Electron Dance
22Jan/13Off

Counterweight 1: Squabbling Over Peanuts

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Counterweight is a new podcast series in which Eric Brasure and Joel "HM" Goodwin tackle a single videogame topic and talk it to death. Or die trying.

In the first episode, they take Eric's recent interview with Jonas Kyratzes as a starting point and consider the financial viability of indie game development, the impact of Kickstarter and the inevitability of low prices.

Contents

02:40 “I guess I must have become more cynical over the years that I've written now...”

03:40 “That's kind of almost blaming the victim in a way.”

07:30 “The elephant in the room here is how many people are there that are actually interested in playing games?”

12:30 “Maybe it should have been sold for a higher price point... but then is anybody going to buy it?”

16:40 “How much money have I given back to the universities?”

18:50 “If that was built to be a commercial project - you know it wouldn't see the light of day.”

21:00 “And she can't make a living at this... so how is anybody going to do it?”

23:30 “People are in crowdsourcing filter bubbles.”

24:30 “If you're relying on Kickstarter as an economic model going forward... we have many more problems than we realise.”

28:00 “It will change then nature of the crowd and the crowd will source different types of the projects.”

34:00 “I'm almost offended by it. And I don't want to be offended by people asking other people for money...”

36:00 “The reason that the prices have fallen is because the production cost is zero.”

40:40 “I have to fight Valve's corner here, just a little.”

44:20 “The one question that popped out at me was 'Should we bother?'”

Download the podcast MP3 or play it right here in your browser:

References

You can subscribe directly to Counterweight via  iTunes or RSS.

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  1. There is a bonus cough in this podcast if you can find it.

    I like the ground we cover here, even if it is pilfering from some future posts. There was a lot more I think we could have talked about, we didn’t even scratch the surface of the notes I’d made.

    I promise to sound as coherent as Eric and not skip random words in future. Scout’s honour.

  2. I found this, along with Jonas’ interview, really interesting. I was pretty dismayed when the Greenlight thing showed the indie scene to be largely about profit and this sort of myth of a perfect meritocracy, but I thought the discussion had petered out. I was really glad to see that it’s still continuing and people are still worried about it.

    Something that was touched on a bit: the role of art in a capitalist society. If we assume art is somehow connected to the culture industry in any society, and that we currently live in a capitalistic culture, what does this mean for games? How does capitalism change games? What is the difference between, say, a novel written in the 18th century and a novel written now, and is the more recent novel more about making money than before? I really have no idea where I’m going with this but I feel like there’s some incredibly important link between art/products, society, culture, economics and how artists make their money, which has a fundamental (and distorting) effect on the eventual artwork, which then feeds back into culture etc etc.

    I guess that leads to the question: is it possible to make a game which engages with the world in a meaningful way but which you also make your living from? Or is it only possible to make games that engage with the world meaningfully if you *do not* charge for them?

  3. @James: I think what you’re seeing is a very dangerous trend towards the amateurization of art. Not in skill or artistry but in payment. There are systems in place for finding artists, paying them, and distributing their art, which presently is a very bad business to be in.

    I’m all for *increasing* the avenues for payment and making a living, but what we seem to be on the road to doing instead is abandoning the very idea of art as something that some artists get to make a living at.

  4. I was going to ask about the mice; then I got it.

    What Richard said the other day, that “Everyone’s capacity to be an artist can manifest in a game.” -and all the comments that went along with it- seems super-relevant.

    A thought experiment: Video games are a very work-intensive form of art, more or less. Thusly, video games can be built in a capitalist system only under the assumption that a small minority of people make games for a much larger number of people. If a higher proportion of this population produces games rather than paying for them, then the games produced will be under a much higher pressure to compete. Games get cheaper, more cost-worthy, and less innovative.

    Now, if *everybody* makes games, as Richard theorizes, the system’s boned entirely, in the capitalist’s view at least. There’s still the opportunity to create video games as simple art, as love-letters/proposals, as personal messages, and stuff like that, but the commercial market for games would be…

    Also, I don’t see state-funding as being a reliable solution, in this case anyways. How would you appeal for state funding/how would you prove you’re a game developer? A university or a theatre proves it by hiring dozens, if not hundreds of people, then producing things for thousands of people. There are relatively few (as in, only thousands) theatres and schools, so a small staff can handle it all.

