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Is mobile success now impossible for small developers?

Enormous budgets at the top end don't have to mean the end of the dream for everyone else

Is there a future for smaller developers on mobile devices? That's an awful question to have to ask, yet it's one being asked - with some variation in the phrasing or the approach - in quite a lot of contexts recently. Mobile platforms, once seen as safe refuge from the drastic collapse of the mid-range PC and console market, are now themselves displaying the same symptoms; soaring budgets, dependency on franchise or licensed IP, and a market increasingly dominated by the tiny percentage of games which "hit", leaving not even scraps for the vast number of games that "miss".

We watched that happen to console games over the course of the last hardware generation. It's a vicious cycle and it can be hard to tell where it begins; did consumers stop buying sub-AAA titles, leading publishers to stop funding them? Or did publishers, spooked by rising development budgets, throw all their weight behind a handful of "sure-fire" hit titles, starving sub-AAA development of finances, resources and ultimately, existence? A little from column A, a little from column B, perhaps; though I suspect it had more to do with column B, for reasons which are now being recycled in the mobile industry.

There's no doubt that costs at the top end of the mobile business are soaring, with development and - more notably - marketing costs trending upwards at a rate which makes the rise in console development costs through the 2000s look positively leisurely. Companies like King and Supercell are spending up to half a billion dollars a year on marketing alone, and margins are tumbling as costs outpace revenue growth. This creates a twofold barrier to entry for newcomers. Firstly, the rapid advancement of mobile technology has pushed up basic development costs - say what you like about the console model, which freezes hardware advancement in five or six year increments, but it does at least give a long-term level playing field that gives developers an opportunity to master and ultimately profit from the systems.

"even if you can afford the now much more expensive development process for a top-end mobile game, the chances are you can't afford to market it"

Secondly, even if you can afford the now much more expensive development process for a top-end mobile game, the chances are you can't afford to market it - not when you're facing an onslaught of expensive marketing from the likes of King, or takeovers of some of the world's most famous public spaces by Supercell. Winning mindshare from those giants isn't within the grasp of a plucky startup; much as we'd all love to pretend that it's all about the quality of the games, the reality is that at the top end of the market, it's more to do with brand recognition, amplified by the "flocking" behaviour that's endemic to social games.

To some degree, these companies are victims of their own past success. Much of the marketing spend that's inflating their operating costs is not aimed at supporting the launch of new games, but at sustaining the growth of games that first launched three or four years ago. Clash of Clans remains Supercell's big hit; Candy Crush Saga is still King's biggest revenue stream. GungHo has Puzzle&Dragons, Zynga has Farmville. These are all old games, yet they are the marketing focus of their respective companies. This is actually not just a feature of those companies, but a feature of the market overall; a look at the top charts on the iOS App Store reveals that many of the games which remain most popular now are games that date back several years. That forces mobile developers to view sustaining the growth of their old hits as being just as important as developing new hits; more important, actually, because the old game is already a proven success, while all money spent on new development is, by definition, speculative.

It's a tough balance to strike - focusing resources on your existing games, risking having no new titles to take up the slack when the old star finally fades; or focusing on developing new games, effectively re-rolling the dice that gave you boxcars in the past, but with the ever-present risk that you'll never see anything but snake eyes again. This has echoes, actually, of a similar balancing problem that console publishers faced - which brings us back to the question of how the vicious cycle that killed off mid-range development got rolling in the first place. Faced with rising development costs, publishers had two choices. They could keep funding lots of games, knowing that plenty of them would turn out to be sub-AAA and might lose money; or they could dump all of their resources into a handful of titles, "guaranteeing" that each one would be an AAA title through sheer force of finance, spending money to bulk out the feature lists in a quest to stamp out every market risk imaginable.

"Faced with rising development costs, publishers had two choices. They could keep funding lots of games, or they could dump all of their resources into a handful of titles"

We all know which way that went. We sometimes say that companies like game publishers are averse to "risk", but that's not the whole truth; they're actually averse to one specific type of risk, operational risk - the risk that a game will bomb and lose money - while being entirely too relaxed about another form of risk, financial risk - the risk that grows as a game's development and launch gets more expensive. Essentially, publishers (and big companies in general) are remarkably comfortable about spending enormous amounts of money on things; they'll pump endless amounts of cash into the development of a game in order to tick every box on the feature list, telling themselves that they're reducing operational risk ("it's got multiplayer now, people love multiplayer! It's much less likely to fail with multiplayer!") while ignoring the now catastrophically high level of financial risk which means that, should the game actually fail, it threatens to take the whole company with it.

