It’s fairly common knowledge that the gaming sector has been booming in recent years. Globally, revenues for the industry topped over $240 billion* last year alone, and it is expected to have continued growth across the 2020s. Moreover, one of the interesting things about the sector is where that money comes from. Normally, you’d think of AAA games for consoles like PlayStation and Xbox, yet over half the revenue now comes from mobile games, which is supportive of more indie developers.
*This figure varies depending on the source
That said, the sector is notoriously difficult for smaller games developers to monetize their games. Around 90% of games fail to make a profit across the industry. If you look at platforms like Steam, it’s estimated that only around 20% of games available there generate revenues of over $5,000. To reiterate, that’s revenue of $5,000, not profit.
Of course, if you look at some of the highest-grossing video games in history, which have generated billions and billions of dollars, you can understand how the dream of creating a blockbuster game does not seem so elusive for most developers. It might take some luck, but many of the most popular games in history had humble beginnings.
Difficult to stand out in creative arts
It is, however, worth underlining that this is not an issue solely impacting gaming. Book publishing, for example, has a similar success rate: About one in ten books published sell enough copies to turn a profit or at least be considered successful. When it comes to the relatively new phenomenon of self-publishing, the success rate is even lower.
Just as anyone can self-publish a book, (nearly) any game developer can get their game listed on an online gaming platform or app store. That’s not the issue: the issue is the game remaining anonymous when it gets there. The big AAA gaming developers will have massive budgets – sometimes running into tens of millions – for marketing. The little indie developer? Not so much. Of course, even if you spend a fortune on marketing, it does not guarantee success.
There are certainly strategies that indie developers can use to help them stand out from the crowd. They may, for instance, build social media communities around their game pre-launch or enlist the help of streamers and gaming influencers. Among Us, for example, actually took a couple of years to get off the ground in terms of sales and downloads, but it spent those two years becoming a kind of cult favorite on social media channels before its viral success.
AI will transform the sector for good or ill
The future is going to be even more interesting, too, most notably due to AI. On paper, AI is going to make developing games cheaper and less labor-intensive. In fact, we are starting to see evidence of that already. Aside from the argument about how that will impact humans working in the gaming sector, there is also a very real scenario that AI could cause a flood of new games on the market, including games developed on no-code platforms, i.e., platforms where anyone can build a video game. This could lead to more games, which might seem like a good thing, but it could also lead to good games failing to get noticed in a saturated market.
While oversaturation is a concern, it is hoped that distribution platforms will put safeguards in place. Indeed, it could lead to platforms like Steam and the Apple App Store becoming more selective about the games they host. It could also nudge gamers away from general game platforms to more specific ones with hand-picked titles from a specific developer or titles that fall into a certain genre, like RPG games or war games.
AI will likely be both a help and a hindrance. Consider that AI search tools will be able to help gamers find exactly the type of titles that they enjoy, and that, in turn, could help indie developers stand out from the crowd. Nonetheless, the industry is at something of an interesting crossroads. There are more great games released than ever before, but it’s harder for developers to monetize their creations. How that will play out in the future remains to be seen.
