What causes indie games to fail?

Studios are seeing diminishing returns, but most of those can be attributed to crucial misunderstandings of market realities

We're in a remarkable era for independent videogames. The democratisation of tools and distribution has opened up creative possibilities and routes to market for a whole range of creators and spurred a flourishing of new studios, ranging from one-person bedroom operations up to relatively well bankrolled groups of development veterans splintering off to go it alone. Headline success stories have put a gleam in the eye of everyone who's ever dreamed of making games for a living; Minecraft's billions makes it the daddy of them all, but fortunes have been made at the second and even third tier of indie commercial success, too. From their origins on the PC, indie creators have found themselves more than welcome on console platforms, and some of the world's most successful mobile developers have their roots in indie, rather than traditional publishing, backgrounds.

The problem with this kind of success, especially when it comes so rapidly, is that it creates a gold rush mentality. A few people create enormously successful indie games, the scale of the opportunity becomes clear, and suddenly the world is full of people who want to make the next Minecraft, the next Canabalt, the next Undertale, the next whatever. The vast majority have the finest of intentions - a genuine creative flame and a hunger to make something amazing - but in the gold rush mentality, those fine intentions can end up being seriously tainted by the expectations that are set. There's gold in those indie hills; which means that if you turn up with your pickaxe and all you strike is silver, or bronze, you can feel rather let down.

"A surprising number of very talented developers are guilty of sending their indie titles out to die, with absolutely no marketing spend or strategy to back them up"

Recently, a lot of people have been striking bronze - or iron, or tin. Even developers with past successes under their belts are finding that this can be a poor indicator of future performance. The gold is still out there; indie revenues are hard to measure, as they're spread across a wide variety of platforms and services, and there's no official definition of what constitutes "indie", so it gets a little blurry at the edges, but the consensus is that consumer spending on indie games continues to rise year-on-year. All those developers hitting veins of tin, though; their concerns and woes add up, and suddenly someone comes along and gives them a name. All hail the Indiepocalypse.

Whether the Indiepocalypse is real or not, what its extent may be; those questions are largely academic. What's real, and beyond debate, is that for many indie developers there has been a crushing failure to perform to commercial expectations; a failure that is especially difficult to swallow, and especially damaging, in the case of studios which were enjoying significant success only a few years ago. When a new studio launches a game and it crashes and burns, that's unfortunate, but that kind of attrition is expected; when an experienced studio watches revenue from subsequent titles collapse along a diminishing returns curve, that's potentially disastrous, especially if the company hired staff off the back of its early success. Whatever you believe about the Indiepocalypse, that kind of thing is happening, and it's happening with enough regularity to be worth addressing.

What are the factors, then, that are causing the diminishing returns so many indie developers seem to be experiencing? Having looked into a decent number of cases, and spoken to some of the creators impacted, it seems that there are three broad problems which play a role (either singly or jointly) in the majority of cases. The first is a really old chestnut; a failure to understand the need for, and cost of, marketing a game. A surprising number of very talented developers are guilty of sending their indie titles out to die, with absolutely no marketing spend or strategy to back them up. In many cases this is understandable; a small studio which barely scraped together the cash to make a game in the first place can't afford to spend a lot of money on marketing, but at the very least, there should be some kind of plan in place to promote the game through as many free channels as possible. All too often, marketing is viewed with a kind of sniffy distaste, as though it's something that is only required when selling a bad game to the unsuspecting public. On the contrary; the role of good marketing is to let the public know that a good game exists, which, in today's crowded market, they will likely never hear about without some kind of strategy to get the news to them.

"Indie sequels, with a small number of high profile exceptions, don't do well - because, I suspect, indie consumers are buying this kind of game precisely in order to have new, different experiences that aren't offered elsewhere"

Perhaps the reason why this problem afflicts veteran developers is precisely because if you arrived early in the indie gold rush, the very concept of indie games was so exciting that it almost guaranteed a viral marketing boost to the fairly scant number of games being released. This wasn't normal; it was never, ever going to be established as being normal. It was the thrill of a new approach to publishing and distribution reflecting its shine onto early titles, nothing more. On any platform ever created, physical or digital, the long-run norm is that you need to engage in marketing in order to let consumers know you exist and you're worth their money; it's understandable that developers caught up in the frisson of excitement at the dawn of the indie age might mistake this for a sustainable market condition, but settling down into a tougher, more congested reality was always inevitable.

