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Game industry is the economics of superstars. The Macroeconomics of Superstars[1] >Abstract >Recent technological changes have transformed an increasing numb

Game industry is the economics of superstars. The Macroeconomics of Superstars[1] >Abstract >Recent technological changes have transformed an increasing number of sectors of the economy into so-called superstars sectors, in which a small number of entrepreneurs or professionals distribute their output widely to the rest of the economy. Examples include the high-tech sector, sports, the music industry, management, fnance, etc. As a result, these superstars reap enormous rewards, whereas the rest of the workforce lags behind. We describe superstars as arising from digital innovations, whicih replace a fraction of the tasks in production with information technology that requires a fxed cost but can be reproduced at zero marginal cost. This generates a form of increasing returns to scale. To the extent that the digital innovations are excludable, it also provides the innovator with market power. Our paper studies the implications of superstar technologies for factor shares, for inequality and for the effciency properties of the superstar economy. [1] The Macroeconomics of Superstars, Anton Korinek Johns Hopkins and NBER, Ding Xuan Ng Johns Hopkins, November 2017 https://www.imf.org/~/media/Files/Conferences/2017-stats-forum/session-3-korinek.ashx https://www.imf.org/~/media/Files/Conferences/2017-stats-for... [2] The Economics of Superstars The American Economic Review , Vol. 71, No. 5. (Dec., 1981), pp. 845-858. http://www.uvm.edu/pdodds/files/papers/others/1981/rosen1981a.pdf http://www.uvm.edu/pdodds/files/papers/others/1981/rosen1981...

