#28021 - Gene Ostrowski - Tue Oct 26, 2004 6:17 am
Over the last few months, I've read a number of posts from folks discussing how the GBA market is flooded and how difficult it is to publish games, etc. because of the market.
I'm wondering if this is a real issue, or if it's simply a case of something seeming true because everyone says it is.
Looking out on Nin's website, there are only 712 GBA titles on the market and only ~150 licensed developers (and not all of them make GBA games). With several million units sold, and most GBAers owning several titles, it would seem that the market is in fact NOT flooded and that there is plenty of market to go around. With the PC market, there are 50K titles--- that's a flooded market.
Assume:
2 million units (total guess, but seems reasonable)
x 5 carts average per person (total guess, but seems real low)
= 10 million carts sold
10 million carts sold
/ 712 titles
= average 15,000 carts per title (of course, it's skewed, but for sake of argument).
Since half of those titles are actually crap and probably don't sell even 5,000 units, it seems to me that if you have a game that is any good at all, there ought to be enough market out there. Granted, you may only (!) sell 25,000 units, but if you can pull in $5-8$ profit per cart, it ought to keep a small team alive for long enough to crank out a hit title...
And that's going the independent, start-up, publish it yourself route. You'd think that established companies would be kicking our doors down looking for developers or titles to publish.
Am I totally off base here, or missing something that must be obvious but apparently I overlooked?
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Gene Ostrowski
#28041 - sgeos - Tue Oct 26, 2004 2:46 pm
15k units sold times $5 profit gives you a budget of $75k to complete your game. That's $75k for rent and paying people.
Lets say you have 5 people and each of them costs you $2k a month. Lets say rent runs $5k a month. That is about $15k a month. That gives you about five monthes to complete your game if you are planning to break even.
If you plan to sell more units to break even, you can afford to either grow your team or take longer. I read that only about 10% of games break even. I believe PC games were the subject of the article.
-Brendan
#28051 - Gene Ostrowski - Tue Oct 26, 2004 4:19 pm
I can understand the breakeven point on PC games, because the PC market truly is saturated.
And what about small independent teams that aren't trying to do this for a living yet (i.e. at least some of them have their day jobs). And how about those who already have a game 90% complete, where all they need to do is complete the other 90%? This shouldn't take half a year to do...
Are investors that scared to invest in this market, and are publishers that reluctant to take on distribution and production of games made by independents?
I would think that if I was an established, licensed developer/distributor, and a team came to me with a game plan and project nearly complete, and it looked even slightly decent, I'd jump at the chance to publish it. It would increase my shipped titles, plus a small run of carts couldn't be more than 8-10K investment to see how well the game sells. You can always crank out more carts if it does well...
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Gene Ostrowski
#28054 - tepples - Tue Oct 26, 2004 4:25 pm
| Gene Ostrowski wrote: |
| a small run of carts couldn't be more than 8-10K investment to see how well the game sells. |
Really? The retail stores want a lot of advance notice before they'll carry a product, and they also charge what amounts to rent for shelf space. In addition, promotion costs a lot of money.
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#28056 - ScottLininger - Tue Oct 26, 2004 4:35 pm
One thing that makes the game dev market work is the fact that each game is a labor of love. This is "GOOD" in that people are often willing to work 60-hour weeks for a salary that's well below what other computer programmers are making. Assuming your estimated numbers are even in the ballpark, the "labor of love" factor might allow you to find people who'll give it a go.
However, this is also "BAD" because established companies already have a skilled team of people who are passionate about their game ideas. If I'm a game designer at one of these companies, why would I ever seek out titles from the outside world? The only reason I'm even there is because I love games and I love making games. Specifically, I love making MY OWN games.
Now, with that being said, there have been a few people on this forum who have managed to get their games published. It's hard, but it's obviously not impossible. Perhaps you're onto something, and all that needs done is to build an exceptional game and be relentless about trying to get it published. :)
-Scott
#28060 - Gene Ostrowski - Tue Oct 26, 2004 5:08 pm
Tepps:
I agree that advertising does cost money, I was referring to the cart themselves. Obviously there are other costs, including the time it would take to discuss with the other group, working up contracts, etc, that all cost money. But the point is that an established developer already has an advantage in that they have economy of scale because they are established.
I don't agree on the retail angle at all. When I was in retail, the game distributors knew the market. If a company had several titles being released, they'd require our retail stores to carry a certain number of their less-than-anticipated title in order for us to receive shipments of the highly-anticipated title. It was an ugly game they played, but if we wanted the good titles we had to settle for some unknowns. It was done by the game producers and the game distributors alike. I'm sure it still goes on these days.
