The economics of Live Arcade development

correction joystiq, xbox live arcade is reaching its um 2nd or 3rd year anniversery....xbox live arcade was on xbox 1. Not many people had it, but i did.

Indie game-making may get squeezed from above, with the budgets and development teams of AAA games, but I've found they're also getting squeezed from below: as the tools of game-making get easier to use, hobbyists with no interest in profit at all are making some fascinating games, either in Windows or using Flash.

These 'hobbyist games' (not the best term, but I have to distinguish them from 'indie' somehow) are looking better and playing deeper as the years go by, and free makes a good competitor to the $19.99 of the games on RealArcade.

Try Water Cooler Games, or tigsource.com, or even Newgrounds, for a good starter.

"Microsoft's distribution fees and game sales to come up with a rough estimate of a $780,000 net for a game like Marble Blast Ultra. As Tunnel puts it "if you are a starving Indie developer this sounds like an infinite amount of money. But, in the world of publishers, this is not considered a big hit."

In the world of shitty wages for people like me, I would rather work on some games than make $40,000 year at a desk getting pooped on by an overzealous middle management boss.

Indie developers will continue to create games they believe in and eventually one of these games will become so popular that a big publisher will buy it, or perhaps even hire the developer/s involved. The only hurdle I see is the fact that you'll need to be subscribed to the XNA developers network in order to play other people's games. If the games were available to a wider audience in Xbox Live I think indie development would see huge jump in this platform.

Good for them. Like in the world of open source software, the little guy is sticking it to the bloated developer with a litle innovation and a bare bones development model. I don't own a 360, and don't plan to, but this is the kind of news any fanboy coud appreciate. How else do you explain the success of Geometry Wars (one person!)? If games like that DON'T succeed, then you're playing into their hands -- they take the easiest route and will pump out franchise after franchise after WW2 sim franchise.

Are XBLA developers required to sign contracts that prohibit them from taking their game to other markets, like say CD-ROM for PC?

I think this number will just continue to increase, but MS has to pull the lid off the size limitation for titles. We have yet to see any truly deep games (not that I don't love what's up there), or any real episodic content, but it's on it's way.

I'd be interested to find out how some of the indie developers who have distributed through Steam, like Darwinia, or Rag Doll Kung Fu, have made out.

Well, the economics aren't broken, that's for sure. What's included in that $300,000?

You're probably looking at studio overhead, 2-3 programmers on contract, contract artists, etc. etc.

If a programmer and artist team up, there's no reason why a 2-person team can't make a game on their own time. Might take a year, but all you're looking at are incidental tech costs and the engine license and MS fees.

That's how most short films are made (the kind shot on film for film festivals) - on borrowed resources, weekends, at a minimal expense. Sure a 15 minute 35mm film might cost 20k, but that's not unusual. Digital brings the cost down even more. But even at 20k - films keep getting made.

I think the same will be true for games - they'll get made. While the studios with overhead will be playing the numbers game (i.e. how many xbla games can we produce under one roof)...soon we're gonna see 2 high school kids in a garage make the next Pac Man. It's just a matter of time.

This is exactly why I fully expect Microsoft's approach to the Xbox Live Community Arcade to be a complete disappointment. So far, they've announed that for $1000 + $100/year you'll be able to get your game sold through the upcoming XBLCA. They have not announced how much of each sale the developer will get to keep. Previously I figured they might offer something like 20%, since they give "real" publishers 60%, and because they're big and they can and have no scruples. Now, seeing this, I will be absolutely astonished if they allow the creators of any game distributed through the community arcade more than 10% (a standard FINDERS FEE).

Imagine the ire of a publisher like GarageGames first puts up $25,000 for a devkit, then sinks $300,000 into development of a game, and they end up clearing less profit than Joe Blow in Bumscrew, Idaho does on his "Flick the Booger" game! Microsoft will not let this happen.

They also will be very harsh on even accepting money and allowing games to be sold through the XBLCA. They will claim they are "protecting their portfolio" and turn away thousands of massively creative titles because they don't fit neatly into the little slots some committee has determined exist in the Arcade Marketplace.