chongli 8y ago
Yes. At this point, recommending that a 9-5 programmer quit their job to work on an indie game is equivalent to suggesting a PR writer quit their job to write the next Great American Novel.
- hessenwolf 8y ago
  I might use that as my title for my partner case. Automating (super dull financial industry department) is the industry of superstars
- adamnemecek 8y ago
  It’s not actually because even if you fail, you’ll be in a better position skillwise.
  - deleted 8y ago
    [deleted]
  - ALittleLight 8y ago
    I'd think this is more true for a writer than a programmer. You could probably attempt to program a game by spaghetti coding, copy pasting from stack overflow and tutorials, not using version control or tests, and working solo - at the end you'd have a lot of bad habits and not so much that would be useful at a professional studio.
    - adamnemecek 8y ago
      Ok don’t do that. I’ve done something similar two year ago (although not working on a game) and it was the most productive time ever.
    - hexane360 8y ago
      Your impression may be biased because you're more familiar with bad programming habits than bad writing habits.
    - kbenson 8y ago
      Some people use mistakes as a launch pad to learn a better way. Not always, and not always immediately, but sometimes it takes dealing with the negative consequences to make the better solution obvious when finally encountered. Sometimes convincing someone to spend the extra 10-20% of time or effort to do something "the hard way" is nigh impossible until they've spend time doing the alternative and know the extended pain that sometimes results. It's sort of like seat belts. When they were first required in all vehicles, many people still didn't bother with them. Even before cultural indoctrination took over, a lot of people eventually started too. It took some close calls for people or their friends and family for them to finally make the effort, and such a small effort it was. I saw exactly this play out with my own parents and their siblings.
- drb91 8y ago
  Well, making money just off of novels seems impossible these days (you gotta hold out for HBO); there’s still a good deal of difference.
  - Cthulhu_ 8y ago
    Novels are their own problem, but it's a similar one; there's hundreds of thousands of great writers and publishing is trivial nowadays (iirc the longest work of fiction ever made is a Super Smash Bros fanfiction published for free), but getting 'mindshare' (or, just some attention - and that's before making a sale still) is hugely difficult.
  - macspoofing 8y ago
    Is there really a difference? I know an acquaintance that published a novel they worked on for a few years. They didn't share any numbers with me but they were clear, they made no money. I assume there are thousands of people trying to sell their novels, and a tiny minority succeed in making (big) money.
    - drb91 8y ago
      > and a tiny minority succeed in making (big) money. Who is making big money JUST off novels? Not speaking, not tv deals, writing. Meanwhile I know several game developers making a living. Setting out to do it still follows a success distribution, but it’s fundementally achievable in a way unavailable to writers entirely.
      - cableshaft 8y ago
        They exist. But those writers are making money are doing quantity over quality. I.e. they're releasing like 12 pulp novels a year that they churn out once per month, and build up a fanbase over time with every new release, who then buy up their quickly growing backlog of novels. Seems like urban supernatural or romance (or urban supernatural romance) seems to be the main genres where this is working. My girlfriend follows several writers who make a living this way, and is wanting to give it a try herself, that's how I'm aware of it. You can't write The Great American Novel or spend years writing your novel and make money this way though. It pretty much requires the momentum and consistent quick releases for it to work. You're making sugary garbage that's consumed quickly and forgotten just as quickly.
- eksemplar 8y ago
  It was always like that though. Game programming had always been the worst field for programmers, and the industry had and is exploiting the fact that some people like games enough to work on them under horrible conditions. I don’t think it’s the equivalent to writing the great American novel though, because programming is just a minor part of game creating and arguably one of the least important. Design I’d the most important. The author of this article rants about the swarm of unity games, but some of those unity games are better than what the author made exactly because they took design seriously.
  - kbenson 8y ago
    > The author of this article rants about the swarm of unity games, but some of those unity games are better than what the author made exactly because they took design seriously. Did we read the same article? Not only the total number of games, but the rate of their release seems to be geometrically increasing! Holy crap. And while many of them are Unity shovelware, etc., many are polished games that a lot of effort went into. A tiny percentage are hits, but most are forgotten in the deluge. To me that reads as someone that's fully aware that some people are putting a lot of effort in and making good games (Unity or not), but is upset by the realization that quality doesn't seem to be nearly enough. The problem is not (just) that a lot of crap is being released, but that a lot of everything is being released, good and bad. So much so that even the good things can't make good money because supply has so far outstripped demand. It's sort of like the Netflix queue problem. I'm continuously adding things to my Netflix queue that look interesting, but my time to actually watch them is such that my chance of getting through even a majority of the queue is almost nil.
    - eksemplar 8y ago
      To me it reads as someone who disregards unity games, while praising well made indie games in general. And in the light of the rest of the article, the author seem to favor people who did good programming, but the truth is that you don’t need to be a good programmer to make good games. I think supply is an issue, but I also think the author added to the problem by releasing a game that doesn’t have appealing graphics, gameplay or sound. Where as many much of the unity “shovelware” is exactly the opposite.
malkia 8y ago
Haven't read the paper, but kept me thinking about twitchers, youtube streamers and such...
- macspoofing 8y ago
  You'll see the same thing: a tiny minority of streamers making most of the money, and a large majority making little to no money.
  - theandrewbailey 8y ago
    That's a Pareto distribution. https://en.wikipedia.org/wiki/Pareto_distribution https://en.wikipedia.org/wiki/Pareto_distribution
  - redisman 8y ago
    Web, ecommerce, music, film, ticket sales, furniture, search... It's really a stacked deck for the big guys in most industries these days
Applejinx 8y ago
Absolutely. All things are turning into the economics of superstars so long as they're subject to network effects and the widest, most fluid and well-informed possible market. Uber drivers will turn into the economics of superstars. Amazon warehouse workers will turn into the economics of superstars. You'll keep on getting individual ultra-high performers who dominate whatever area it is, and more ordinary performers will just plain fail.