    With games though, how would you prove that you deserve this money? By simply working on a game? By producing a game, then using that to appeal for grants? By producing games at regular intervals? Where does the quality and length of these games factor in? What’s stopping a person from periodically ripping off platformers to milk the government? Why wouldn’t people make lots of shitty games under different names to live a life of undeserved luxury? Do you have to dedicate your life to it, or only spend a few hours a day? Can you keep your regular employment while still getting these grants?

    Most of all though; if millions of people scouring the world can still miss large proportions of games, how could a governmental institution (or dozens of them, if every country does its own little inefficient thing) even hope to fare better? What’s stopping this from becoming another Greenlight, just with the added ineffectiveness of government?

    Besides those concerns, the net effect of these grants would seem, simply, to spend a larger portion of GDP on video games, which improves the overall quality of games, but does little for the dev’s themselves. The larger market and stipends entices more dev’s to make games, which leaves a similar number of starving artists. That’s still probably an improvement, but…

    On a different note, Kickstarter *is* a loan; a detail that’s simply ignored most of the time. The money doesn’t spawn from thin air; you’re trading sales at the end of development for sales during development, which means you get to make the game, but also makes that game less profitable. Which forces the developer to go back to Kickstarter for the next project… Same game, different name. (The caveat; Kickstarter is free advertisement, interest free, and is more investment than loan, but it also involves a month-long waiting period, is very risky, and costs a certain amount of time and money. Kickstarter is preferable to a loan from the bank, but only marginally.)

  5. Or, rather, Kickstarter is WAY better for the dev, but Kickstarter shares a soul with debthood. As in, comparing a 10% loan to a 1% loan. One is vastly better than the other, but the important number is the principal that has to be paid back in both.

    I know someone was going to nitpick my phrasing at the end. So, there. You’re wrong before you even thought of being wrong… which makes you right? Does that make me wrong? Did I just start a paradox? Did I just veer us into a twisted alternate future? Did the universe just implode?!?

    To hell with nitpickers, I say!

  6. @James

    I agree that there’s this issue of artistic endeavour vs commercial product which is problematic but I don’t think it’s restricted to games. I’d argue that “art” has always had problems keeping itself fed and clothed; it’s only the winners that get starring roles in culture. It’s why the idea of grants came to mind; not all art attracts profit or get recognition during their early years – and sometimes these things just need to be made.

    It’s more problematic in games because games tend to be (a) lengthy efforts and (b) digital commodity. There are an awful lots of games out there now, more being released every single day of the year. The only way you make money now is to carefully silo yourself (e.g. AAA commands $60 prices). It’s difficult for a short-form game to make money although not impossible (re: Two Dollar Horror). Giving up a day job to go independent is still a significant risk and I don’t know how much indie developers would actually recommend this today.

    @mwm

    Exactly. Games as a commercial endeavour may be happily striding into a crash. It’s not the first time this has been said and won’t be the last. It’s more complicated because “games” follow all sorts of different commercial disciplines under one roof – subscription, F2P, purchase and subsidized (selling a complimentary good).

    State funding will not be a solution, but it may permit complex, off-beat projects to be built which otherwise might not have been made. Money is pumped into culture by governments all the time, such as the UK lottery. The original Dear Esther mod was built on a research grant. Nidhogg and Hokra were commissioned for the NYU No Quarter exhibition. Channel 4 has spent a fair bit on game development, here are some examples: Privates, Sweatshop, The Bow Street Runners, The Curfew.

    The argument there is not about whether grants for games have value, but about games as culture and what proportion of cultural budgets should go towards games. We should think more about the potential for grants stimulating economic activity and interest in games; the Sportsfriends Kickstarter argument.

    I think characterising Kickstarter as a loan leads us into the same problems as considering a contribution as a preorder. Once the donation amount exceeds the “preorder cash value” then this is pretty much free money, regardless of whatever trinkets the developer has attached to the donation tier level. There’s extremely little legal binding here as well, the other reason why Kickstarter is so easy (it acts like charity and no contract is required) and free from a expense-reducing capitalist perspective. If debt repayments fall through, there is a legal process to follow. If a Kickstarter falls through… who knows.

