February 27th, 2015

The Fiscal State of Indie Downloadable Games

There are no official numbers for any digital distribution channels, but in looking at the only estimates I can find, on vgchartz.com, the sales outcome for most downloadable titles is pretty bleak. This goes against my philosophical stance of trusting a website that substitutes a z for an s, but they seem to be the only data that is readily available. So, here’s a link to the most up to date sales data through 2/13/09. Sorting that data by cumulative revenue, the top 10 is as follows: Texas Hold’em, Castle Crashers, Bankshot Billiards 2, Uno, Worms HD, Street Fighter 2 HF, Bomberman Live, Boom Boom Rocket, Castlevainia: SOTN, and PacMan CE. Four of those titles have been included in some sort of bundle, either with an Xbox console or the Xbox Live Unplugged bundle DVD game. Out of the 6 remaining, there’s only one original IP, Castle Crashers, which is doing amazingly well.  I have to congratulate the Behemoth for not only putting together a kick ass game but for actually creating one that has really achieved the holy grail of indie game development by making a ton of money as well. Now comes the bad news.

If we look at all games that aren’t free, there are 184 titles. Just under half of them made less than $500,000. Now, half a million may seem like a large budget for an indie game, but you have to consider that Microsoft and/or a publisher is taking a cut. Assuming the split put forward here, and the developers are only taking 35% of that $500k, that’s $175k. Developing an Xbox Live title is most likely going to cost you more than $175k. It can vary widely, so I’m not going to speculate on the average cost, but I think it’s safe to say that well over half the titles on XBLA are not profitable.

But in looking at the upper end, Castle Crashers has over half a million units if vgchartz stats are accurate. It’s still fairly early in the lifecycle of the product, and it’s selling quite well currently, but I’d be surprised if they could break a million. The only titles that have so far are Uno and Aegis Wing. Aegis Wing is free, and Uno is a very popular card game and only costs $5 and is included in both the Xbox Live Arcade console and with the Xbox Vision Camera. 1 million in sales is nothing to scoff at, but it’s hardly the amazing cash out of some indie movie successes like the Blair Witch Project. (It cost $60,000 and grossed $140 million in the box office)

 I think this is why publishers aren’t really all that keen about this space. Although there are movie companies like Lions Gate and Focus that focus on indie and smaller budget movies, the payoff for an indie film can be huge – enough to amortize the loss of many unsuccessful indie films. Although some indie movies have limited appeal, I think many indie or inexpensive movies can have audience sizes that are in line with many blockbusters. I think plenty of games sell multiple millions (the real blockbuster games break 10 million), but multiple millions is unheard of in the XBLA space. Aegis Wing  is free and has only gotten 1.5 million downloads (according to vgchartz). That to me means that the average gamer isn’t really all that interested in smaller cheaper games, which is disappointing because that’s all indies can afford to make.

Another troubling fact is that if you look at the high sales games, most are remakes or rereleases. Ignoring the anomalous Castle Crashers and the various bundled games, Braid comes in as the first original game that’s not a remake or rerelease behind 6 other titles (and Castle Crashers and some bundled games of course). The trend continues in the top sellers. Two thirds of the top 30 games by revenue games are board/card/video game remakes or sequels to existing IPs. I imagine that sends the message to publishers that their best bet is to rerelease old stuff and not invest in new original products.

Anyway, I’m not trying to say that indie game development is doomed. Obviously if I thought that, I wouldn’t be trying my hand at it. But, I think it’s important to look at indie game for what it is. It’s a very fulfilling thing to work on, but a very difficult thing to make money from. Do I think Retro/Grade will be successful financially? Yes I do. If I didn’t, then I would make adjustments to make sure I thought that it would be. Am I the best judge of that? No, of course not. It’s my baby. Every parent thinks their baby is the cutest regardless of how hideous he/she is. Hahahahah Of course I think it’s fun and worth what we will charge for it. Will the general public? Only time will tell.

In the end though, everyone votes with their wallets, so if you want to continue to see lots of creative indie titles, be sure to keep buying them. That’s the only way to keep small developers doing creative and original games in business.

7 Responses to 'The Fiscal State of Indie Downloadable Games'

  1. 1Pete K
    February 18th, 2009 at 8:40 pm

    No one is gonna sign up for the 35% XBLA cut. It’ll go back up, probably not to 70%, but somewhere more fair.