- whatshisface 8y ago
  Amazon warehouse workers are limited by human physiology to move boxes within 10x of the average box moving speed. That disqualifies them from the superstar economy.
- projektir 8y ago
  I'm not sure how your conclusion follows. Uber drivers and warehouse workers are unlikely to undergo this effect because no matter how good an Uber driver is, they can't be in multiple places at once. Similarly, there's a limit to how much one warehouse worker can do.
  - macspoofing 8y ago
    Kid of. You'll still see a small minority of Uber drivers making money and a large percentage breaking even or losing money. It's like that in the real-estate market, where a small minority of agents take in most of the profit and a large number breaking even or losing money. This is also why you see trade groups frequently supporting policies to increase barriers for market entry. In real-estate this means higher and higher licensing standards. For example in Canada it costs around $6k and 3 years to get fully licensed [1].. which is crazy. But the real-estate lobby wants it even higher. [1]https://www.remic.ca/real-estate-sales-person-vs-mortgage-agent/ https://www.remic.ca/real-estate-sales-person-vs-mortgage-ag...
    - varjag 8y ago
      Real estate is infrequent high value transactions with high margin/commission. Doubling your real estate sales can well make you rich; doubling your Uber driving would not.
the_cat_kittles 8y ago
this is why i feel compelled to think about things that are necessarily localized. how the hell can you compete with the whole world?
- krapp 8y ago
  You're not actually competing with the whole world, though, just whatever else is similar to someone's interests. In this case... "metroidvania" is a very oversaturated market, and a lot of games do it better.
  - darkmighty 8y ago
    Indeed, you have to look for niches -- and find the ones that are in 1) high demand (not just high demand in general -- high demand for new/better content by a new entrant); 2) low supply; 3) well paying customers. I'm sure despite the flood those will still exist, as long as there's still a good amount of differentiation between people's preferences. A niche is a small subset of in the space of products that a small subset of customers have strong preference to. This needs preference differentiation. This preference difference could be toward many features: cultural setting, story style, gameplay style, aesthetic style, etc. There's perhaps a combinatorial advantage here: if sensitivity varies significantly across many of those parameters, just choose any unexplored subset, optimizing for 1/2/3 -- there are exponentially many in the number of distinguishing features (if you browse Steam tags you see this is potentially a very large number!). https://store.steampowered.com/tag/browse#global_492 https://store.steampowered.com/tag/browse#global_492
  - seventhtiger 8y ago
    Making the games you want to play is actually not great advice. You need to find a niche and hit it hard. Maybe that used to be metroidvania, but that's long over. Visual novels have been on the rise for a while, so are rougelikes and card games, but those are saturated now. You want to get in before the big streamers and reddit frontpage and ride the wave. Who knew a Harvest Moon clone would be the biggest indie success of its year? Maybe we can systematically analyze old games to identify overlooked gems and valuable revivals.
invalidusernam3 8y ago
Game development is hard, it seems like it's completely hit or miss, there is no middle ground. I've released 5 games, but I have to say, spending 2,600+ hours on something without doing market research or at least starting small seems crazy. My most successful game was an app for iOS which made me a grand total of around $30. The difference is I only spent around 80 hours working on it (40 or so for the game, 20 or so on the level editor, and 20 or so making levels). I had no money for marketing, had done no research beforehand, so I pretty much knew it was going to fail but did it as a fun side project to learn some new stuff and for my CV. Compare that to the various website side projects I've worked on over the years which have made me hundreds of thousands of dollars (over 10 years). Game dev sounds fun, but if you're looking to make money, I would definitely stay away from it.
- kahoon 8y ago
  > Compare that to the various website side projects I've worked on over the years which have made me hundreds of thousands of dollars (over 10 years). Was this orders from clients or did you create some SaaS?
  - invalidusernam3 8y ago
    Most of it (more than 90%) ad revenue, some SaaS.
- bemmu 8y ago
  Instead of making a game for some category on Steam and hoping it sells enough in the first month before sales drop off, I wonder if it could work to make a super-super niche game where the goal would be to rank for a Google search term instead. You'd try to be very long-lived, steadily selling for years, say just a few copies a week. All traffic would come from people who have some incredibly niche interest they are searching for, say baptism planners discovering your "baptism planner simulator 2000". If you continued to make games like these say one per month or two, it might be possible to gradually build up a liveable income from them.
  - 8y ago
WalterBright 8y ago
This isn't new. It happened before the internet to books, music and film. The internet has just amplified it.
- kayamon 8y ago
  Do you ever think about getting back into games?
  - WalterBright 8y ago
    Sometimes. But Empire was a bestselling game, and it still didn't work out to much money. My hourly rate was pathetic :-)
- reaperducer 8y ago
  It's 1983 all over again. https://en.wikipedia.org/wiki/Video_game_crash_of_1983 https://en.wikipedia.org/wiki/Video_game_crash_of_1983
  - volkl48 8y ago
    Not really. The market is large and fairly mature, it's doing fine and continuing to grow. The video game crash is titled that for a reason, the market shrunk by 97% in a short period. There are a large number of amateur creators who are trying to win the lottery (either from a fame or monetary perspective), and most won't and will see little recognition and remain obscure or very niche. This is seen in basically every area of media. Music, books, movies, etc and is perfectly normal.
  - CodeArtisan 8y ago
    >In 1986, Nintendo president Hiroshi Yamauchi noted that "Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games". In response, Nintendo limited the number of titles that third-party developers could release for their system each year, and promoted its "Seal of Quality", which it allowed to be used on games and peripherals by publishers that met Nintendo's quality standards. In 2017, 21 games per day were released on Steam and most of them were trash.
amelius 8y ago
Isn't this simply a rephrasing of "winner takes all"?
- hannasanarion 8y ago
  No, because a "winner take all" industry is one that trends towards monopoly, that's not the same thing. No one person will ever have the entire video game pie. "Superstar industries" follow extreme power law distributions, where, due to the low barrier to entry, high ceilings, and limited consumer base (there are only so many hours people can spend on entertainment), the pie isn't growing and new entrants aren't going to be able to carve out much that hasn't already been claimed. It's not a new thing, the name comes from the music industry which acts the same way. Anybody can record a song and print it on CDs, but the market is already saturated: you have to either really really really stand out like nobody has in decades (An event so rare I couldn't find any examples), or you have to get the support of one of the big players (game studios or music labels) to lend you their resources and audience.