The future is not a market where indie developers can make themselves known and get hired by a producer. The future is producers rotting in a field while developers distribute their creations personally and clear millions in profit when they generate a hit. The future is a totally open platform with community-rated content.

Microsoft made its initial fortune on a very small royalty they got on every IBM PC sold loaded with MS-DOS. They need to remember the power of NUMBERS. If they put up a selection of 10,000 games and take as small of a cut as possible (Microsoft should be the ones getting a finder's fee of 10%, not the creators) they will have to build another planet to hold all of their money to prevent gravitational disturbances on this one.

Didn't Moore say it was an 80% cut? Also, the Marble Blast example is poor, since this was a Windows game first. So this was just a port. I don't care who you are, a port of an indie game make you 1M$ isn't bad.

Now the only thing that needs to be done is..

MARBLE BLAST RELEASING THE UPDATE THAT'S BEEN PROMISED

And also deliver those "Marble it UP" shirts they said they were going to send if you beat them in a multiplayer game..

When are those 11 new multiplayer maps for Marble blast coming out?????


http://thrillskilla.wordpress.com/2006/08/28/dev-interview-marble-blast-ultra/

I don't think this will effect indie developers much. Live arcade has a different concept than normal games. Graphics, in depth gameplay, sprawling game worlds aren't the objective here. Fun and quickly accesable gameplay IS however.

I don't play live arcade cause I have tons of time on my hand. I play cause of the convenvience. The wireless controller (Which can turn the console on) lies on my coffee table... I hop on the couch, turn on the console and get a few mins of play in. No worrying about discs, load times, going out of the way to setup the console, etc.

Live arcade will always be about convenience. Quick, addictive and easily accesable gameplay is what will rule supreme here. None of these aspects require big budgets, only innovation/imagination on the devs part.

Jeremy Wright: I have read everything I've been able to find on the XBLCA plans, and I've never seen a number cited. If you know of a source for that '80%' number, please point me to it... and explain to me why major publishers aren't calling for Moores head?

MthdDirector: You're assuming that MS will allow such a thing to happen. Why? How many independent movies would be made, do you suppose, if there was 1 movie publishing house and they owned all the theaters and were concerned about maintaining a "portfolio"?

What are we comparing Marble Blast Ultra to? XBLA isn't a huge market yet, it's in its infancy. And the specific game he mentioned is already offered through the same means on PCs, which have a much larger market.

I'm more interested in Street Fighter 2 games, you know, back catalog games that publishers would never do a full release for. Or XBLA exclusives, which isn't a big deal yet.

Plus, Marble Blast Ultra's audience is already served by the Monkey Ball series. I think Steam, Yahoo's Casual Games and Alien Hominid are proof enough that digital distribution works. Marble Blast Ultra is hardly a huge, original franchise. But XBLA will eventually have some.

Not to change the subject, but did this Live Arcade Wednesday come and go without a game?

I am the author of the article. There are many astute observations on this site (probably the best I have seen. There are also some very misleading statements. I would like to clear these up the best I can.

@OtakuCODE: You seem to be making some very strong statements about how things are going to work out. Maybe you have insider information that I don't have. Some things you state are wrong, such as the price of an XBox development kit being $25,000. We paid $10,000. You state that it will cost $1,000 + $100 per year release a game on XNA for the XBox360. As per Michael Klucher, Program Manager, XNA Game Studio stated in the MSDN forums yesterday, "Right now no information has been released with pricing of XNA Game Studio Professional. As mentioned in our FAQ we are looking to release next spring, so please look for more information around then."

Although I have no insider information, I also think you are way off on your estimates of what the royalty rates MS will pay. If they paid the low amounts you paid, I think the world wide uproar would be unbearable.

Remember that my article was about what is going on in the current XBLA market. It had nothing to do with XNA Game Studio or Torque X allowing developers to bring their games to XBox360.

It is true that bringing titles to the current XBLA market is getting harder for all but the most experienced and well funded indie game developers. I look forward to seeing the vibrant community and the kinds of games that will come from XNA GS and Torque X.

-Jeff Tunnell, Make It Big In Games