer and new IPs.  Now investors can see what concepts attract a lot of consumer attention from the earliest stages on.  This makes it possible for the market to respond much more quickly to the desires of the consumer.  Services like Kickstarter are enabling developers to market new software of any size and complexity directly to the public.  Instead of separate and disjointed campaigns to raise money for an indie project, people can now easily find your product and donate a dollar or two to it’s realization.  In the past there have been huge campaigns to publish independent games and software with many users of various forums and outlets pledging to donate thousands to the product.  Sites like Penny Arcade have raised millions for charities using only their own site and normal methods of publicity.  The unification of these into one or a few dedicated services, like eBay for auctioning and craigslist for bartering, would be a huge step forward.  Whether it’s Kickstarter, or a service dedicated specifically to software or entertainment, this seems like the next natural step for independent software development.

Finally we have the failure of the corporate market to respond to new pricing structures.  The thing about the Android market and the indie software market, is that both of these dictate price by market reaction very effectively.  Indie games range from a dollar or two to around $20.  The $20 games are almost always of comparable length and value to a big-budget game.  The cheaper games are usually ones that will entertain you for an afternoon or a weekend.  Compare this to the Xbox Live Arcade market for example:  The cheapest games that are not emulated classic games are generally $5-10.  While some of these offer hours of potential entertainment, like Shadow Complex or Toy Soldiers, many do not.  Going up to the $15-20 category you have many worthy games like Minecraft and Castle Crashers, but also a lot of games like Resident Evil 4 or Torchlight that would cost you less on Steam.  Also you will see a lot of the same games you may have played on Android or iPhone (or clones of them) for a few dollars more.  Since these games don’t seem to offer any added features (in the case of Minecraft, reduced features), it’s difficult to justify the added cost.

The software and apps market looks similar.  A lot of companies like Apple and Microsoft are losing ground because other services can do the same for cheap or free.  A lot of apps that cost money on Apple’s marketplace are free on Android and a lot of software that Microsoft markets has free competition like Open Office.  Even antivirus software is seeing mass adoption of cheap or free software over expensive, subscription-based packages like Norton and McAfee.

At the heart of this is a concept know mostly to economists:  A successful, established market should have deflating prices and decreased cost of production.  Software is not a resource, like petroleum or a highly addictive drug, like cocaine.  As we become able to distribute the product more efficiently (no paper, no buildings, no middlemen, no discs) the product should get cheaper and faster to produce.  The concept of the software and entertainment industries, that they can maintain boom pricing forever is just absurd.  Entertainment and productivity through technology is not some gee-whiz Star Trek concept that you can market people into paying anything for.  It’s a fact of life that people expect to be realized the same as they expect their can-opener to open cans.  The same as a can-opener is something you can buy cheaply in almost any country, functional software is no different.

The average consumer has been using computers and cell phones for decades and the average marketing exec probably knows the same or less about the product they market.  If you say “It’s the best software ever!”  People can just go online and read a dozen reviews by consumers like themselves in minutes.  If your product is not in fact the best, or has competition that is a better deal for the price, this consumer will probably hear about it within those dozen reviews.  This is the market reality.  A product like Norton antivirus can’t claim to be the best, because anyone can go and check out the results of various internet security tests and see that AVG was in fact the best last year and Avast the year before that.  Putting a big shiny store, webpage, package or menu around it doesn’t mean very much anymore.  So the product that does the same for less will almost always win.

Usually this is accomplished by having as little as possible between the people who create stuff and the people who want it.  By this I mean as little money, as little hassle and as little research as possible.  If you can take your product and prove that it does the job for less in a short paragraph, you win.  Don’t forget to put the buy button next to that paragraph.  If people have to buy a specific device, log into a new service, enter a credit card or pay a certain cost “just to get in the door,” these are all marks against your potential success.  If you can somehow provide a free trail that people can experience in a brief moment of free time, your chances go even higher.  You may notice that many large corporations are pretty bad about most or all of these things.  Companies like Sony are still trying to push disc media.  Companies like Microsoft still expect you to purchase large bundles of expensive software, just to get on the bandwagon in any decent way.  Companies like Apple push exclusive hardware formats and overpriced accessories.  The above mentioned things do not in any way make it easier for the consumer to consume.  If anything, the opposite.

Why do they need them?  Those above mentioned middle-men, buildings and advertisements cost money.  Even the most sluggish software corporations realize the market is changing.  They just think they can gradually adapt by justifying the current model as long as possible.  What they don’t seem to realize is that it’s already too late.  While Microsoft, Sony, Apple and others are still trying to market expensive devices and software, Android, Steam and Netflix are already inside your TV, PC and smartphone selling you discounted products right now.  You don’t need a new phone or a new version of windows, you generally just need to install an app that takes minutes if not seconds.  You can also most likely use any keyboard, mouse, tv remote, game controller or whatever you already had hooked up to your device.  Chances are, you can even use the app on multiple devices, even those manufactured by the above mentioned companies.  In such a poor tactical situation on all sides, these companies will have no choice but to adapt.


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