I digress, but this is as much about the careers of the company's managers and producers as it is about the health or culture of the company itself; managers make a perfectly rational calculation that operational risk is much more dangerous to their careers than financial risk. Being in charge of a small game that flopped looks pretty bad, and being in charge of a small game that did well is a career positive but not an enormous one; while being in charge of a big game that succeeded is a career-making move, and being in charge of a big game that flopped is actually not all that bad either, perhaps no worse than being in charge of a smaller flop, since the industry tends to respect experience of managing large projects, no matter how badly they did in the end.

That's what happened in the console and PC games business, and it was nothing short of apocalyptic for the small development studios which had once been the backbone of the industry. Many of those studios and their staff saw mobile development as a liferaft; yet here we are again. The raft is sinking into the same sea that consumed the mid-range development sector on console and PC. Budgets are rising, launches are getting more expensive and, from what I can gather, publishers are responding just the same as before - throwing more and more money at a smaller and smaller selection of products, trying vainly to insulate themselves from operational risk while all the while constructing a huge, shaky tower of financial risk. If anything, it's even worse on mobile than it was on console, since one of the best things about mobile - the long tail that means successful games can keep on being successful for ages - conspires to give publishers a whole new way of avoiding operational risk, by dumping money into old, proven games rather than new, risky ventures.

"publishers are responding just the same as before - throwing more and more money at a smaller and smaller selection of products, trying vainly to insulate themselves from operational risk"

If that sounds bleak, though, I'd urge you to consider the flipside of what happened on PC and console. The mid-range disappeared, yes; it was upsetting, it wrecked people's lives in many cases, and it narrowed the kind of games available for quite a long while. Yet at the same time a whole new low-end of games (and I mean "low-end" in budget terms, not quality) emerged. The indie scene blossomed, from a new generation of bedroom coders through to a whole new wave of small, creative, innovative studios who have done more to push the medium of games forward than almost anything else in the past decade. Not every indie game was a success, but most of them were sufficiently low-budget that their failure could be chalked up to experience and the creators could move on to the next thing. "Fail again. Fail better"; Beckett's words could be the slogan of the indie game scene.

Moreover, and crucially for how we choose to perceive the change in the mobile games industry, these "low-end" creators have a different concept of success to a large publisher or studio. Sure, Notch made billions and bought a Hollywood mansion; but while much of our attention gets focused on such enormous successes, the truth is that for most indie creators and small developers, "success" looks like the bills being paid, the paycheques being sent out and the funds for working on the next title being secured. Never mind billions; many smaller games would comfortably cover their costs and pay their creators a healthy wage with a few hundred thousand dollars in revenue, or perhaps even less.

On mobile, too, far away from the giant marketing budgets and multi-million-dollar development plans of the big players, such a sector can and will thrive. We are rapidly approaching the point where everyone in the developed world, and a healthy percentage of people elsewhere, will carry a smartphone; that's a whole lot of niches to be filled, a whole lot of niches to be satisfied, an almost unimaginable number of daily moments to be brightened with a spark of entertainment. It's nonsense to imagine that King, or Supercell, or any of the other huge companies dominating the top end of the market, are going to release games that satisfy and enthral everyone with a phone in their pocket. For those plucky, interesting developers who challenge themselves to fill the cracks and flow into the niches, there's absolutely a living - a good living - to be made. There are challenges, the greatest of which may be discovery, but just as PCs and even consoles have seen the flowering of indie talent, the end of the mobile device "gold rush" doesn't mean the doors are shut for smaller developers; as long as your dream is to make a living from creating games, rather than to buy a Hollywood mansion and a private jet, your dream is still alive.

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Latest comments (30)

Paul Johnson Managing Director / Lead code monkey, Rubicon Development3 years ago
It has nothing to do with "rising development costs". Examples of cheap to make runaway successes abound, and having not had one it's something I regularly torment myself over. Crossy Road, Flappy Bird - the list is long. Decent enough games, sure, but deserving of millions on technical merit? No.