Plus, shelf space was predominately determined by product popularity, and not by someone "buying" space, unless it was either a promotional campaign or an "end-cap" or a very rare case where they actually bought shelf space.
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Gene Ostrowski
#28061 - poslundc - Tue Oct 26, 2004 5:15 pm
One of the problems facing the GBA is not so much that it's a saturated market as it is a mature market. It is old technology and its path is known; it's just a question of how long it'll take to get there. In the meantime, investors are reluctant to put money into anything that isn't a "sure thing" with it, ie. something licensed off of a Disney movie or the Olsen twins.
Dan.
#28064 - Gene Ostrowski - Tue Oct 26, 2004 5:24 pm
Aah, now we're getting somewhere. A mature market is a different beast from a saturated market. A mature market--I agree with this 100%.
But with the upcoming DS market around the corner, it's no longer going to be "old technology." You'd think that the licensed companies would be crying to find GBA developers who have experience and want to work on the new console. I still think the old GBA format won't go away right away, either. With the enormous base of current units on the street, it might be some time before it's as dead as the older gameboys are today.
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Gene Ostrowski
#28066 - keldon - Tue Oct 26, 2004 5:26 pm
I don't want to undermine anything; but people need to focus on making a Great game and nothing else. I believe success is an ultimate result of that; whether you have it now it will benefit you from creating great games.
For example with this competition it will be some people's ambition to woo us with flashing neon intro screens with sub pixel rendering; but the game could have been improved if they had considered it as more important than the cake's icing.
Denki blocks was worked on as a great game, and became recognised; and needed no advertisements (I never saw anyway) as it was all over the mags and game shows.
People need to look at the hip hop industry. When music was dominated by multi millionnaires, controlled by less than ten people; independant groups created their own labels and distributed their stuff from the back of their truck. Jay Z, for example; was becoming a millionnaire before he was released; he went from rags to riches just to sell his music, not the other way around.
#28072 - SimonB - Tue Oct 26, 2004 6:13 pm
| Gene Ostrowski wrote: |
| plus a small run of carts couldn't be more than 8-10K investment |
Im not so sure about your figures. Correct me if Im wrong...
| NOA wrote: |
| A licensee will initially purchase from Nintendo a minimum of 5,040 approved game cartridges |
Ok...5040 games. The cheapest this would be is ~13$ for a 32Mbit game with SRAM (according to a Nintendo of Europe pricelist...might not be accurate today). 5040*13 =~ 65500$usd
| NOA wrote: |
| Game cartridges will be delivered FOB Japan with shipment (at licensee's expense and direction by air or sea) to not more than two destination points per order in the U.S., Canada, Mexico and Latin America. |
Ok, now you need to pay for shipping of 5000+ games. That only moves them to 1 or 2 of your main warehouses. Now you need to distribute them around the continent.
gives a total in the neighbourhood of $70-$75k maybe?
| sgeos wrote: |
| 15k units sold times $5 profit gives you a budget of $75k to complete your game. That's $75k for rent and paying people. |
We have only sold 5k games with our $70-$75k investment though...and at $5 profit that gives you a $25k profit. If we need $75k "for rent and paying people"....we need to sell 15k games. 70-75k * 3 = $210-$225k
Again, correct me if Im wrong...
Simon
#28094 - sgeos - Tue Oct 26, 2004 9:42 pm
| keldon wrote: |
| I don't want to undermine anything; but people need to focus on making a Great game and nothing else. I believe success is an ultimate result of that; whether you have it now it will benefit you from creating great games. |
Companies have a bottom line. If you need 4 million to make the bestest game there ever was, and it can only pull in 2 million, you will not be around to make the bestester game there ever was. People need to work for money. If your staff becomes homeless, they don't care about making a Great game. They want to be out of the rain and the snow.
| SimonB wrote: |
We have only sold 5k games with our $70-$75k investment though...and at $5 profit that gives you a $25k profit. If we need $75k "for rent and paying people"....we need to sell 15k games. 70-75k * 3 = $210-$225k
Again, correct me if Im wrong...
|
I get $210k to $225k for production, plus the $75k development budget for a total of about $300k to break even, assuming all 15k units sell.
If you can sell your carts before they are produced, it looks to me like you'll only need the dev budget up front (75k). If the revenue from the first run can be used to buy the second run, it looks like you'll only need ~150k up front.