  - Theodores 8y ago
    Adele? Nearest example I can think of, mySpace was where she got noticed so that dates her breakthrough to a good decade ago. Adele was legitimate however others have pretended to have an Adele grade story. Lily Allen also claimed to have been discovered on mySpace but her dad was rock and roll celebrity so her efforts can be dismissed as nepotism. Often these links to rock and roll celebrity are not obvious because performers use stage names that sound like real names. Their children don't use their parents fake surnames.
    - hannasanarion 8y ago
      Adele wasn't self-published though, right? I'm not super familiar, but based on the wikipedia page she got picked up by an XL Recordings talent scout who put her on other albums associated with that label, including appearances on BBC, before even her first album, which had 32 credits. Being really good and self publishing helps you build your resume in a superstar industry, but it's nearly impossible to actually achieve commercial success without a well-established sponsor. Adele probably wouldn't have gotten far on her own if XL or some other label hadn't picked her up. Her accomplishment before then was a really good resume.
ransom1538 8y ago
The problem with games is the amount of effort involved just to determine if it is “fun”. When I was in it cancelling a game 1 year deep with 10 people was normal.
- ReverseCold 8y ago
  I think this is why minigame-style games (battle royale, fighting games, first person shooter competitive, etc) are so common. You can implement a simple version of your game idea in a weekend and, if your idea was good, people would likely already have fun playing it.
  - yoz-y 8y ago
    Never really did modern game development, but can you really implement a first person shooter with a twist over a weekend? How would you go about it, create a mod for an existing game?
    - manquer 8y ago
      You could do that or a frramework like Unity takes care of lot of stuff for you.. weekend maybe a bit extreme, but you can get something running and functional in very short time
    - giobox 8y ago
      Almost no one writes their own FPS entirely from scratch in the past decade outside of a handful truly enormous industry players, much as no one really writes the entirety of a web app themselves. You choose one of the many existing game development frameworks and rapidly prototype a concept, if it works you keep iterating on it etc etc. This works in games as well as any other major software endeavour. The matter of having the talent to produce a new idea that’s actually fun to play and marketing it successfully is arguably the hard bit here, rather than the technical implementation details. I’d make the argument today that the technical barriers to entry for game development are almost _too_ low now, which is why partly why Steam is filled with so much “indie” junk.
    - 8y ago
matchagaucho 8y ago
Classic long-tail pattern. The growth of superstars makes me optimistic enough to look at ETF funds like GAMR. The industry overall seems undervalued. http://www.longtail.com/about.html http://www.longtail.com/about.html
alanz1223 8y ago
Sure but I think this really applies to industries under a free market in general however the dynamics in the tech sector are such that a single person with little to no startup capital can create something with paranormal returns and that is really what indies are after (perhaps after having their idea come to life). I wonder if there any other industries that have this same allure
downandout 8y ago
What you are saying is true. However, throwing your hands up in the air and saying “I guess I didn’t get lucky” isn’t quite the correct response either. Success is a matter of exposure and conversion rate. 1,016 visits, many of them random and untargeted, is simply not enough to make a statistically significant decision about the viability of this game. Conversion rates for any product tend to vary wildly within specific demographics. Some games perform abysmally with wide audiences, but may have very high conversion rates with specific, well defined groups. To be sure, there are games that don’t need to look for their niche audience. They become viral sensations because they appeal to mass audiences. They get enormous amounts of “earned media” - viral clicks from people talking about and uploading video of themselves playing - and those are the games we hear about and consider to be “Superstars”. But that in no way means that games that aggressively target some relatively small group of people that the game actually appeals to with paid advertising cannot be very financially successful. Maybe not billion dollar blockbusters, but I’d imagine this author would be happy with a six figure income from his work, which is entirely possible if he finds the right audience and applies the same work ethic he did to developing the game to marketing it. He needs to figure out who likes the game, what makes them like it, and then use the plethora of online ad platforms and targeting options to find more people like them. His game is not a steaming pile of crap, so he will find a paying audience for it if he looks.
jondubois 8y ago
I don't think that it's just technological change which has brought us there. It's also because of the last 10 years or so of Federal Reserve Bank policies. The elites have figured out how to maximise their profits during expansionary economic times and a big part of the elite strategy is limiting the number of winners.
- Pimpus 8y ago
  Interesting, can you expand on this?
  - jondubois 8y ago
    It's pretty clear that a lot of jobs today are useless and if you've worked for enough big companies, you might have realized that big companies are extremely inefficient. If big companies are so inefficent, why then are they able to generate so much profit from the economy? The reason is monetary policy. The Fed constantly 'prints' new money out of thin air and injects it into the economy via a combination of 1. loans to the government and 2. open market operations. Guess who gets the first dips into these two huge pots of newly created money? In the case of government money (loaned by the Fed), big corporations get a huge chunk of that money pot because they get all the lucrative government contracts. In the case of open market operations; big finance firms like Goldman Sachs and big traders with insider information are the first to get their hands into that pot. Basically that money which is meant to 'trickle down' isn't actually doing that; instead it appears to be trickling back up to government officials who are enacting policies that benefit corporations and increased centralization of wealth.
    - detritus 8y ago
      ...and what about all the other countries?
      - jondubois 8y ago
        The currencies of developed countries are pegged to the US dollar and so their reserve banks are just copying whatever the Fed is doing; their main goal is to make sure that the value of their currencies doesn't change too much relative to the USD. All countries reinforce the same economic distortions on a global scale.