The problem, and it is terminal, is that nobody knowns which is going to be the next one, and making sure it's going to be yours is almost impossible. And if you don't get that next one, you will earn approximatly bupkis.

All mobile development is a complete lottery now and you apparently can't bias favourable results your way by putting in more content etc.

You have to just keep firing at the market and hoping for the best, which is hardly an ideal business model. The other alternative is to get 10M of investment and spend every penny on Chartboost etc., trying to get 11M back. Not very indie-friendly either.
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Anthony Gowland Director, Ant Workshop3 years ago
Is mobile success now impossible for small developers?
No, unless you define success as "being in the top 100 grossing". But to be honest most small developers don't need to make that kind of money to turn a healthy profit.
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Darren Adams Managing Director, ChaosTrend3 years ago
Mobile development is one part hard work and 3 parts pure luck and no budget, no matter how large can ever buy luck.

You can however spend insane amounts of money to keep a game up in the charts by giving all your budget to marketers. But IMO when it comes to development of games, just make a good game and hope that it hits at the right time and gets picked up by the right people.

Edited 1 times. Last edit by Darren Adams on 27th March 2015 10:14am

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Robin Clarke Producer, AppyNation Ltd3 years ago
"Firstly, the rapid advancement of mobile technology has pushed up basic development costs"

I'm not sure that this is a given. If you look at what is at the top of the charts/featured/generally getting attention and doing the business on the App Store, the average development cost has probably increased over the last five years, but the barrier to entry hasn't rocketed up. There are more mature (and cheaper) tools available now, and games with smaller scope and production values still sit side by side with lavish console-style games from the big publishers. The pie has gotten bigger rather than the big games starving everything else.

...

There is luck involved in any venture. But this supposed 'lottery' seems to have consistently rewarded developers who have taken time to fully understand the way the market works now and what platform holders and customers value, instead of striking out in a random direction and hoping for the best.
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Elphège Kolingba Brand Manager 3 years ago
Great :)
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Nick Parker Consultant 3 years ago
I think what we're all saying is, set your expectations realistically and set a return target based on those expectations. It's your business plan and you haven't failed if you're not in the top ten/twenty, only if you don't achieve your business plan.
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Ruben Monteiro Engineer 3 years ago
The indie scene blossomed
The past tense is the keyword here, since shit has hit the fan there too.
Free engines and easy distribution made everyone and their mom develop and publish games. The indie scene is now overcrowded. Welcome to the lottery, may the luckiest man win.
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Success is 3/4 luck? It's a factor for sure, but a lottery? In a creative field I rather think the buying public has some say in the matter. Like music, games has always been about making hits and I doubt anybody here buys albums by throwing a dice. The work matters. If I had to place a bet on two devs, the one who believed success was 3/4 luck wouldn't get a bent penny.
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James Coote Independent Game Developer 3 years ago
Realistically, indies cannot pay rent selling mobile games. The successes are statistical outliers. Looking at those successes individually is a useful academic exercise. However, the picture that builds up after a while is of successful developers being in the right place at the right time, and then being able to leverage that initial opportunity.

There are loads of opportunities in the games industry, including in mobile. However, it's very hard to anticipate those opportunities far enough in advance that you can actually catch them. Particularly for indies, they don't have the resources to make, for example, a smartwatch game in the next 6 months. Especially if they are working a day job. I regularly see games that would have been great six months ago, because the developer making that game started on it a year ago.

Being an indie is kind of like being an athlete. It's brutally hard work for years before you even get a sniff of something like success. Only the top 5% will ever make a living from it, and only the handful at the very top will make the big bucks. Leaving aside the marketing spend thing, on the app store, you're competing with every developer on the planet. Literally, competing against the Usain Bolt of video games. Most simply haven't got the talent, just aren't good enough.

Moreover, at the end of the marathon to complete a game, developers are then expected to climb the marketing mountain. We need to be training Triathletes, not sprinters.

As for that marketing, I think Robin's point above about firing in random directions is part of the problem. There's no business model to necessarily follow, so it's a case of make up one on the fly. Furthermore, the idea of indies sitting down to make a game for a demographic/audience that isn't themselves is antithetical to being an indie. (No one goes indie to make someone elses game). Where upon the lack of diversity kicks in. Most of the indie success stories on PC are where indies have aimed at 'core-gamer' niches that are easier to reach using the channels available to indies, such as youtube and social media.