  7. @mwm “Also, I don’t see state-funding as being a reliable solution, in this case anyways. How would you appeal for state funding/how would you prove you’re a game developer?”

    I think you’ll find that these are (mostly) solved problems. As Joel points out, the UK Lottery pumps millions of pounds a year into various artistic and cultural endeavor. On the other side of the ocean, the NEA grants money to artists and organizations. It is true that direct personal grants are hard to come by, but that’s true for all fields of art, not just games. Go try and get a state grant for dance… you won’t, unless you’re part of a dance organization.

    My whole argument is: let’s not focus on finding the magic bullet, let’s increase avenues for artists to be able to make a living making art. Instead of focusing on Kickstarter as the magic solution, let’s talk about Kickstarter as another funding opportunity for some game developers. Art doesn’t need to be insulated from market forces, but it should be protected, at least a little.

  8. @HM: Having someone buy your product while you’re making it means they won’t buy it when you sell it. I assumed that anyone reading that could make this logical jump, but I forgot that they could just as easily think I was talking about the rewards from Kickstarter. Apologies.

    But, yeah, part of the reason I used debt terminology is because, if you take a few decades repaying the debt, the 10% loan can be four or five times the cost of the 1% loan. They share a soul; that’s all.

    The big Kickstarter story, right now, is Gas Powered Games. It’d be a pity to never see a well-made Supreme Commander, that’s for sure.

    @HM+Eric: Okay, thanks for clearing that up. You certainly didn’t sound enthusiastic about it in the podcast; it just seemed like the one idea that came to you guys. I should’ve picked up on that.

    Well, we do bemoan the lack of a video-game middle class between 5$/free indie titles and 60$ AAA titles. Grants, limited to somewhat sizable institutions, wouldn’t lead to games with sparkling new ideas; they would lead to games with sparkling new ideas with a certain amount of polish. No magic bullet by any stretch of imagination, but certainly an improvement.

    Extending games in the popular imagination is pretty much the essential step, huh? Can’t change the government while they’re blaming everything evil on video games. Can’t get a patron-system while wealthy individualists blame all of society’s ills on youths in basements. Can’t sell out-of-the-way-games when your consumers will yell and complain at you for just trying. It’s like waiting for money in an RTS; your opponent is out there, destroying your forward bases, and all you can do is wait for your newly built mine to bring you enough money to build anything but cannon fodder.

  9. @mwm

    All development money has to come from somewhere and – inevitably – has to be repaid. Kickstarter shunts some of the future revenue stream to the start of the dev cycle, but the AAA publisher model does the same thing.

    Publishers fund a studio during the development phase as an investment. It’s why AAA dev teams often go out of business or downsize after a project is finished because without new funding for subsequent work, the studio has little cashflow. Looking Glass Studios died as Thief II went to press and publisher Eidos could not offer them an additional injection of cash at the end (there is some debate about whether the original Ion Storm is responsible for the death of Looking Glass). I’m not an expert on AAA publisher contracts so I don’t know anything about royalties post-release, but I’d guess such a thing is heavily skewed towards the publisher in exchange for the risk of investment.

    Some indies are also using alpha funding or preorders (e.g. Project Zomboid, Proteus, Prison Architect) to shift money from the future to right now when they need it. Depending on the reward structure, a successful Kickstarter is much more likely to be a better deal for the developer because all that money is cheaper in terms of rights and eventual cost compared to every other route to funding except one: your own savings. And that’s when you trip into the “only people with money can make games” line of reasoning, game-makers as entrepreneurs first.

    So I did pick up on your point but felt it side-stepped the issue that funding is *often* this sort of “zero-sum game over time”.

    (There is one potential pitfall with a super-successful Kickstarter and that is you feel bound to spend all of the money on the development rather than something manageable. Then again, there are no checks and balances on Kickstarter projects, so I doubt this is a serious problem.)