The second factor that is common to many indie titles facing decline is also marketing related, but it's very specific - a failure to engage with, or provide in-game support for, streaming and other online video content. Twitch and YouTube have very rapidly become the most important marketing channel for indie titles by an enormous margin; short of being listed on the front page of Apple's App Store, there's pretty much nothing that will do as much for sales of a good indie game as being featured by a popular streamer. Developers who tailor their games to work well in a streaming context - both technically and in content terms - do very well commercially, in general. Again, this is something that has risen to prominence since the first bloom of indie, so some veteran developers have overlooked it. More importantly, perhaps, there's a bit of a generation gap involved. The audience for game streaming skews young; many of the developers I've encountered who don't see its relevance (either simply not getting it, or in some cases genuinely disliking it) skew, well, mature. Being aggressively negative towards media that can drive so many sales isn't good business.

The final factor (or at least, the final I've been able to discern; it would be interesting to see if others perceive different factors common in these situations) is actually one that makes me rather optimistic. One of the biggest things driving perceptions of the Indiepocalypse, it seems, is the failure of sequels to live up to the commercial success of their predecessors. A great many studios which have had a solid success with their first game immediately double down on production of a sequel, investing profits from the original title into it to make it better in almost every way... Only to find that this objectively better game just doesn't sell as well as the original, in some dramatic cases selling only a fraction of the copies the original managed. The developer, having just made a better, more polished version of the successful original, is stumped. Where has the market gone?

"If the Indiepocalypse achieves anything, perhaps it will introduce a more down to earth view of what indie games are, and how much money should, realistically, be spent on their creation"

The market, bluntly, has gone to find something else as original and interesting as your original game was. Indie sequels, with a small number of high profile exceptions, don't do well - because, I suspect, indie consumers are buying this kind of game precisely in order to have new, different experiences that aren't offered elsewhere. The logic of AAA does not apply to indie in this regard; the sequel is the safest bet possible in AAA, but in the indie world, being a sequel actively discourages consumers and forces you to work hard to market the originality of your game, not how close it is to a beloved predecessor. This, in a sense, is what we've all called for over the past few decades; consumers who don't want sequels, they want originality! It turns out that that's quite tough for developers to deliver consistently; but ultimately, a recognition that indie sequels are a poor investment should free up everyone to behave more creatively in the wake of early success, rather than tying them in to making the same game over and over again.

These are all errors of perception and expectation. People expect that strategies which worked in 2012 will work in 2016, but the market evolves. They expect that strategies that worked in AAA will apply to indie, but the market is different. Keeping a very open mind and eyes carefully trained on the realities of the market is an essential skill for an indie developer; but so, too, is a grounded sense of realism. Many of the games whose performance is claimed to herald the Indiepocalypse have actually done pretty well, earning hundreds of thousands of dollars; the problem is that their creators, based on past successes, had anticipated millions. Similar problems happen further down the line; tens of thousands might be a nice earner for a bedroom coder, but means curtains for a small full-time studio with office overheads. Some studios undoubtedly expanded too quickly, taking on overheads and projects more suited to AAA than indie; if the Indiepocalypse achieves anything, perhaps it will introduce a more down to earth view of what indie games are, and how much money should, realistically, be spent on their creation.

Ultimately, it's worth bearing in mind that for all the commercial troubles facing indie games, this sector is faring far, far better in the digital economy than others. A wealth of opportunities to make a decent income, if not a fortune, await talented indie developers with enough nous to take advantage of them - a far better fate than currently awaits most authors and musicians hoping to take advantage of those industries' respective transitions to digital. The indie scene and its commercial aspects are far from perfect, and not everyone navigates them deftly; but it's hard to argue that the needle isn't closer to Eden than Apocalypse.