It's worth differentiating between indie and small studio here, as those more professional outfits of a half dozen AAA vets are capable of finding those harder to reach niches, have at least a little bit of a budget for effective low-cost (vs no-cost-but-time) marketing, and are more attractive to investors and as partners for platform holders. Plus they have the ability to pull off a polished, professional "stylized-art" product to get around budget-inflation, in a way many indies struggle with.
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Jakub Mikyska CEO, Grip Digital3 years ago
As it has been said numerous times, the market being overcrowded is the biggest problem. Even if your game is better than 99% of what's out there, customer's won't find it. Most of the small and medium-sized developers will die, their dreams with it and they will go find a job at Google.

And I think that is a good thing. Not for the particular developers, but for the market. We will have the big guys, who will stay big guys. All those "in-between" developers who got 5 - 10 million dollars in funding to make a mobile game will disappear, because the investors will finally realize they just sponsor the "mobile PR companies" and then we'll have garage developers who will happily get a few hundred or thousand downloads and brag about it after school.

And then there will be balance and there will be opportunity again. There will be great games being able to stand out again, making the profit they deserve. It has happened before, it will happen again.
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James Berg Games User Researcher, EA Canada3 years ago
The issue remains discoverability, not budgets and not even, in many cases, quality (Flappy Birds). That's the lottery aspect.
GDC this year had a TON of chartboost-style companies trying to capitalize on this.
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Jamie Firth Video Games Production 3 years ago
It's a very new and constantly shifting business model. It's most definitely not a lottery, but it IS something that needs to be constantly worked on.
I don't think that there has been any "luck" in any of the big successes that are being mentioned (unless you consider having made an excellent game or getting massive investment "luck") - and people's definitions of success seem to be questionable to me. Sustainable games making profits after all the costs are taken care of... THAT's success: not just the handful of games that have made billions.
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development3 years ago
Why is it that even now, the people with some sort of "I'm a game developer" job title all agree with me about the lottery/luck/random factor and the lack of earnings whilst all the evangelistas are still saying stupid things like "quality sells" and "make it good and you'll get paid". It's bollocks. Please stop this, it's just doing damage.

For example. Jamie.
Sustainable games making profits after all the costs are taken care of... THAT's success: not just the handful of games that have made billions.
Care to name just a dozen?

All of my games have a 4+ rating. All of them now earn under £20 a day, bar one. The best one with the highest production values averages about £6 a day. On the other side of the coin, the thing that's paying the wages of four people is basically an adware yahtzee clone. It's a good implementation but I think it sells above zero because if you search for "yahtzee" mine comes up second. That is all.

And believe me, I'm not the outlier here. I speak with many experienced developers regularly and the only ones who think skill played a part are those that had one success. Exactly one.

Edited 1 times. Last edit by Paul Johnson on 29th March 2015 12:19am

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Jamie Firth Video Games Production 3 years ago
The fact that some companies seem to consistently succeed proves beyond doubt that there is no lottery/luck/random about it: It's just that they understand how to get their games visibility.
No arguments that quality doesn't guarantee success: you can make the greatest game in the world, but it won't be a success if nobody ever sees it. One key issue is that many developers say that they are "self-publishing", by which often they actually mean "self-distributing": they can release the game themselves, but often do it without any of the basic things that a publisher would previously have done. That's where the visibility comes in.
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Darren Adams Managing Director, ChaosTrend3 years ago
Hmmm, I think my 'luck' comment has gone a bit westward.

My point was that it is firstly a developers sole purpose to make a great game, but after that you do rely on a massive bit of luck. Maybe, 5/8ths would have been a little more realistic estimate, but luck does play the biggest part once your game is done and dusted.

Marketers will obviously tell you that it is them alone who can push your game up the charts, but as we all know this is utter bullshit. Just take a look at the spam companies offering "1000x 5 star ratings" or "100 great reviews" or "Play X game and get credits to spend on Z". The charts are all but a complete lie, with titles like angry birds artificially keeping the top of the charts with aggressive marketing. How much do they spend each month to stay relevant I wonder.