    I think regarding the podcast, Eric and I didn’t come with a set of bullet-points to get through and so some of our conclusions, er, don’t really conclude. Apologies for that =)

  10. I’m listening RIGHT NOW! I will totally live-comment my responses!

    I’m not going to do that!

  11. @Richard: Congratulations! You have now contracted an illness.

  12. You’re kidding, right? Who do you think Eric got that cough from in the first place!

  13. Okay so I would like to start a discussion about one of the points from the episode!

    I’m with everyone in that I miss print and I miss record labels and all of that, but I caught a bit of a suggestion that the old model did not need any changes. I do agree with the basic principles of the Zinesters–that the the tools of creation SHOULD be in the hands of anyone who’s interested in using them–my main objection is that, unlike them, I reserve the right to say it’s shitty.

    I felt that you (Joel!) may have been a little too much on the side of the old system, particularly when you suggested that games which are worth it would naturally find followers on their own. I find this very untrue and part of the attitude which leads to a homogeneity of taste in the first place. In order to be a success in any creative field, marketing might be even more important than talent.

    There’s just a very important step that everyone is missing. The Zinesters get people creating games. (Or writing videogame criticism, or whatever–Making Shit.) Things like Kickstarter exist to help games that have a marketing plan get funding. But no one is interested in helping people to market shit.

    Maybe we just need to get people to become agents or managers. I would fucking love an agent or a manager.

  14. Richard, this is the downside of speaking off the top of my head, I didn’t mean to suggest any of that =) It’s true I romanticise the open home computing scene of 80s somewhat, but I am no lover of the corporate-dominated culture that took over. I will hopefully get into this in more detail down the road.

    I can’t remember where I would have suggested games would find followers on their own except when I mentioned Greenlight. That’s a slightly different kettle of fish.

    Greenlight is a system without a mission statement. Everyone can say it’s a system “to get onto Steam” but to get what on there? Ideas? Work-in-progress projects? Completed projects? Is it a system to make you popular or reflect your popularity?

    I don’t see projects becoming famous through Greenlight itself. Major sites don’t talk about great new Greenlight projects (unlike Kickstarters), they talk about great new projects. All that PR is external to Greenlight.

    Let’s assume – like I do – that Greenlight is not a PR system. Instead just see it as the path to Steam which needs some sort of filter to prevent jokes and half-assed non-projects from getting on there. You can go with the $100 fee if you like or, alternatively, a supporter-driven model. To go on to Greenlight as a complete unknown, with no reputation to speak of… I just don’t think that gets us anywhere.

    So a two-tier system, where you stay unlisted until a certain low threshold of your “dedicated supporters” push it into listed status. Maybe it doesn’t stop ALL the jokes (4chan could crowdsource support) and half-assed non-projects but it would act as pretty decent filter.

    I’m not talking about thousands of followers, but enough to verify your project is Interesting and Real. There are all sorts of nuances that might need ironing out – do you punish users who push fake projects into listed Greenlight? if you’ve been listed once, do you need to go through unlisting for your second project? what counts as the listing threshold? – but I felt this was a promising alternative to the $100 fee.

    I agree that marketing is the real problem which was in the back of my mind during the podcast – which is why I raised a grant model for the more esoteric projects. How do you get proper attention? I don’t have a solution to that. And I don’t want to respond in depth to this right now, because it will eat the heart straight out of some stuff I am planning. I have some harsh shit to say on this and once I start I will not stop.

    Of course, if you’re referring to something else and not the Greenlight bit, then I just typed a lot of text for nothing =)

  15. @Richard & @HM I guess this is one of the areas that I could have more strongly disagreed with Joel–but first episode, you know.

    I think that Greenlight is fine, but it’s seriously misguided. I believe I said on this episode something wondering about why Steam didn’t try to hire a couple of people to do A&R–find interesting games and feature them heavily on Steam. Joel implied that they did try that, and it didn’t work. I don’t know what the details of that are, but I find it hard to believe that they couldn’t make a go of it. You’re telling me that if Steam found, say, Cart Life, a year ago, and threw it up on the Steam launch screen, that wouldn’t have done something for the game?

    Maybe it wouldn’t have–but in that case, we need to abandon the internet, because it’s not working out.

