Is there another way?

Game dev folks, I’d like your thoughts on this one: Michael Martinez, CEO of JuiceBox Games, wrote a smart and heart-felt mini post-mortem of his company, which is shutting down. In it he details the difficulties of running an effective game development business in today’s market. I don’t know Martinez, but I agree with most of what he says 100%. And of course I have immense empathy for him and his team, and the difficult decisions he’s had to make.

That said, I’m left with the nagging feeling that he (and many other smart people) have bought into the equation of “game dev success” that requires many millions of dollars of investment. JuiceBox had a $2.54M seed round, the kind of money which then requires hit games to sustain the business. This view is hardly new; it’s how people have been setting up businesses for a long time (and how I’ve set up some of mine in the past). However, it also leads to the kind of tunnel vision that makes the conclusion that “games are a hit-driven business,” inevitable. It’s the classic (if often self-defeating) “go big or go home” mentality that shoves aside all other possibilities. The thing is, I don’t think that conclusion is actually all that inevitable: we can do this differently, with less risk and more success.

 

Meaning no disrespect to JuiceBox or other game entrepreneurs (game development as a business remains incredibly difficult), but in today’s market the “take VC money and make it big” strategy sounds more and more to me like, “I took millions of dollars in ‘investment’ and now I’m going to buy a few really expensive lottery tickets with it, so I need a big win from those tickets to keep everyone happy.” It’s in slower motion than buying lottery tickets, and features smart, hard-working people who believe that by being smart and hard-working they can somehow turn the entirely capricious odds of the lottery market in their favor, but I’m not sure there are a lot of other differences.

By an “entirely capricious market” what I mean is that there seems to be little rhyme or reason to commercial success in games today, especially in the mobile and tablet market. Having a great game is usually a pre-requisite, but as difficult as that is to do it isn’t sufficient (as Martinez notes). Spending millions on marketing isn’t any sort of guarantee either, especially as user acquisition costs rise to points well above any reasonable lifetime value for those users.

This isn’t a new condition in games. Prior to the rise of social and mobile games, the commercial success rate of retail games (back when games were sold only at retail!) was in the single digits — typically modeled at around 5%. That meant that everyone just lived with the idea that their product had a 95% chance of failing… but that the wins were presumably big enough to offset those odds. Never mind the fact that game companies came and went quickly by trying to play in such shark-infested red ocean waters.

What has changed is that we now have options beyond “take millions of dollars, rent expensive space in San Francisco, gather a great team, and … hope for the best.” The technological and distribution barriers to game development have all but vanished, and there is little reason (other than mythology) to site your company in an expensive location — or even in a single location at all. Having smart, hard-working people is still necessary, but they ways they can be smart and work hard have changed completely in the past decade. This may, I think, have changed the equation necessary for commercial game success, if we’re willing to take the chance and embrace it.

What this argues for is a concept of success that’s anathema to the “take as much VC money as you can swallow” mindset: it means aiming for smaller successes, ones where you get to continue making games, feeding your family, buying a house, and slowly building up credibility and a following — but probably not doing what’s often called “swinging for the fences,” a baseball analogy that implies the result lies in you and your talent, not in how well you can scratch off venture capital lottery tickets.

A lot of successful game devs are doing this already. Dan Cook has written an unflinching and insightful (of course) post about the math and work that goes into “minimum sustainable success” for a small studio. He doesn’t advocate buying expensive investment lottery tickets, though he does recognize that many — most — of the games you make will likely be failures. He also has some sage advice for how to navigate this reality, and tilt the odds as much as possible in your favor.

The one aspect of designing, developing, launching, and running a game that becomes a commercial success that is still outside of the control of small (and large!) developers is discoverability. If people can’t find your game, they can’t play it. And now developers and publishers are faced with the fact that hundreds of new games are published every single day. If you launched a game on the iOS app store yesterday, it would be in the jumble of several hundred others that came out the same day, and a few thousand in the past week. Advertising is incredibly, untenably expensive, and the old standby of “getting featured” no longer seems to be generating a significant bump in sales.

At present, there is no known cure for this condition: no “best practices” for marketing a game, no short-term sure-fire way for developers and publishers to help those who would love their game find it among the many others clamoring for attention. There are a few things people try: getting a youtube streamer to play your game comes up a lot as an example.

But ultimately this is just one aspect of a deeper strategy that also argues against the “investment lottery ticket” approach: beyond building “games as a service” (as Dan Cook suggests), build games as a community. This takes time, personal presence, brand-building (of yourself and your games), and patience. This is the opposite of the new version of the old “fire and forget” retail strategy that’s come up again with online sales. Instead, it argues for a small developer playing a long game, looking to make and keep customers. It means calculating LTV over the life of the player, not the few weeks they’re likely to stay with any one of your games.

And of course, it may not work. You may run out of money before you successfully build a brand and a following. Or your games may just not be that good. But in the light of the unending stream of heartfelt posts like that of Juicebox Games shutting down, I have to think it’s better to try.

Aim lower. Aim slower. Build a business, don’t try to flip one. It’s old-fashioned, I know, but I think it endures for a reason.

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