A few random thoughts- If you only need to worry about your dev costs, you can mitigate risk by having people work for performance based salaries/bonuses (where performanance == company/project performance). If your project is a labor of love for your staff, they might be willing to take shares in the company in exchange for less cash. Your company may not have much more than shares to offer at first. The shares will of course be worth nothing if the company fails.
-Brendan
#28101 - keldon - Tue Oct 26, 2004 10:21 pm
bren, you might have missed the point of my post. The same thing was said about so many things; then people went independant and the big boys realised they were wrong because the independant labels were making dollars. What is stopping the gaming industry from doing it ?!?
Obviously people need to make money; I would be stupid to suggest we should ignore it, and likewise to think I would think that. And before you mention it; no I don't think it's "that simple"; I'm no fool. But I'm sure my uncle was told he'll never make it selling cerial and cows milk in bulk .. I bet they wouldn't say it too loud now he'd got Audi TT's and dream cars he drives around Brands Hatche ( like they'd even be heard saying it loud against that engine anyway ).
People need to be ambitious about thier product, that's all I'm saying. And *cough cough*, let me clear my *cough* throat.
EDIT: And no, I don't think I've discovered the solution to homebrew before you ask. Merely an observation / opinion / thought / comparison .. or *something*
Last edited by keldon on Tue Oct 26, 2004 10:31 pm; edited 1 time in total
#28102 - SimonB - Tue Oct 26, 2004 10:27 pm
| sgeos wrote: |
| I get $210k to $225k for production, plus the $75k development budget for a total of about $300k to break even, assuming all 15k units sell. |
Yes, sounds about right.
| sgeos wrote: |
| If you can sell your carts before they are produced, it looks to me like you'll only need the dev budget up front (75k). |
You mean like 5000 people paying when they pre-order the game?
| sgeos wrote: |
| If the revenue from the first run can be used to buy the second run, it looks like you'll only need ~150k up front. |
Yes, sounds about right from where im standing :)
Of course, we calculated with the cheapest 32mbit games and you would need to sell all those 15000 games to break even. A few too many "if's" and "but's" for my liking...and to the publishers it seems.
Simon
#28110 - sgeos - Tue Oct 26, 2004 11:40 pm
| SimonB wrote: |
| sgeos wrote: | | If you can sell your carts before they are produced, it looks to me like you'll only need the dev budget up front (75k). |
You mean like 5000 people paying when they pre-order the game? |
Yes, 5000 pre-ordered games. That is different from 5000 people preordering. Stores should buy in cases. How many GBA games come in a case? (Cracking a case incurs extra cost. Am I wrong to assume games are sold in cases?)
| Quote: |
...people need to focus on making a Great game and nothing else...
bren, you might have missed the point of my post. |
I was responding strongly to "and nothing else". I agree that people need to be passionate, but you do need a business plan. All members of a startup have to have a certain level of ambition, otherwise they would not be part of a startup.
| Quote: |
| ...then people went independant and the big boys realised they were wrong because the independant labels were making dollars. What is stopping the gaming industry from doing it ?!? |
I'm with you on this one. I'd love to see developers cut out the middleman and directly market to customers. Perhaps with online gaming we will see more business models like this.
The publishers are not taking risks. Rewards scale with risks to some extent. Call me crazy, but I have a feeling that fairly soon that risk/reward thing will come around to haunt publishers.
-Brendan
#28113 - Abscissa - Tue Oct 26, 2004 11:52 pm
| sgeos wrote: |
| The publishers are not taking risks. Rewards scale with risks to some extent. Call me crazy, but I have a feeling that fairly soon that risk/reward thing will come around to haunt publishers. |
Lately, I'm not sure I would attribute that to just "a feeling", and I wouldn't think of calling it anything other than perfectly sane and rational. I think it's almost imminent (especially with the next generation of non-portables), if not already starting to bite them (look at all of the publishers that have shut down over the last year). I'd be suprised if there's very many people in the industry (publishers *and* developers) that don't already see it coming as well, even if they don't say so.
#28114 - keldon - Tue Oct 26, 2004 11:58 pm
Publishers going down; I think you're missing the big picture. Everything's going down.
The second biggest record label couldn't hack. A legendary games publishing team has gone down. The second biggest film studio had to merge because they couldn't hack it; even England Ractrack can't hack F1. In fact in the last 5 or so years, the tycoons have eliminated those who relied on being in the elite group.
On the other hand smaller film studios; are suddenly cashing in :-/ and becoming big. This trend is following the music industry; however it is more of an effect of their lifelong investment. Who knows about gaming. It looks impossible to budge bowser off his kart; but I doubt that even the analysts would bet their money on it.