chongli 8y ago

Yes. At this point, recommending that a 9-5 programmer quit their job to work on an indie game is equivalent to suggesting a PR writer quit their job to write the next Great American Novel.

hessenwolf 8y ago
I might use that as my title for my partner case. Automating (super dull financial industry department) is the industry of superstars
adamnemecek 8y ago
It’s not actually because even if you fail, you’ll be in a better position skillwise.
- deleted 8y ago
  [deleted]
- ALittleLight 8y ago
  I'd think this is more true for a writer than a programmer. You could probably attempt to program a game by spaghetti coding, copy pasting from stack overflow and tutorials, not using version control or tests, and working solo - at the end you'd have a lot of bad habits and not so much that would be useful at a professional studio.
  - adamnemecek 8y ago
    Ok don’t do that. I’ve done something similar two year ago (although not working on a game) and it was the most productive time ever.
  - hexane360 8y ago
    Your impression may be biased because you're more familiar with bad programming habits than bad writing habits.
  - kbenson 8y ago
    Some people use mistakes as a launch pad to learn a better way. Not always, and not always immediately, but sometimes it takes dealing with the negative consequences to make the better solution obvious when finally encountered. Sometimes convincing someone to spend the extra 10-20% of time or effort to do something "the hard way" is nigh impossible until they've spend time doing the alternative and know the extended pain that sometimes results. It's sort of like seat belts. When they were first required in all vehicles, many people still didn't bother with them. Even before cultural indoctrination took over, a lot of people eventually started too. It took some close calls for people or their friends and family for them to finally make the effort, and such a small effort it was. I saw exactly this play out with my own parents and their siblings.
drb91 8y ago
Well, making money just off of novels seems impossible these days (you gotta hold out for HBO); there’s still a good deal of difference.
- Cthulhu_ 8y ago
  Novels are their own problem, but it's a similar one; there's hundreds of thousands of great writers and publishing is trivial nowadays (iirc the longest work of fiction ever made is a Super Smash Bros fanfiction published for free), but getting 'mindshare' (or, just some attention - and that's before making a sale still) is hugely difficult.
- macspoofing 8y ago
  Is there really a difference? I know an acquaintance that published a novel they worked on for a few years. They didn't share any numbers with me but they were clear, they made no money. I assume there are thousands of people trying to sell their novels, and a tiny minority succeed in making (big) money.
  - drb91 8y ago
    > and a tiny minority succeed in making (big) money. Who is making big money JUST off novels? Not speaking, not tv deals, writing. Meanwhile I know several game developers making a living. Setting out to do it still follows a success distribution, but it’s fundementally achievable in a way unavailable to writers entirely.
    - cableshaft 8y ago
      They exist. But those writers are making money are doing quantity over quality. I.e. they're releasing like 12 pulp novels a year that they churn out once per month, and build up a fanbase over time with every new release, who then buy up their quickly growing backlog of novels. Seems like urban supernatural or romance (or urban supernatural romance) seems to be the main genres where this is working. My girlfriend follows several writers who make a living this way, and is wanting to give it a try herself, that's how I'm aware of it. You can't write The Great American Novel or spend years writing your novel and make money this way though. It pretty much requires the momentum and consistent quick releases for it to work. You're making sugary garbage that's consumed quickly and forgotten just as quickly.
eksemplar 8y ago
It was always like that though. Game programming had always been the worst field for programmers, and the industry had and is exploiting the fact that some people like games enough to work on them under horrible conditions. I don’t think it’s the equivalent to writing the great American novel though, because programming is just a minor part of game creating and arguably one of the least important. Design I’d the most important. The author of this article rants about the swarm of unity games, but some of those unity games are better than what the author made exactly because they took design seriously.
- kbenson 8y ago
  > The author of this article rants about the swarm of unity games, but some of those unity games are better than what the author made exactly because they took design seriously. Did we read the same article? Not only the total number of games, but the rate of their release seems to be geometrically increasing! Holy crap. And while many of them are Unity shovelware, etc., many are polished games that a lot of effort went into. A tiny percentage are hits, but most are forgotten in the deluge. To me that reads as someone that's fully aware that some people are putting a lot of effort in and making good games (Unity or not), but is upset by the realization that quality doesn't seem to be nearly enough. The problem is not (just) that a lot of crap is being released, but that a lot of everything is being released, good and bad. So much so that even the good things can't make good money because supply has so far outstripped demand. It's sort of like the Netflix queue problem. I'm continuously adding things to my Netflix queue that look interesting, but my time to actually watch them is such that my chance of getting through even a majority of the queue is almost nil.
  - eksemplar 8y ago
    To me it reads as someone who disregards unity games, while praising well made indie games in general. And in the light of the rest of the article, the author seem to favor people who did good programming, but the truth is that you don’t need to be a good programmer to make good games. I think supply is an issue, but I also think the author added to the problem by releasing a game that doesn’t have appealing graphics, gameplay or sound. Where as many much of the unity “shovelware” is exactly the opposite.

