Peak Game

Have we reached Peak Game?

Recently, there have been a number of clickbait headlines pontificating about the state of the games industry, the never ending stampede of flops from incumbent publishers, venture-backed studio collapses, and layoffs galore.

So here’s mine. 🙃

In the last couple weeks, I’ve been spending a lot more time looking at every upcoming indie game I can get my eyeballs on. And look, I know the “18,000 games came out on Steam last year!” narrative is incomplete. There’s a lot of hobby projects, asset flips and vaporware out there. But DAMN if there aren’t more real deal, seriously competent attempts to make commercially viable games than ever before.

🏰 Incumbent publishers’ moats have simply evaporated. Their distribution advantage is fully dead, the power of their brand equity has significantly eroded, leaving them with maybe the ability to simply outspend the startups. But that spending hasn’t largely resulted in great games that players love.

💰 Western development budgets have ballooned at the same time as costs of actually making great games have never been lower, thanks to a combination of technology, the maturity of the global talent pool, and the ability to distribute games basically for free.

📉 Meanwhile, all these incredible games -- big ticket and small ticket alike -- are competing for a mere 12% of playtime that goes to new titles. The rest is stuck on established franchises and live service black hole games.

🧱 And a couple of those black hole games are UGC platforms that are increasingly pulling new game publishing into their gravity wells — with horrible monetization and worse revenue share terms than the platform monopolies.

All of this is squeezing the entire value chain, with content creation squeezed the hardest.

On the Gamecraft Podcast, Mitch Lasky says we’re at the simultaneous nadir of three different vectors for innovation - distribution, tech and content. And perhaps some new business model or platform will restart the growth engine.

But perhaps we’ve just reached peak game — more or less the maximum amount of time and money humans want to spend on games against other uses of their time.

So, what to do in this market? Go fast, focused, and different. Have a strong hypothesis that there is a big enough underserved audience that wants your game, and get signal to validate that audience as early as humanly possible. Leverage that early attention to build momentum, and use it to raise money if you need it — from investors, publishers or the crowd — and capture the energy of your early community and turn them into activists on your behalf. Otherwise you are simply shouting into the same hurricane that everyone else is.