Then on the other side you have thousands of indie developers all fighting over the scraps and you tell me its not luck when all their games are excellent quality and have good coverage. What makes flappy bird better than a top shelf mobile game that costs 10+ million to make and market? Sometimes it all comes down to luck, how much is up to the individuals perspective.

Of course this is my opinion and not scientific research, so take from it what you will.
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Jamie Firth Video Games Production 3 years ago
Darren:
you tell me its not luck when all their games are excellent quality and have good coverage. What makes flappy bird better than a top shelf mobile game that costs 10+ million to make and market? Sometimes it all comes down to luck, how much is up to the individuals perspective.
I see where you're coming from, but I don't think that "luck" is what you're describing: I think that's worst case an "X Factor" or in a lot of cases "Craft". There's an extra soul or charm to some games and to describe it as "luck" is a great discredit to the developer.
"Crossy Road" (to name one example) is a magnificent game top to bottom: every part of it fits together incredibly well... even the monetisation is done incredibly skillfully with no impact on the game. That's no accident.
Flappy bird had an incredibly satisfying core mechanic and it went hugely viral because of that - I don't think it had any help outside of that.
To use Monument Valley as another example, that was no accident IMO either. It's very high quality meant that it got lots of press coverage and Apple featuring. It gets brilliant reviews, which push it up the search terms, which generate MORE downloads, which increase visibility further. And then the House of Cards thing and suddenly you've got millions more eyeballs on it.

But then (and I hate numbers, but it's the best way to explain it!) these are all basically 10/10 games. If your game is a 7 or 8 you need a little push. If it's a 6 then you'll need a lot more. "Quality is no guarantee of success" is definitely true (as indeed it has ALWAYS been in any creative sector)

Paul:
Why is it that even now, the people with some sort of "I'm a game developer" job title all agree with me about the lottery/luck/random factor and the lack of earnings whilst all the evangelistas are still saying stupid things like "quality sells" and "make it good and you'll get paid". It's bollocks. Please stop this, it's just doing damage.
Because, in my experience, developers often develop massively inflated opinions of the quality of their games: There are very few truly good mobile games out there, and a lot of solid but basically average ones.
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development3 years ago
The fact that some companies seem to consistently succeed proves beyond doubt that there is no lottery/luck/random about it: It's just that they understand how to get their games visibility.
No, it just means they're very well funded and able to do things that mere game developers cannot. Because they have appropriate staff. This article is about small indies.
...but often do it without any of the basic things that a publisher would previously have done.
Let me fix that for you:
...but often do it without any of the basic things that a publisher should previously have done.

Been a consultant long?
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development3 years ago
To use Monument Valley as another example, that was no accident IMO either. It's very high quality meant that it got lots of press coverage and Apple featuring. It gets brilliant reviews, which push it up the search terms, which generate MORE downloads, which increase visibility further. And then the House of Cards thing and suddenly you've got millions more eyeballs on it.
You just gave a description of one of my games that now earns under £20 a day. Don't take my word for it, ask BAFTA. Where are my house of cards and millions of eyeballs please?
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Darren Adams Managing Director, ChaosTrend3 years ago
Indeed. As you mention Paul, money is a large part of the equation, but even that accounts for less than people give it credit for I think. Sure, you can throw money at anything and it will inevitably claw back some money from being shoved in peoples faces every 20 seconds, but I don't really subscribe to the "throw more shit at the wall till it sticks" mentality. But hey, that's just me.

I have a mobile game that has had over 1.5 million downloads on iOS and has made me a chunk of money without me doing anything more than throw it around a few websites and promote it myself. Could I have done more? Sure I could of, but I don't have the resources or inclination to keep pumping money into a game for more than a couple of months unless it is really popular. If it falls down the charts and disappears then so be it, it probably needed to be better and I will just get on with the next one. That is after all why we are in the business.... To make games and as a result of good work, money.

