Friday, February 14, 2014

Fallout from the Indie Gaming Bubble

How the Indie Bubble is forming

I was reading some news on the Video Gaming industry and I came across this article by Joystiq on the indie gaming bubble. The phenomenon is well known especially in the technology sector in the last 10-20 years. The dot-com bubble, the mobile bubble, the real-estate bubble. All these are recent examples that anyone, young and old, should vaguely recognize. The bubble represents the rise of a new technology, and the resulting bandwagon of start-ups that try to grab on to this new economic gold-mine. Really, they start popping up left and right, good, bad, it doesn't matter. When a bubble forms everyone wants a piece. 

Joystiq in their article mostly addressed how the developers feel about this bubble. There was one quote in the article sums up how any indie developer should see the market now. Retro City Rampage creator Brian Provinciano explains it best: 

"The big challenge we now face is saturation, quality and protecting platforms from the race to the bottom, which happened to mobile. It's been a bit concerning to see that this most recent Steam Holiday Sale saw developers doing deeper discounts than last year, no doubt in an effort to try and rise in the charts against the ever-increasing competition. However, it's a very slippery slope, and if this continues, it will once again become less viable to be indie."

Steam and GoG are the current propagators of the indie bubble,
and a good indicator of when things will start turning south.

What the scene will look like after it pops

Historically, when there is a bubble in the economy, it boosts production, and quality for a while. It lowers prices and makes everyone all giddy over the possibilities. However like any bubble it's got to pop. From what I've seen of the over saturation on the Steam store, it's beginning to happen already. Games are green-lit to go on Steam with very little following, and in order to appease the masses, Steam is lighting up more and more games, regardless of the assurances or quality of the product.

Historically, two things happen when a bubble pops. They take place on two sides of the situation; effects on the producer, and the consumer. The consumer up until the bubble pops, has a high perceived value of assets they gain from the bubble. Goods from the bubble are cheaper and easier to obtain, and have high relative value. When the market becomes well saturated, the consumer uses this perceived value to justify spending in high quantities. Much more than when they had to pay more for similar goods. When the bubble pops, people recoil in their spending, and suddenly there is much less to go around, especially to those who can't withstand the sudden drought of economy.

After the over saturation of digital marketplaces, we can expect this to happen. People will see a rise in prices, as indie companies try to improve their quality of games. Consumers will stop spending as much money on those games, and in general when they realize the back log of low-priced goods they already have. Indie companies will suffer as they can only sell games when there is a seasonal sale, and even then have to compete with other studios for the lowest discount to reach larger audiences.

Finally, indie studios that have to disband or go bankrupt will have to let loose massive amounts of developers that are qualified for a single type of job that may or may not be applicable elsewhere. When you have a bubble burst, you end up with an over saturation of the work force for that particular industry. Game developers, artists, and programmers will be everywhere, and there won't be enough jobs to go around because of the recoil from the bubble popping. Unemployment and a general distaste for the industry will prevail amongst those who cannot be hired, and they will apply their skills to other areas, as the pool thins itself out. 
Here's a good visualization of how a bubble looks when it pops.
The digital market is nearing the "New Paradigm" marker.

The good news?

The good news from all this, is that eventually the over-saturated pool from which developers hire will regulate itself to a lower number of higher quality individuals. Over time the quality of games will return to what the average should have been prior to the inflation of the economic bubble. So games will return to the AAA quality that we remember from the initial release of the XBox 360 and PS3. You remember? Halo 3, Modern Warfare, Oblivion, Skate. Games that bring new and exciting things to platforms will return with the talent returning from the indie scene. We might even see a massive conglomeration of indie studios form a new gaming corporation. the possibilities after the market re-establishes a norm will be endless. Until that happens, brace yourself, because the gaming community is most likely going to be weathering some hard times soon. 

You'll like the bubble if: You dislike all the indie games that are low-quality coming out on the market and want higher quality, if less quantity.

(If you had a different opinion or a new video game to suggest, leave a comment below!)

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