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Why There Are No Indie Video GamesAnd why that's bad for gamers.

By Luke O'Brien
Posted Friday, May 26, 2006, at 10:50 AM ET
Illustration by Rob Donnelly. Click image to expand.

Don't believe all those recent articles about how video game manufacturers are headed to the poor house. The global market share for video games should surpass $40 billion by 2010. Thanks to powerful new consoles, their graphics are approaching CGI quality. And they now attract an audience well beyond teenage boys. Remember, this all started with two paddles and a bouncing ball.

But success can have a downside. Just ask Pong's creator, Nolan Bushnell, who often gripes that flashy game technology stifles creativity. Bushnell might be a dinosaur, but he has a point. Over the last decade, the costs of high-gloss, graphics-intensive titles have mushroomed. Console games are now so expensive that only a few companies can afford to make them. Today's game industry is like Hollywood in the first half of the 20th century, when an oligopoly of studios controlled the business. Instead of MGM, Paramount, and Universal, we have Electronic Arts, Sony, and Activision.

In today's movie business, it's possible for an indie film like Napoleon Dynamite to become a sensation. Saw, which cost a mere $1.2 million, grossed 100 times that amount. That just doesn't happen in video games. The average PlayStation 2 game costs about $8 million. Studios often need large development teams—usually 40 or more people—to meet their tight deadlines. They spend money to license everything from comic book heroes to graphics engines. They record A-list actors. And if they burn their own CDs or do their own marketing, costs can really soar.

Most independent developers take money from the big publishers in exchange for the rights to the games they've developed. The publishers market and distribute the games to retailers. The developers pay back the initial loan from the royalties they earn. Several industry types told me that an indie studio will typically get a $5 million advance on 15 percent royalties. If the game has a wholesale price of $30, the developer must sell more than a million units to get out of hock. In other words, the game has to be a blockbuster, something on the order of Tomb Raider or Splinter Cell. The cost of the average PlayStation 3 game is expected to rise to $15 million-$20 million, plus another $10 million or so for marketing. That means indie developers, who already go bust with great regularity, will have even less wiggle room.

For today's indie developer, a safety net is just as important as a good idea. Stardock, the company behind the hit PC strategy game Galactic Civilizations, gets most of its revenue from sales of office software. Other indies make deals with the government to work on defense technology then plow these funds back into game development.

Why should gamers and industry bigwigs care if it's tough for the little guy? Because back when games were cheaper to make, the independents came up with the ideas that moved the business forward. Richard Garriott peddled Ultima, the first major role-playing title, in plastic bags. Sid Meier's Civilization and Westwood's Dune II cracked open the strategy genre. Id Software's John Carmack and John Romero created the pioneering first-person shooter Doom. Will Wright gave us SimCity and open-ended "sandbox" simulations.

What happened to these pioneers? Garriott never produced another breakthrough like Ultima; he now works for online multiplayer giant NCsoft. Meier has spent most of the last decade updating his previous hits at a company owned by Grand Theft Auto publisher Take-Two Interactive. Id Software has clung to its independence but produced nothing further in the way of milestone games. Perhaps the lone indie superstar to retain his auteur status is Will Wright, who now has his own "studio" within Electronic Arts. Wright takes years to cook up his always-innovative games. In 2000, he released The Sims, which transported players into the first of many "digital dollhouses" and became the best-selling computer game of all time. Wright's next game, Spore, aims to simulate the evolution of life from microorganism to space-faring civilization. It will probably be the only innovative title EA releases next year.

But Wright and his studio, Maxis, are an exception. The most successful indies get bought by the industry giants, where they often become casualties of consolidation. Westwood Studios, which created the hit Command & Conquer, was bought by Electronic Arts in 1998 and shut down in 2003. Wolfpack Studios, which made the game Shadowbane, was bought by Ubisoft in 2004 and shut down last week.

Instead of adopting the solo developers' pioneering mojo, the risk-averse major studios stick with proven formulas. Can't wait to fire up Final Fantasy 13? It'll be out soon. So will the 19th iteration of EA's Madden football game, complete with updated player names and numbers. EA, the industry's leading publisher, had a nasty case of sequelitis last year. I've looked at nearly 50 games that EA released last year, and I've yet to find one that isn't a rehash like NBA Live 06 or a movie tie-in like Batman Begins.

With costs rising, the console market looks nearly impossible to break into. If there's a niche indie developers can make their own, it's PC gaming, which accounts for about 15 percent of the domestic market. Greg Costikyan, a purveyor of experimental PC games with less-demanding graphics, plans to bypass publishers' distribution chains by selling his games online. His online publishing effort, Manifesto Games, is due to launch this year with about 100 titles.