malkia 8y ago

Haven't read the paper, but kept me thinking about twitchers, youtube streamers and such...

macspoofing 8y ago
You'll see the same thing: a tiny minority of streamers making most of the money, and a large majority making little to no money.
- theandrewbailey 8y ago
  That's a Pareto distribution. https://en.wikipedia.org/wiki/Pareto_distribution https://en.wikipedia.org/wiki/Pareto_distribution
- redisman 8y ago
  Web, ecommerce, music, film, ticket sales, furniture, search... It's really a stacked deck for the big guys in most industries these days

Applejinx 8y ago

Absolutely. All things are turning into the economics of superstars so long as they're subject to network effects and the widest, most fluid and well-informed possible market. Uber drivers will turn into the economics of superstars. Amazon warehouse workers will turn into the economics of superstars. You'll keep on getting individual ultra-high performers who dominate whatever area it is, and more ordinary performers will just plain fail.

whatshisface 8y ago
Amazon warehouse workers are limited by human physiology to move boxes within 10x of the average box moving speed. That disqualifies them from the superstar economy.
projektir 8y ago
I'm not sure how your conclusion follows. Uber drivers and warehouse workers are unlikely to undergo this effect because no matter how good an Uber driver is, they can't be in multiple places at once. Similarly, there's a limit to how much one warehouse worker can do.
- macspoofing 8y ago
  Kid of. You'll still see a small minority of Uber drivers making money and a large percentage breaking even or losing money. It's like that in the real-estate market, where a small minority of agents take in most of the profit and a large number breaking even or losing money. This is also why you see trade groups frequently supporting policies to increase barriers for market entry. In real-estate this means higher and higher licensing standards. For example in Canada it costs around $6k and 3 years to get fully licensed [1].. which is crazy. But the real-estate lobby wants it even higher. [1]https://www.remic.ca/real-estate-sales-person-vs-mortgage-agent/ https://www.remic.ca/real-estate-sales-person-vs-mortgage-ag...
  - varjag 8y ago
    Real estate is infrequent high value transactions with high margin/commission. Doubling your real estate sales can well make you rich; doubling your Uber driving would not.

the_cat_kittles 8y ago

this is why i feel compelled to think about things that are necessarily localized. how the hell can you compete with the whole world?

krapp 8y ago
You're not actually competing with the whole world, though, just whatever else is similar to someone's interests. In this case... "metroidvania" is a very oversaturated market, and a lot of games do it better.
- darkmighty 8y ago
  Indeed, you have to look for niches -- and find the ones that are in 1) high demand (not just high demand in general -- high demand for new/better content by a new entrant); 2) low supply; 3) well paying customers. I'm sure despite the flood those will still exist, as long as there's still a good amount of differentiation between people's preferences. A niche is a small subset of in the space of products that a small subset of customers have strong preference to. This needs preference differentiation. This preference difference could be toward many features: cultural setting, story style, gameplay style, aesthetic style, etc. There's perhaps a combinatorial advantage here: if sensitivity varies significantly across many of those parameters, just choose any unexplored subset, optimizing for 1/2/3 -- there are exponentially many in the number of distinguishing features (if you browse Steam tags you see this is potentially a very large number!). https://store.steampowered.com/tag/browse#global_492 https://store.steampowered.com/tag/browse#global_492
- seventhtiger 8y ago
  Making the games you want to play is actually not great advice. You need to find a niche and hit it hard. Maybe that used to be metroidvania, but that's long over. Visual novels have been on the rise for a while, so are rougelikes and card games, but those are saturated now. You want to get in before the big streamers and reddit frontpage and ride the wave. Who knew a Harvest Moon clone would be the biggest indie success of its year? Maybe we can systematically analyze old games to identify overlooked gems and valuable revivals.