Edited 3 times. Last edit by Darren Adams on 29th March 2015 6:50pm

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Jamie Firth Video Games Production 3 years ago
No, it just means they're very well funded and able to do things that mere game developers cannot. Because they have appropriate staff. This article is about small indies.
We're totally agreed that a business should have appropriate staff for that business. And developers of any size, if acting as publisher themselves, should be either finding people with those skills or developing them internally. Otherwise yes, I totally agree that mobile is a dead duck for them because discovery will be a nightmare.
Been a consultant long?
I'll take this as genuine interest rather than a snark and say a few years. But before that, and throughout, I've worked with publishers who definitely DID do the things a publisher should be doing for a developer.
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development3 years ago
I'm 3 and 0 with publishers, but I'll give benefit of doubt that some actually do some work for their cut. Someone must do! :)
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James Coote Independent Game Developer 3 years ago
Obviously some developers do have the right business model and are able to make a success of it. But if you ask them "Why did you pick this winning strategy," most will be like "dunno, it seemed like a good idea at the time?" That's telling.

At any one time, lots of indie developers are throwing different game and business model ideas at the wall to see what sticks. It's not that useful to then hold up the arm of the successful indie and declare like a boxing promoter that "this dev has a great throwing arm, and they know what's sticky!"
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Tom Keresztes Programmer 3 years ago
I'm 3 and 0 with publishers, but I'll give benefit of doubt that some actually do some work for their cut. Someone must do! :)
Because your game is nice, but publishers want it with monkeys.

"He also revealed some of the knock back statements Hello Games received from early talks with publishers for Joe Danger, including: "Name me one popular game with motorbikes", "we want games that are less about fun right now" and "can Joe be a monkey? We like monkeys".
Source
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Marty Howe Director, Figurehead Studios3 years ago
"we want games that are less about fun right now"

Did a game publisher really say that? That is terrifying.
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I can't resist any longer...

Luck is important but it's the same luck a golfer gets after landing their approach shot on the green and seeing the ball roll into the hole. He had to hit the green first.

After launching Murder Files on iOS nearly 2 years ago, we took a set of deliberate steps to achieve a bigger success. The Trace is the result. Currently riding high on the app store charts and In a weekend it has outperformed lifetime sales of Murder Files.

You have to aim right to get the benefit of some luck. Sorry about the golf analogy.
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Robin Clarke Producer, AppyNation Ltd3 years ago
@Paul Johnson

Well I've been making and selling mobile games for a while now, and that has taught me that if you ignore how the market operates no amount of quality will save you.

I feel like I'm repeating myself here, but user reviews are close to meaningless. Awards are meaningless. What matters is people being able to find your game, understanding what it has to offer them, and keep coming back. You assert that this is out of the reach of small indies, yet there are many instances I can think of where small teams have either broken through or successfully addressed a niche.

You say you have a game that works in the market but instead of considering why the rest of your games don't, you've decided that the market is broken. You talk about not wanting to learn about ads or marketing. Learning about (or hiring in expertise in) these things are just the table stakes now.
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@John

Thinking of naming a Develop session: Why Game Dev Is Just Like Golf.
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Robert Mac-Donald Game Designer, Lethe Games3 years ago
I find myself at a pretty scary place right now. I've stopped playing AAA games in 2008. Bioshock infinite, Far Cry series, Mass Effect series - It´s just not for me. I spend my time playing indie (such as lone survivor) or small dev games like Mount and Blade. I couldn't go back to working at an AAA studio now because I simply don't play their games, I'm not part of that industry anymore.

That leaves me with indie as my only alternative if I want to continue working in the games industry. Mobile would be the perfect entry point for that, or so I thought when I started in 2011, but I'm far from being able to live from it. A few weeks ago I switched to free with ads model, let´s see how that goes.

Before facebook and mobile games, there was a flash games industry that was very healthy. You could make some decent money from your games, you had sites like newgrounds that would promote good ones and sites like flashgamelicense where you could bid your games to sponsors. But facebook+mobile greatly weakened that market while not offering a living to most developers. With millions of android and iOS devices out there, it shouldn't be this hard to make a few thousand dollars from a game.
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Tom Keresztes Programmer 3 years ago
With millions of android and iOS devices out there, it shouldn't be this hard to make a few thousand dollars from a game.
With millions of users who got those devices because they can play free games. They never actually considered paying.
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Robert Mac-Donald Game Designer, Lethe Games3 years ago
True, but it seems even those that go free + ads/in app purchases have trouble generating downloads.

When even free games don't get enough exposure, you'd say something was very wrong with Apple's system.
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