Why So Many Developers Are Dying

Why So Many Developers Are Dying

Video games need some kind of a budget before they’re able to blink into existence. A game like Halo: Reach costs tens of millions of dollars to produce, distribute, and advertise. The three-person developer team putting together the latest viral hit for the iPhone App Store also needs to pay rent on the hovel they rent at the edge of downtown. Even the teenage kid tinkering with some Pong clone needs a steady influx of Doritos and Mountain Dew to keep going.

We hear all about the games that cost millions to produce. We usually can’t help it. If the collective Internet isn’t blaring hype for the latest potential blockbuster, the media and the game’s publisher certainly are. Far, far down on the other end of the cha-ching spectrum, word of mouth also tells us about the tiny development teams that put together the next hyper-addictive iPhone or Xbox Live Arcade sensation.

But what about the developers in between? Is anybody still making games with modest budgets that aren’t composed of beads and buttons? Is there still room for average-sized development studios, or are they being squeezed out?

There are still numerous average-sized development teams hanging around. The solid and unfortunate proof lies in the hills of shovelware for the Wii. Regardless, the financial future of game development is in a state of change, and the games media, consumers, and developers themselves are all responsible. That’s not necessarily a negative thing. Life has always been about change, and the same holds doubly true for the entertainment industry.

At first glance, “middle class” game studios may seem to be ailing, unable to compete with the resources and marketing muscle of the big guys, and generally being outdone by low-budget twitch games. Even the Wii’s momentum is stumbling a bit after four years, and the demand for yet another party game probably won’t be so hot a year down the road. But then you have to ask yourself how long a middle class game studio has to live in the first place. The foundation of games history is built on a mile-thick layer of studios that did well enough during the late ’70s boom, then plinked out like a spent lightbulb in the mid-’80s. Typically, a successful game studio is born, builds a niche for itself with some moderate hits, evolves as necessary, then either grows into a giant by itself, or else is bought out and consumed. In other words, small studios that survive to become middle-of-the-road game studios rarely remain that way for long.

Moreover, digital distribution has changed the game development landscape. Yesterday’s “small” game studios come across as buzzing hives next to those two guys who jokingly called themselves “Awesome Inc.” and made/distributed a hit game over the PlayStation Network for a buck. Even the smallest game studios in ye olden days had to have some kind of team if they wanted to make sure their games shipped to stores. This holds true for the studios we perceive as “medium sized” today. They don’t operate out of the guts of a behemoth, but they still have teams to pay and hard copies of games to distribute. They can’t do anything with a tiny development budget, nor can they afford to price their games like hamburgers. They’re at a disadvantage.

Then there’s the hype that comes with big-name games. It’s impossible not to talk about a game that cost millions of dollars to produce. These are the studios that can afford to fly game journalists to preview events, which will subsequently be written up on websites and in magazines. These are the studios that can hire the best advertising agencies to cook up the most clever viral ads. These are the games that throw reviewers into euphoria through glitter alone, and prompt players to line up at midnight. A week later, it doesn’t make a difference if the Internet collectively exclaims, “Hey, this game actually kind of stinks.” The studio already has your money, suckah!

So does the future of gaming belong to tiny indie studios and Jabba-sized corporations that will devour medium-sized game developers until the end of time? Hard to say for sure.. The landscape will shift, as it has done before. For starters, that kid with the iPhone hit is going to want to try something bigger and better. Something that might become medium-sized and will hang around for a while–or get bought out. And by then, his successor will have a whole new kind of development and distribution system to play with.

About Nadia Oxford
Nadia is a freelance writer living in Toronto. She played her first game at four, decided games were awesome, and has maintained her position since. She writes for 1UP.com, Slide to Play, GamePro and other publications, and is About.com’s Guide to the Nintendo DS.


  1. I have a hypothesis on how mid-sized gaming companies can survive. What they would need to do is form a union of sorts. If they banded together and shared their resources, then they’d be able to cut down costs and build upon eachother’s intellectual properties. You’d just need to create a medium that could manage the pool of resources. That management entity might cost a little to create, but the rewards would be exponential. Take it or leave it. I put it out there.

Leave a Reply