If you relish adventure games, intricate strategy titles or like anything other than World of Warcraft and The Sims, you’re in trouble. Game development costs are reaching exospheric heights and titles that don’t have established, proven and, most importantly, massive user bases simply won’t survive. Games are typically given a two-week retail window to prove their value and if they come up short, they’re usually marginalised or abandoned. So if you’re developing a game that doesn’t have blockbuster potential, chances are you won’t make much money from it through the shops, unless you have the marketing muscle of one of the console companies or film studios behind you.
Developing an innovative, unusual piece of interactive entertainment is prohibitively expensive and can, in some cases, lead to bankruptcy. Take Tim Schafer's critically lauded Psychonauts. Its commercial failure was reported as a contributing factor to publisher Majesco's net loss of $70.2m (£34.9m) in 2005 and the game itself is now out of print. While Psychonauts may no longer be available, though, it's enjoying new life through online content distribution. Services such as Steam, GameTap and Manifesto Games are now delivering original and niche-focused titles via the internet, significantly slashing production and marketing costs and providing a persistent, Amazon-esque market for independent game developers.
Casual gaming
Greg Costikyan, known in the industry as Designer X, created the Manifesto Games website with the latter goal in mind. He explains: "The basic idea is to provide a path to market for more creative works that may not reach as large an audience, but can still attract a following. We also look at the casual game market, which has grown from nothing to a pretty substantial market in a very short period of time, by appealing to a largely middle-aged female demographic. Shouldn't it be possible to do the same thing, but do it for people who have traditionally purchased games?"
Costikyan doesn't think digital distribution's advantages should preclude traditional publishing deals. "I think that any small developer should be trying to get distribution through any channels they can," he says. "I would never say 'don't sign a deal with a conventional publisher'. What I would recommend is that you try to retain digital distribution rights. Don't sign those away."
Jason Holtman is the director of business development at Valve Software, the creator of the Steam client application. Steam allows players to compete against each other online on Valve's secure servers and it also serves as a virtual store where both independent and triple-A titles can be purchased. Holtman agrees with Costikyan's sentiment: "In many cases digital distribution complements traditional retail channels.
The online channel can be a great way for smaller developers to get noticed by publishers who can secure shelf space in major retail outlets. By providing more convenient access to games, Steam and other digital distribution services can only benefit the industry. People are finally gaining access to the games they want in the way they expect to access entertainment content. PC titles are experiencing longer sales cycles; both digitally distributed and boxed retail games, thanks to the greater and longer visibility that digital distribution provides."
In referring to Valve's system-specific benefits, he points to Steam's 13-million-plus installed user base; this in effect guarantees they will be introduced to one of Steam's offerings, if only because they're using the client to play Valve's multimillion-seller, Half-Life 2.
"Steam is a tool that lets developers identify and directly connect with their audience," Holtman says, "whether mainstream or niche, from among the over 13 million Steam users. We have both the long tail and a huge breadth of potential customers. "Plus, developers are also given integrated tools for flexible billing, ensured version control, anti-cheating, anti-piracy and lots of other features that place control in the hands of the content owner," he adds.
Costikyan hopes that Manifesto and Steam won't just attract mainstream developers. "There were many developers who were frustrated by the constraints of the conventional market," he notes, "and flocked to the casual market and I think there's the potential for the same thing to happen to the independent games market ... but we don't have a Bejeweled [the puzzle game which has even appeared on the iPhone] yet, you know? And although Manifesto exists as a similar market for independent games, we're not putting out the same volumes of content that a casual distributor like Yahoo! is."
Service to community
One of the ways of providing online distribution outlets with a stronger presence is to unite consumers through community features. Steam, by virtue of serving as a gateway to multiplayer matches, is probably the most obvious example of this. But Valve wants to take it further.
"We keep an open mind about the direction of Steam," Holtman says, "an approach that has driven its evolution in a relatively short timeframe from a tool for automatically updating games to a platform for authenticating, purchasing, marketing and distributing games."
While Costikyan acknowledges Steam's importance to the online distribution industry, he believes one of its most attractive features to developers – its solid, installed userbase – is also a limiting factor. "Steam is interesting technology," he concedes, "and, you know, their independent game offerings have been very helpful to a number of developers, and I think that's great.
Steam has a large installed base of users that it can market games to, and that's great, but you're kind of locked into that existing audience of users. Somebody who's interested in indie games probably isn't going to download and install Steam.
If they've already got Half-Life 2 and like to play Counter-Strike and so on, though, then that's fine."
Steam also suffered initial problems with instability and impaired functionality - players could occasionally find their Steam-bought titles deemed pirated copies by the system - but this has been more or less cleared up. "Deploying a new set of services to millions of customers, while attempting to ship a sequel of epic portions - Half-Life 2 - taught us a lot in the very early stages," Holtman admits. "Since then, we've shipped hundreds of games from third parties, which has also been a tremendous learning experience."
Judging from Steam and Manifesto's successes, it would seem that independent and otherwise unconventional developers really have no choice but to take advantage of this new market for interactive software. One UK-based independent company, Introversion Software, was arguably saved by Steam: its games enjoyed significantly improved sales once made available on the system; at retail, the company faced bankruptcy.
However, Costikyan admits that the retail channel has some very important advantages: "For one thing, review media tend to take things that appear in boxes more seriously, so it's easier to get attention that way.
Added to that, just the fact that the box is sitting on a shelf in a store means it's kind of serving as a billboard for itself; it's being exposed to people who are presumably there because they want to purchase games. And even if they haven't heard about it from someplace else, they can still pick up the box and have a look.
"So, yes, the drawback of the website model is that, yes, a billion people can access your site, but trying to make them aware that you exist and have products they may be interested in isn't a trivial concern."
Whether or not digital distribution will overtake retail is unclear. But there is little doubt that providing easily accessible and distribution platforms that are in effect omnipresent for games that probably won't survive at retail will only benefit the industry.
If game developers can be allowed to create titles that bust genres, or titles that appeal to specific but loyal niches, one can expect creativity to once again flourish in an industry that has become increasingly hit-driven.