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Latest comments (9)

Nick Parker Consultant 6 years ago
Some developers still treat indie creation as a hobby; it's not, it's a business. Like any business, indie games need a commercial strategy that includes a realistic marketing budget (maybe 10% of forecast year 1 revenues) and post release support. Building a community through social media is fundamental to this and should start during the development stage. Indie games need business loving from the cradle to the grave.
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Sound advice above, though I think speaking about marketing without framing its very different efficacy from platform to platform and across payment models makes this piece tough to really absorb. For example, is spending 10% of your projected sales on marketing actually viable for mobile Indie's, where most sales land at £1.99 or less? I'd love to read a story demonstrating those numbers, if any expert GI readers wish to contribute :P
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Keldon Alleyne Strategic Keyboard Basher, Avasopht Development6 years ago
(Pareto principle or zipf law) * 3 stores * high competition * $25Bn = extremely difficult market.

Edited 2 times. Last edit by Keldon Alleyne on 15th April 2016 11:46am

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Show all comments (9)
So much to consider here but here are what I think are the most important factors:-
1. What defines an indie studio.. excluding students and cynical, copycat quickbuck chasing developers in emerging countries would be a start.
2. Lack of funding... this leads to abandoning games half way through or rushing them out.. if devs take less time (man hours) they generally make less polished games.
3. Lack of publishers.. in the old days publishers did the marketing ( they also funded the games during development (see point 2)), they also help reaching the distribution channels.. but nowadays many indies can do this themselves... however they are generally terrible at marketing of any form
4. Marketing share... if last years mobile figures are to be believed then 80% of all money made by the game devs and publishers was spent on marketing (I am including UA in this figure). This is most of the reason for lack of publishers and funding.. someone else is ending up with the lions share of the money
5. Channels treat hobbyists and professionals the same.. this is wrong the EXCELLENT hobbyists should be able to earn the right to share the top table with the pros.. not ANYONE... For this I blame the platform holders, conference circuit and many universities all of whom make their money by DELIBERATELY not filtering quality
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Adam Clark Design Director, Green Box Games ltd6 years ago
"Recently, a lot of people have been striking bronze - or iron, or tin."

I've been striking thin air.
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Paul Murphy Owner, The Vita Lounge6 years ago
The Vita has its own difficulties, but there is an abundance of quality indie titles already on the platform and still to come, but in my experience trying to get these developers interested in talking about their games has been difficult. We want to talk about their game, big it up and do interviews to raise awareness in our FREE digital magazine and website, and the only cost is their time. We have many thousands of unique readers. You'd think they would want to reach that many people for free.

Some have been more than willing, but for as many as we have featured, twice as many declined. Do you not want people to know about your games?
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Ruben Monteiro Engineer 6 years ago
Developers who tailor their games to work well in a streaming context
Translation: To hell with depth and playability, let's just make it look good on video. For a duration of 10 seconds of course, because that's as far as the millenial's attention span goes.
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Anthony Gowland Director, Ant Workshop6 years ago
No, not at all. First off, millenials will happily sit and watch hours of video, that's why streamers are so popular these days. Second, some games stream better than others, and it's nothing to do with how they look. Games that offer creativity or personalisation in play work better than strictly linear experiences, for example.
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Without my kids (15&16) I would have dramatically narrower view of how the newest part of our industry works. It goes beyond tubers and streamers too, also what kind of games are played, why, how, when, where etc.

Nobody under 25 reads anything on paper and nobody under 20 reads anything. They watch videos. That does not say anything about their attention span though: they can just as easily pour 2-3 hours a day, every day, into a mobile game as I spent my time on Amiga 500 when I was a teen. Besides the different platform, the main difference is that playing time is often fragmented to dozens of sessions during the day.

Edited 1 times. Last edit by Kim Soares on 18th April 2016 2:01pm

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