It seems doubtful, though, that someone like Costikyan can impact mainstream tastes. In the online gaming magazine Escapist, he wrote that gamers are partially to blame for the lack of an independent scene:

Indie rock fans may prefer somewhat muddy sound over some lushly orchestrated, producer-massaged score; indie film fans may prefer quirky, low-budget titles over big-budget special FX extravaganzas; but in gaming, we have no indie aesthetic, no group of people (of any size at least) who prize independent vision and creativity over production values.

It's true that mainstream consumers have given big publishers little incentive to change. When the movie business decentralized in the mid-20th century, the door opened for avant-garde filmmakers free from studio control. Just as important, though, was the social change of the 1960s—moviegoers wanted something new. It happened again in the 1990s, when Quentin Tarantino and the Weinsteins re-invigorated American indie film and transformed the business.

Today, the video-game industry is at a similar crossroads. In one direction is an ever-deepening Madden playbook, and in the other is progress. The video game now holds much promise as a cultural mover. If the big studios stay in charge, it may return to its former status: the pastime of teenage boys and middle-aged nerds at gaming conventions.

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Luke O'Brien is a freelance writer in Washington, D.C.
Illustration by Rob Donnelly
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Remarks from the Fray:

If there was an actual way to identify and recognize good independent games, such as a Cannes Festival for video games, then I think you'd start to see some independent games take off. The problem is there is no way to say that this unknown title is innovative and this unknown title is garbage. Without a festival or something to showcase independent work, then distributors won't know and the public can't tell them that purchasing and distributing this critic's favorite will net them money.

Independent film has an entire cottage industry of festivals and circuits that help put independent film makers in touch with major distributors. It also allows them to build a fan base and get some critics to see the movie. Then the distributors can say "Yeah this will make money" or "No one would pay for this." Without something similar in the game industry, there is no way to put independent game developers in touch with distributors.

--Drom

(To reply, click here.)

The author overlooked the most notable aspect of independent video games, namely the "mod" community. [...] "Mods" are modifications of existing games, often built on the source code, which is supplied for just such a purpose. Software development kits (SDKs) are typically released for first-person shooters almost as soon as the game hits store shelves, to allow fans to built their own levels, or in many cases create truly unique games. And often times what the modders are creating can even become as popular, or more so in a few cases, than the original game.

--Peter_Suciu

(To reply, click here.)

In the early days of gaming, technology was so primitive that a coder with a clever idea and some time on his hands could come up with a game that was as sophisticated as systems could handle, so there wasn't much to be gained from massive budgets and huge teams. Then systems evolved to handle much more, and we reached the current state of affairs. But I see the trend changing just a few generations down the road. By then, games will reach the near-photo-realistic level, and there will be rapidly diminishing returns in investing in new graphics. Meanwhile, systems will be so fast as to allow real-time ray mapping, which will change the rules. What it will mean is that there will be a bunch of open-ended game engines that will handle the complicated technical feats for making games look good, all by themselves. That part of game design will occur with point-and-click ease, requiring much less technical savvy and a whole hell of a lot less man-hours. Meanwhile, competition will drive down prices.

What you'll end up with is the video-game equivalent of modern "prosumer" video cameras and personal-computer digital film editing software: something that can let a minimally technically proficient artist replicate something that once would have taken hundreds of thousands of dollars of equipment, a large crew, and a wealth of knowledge about lenses, lighting, and editing. That will open the door to a game-design phase that looks more like the current state of independent film... just as Hollywood still dominates the box office, the big game outfits will dominate games, but in addition to churning out their known-quantity franchises, they'll be getting frequent shots of inspiration from surprise blockbusters by auteur's making truly innovative games on a shoestring.

--Arkady

(To reply, click here.)

The real barrier to indie games isn't the studios, it's chains like Best Buy and Futureshop and Circuit City that are inaccessible to small studios or individuals. Real distribution channels outside of the mega-marts are getting better, though, and that's where indie gaming can grow.

--Hroomba

(To reply, click here.)

Why the repeated references to Madden as an example of a lack of innovation? Sports games are one place you don't want to see massively innovative gameplay. You just want an incrementally better simulation of the actual sport. And of course there will always be a new version every year, because there will always be another football season, and serious sports gamers want to play with simulations of the actual teams.

--HoundDog

(To reply, click here.)

I'm confused by the assertion that there are no Indie game developers. If you take the population of gamedev.net (a popular amateur game development site) alone, there are at least a few thousand hopefuls.

Perhaps the problem is with the definition of "indie". This industry is still very, very young. Most of the bigwigs you listed are either indie teams that made it big, or indie teams that got bought by a corporation after their success.

--Fel

(To reply, click here.)

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