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Daedalic Entertainment: "1,000 releases in six weeks? It's crazy"

CEO Carsten Fichtelmann on his hopes for a higher Steam Direct fee, and the impact the boom in releases could have on PC developers

For any company with an audience of PC gamers, the number of new releases on Steam since June will have made for uncomfortable reading.

According to Ico Partners' data, new games on Steam in the eight weeks prior to the launch of Steam Direct fell in a range of 90 to 140, with six of those weeks below 120. Following a brief lull around the Steam Summer Sale, the limits of that range quickly spiralled upwards, with the four weeks leading up to August 7th seeing the release of between 159 and 215 new titles.

That trend continues today. Ico Partners' weekly Steam newsletter dated September 18th listed 222 new games, the following edition showed 252, and Tinybuild's Alex Nichiporchik highlighted a single day, September 21, on which 77 new games hit Valve's store. As more time passes, the notion that this phenomenon is anything other than an absolute consequence of Steam Direct seems less and less credible. For many developers that rely on Steam to sell to their customers, the chief concern now is just how high that number will climb before it eventually settles.

"$100? That's no barrier. Even $2,000 or $3,000 would not be enough of a barrier"

This is very much on the mind of Carsten Fichtelmann, the founder and CEO of Daedalic Entertainment, a German company best known for its PC adventure games. Speaking to at Gamescom, Fichtelmann discussed Daedalic's activities as both a developer and a publisher, and when asked how many games the company now handles each year his answer was immediate.

"Too much," he said. "When you see the last six weeks on Steam... 1,000 releases in six weeks? It's crazy."

As a concept, Steam Direct made a great deal of sense as a replacement for Greenlight, but the price attached to the service was always going to radically alter its impact. Ultimately, Valve elected to charge $100, making it affordable for just about anyone and opening the gates of the store to an unprecedented degree.

"I saw what would come [as a result of the fee]," Fichtelmann said. "$100? That's no barrier. Even $2,000 or $3,000 would not be enough of a barrier.

"All of these games, or let's say 80% of these titles, the developer hopes they might have a hit on their hands. That's what you think every time as a developer. Maybe you don't have the best game, but maybe something wonderful will happen. Normally it doesn't."

"Getting awareness when you have 1,000 titles coming out, and 25 relevant AAA titles - you are competing with everyone"

Finding success in the games market has never been a simple matter, and this argument is often put forward when developers talk openly about the consequence of stores with huge market share becoming so open. For Daedalic, though, and many companies like it, the degree to which trading conditions on Steam will become more difficult can be the difference between a good year and a bad year; in extreme cases, it is the difference between stability and collapse.

According to Fichtelmann, Daedalic has been handling ten games for each of the last two years, including first-party titles and publishing games from other studios, like Mimimi Productions' Shadow Tactics. However, the changes to Steam have prompted Daedalic to reassess just how many games it will be feasible and responsible to publish in an environment where the rate of new releases each week could be double what it was just a year ago.

"I think we will have to bring that down to four to five games a year, and we will definitely concentrate a little bit more on core gaming," he said. "When you have 1,000 releases [in six weeks] it is really, really difficult. We work with [external PR agencies], we have our own internal PR force, but getting awareness when you have 1,000 titles coming out and, I don't know, 25 relevant AAA titles - you are competing with everyone."

Daedalic built its business on PC adventure games, the most recent of which is based on Ken Follett's novel The Pillars of the Earth

Whether Daedalic really is competing with all of the new games coming through Steam Direct is not entirely clear. As Steam Spy's Sergey Galyonkin pointed out last month, some of that volume will be "shady publishers pushing 'game-shaped objects'" into the market in the hope of making a quick buck. When Fichtelmann talked about the fee being a "barrier" this is exactly the kind of content he believes a higher fee might have kept out.

Valve has already removed 173 games from one of the worst offenders, Silicon Echo Studios, but it's unclear how many resources will be allocated to doing so going forward. In any case, whether some of these games can truly be considered direct competition, for Daedalic they are most certainly additional noise in a marketplace where consumers were already struggling to pick up the signal.

"Definitely, many good companies will go out of business in the next 24 months"

"With adventure games, it's very, very important that you get good press coverage," Fichtelmann said, noting the enthusiastic but relatively small audience that finds the genre appealing. "It's growing slowly, but also if a game is good and it's growing slowly it means you need a critical mass of knowledge that it exists.

"Maybe this [game] is not a must-have in the next two weeks, but if there's a rainy Sunday?"

Fichtelmann believes that this dynamic, in which potential consumers will return to a game after having it brought to their attention weeks or months before, could be destabilised by the current trend on Steam. Daedalic has been working more and more with console releases, but adventure games remain its primary focus and so Steam "has to be" its target platform.

Fichtelmann seemed confident that Daedalic has the right products to be successful in the coming years - including a three-part adventure game based on Ken Follett's hugely successful novel The Pillars of the Earth - but with Steam Direct barely four months-old the future remains a prospect both fearsome and difficult to predict.

"We have a fantastic portfolio in preparation for 2020, but our goal is also to survive the next two years," he said. "There are companies similar in size to Daedalic, and the amount of games that are coming out on PC - and on console, VR, or whatever - this is not good for everyone.

"Hopefully the number of releases will reduce a little bit over the course of the next two years, because, definitely, many good companies will go out of business in the next 24 months. It's impossible to reach the numbers that maybe have been forecast when you have so many releases."

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Matthew Handrahan avatar
Matthew Handrahan: Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.
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