Saturday, April 18, 2009

Shrink to Success (Part II)

In Part I, game designer Josh Sutphin elaborates on how "short-form" games ultimately lead to a more engaging experience for the player. In Part II, he explains why these games are attractive from a business perspective.

There are several financial benefits to short-form games as well, and these are arguably more likely to make allies of producers and publishers.

First, the average gamer is 35 years old. That means he or she is likely to be employed full-time and to have a family, or at least a spouse. This is not a person with a lot of free time. Films are an enduring entertainment medium because they run about two hours, which isn't difficult at all to fit into an otherwise busy schedule. 60-hour gaming extravaganzas are a whole different story, but a quality 2-4 hour game can be completed in a sitting or two and not feel like an endless slog. A ubiquity of 2-4 hour games would place games firmly in the same "impulse buy" space as movies and music, for the simple reason that consumers would no longer see games as a significantly greater time investment than those mediums.

However, even if such a ubiquity came to pass, games are still seen as a financial investment, due to the unconscionable $59.99 standard price point. The most common argument given by publishers at the beginning of the 360/PS3 generation for the price increase was that "next-generation" games were more difficult and, critically, more expensive to develop. While it is true that game development budgets increased significantly from the PS2/Xbox generation to the 360/PS3 generation, they are still, with the exception of a very few outliers, far below the average budget of a feature film. The key difference, as I have argued previously, is the difference in audience size. $10 DVDs sell to tens of millions of consumers and make a handy profit on $100 million dollar films. If a game sold to tens of millions of consumers, it wouldn't need to be priced at $60 to make a profit on its measly (by comparison) $20 million development budget. And if you're wondering where we find those extra customers, all you have to do is lower your price point.

But for the sake of argument, let's indulge these publishers' assertion that higher prices are necessitated specifically by higher development costs. Short-form games have dramatically lower development costs than long-form ones; notable short-form indie titles like Braid and World of Goo were done in their entirety for under $200,000. Such lower development costs should make reduced game pricing a non-issue, and as Valve's data shows, reduced game pricing is highly likely to result in dramatic increases in net revenue... and that's before we even factor in the short-form game's superior focus, consistency, and ludo-narrative coherence, and the subsequent word-of-mouth and goodwill boost it's all but guaranteed to receive!

It's no coincidence that games whose duration is nearer that of films are likely to prove more compelling in many respects than 60-hour epics. Short-form games necessarily hold sacred the all-important flow of player education, keeping engagement high by avoiding filler and redundancy. They are more tightly focused, presenting a better-integrated set of mechanics and superior ludo-narrative coherence. They are cheaper to produce, which means they can be sold at a price point that supports impulse purchases, and good data suggests that price-point will actually increase net revenue. They fit sensibly into the average gamer's schedule, all but eliminating the negative perception that games must be a significant time investment. And perhaps most importantly, they are small enough to be memorable in their entirety, rather than recalled in disparate pieces tainted by a plurality of poor experiences.

Presented with such a win-win package, why would producers and publishers not jump on board?

Josh Sutphin is the design lead at LightBox Interactive (formerly Incognito Entertainment). He also produces mods, indie games, and electronic music, and blogs on game design and politics, at http://www.third-helix.com.

2 comments:

Nels Anderson said...

Very good thoughts Josh, and ones I largely agree with, but I'd be careful stressing the film cost of creation vs. cost of sale comparison too much. Films are able to monetize their content numerous times- first in the theatre, again with DVD sales (and rentals) and finally in TV syndication, which contributes a lot more in the long term than a lot of folks realize. Music too can monetize beyond retail album sales, with royalties for use in ads, films, etc. That's pretty different from games' model, which monetizes only once at retail.

It's probably no coincidence that the most financially successful game thus far (WoW) is subscription-based.

Don't get me wrong, I think games are too expensive as well. But the differences between music, film and games are significant enough that saying "film can do it, why can't we?" might lead to some inaccurate conclusions.

Still, it's really enlivening that the industry seems to be coming around on this issue. Folks have been talking about it for years, but it looks significant acceptance is finally building.

spicyragnatz said...

One note on the game-film comparison:

Whenever I play a really good 60+ hour RPG and think about how the story would make a great movie, I always take a step back and realize that it wouldn't specifically because the pacing of the story would be lost once you took out the small battles, and those small battles would get very boring to watch very quickly.

At least that's my $.02.

Ryon

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