invalidusernam3 8y ago

Game development is hard, it seems like it's completely hit or miss, there is no middle ground. I've released 5 games, but I have to say, spending 2,600+ hours on something without doing market research or at least starting small seems crazy. My most successful game was an app for iOS which made me a grand total of around $30. The difference is I only spent around 80 hours working on it (40 or so for the game, 20 or so on the level editor, and 20 or so making levels). I had no money for marketing, had done no research beforehand, so I pretty much knew it was going to fail but did it as a fun side project to learn some new stuff and for my CV. Compare that to the various website side projects I've worked on over the years which have made me hundreds of thousands of dollars (over 10 years). Game dev sounds fun, but if you're looking to make money, I would definitely stay away from it.

kahoon 8y ago
> Compare that to the various website side projects I've worked on over the years which have made me hundreds of thousands of dollars (over 10 years). Was this orders from clients or did you create some SaaS?
- invalidusernam3 8y ago
  Most of it (more than 90%) ad revenue, some SaaS.
bemmu 8y ago
Instead of making a game for some category on Steam and hoping it sells enough in the first month before sales drop off, I wonder if it could work to make a super-super niche game where the goal would be to rank for a Google search term instead. You'd try to be very long-lived, steadily selling for years, say just a few copies a week. All traffic would come from people who have some incredibly niche interest they are searching for, say baptism planners discovering your "baptism planner simulator 2000". If you continued to make games like these say one per month or two, it might be possible to gradually build up a liveable income from them.
- 8y ago

WalterBright 8y ago

This isn't new. It happened before the internet to books, music and film. The internet has just amplified it.

kayamon 8y ago
Do you ever think about getting back into games?
- WalterBright 8y ago
  Sometimes. But Empire was a bestselling game, and it still didn't work out to much money. My hourly rate was pathetic :-)
reaperducer 8y ago
It's 1983 all over again. https://en.wikipedia.org/wiki/Video_game_crash_of_1983 https://en.wikipedia.org/wiki/Video_game_crash_of_1983
- volkl48 8y ago
  Not really. The market is large and fairly mature, it's doing fine and continuing to grow. The video game crash is titled that for a reason, the market shrunk by 97% in a short period. There are a large number of amateur creators who are trying to win the lottery (either from a fame or monetary perspective), and most won't and will see little recognition and remain obscure or very niche. This is seen in basically every area of media. Music, books, movies, etc and is perfectly normal.
- CodeArtisan 8y ago
  >In 1986, Nintendo president Hiroshi Yamauchi noted that "Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games". In response, Nintendo limited the number of titles that third-party developers could release for their system each year, and promoted its "Seal of Quality", which it allowed to be used on games and peripherals by publishers that met Nintendo's quality standards. In 2017, 21 games per day were released on Steam and most of them were trash.

amelius 8y ago

Isn't this simply a rephrasing of "winner takes all"?

hannasanarion 8y ago
No, because a "winner take all" industry is one that trends towards monopoly, that's not the same thing. No one person will ever have the entire video game pie. "Superstar industries" follow extreme power law distributions, where, due to the low barrier to entry, high ceilings, and limited consumer base (there are only so many hours people can spend on entertainment), the pie isn't growing and new entrants aren't going to be able to carve out much that hasn't already been claimed. It's not a new thing, the name comes from the music industry which acts the same way. Anybody can record a song and print it on CDs, but the market is already saturated: you have to either really really really stand out like nobody has in decades (An event so rare I couldn't find any examples), or you have to get the support of one of the big players (game studios or music labels) to lend you their resources and audience.
- Theodores 8y ago
  Adele? Nearest example I can think of, mySpace was where she got noticed so that dates her breakthrough to a good decade ago. Adele was legitimate however others have pretended to have an Adele grade story. Lily Allen also claimed to have been discovered on mySpace but her dad was rock and roll celebrity so her efforts can be dismissed as nepotism. Often these links to rock and roll celebrity are not obvious because performers use stage names that sound like real names. Their children don't use their parents fake surnames.
  - hannasanarion 8y ago
    Adele wasn't self-published though, right? I'm not super familiar, but based on the wikipedia page she got picked up by an XL Recordings talent scout who put her on other albums associated with that label, including appearances on BBC, before even her first album, which had 32 credits. Being really good and self publishing helps you build your resume in a superstar industry, but it's nearly impossible to actually achieve commercial success without a well-established sponsor. Adele probably wouldn't have gotten far on her own if XL or some other label hadn't picked her up. Her accomplishment before then was a really good resume.

ransom1538 8y ago

The problem with games is the amount of effort involved just to determine if it is “fun”. When I was in it cancelling a game 1 year deep with 10 people was normal.