  16. @Richard Oh, and that wasn’t me coughing. I rarely cough. I think I might be like Bruce Willis’s character from Unbreakable.

  17. Seriously, why are you all coughing so much?

  18. @Eric I was a heavy cigarette smoker for 10 years, I’m a heavy marijuana smoker, I scream in a punk band, and I get sick a lot. The question is not why I’m coughing so much but why I’m not coughing way more.

  19. Eric – I think I misunderstood your point. I was commenting on the fact that Steam were already having problems with people handling indie submissions to Steam, I didn’t catch that you meant talent scouting. Sorry I have a conditioned response to “why don’t Steam just throw people at the problem”. My bad.

  20. @HM Good, then we agree! Let’s never fight again.

    I just find it weird that even the organizations that are making money can’t be bothered to try different approaches. You think that Steam would be interested in broadening the appeal of their service. It would be in their financial interest to.

    Then again, they seem focuses on the Steam Box and Big Picture and turning PC games into console games, and a lot of the weird indie titles out there wouldn’t work that way. So maybe that’s our answer right there.

  21. Eric, there was also that idea about customised Steam stores. I’m still not sure exactly what that means. But yeah, the attempt to transform the PC to console isn’t going to solve these problems.

  22. A while ago, sometime after the beginning of the Greenlight kerfuffle, I ran across a piece by Greg Costikyan that mentioned (sort of offhand), “Amazon has solved the problem of how to recommend stuff to people based on what they like, why the hell can’t game distributors figure this out?” Of course I can’t find it.

    I cough all the time because my kids are mobile bioweapons labs, I think. I started they with this raging three-week cough that taught me a new vocabulary word (“hemoptysis”), then for a week and a half I wasn’t sick, and now I have a voice-destroying cold which is particularly annoying because I blather in front of small/large audiences for a living.

  23. Matt, on one hand, it would nice to see more targeted recommendations. On the other- it would likely preserve a filter bubble problem that doesn’t get indies out of their niche boxes into the wide world.

    “YOU LIKE PROTEUS, MAYBE YOU’D LIKE DEAR ESTHER?”

    “YOU LIKE CALL OF DUTY BLACK OPS, HOW ABOUT CRYSIS 3″

  24. Well, the more ideal system of games recommendation wouldn’t always offer such a focused bunch of games. Ideally, it would give games so many attributes (genre, sub-genre, difficulty, rating, length, player base, cost, etc.). So, it would regularly offer games outside of an individual’s preferred genre if the game roughly matched their tastes, or is short and inexpensive, or if all his friends have that one game.

    That just offers a better experience to the consumer, and gives a little bit of field-leveling.

  25. All the systems do right now is crowdsource the solution by matching you with customers with similar purchasing patterns and that’s the perfect solution for companies because (a) they don’t have to work beyond that automation and (b) it results in sales. It’s an technological equilibrium point which works well for them. There isn’t incentive to go further than this.

    Google was attacked on a “results you like” filter bubble and their solution was disable the personal bias if you wanted. It wasn’t to improve the formula to surprise the user, but offer the ability to switch it off.

  26. Okay, I get that. But, is it the same for Steam? While it may not directly influence sales (except perhaps by pushing the cheaper products more constantly), any additional feature will help cement their user base.

    It’s not important for companies when they’ve got plenty on their plate besides, but, will they always rely on the same search algorithms?

  27. The better question is this: Is there a financial win for spending developer time on algorithm experimentation? Are they losing money right now they could otherwise capture?

    Developers complain about “discovery” and sometimes players. But distributors, meh, not so much.

  28. Well of course there’s a financial win in offering your customers a better service without recurring costs! Better customer service, plus a better deal for dev’s (or charging indie dev’s for the newly found sales, whichever), means more money.

    It’s risky, yes, to deliver such a thing in mid-flight. But that just means that features like this will first crop up in the services (ie Origin) looking to grab a noticeable market share. If it turns out to be successful, then the bigger guys will copy it. If it isn’t successful, then at least the question is answered.

  29. @mwm Recommendation engines, of course, are about making more money, as you’ve said. Since I don’t have any financial interest in making, say, Amazon more money, I’m interested more in trying to figure out a way to get things to people that might like those things. Recommendation engines are fine, but I’d like to see more, y’know, people, curating things too (even if “curate” has become an Internet Dirty Word.)