#28528 - Andrew Kesterson - Tue Nov 02, 2004 7:06 am
This all comes down to the fact that we are now living in an age where all kinds of data (information) is available at the click of a mouse. With indie music producers able to record, mix, and burn their CDs with good input hardware and a PC that costs maybe $3K totally and completely tricked, then combine it with distributing their music online in the form of pay-for-download MP3s or CDs ordered online etc, yes the big record labels are hurting. Ditto for the indie film market. And with game development going online, indie teams who can gather and develop effectively online, bypassing the costs of rent and physical incorporation, blah blah blah, then distribute their games online - well, you get the idea...
The point is that the customer is no longer limited to what is on Wal Mart's shelves, or Toys R Us's bargain bins. They can now go online and look for the content they want, and likewise the developers who have that content can deliver it - and information about it - to the consumer in record time and ease, thereby bypassing the Sony's and Nintendo's of the world.
So if we developers would just get together, coordinate, market and distribute, we could cash in on the information age... I don't know if we'll ever do it, tho.
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#29730 - blinky465 - Wed Nov 24, 2004 12:17 pm
| Andrew Kesterson wrote: |
| So if we developers would just get together, coordinate, market and distribute, we could cash in on the information age... I don't know if we'll ever do it, tho. |
I'm with you here Andrew, and proposing to make small volume production runs available to home-brew developers (if only to recoup my outlay on a test run of my own game). See 'home publishing' in the Help Offered section.
So how about we indie developers think 'indie' instead of global....
... I reckon that I can get a ROM burned to cart for about ?5.
Add in a couple of quid for packaging, fancy labels and a booklet etc (working on the prices from a local digital printer bureau for 50 booklets/labels at a time) and I'm left with the problem of distribution and advertising.
No mean feat, but let's not try to take over the world in one go. How about taking a batch of 10 at a time to video stores and local shops (targetting franchised chains rather than Game/HMV etc, where the managers can actually make decisions about the stock they carry).
Offer them on a sale-or-return basis and see what response there is.
You've now got your game in the shops, at a cost of about ?8 plus your time. At a selling price of ?19.99 you're still ?10 cheaper than the latest releases (though competing with some of the bargain bin titles) and you're ?12 up! And importantly - you've got your game in the shops! People are playing your game, not just friends and family and dev communities, but Joe Public, playing your game, talking about it with their pals.... isn't this the aim?
#29749 - Abscissa - Wed Nov 24, 2004 6:45 pm
I'm not sure about that for a closed-system like the GBA. It's akin to Tengen. A console manufacturer's profit model is totally reliant upon their royalties from officially liscenced games, so naturally they fight anything like that to the end.
#29764 - blinky465 - Wed Nov 24, 2004 9:48 pm
| Abscissa wrote: |
| It's akin to Tengen. |
? I don't understand, sorry. What is Tengen?
Since the GBA is built around the ARM processor, rather than a custom-designed processor, there's no legal restrictions on people making compatible code, and compatible hardware.
Nintendo may have built their business model around controlling licences for game development, but surely there's nothing they can do, legally, to stop home publishing (however much they dislike it)?
#29768 - tepples - Wed Nov 24, 2004 10:41 pm
Tengen was the console and computer publishing arm of Atari Games, the arcade division that Atari spun off when it decided to concentrate on the Atari 400/800 and ST computer platforms. Tengen made a couple licensed NES titles for Nintendo, but then Nintendo started treating Tengen like crap, and Tengen decided to work on its own way around the NES lockout chip. Turns out Tengen did it by defrauding the Copyright Office into disclosing Nintendo's unpublished source code for the lockout chip, and Tengen lost. (Tengen and the rest of Atari Games are now part of Midway, a licensed publisher.)
The other self-manufacturing NES game publishers (Color Dreams, Codemasters/Camerica, and American Video Entertainment) used a different method of defeating the lockout chip, and they managed to beat Nintendo in court. This "Macronix method" involved a charge pump sending -5 volt pulses to the lockout chip's I/O pins.
Now the GBA has no lockout to speak of except for a requirement of a 156 byte magic cookie stored at 0x08000004-0x0800009F. In at least two cases, Sega v. Accolade (pre-DMCA) and Lexmark v. Static Control Components (post-DMCA), U.S. courts of appeals have held that copying this magic cookie to get the cart to boot competitive media is a fair use.
It appears that Nintendo can stop independent publishers of GBA games only if 1. Nintendo holds a patent on the GBA cart bus (unlikely given the prior art in Intellivision and ATA buses), or 2. the independent publisher doesn't have money to retain a lawyer and the EFF doesn't want to join the case.
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