    Everything on XBLA with

  2. 2Pete K
    February 18th, 2009 at 8:43 pm

    ugh, whole comment lost because I used the less than sign

  3. 3Pete K
    February 18th, 2009 at 8:52 pm

    retyped so it’s not as well spoken :)

    Everything on XBLA with less than 100K sales is pretty bad. Maybe one or two have the wrong price point like Penny Arcade, but the majority are just horrible games and totally wrong for the XBLA audience.

    You can make XBLA games for $175K, just move out of California and live like you’re poor. My current yearly expenses are under $30K and I’ve got tons of wiggle room to get tighter (If I shared an apartment with the rest of the dev team, got rid of the sports car, etc.) With a designer, a programmer and an artist, you could put together a 10 hour game experience right for the XBLA audience in two years for around $180K. You would recoup the first week.

  4. 4Matt
    February 19th, 2009 at 12:19 am

    Pete, good to hear from you. I disagree with your statement about everything with less than 100K in sales is pretty bad. I for one really liked Space Giraffe, which is one of the worst selling games on XBLA. As well, I thought Go! Go! Break Steady was pretty decent, and that’s currently 12th worst. Exit was cool and that only sold 30k. Poker Smash got a A+ from 1up and is at less than 80k. Marathon: Durandal has only sold 85k. Age of Booty is only at 40k, and it looks like it’s sales are slowing. I doubt it’ll crack 100k, but hopefully.

    Anyway, my point was not that great games cannot be done for less than $180k of an investment. My point was that to actually establish an indie game company and pay people salaries (rather than the true garage dev experience), it might be difficult to achieve the required number of sales. Let’s take The Maw as an example. The Maw’s team tried to create a pretty sizeable game and it looks quite good. In the postmortem, it said they had 7 full time and 2 part time for 9 months. Let’s say it averaged to 8 people a month including the part timers. Twister Pixel isn’t a garage developer, so they have office space and presumably are paying salaries. The ballpark fully loaded for an employee is $10k a month. That includes medical insurance (which I’m finding is really expensive), office space, utilities, etc. That means their game probably cost them $720k. Assuming they got a 35% royalty rate (which I think plenty of developers will take because there isn’t much of an alternative for indies), they would have to sell 205k to break even. Will they reach that? I don’t know. Hopefully they will, but I wouldn’t be surprised if they didn’t.

    Obviously since we are self funding Retro/Grade, we are living on quite conservative budgets. Sustained though, no one wants to live like they are poor, and it’s very difficult for us to entice others to work for free, so for someone who wants to actually start a real company doing downloadable indie style titles, it’s a tricky thing. Also, I strongly doubt that we will make $180k in the first week, but I hope you’re correct! :-D

  5. 5Matt
    February 19th, 2009 at 1:47 am

    Here are some more depressing sales numbers. Omega 5 looked cool (never played it), and that only sold 48K and Schizoid was pretty neat, but that only sold 21K… Eets: Chowdown looked neat as well, and that’s sold 37k.

  6. 6Pete K
    February 19th, 2009 at 8:45 am

    I think companies like Twisted Pixel bit off more than they can chew for their first game release. Start small, establish the ip and then make the big game after you’ve recouped a bit. Yeah, you might be living in moms basement for a bit, but everything great takes sacrifice.

    Nitpick time:
    Space Giraffe sucks for XBLA, it’s not what people want to play even for $5. Just going to have to agree to disagree on whether this is the worst game ever :)

    Marathon blew it big time. They wasted money updating the graphics when they should’ve spent more time making the experience more playable. We put a big investment making the Duke 3D rewind system so people would have a reason to spend $10 on a game that they could warez on pc for free.

    Dude, Break Steady is match-3 garbage. Played it on partnernet several months before release, someone along the line should’ve said it’s not fun and not what gamers want to buy. Would’ve saved the dev and MS a lot of money.

    Don’t know what to say about Poker Smash other than the market for poker on XBLA might be saturated by the free Hold’em Game. The game UI is slick as all hell, but I think they invested their time poorly on all that and not enough on why someone would want to play the game.

    Did you get an XBLA deal? If you want some TCR tips or ballpark figures for using VMC, MS loc, etc, let me know in email.

  7. 7Matt
    February 19th, 2009 at 11:29 am

    Twisted Pixel did some contract work before doing the Maw (NBA Ballers: Chosen One and Blitz: The League II), so they did establish themselves. A lot of rereleases are extremely successful even when they don’t add ANYTHING new, so I don’t think Marathon can be faulted for that… People really like the whole match 3 thing.. Zuma is incredibly successful when it’s just a rip off of Puzz Loop. Go Go Break Steady innovated more than Zuma did, I’d say. Poker Smash seemed like a clever puzzle game, but I haven’t played it yet.

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