    For instance, right now, Amazon is telling me I might like:

    Pandora’s Tower (no)
    The Legend of Zelda: Hyrule Historia (hell no)
    Big Mozart Box (….okay?)
    Battlestar Galactica: Blood & Chrome (well maybe, but probably not)

    So, yeah… I don’t know.

  30. Excellent points. If you’re not selling something, it’s not going to make it into your recommendation engine.

    Aha! I found the Costikyan piece! Worth noting that he completely rejects the title of the interview. OK, here’s the, er, money quote:

    But what are the main problems facing indie games developers today? “The basic issue is a combination of growing clutter in distribution channels and what business people call ‘the discovery problem,’ but might be better described as “moronic failure to understand merchandising.”

    “An example is the Apple app store, in both cases. There are so many available titles that it’s well-nigh impossible for an app from an indie developer to gain exposure, now; about your only hope is finding out whose cock to suck at Apple in order to get yourself on the featured list. Most people browsing the app store see only best-sellers and featured titles, and it takes dedication and effort for anyone to go beyond those lists”.

    “This is, of course, idiotic. The problem of how to surface titles to individuals based on their individual taste has been solved for more than a decade — by Amazon, of course. In other words, Apple could create a far more vibrant business system, far friendlier to smaller developers, and more engaging and useful to users, by adopting well-understood technology. They’re not alone in their foolishness; virtually no other online distribution channel merchandises effectively, either”.

    “The danger is that, as these markets mature, they replicate the circumstances of conventional retail that eventually crowded out all but the biggest publishers, scarcity of shelf space being replaced by a wholly artificial scarcity of portal placement”.

    That aside, talent scouting, yes. If I can figure out that every damn game blog I’ve ever read is talking about how great Immortal Defense is, why does it have to go through Greenlight to get on Steam?

  31. I don’t know if there’s enough financial incentive for an improved recommendation engine. Games are a pretty saturated market and people are loading up on discount sales every time they come around. Is there really that much unspent player cash out there? If the recommendation engine just redistributes the sales across titles, then there’s no net gain for the portal.

    As for the idea that players will drift to alternate portals on the basis of the front page recommendations… I just don’t see it happening. If players aren’t even looking for games they don’t know about, they will not switch portal on the basis of search. I can see a certain possible scenario, but it just seem unlikely. I think the only way this will happen is if one of the portals decide to be a nice guy.

    Eric, don’t we have curators already? Isn’t “the latest games this week on RPS” the equivalent of a curator’s latest favourites? Any indie game blog you happen to mention? If you fancy something new, the curators exist. I guess you’re pushing for curation within a storefront which comes up against Costikyan’s comment on sucking Apple cock. Are we talking about providing alternate cocks? However, Valve wants to move towards a more liberated Steam store, where anything could be sold, so who knows.

    (On the other hand, Eric, you have given me an idea.)

    Keeping arguing, I’m interested in to see what drops out of this ongoing conversation. (Thanks Matt for that interesting Costikyan interview.)

  32. “Is there really that much unspent cash out there?” Think of it this way: Are there any burnt video game customers who need a significant confidence boost to buy games at all? Anyways, it’s more about keeping your customer base (“Steam has never given me a game I didn’t like, and always did it at a good price. I’ll never look at another woman again.”) than it is about increasing revenues.

    Steam makes -a wildly inaccurate, and very low, estimate of- one billion dollars a year, gross. 1% of a billion is 10 million.

    So, if a new algorithm ‘only’ costs 10 million dollars to build, and manages to increase revenue by 1%, then it would pay itself off in a year, and be free money from there. You know, assuming that everyone pretended that gross revenue is the same thing as profit.

    Big companies+competitive market=arms race

  33. @HM We do have curators (RPS as you mentioned, Kill Screen does an email thing, others) but they’re pointing out theoretically good things out of the goodness of their hearts. What I’m talking about is a bit more… capitalist… than that. Maybe this would make a good episode of Counterweight! We should tell the hosts.

    @mwm Isn’t that basically what Netflix did?


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