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Saving us from the games industry March 7, 2008

Posted by jeremyliew in business models, distribution, games, games 2.0, gaming.

This is a guest post from John Szeder. John has been kicking around the gaming industry for a ten years now and is a frequent speaker at GDC and other gaming conferences. In his words:

John Szeder is an enthusiastic digital content creator and evangelist. He is presently working on a project in stealth mode, but ran two of his own companies successfully and profitably for most of the past eight years. He was a founding staff member at Digital Chocolate and early employee at Research In Motion. He holds a Bachelor of Mathematics degree from the University of Waterloo.


I have been attending GDC for 10 years now and every year I am happy to say that I learn something new. I don’t think that everyone gets the same benefit from the tradeshow, and I have a little story to tell you about the importance of learning the lessons of history.

I recall back in 2000 when I first started doing mobile development sitting with a room of bright developers who said “Hey let’s go into the mobile marketplace! The mobile platform will save us from the games industry!” We all downloaded the various SDKs, bought some phones. We called Qualcomm, JAMDAT, and Verizon. Some of us started direct distribution of our own content, some of us did projects with publishers. I made a game in roughly four hours that paid over $100k in royalties over 3 years. These were good times.

In 2003, the bloom was coming off the rose. A lot of companies were making games and the carriers were getting overwhelmed. Fewer titles were getting placed. 10 new handsets, all rife with bugs, started coming out every month, and suddenly what started off as nice little cottage marketplace was full of people in business casual going “Here is our co-marketing agreement”.

So a group of developers at that point saw that there was opportunity to make downloadable games. I was not one of them but I heard a business pitch where someone was going “Hey let’s go make downloadable casual games! The casual games marketplace will save us from the games industry!” We won’t describe what happened next, it bears some remarkable similarities to what happened in mobile.

A short few years and 20 match-3 clones later, those same people gathered at the bar (bringing us to 2005) and realized that adding a set of smashing pumps to a match 3 engine and calling it “be-shoe-eled” was not going to buy clean diapers and beer anymore, but one of them had great news. “Hey I just got off the phone with Microsoft, and I can put my game on XBLA Marketplace!
Microsoft’s XBLA platform is going to save us from the games industry!”

It was a nice idea. They started off paying more than half the royalties to developers. Then it went to an even royalty split. And from what I hear, now the developer gets less than half, pretty much the same as in every channel.
It is sad to see people’s misguided monopolist instincts hard at work.
The same could probably be said for the Wii, but I didn’t bother getting one to put in my closet to gather dust after showing Tennis to my wife and her mother, I only buy hardware that I can play games on that I enjoy and Italian plumber games are *so* 1987.

The final nail in the coffin for me came when two of the people I respect for their artistic talent and creativity both said to me this
year: “John, I have an idea. Let’s go pitch this project to Sony. Their new PSN marketplace will be awesome

[wait for it]

AND IT WILL SAVE US FROM THE GAMES INDUSTRY”. You need to drop your voice a few octaves and say that last part aloud to someone near you in slow motion, because that’s what happened to me. I dropped into slowtime as though I was in the matrix and people were shooting at me. The echoes of developer’s ideas from the past several years hit a strange resonance and harmonic that was almost physical, even though half the conversations happened at the Fairmont Hotel in San Jose and the other half were in the W lobby in San Francisco.

I have some shocking news for you.

Nobody will save you from the games industry.

You will need to do it yourself.

You need to stop signing bad deals. Retain control of your IP. Seek alternative financing for your game development dreams. Find channels where you can participate in distribution (and revenues) and move up the food chain. Most importantly, understand that the people who you think will save you from the games industry are the very ones you need saving from.


1. Leon Atkinson - March 7, 2008

How many times have we seen the pattern of people looking for someone to save them when they really should stop accepting bad deals in the first place? Rand called it the “sanction of the victim”.

I would urge anyone to consider that in business, everything is negotiable. You can protect yourself by making your software Open Source. You can also work I deal like I did with my books–have the rights return to you immediately if it stops being published.

But by all means, look out for yourself.

2. alex - March 7, 2008

The internet has chipped away on many established distribution channels (outside of gaming) and while it may not offer direct routes to propriety gaming plattforms it does allow to create and distribute games to end users via the browser just fine. That may not save you from THE industry but it just might allow you to create your own next to it.

3. George J. Notaras - March 7, 2008

Amen to that . . . Mr. Szeder is spot on! Anytime ANYONE invites you to play in THEIR sandbox, you will most likely go home with a diaper full of . . . not money.

4. Adam - March 7, 2008

I agree with everything except the comment about the plumbers 🙂 Mario Galaxy FTW!

5. gj - March 7, 2008

funny. the old Elliott Gould style or Dustin Hoffman in “wag the dog”

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