ReverseCold 8y ago
I think this is why minigame-style games (battle royale, fighting games, first person shooter competitive, etc) are so common. You can implement a simple version of your game idea in a weekend and, if your idea was good, people would likely already have fun playing it.
- yoz-y 8y ago
  Never really did modern game development, but can you really implement a first person shooter with a twist over a weekend? How would you go about it, create a mod for an existing game?
  - manquer 8y ago
    You could do that or a frramework like Unity takes care of lot of stuff for you.. weekend maybe a bit extreme, but you can get something running and functional in very short time
  - giobox 8y ago
    Almost no one writes their own FPS entirely from scratch in the past decade outside of a handful truly enormous industry players, much as no one really writes the entirety of a web app themselves. You choose one of the many existing game development frameworks and rapidly prototype a concept, if it works you keep iterating on it etc etc. This works in games as well as any other major software endeavour. The matter of having the talent to produce a new idea that’s actually fun to play and marketing it successfully is arguably the hard bit here, rather than the technical implementation details. I’d make the argument today that the technical barriers to entry for game development are almost _too_ low now, which is why partly why Steam is filled with so much “indie” junk.
  - 8y ago

matchagaucho 8y ago

Classic long-tail pattern. The growth of superstars makes me optimistic enough to look at ETF funds like GAMR. The industry overall seems undervalued. http://www.longtail.com/about.html http://www.longtail.com/about.html

alanz1223 8y ago

Sure but I think this really applies to industries under a free market in general however the dynamics in the tech sector are such that a single person with little to no startup capital can create something with paranormal returns and that is really what indies are after (perhaps after having their idea come to life). I wonder if there any other industries that have this same allure

downandout 8y ago

What you are saying is true. However, throwing your hands up in the air and saying “I guess I didn’t get lucky” isn’t quite the correct response either. Success is a matter of exposure and conversion rate. 1,016 visits, many of them random and untargeted, is simply not enough to make a statistically significant decision about the viability of this game. Conversion rates for any product tend to vary wildly within specific demographics. Some games perform abysmally with wide audiences, but may have very high conversion rates with specific, well defined groups. To be sure, there are games that don’t need to look for their niche audience. They become viral sensations because they appeal to mass audiences. They get enormous amounts of “earned media” - viral clicks from people talking about and uploading video of themselves playing - and those are the games we hear about and consider to be “Superstars”. But that in no way means that games that aggressively target some relatively small group of people that the game actually appeals to with paid advertising cannot be very financially successful. Maybe not billion dollar blockbusters, but I’d imagine this author would be happy with a six figure income from his work, which is entirely possible if he finds the right audience and applies the same work ethic he did to developing the game to marketing it. He needs to figure out who likes the game, what makes them like it, and then use the plethora of online ad platforms and targeting options to find more people like them. His game is not a steaming pile of crap, so he will find a paying audience for it if he looks.

jondubois 8y ago

I don't think that it's just technological change which has brought us there. It's also because of the last 10 years or so of Federal Reserve Bank policies. The elites have figured out how to maximise their profits during expansionary economic times and a big part of the elite strategy is limiting the number of winners.

Pimpus 8y ago
Interesting, can you expand on this?
- jondubois 8y ago
  It's pretty clear that a lot of jobs today are useless and if you've worked for enough big companies, you might have realized that big companies are extremely inefficient. If big companies are so inefficent, why then are they able to generate so much profit from the economy? The reason is monetary policy. The Fed constantly 'prints' new money out of thin air and injects it into the economy via a combination of 1. loans to the government and 2. open market operations. Guess who gets the first dips into these two huge pots of newly created money? In the case of government money (loaned by the Fed), big corporations get a huge chunk of that money pot because they get all the lucrative government contracts. In the case of open market operations; big finance firms like Goldman Sachs and big traders with insider information are the first to get their hands into that pot. Basically that money which is meant to 'trickle down' isn't actually doing that; instead it appears to be trickling back up to government officials who are enacting policies that benefit corporations and increased centralization of wealth.
  - detritus 8y ago
    ...and what about all the other countries?
    - jondubois 8y ago
      The currencies of developed countries are pegged to the US dollar and so their reserve banks are just copying whatever the Fed is doing; their main goal is to make sure that the value of their currencies doesn't change too much relative to the USD. All countries reinforce the same economic distortions on a global scale.