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Comment by flohofwoe | Hacker News Reader

This is the harsh reality for most independent game development teams, except for a few super-star-teams which are able to negotiate non-cut-throat contracts. The publisher pays production cost in advance, and recoups production + marketing cost before the developer sees any royalties, which means the developer can be happy to cover their costs during production and are then suddenly cut off once the game is finished. New money only comes in after the next deal has been signed or when the last game becomes an unexpected break-out hit and earns much more money then forecast (which is very unlikely). If the team can't land a new project for 2 or 3 months it's usually over. It was always hard for independent teams but since about 2009 it's a massacre.

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Luckily, with the advent of digital downloads, publishers no longer provide too much value. They don't own the channel. For example, a copy of FTL costs $9.99, and I'd be surprised if the FTL team doesn't earn at least $7 of that $9.99, if not much more.

FTL is a bit of an outlier in the sense that they were fully funded. If you're an independent studio without that kind of money, you're still at a publisher (or other financer)'s mercy.

"The publisher pays production cost in advance" - The publisher is paying the salaries of the developers while the develop. Digital downloads don't help change that equation. Crowdfunding could.

Of course there's nothing free of tradeoffs. If you want to self-publish, you just don't earn salary while developing (for higher returns later).

What GP says is that digital downloads fixed the blatant imbalance of power in favor of developers.

I'd submit that's the wrong tense: Crowdfunding has changed the equation. It may not be done propagating yet, but it definitely has.

Further, the rise of channels where you can recoup the majority of the incoming money is more helpful than this thread has yet shown, I think. When you're making pretty much all the money, you can use the income from your first game to start making a second. If your deal with a publisher was that you could make the first one and are given only just barely enough to survive, you're not making a second one, except of course on the exact same terms, never permitting you enough to leave the plantation (or at least that's the goal).

Of course, you still have to make that first one, but, well, here we run into the cold hard reality that nobody owes a developer the money to make their first game. So, yeah, bootstrapping is going to be hard and take some hustle, but at least the hustle required is now closer to the fundamental amount of hustle required, instead of being artificially added to by a gatekeeper standing in the way. I can't guarantee success, in fact I can offer you "probable failure", but at least now you've got a fair shot.

I'd argue this is premature celebration.

Crowdfunding seemed like a great solution to the publisher funding model, and it has proven to be a great gain for consumers in some exceptional cases (see: Prison Architect, Kerbal Space Program, Planet Annihilation, etc).

But it's also rightly lost a great deal of consumer confidence now that we're seeing a lot of crowdfunded games burn out, crash, or just plain fail to ship anything resembling the original promise (see: Takedown, H1Z1). The problem is substantial enough that Valve has basically disclaimed their responsibility if an Early Access game just absconds with your money.

IMO the next year or two is going to be critical for crowdfunding. The whole concept launched with great consumer enthusiasm, but that's fading now that the high-profile failures and scams are emerging.

Are we heading into the Trough of Disillusionment [1]? Sure.

Is crowdfunding going to generally succeed in more-or-less the way I outlined? Yes. Even if Kickstarter totally fails, something else will tweak the model until it succeeds. It's just a straight-up simple disintermediation-and-aggregation play; it's virtually impossible that there exist no viable solutions in this space.

Plus it's not the only thing; the more people who start with crowdfunding, the more little companies and groups there are to join if you're not quite ready to take the full risk yourself. And while the Hype Cycle is leading people to Crowd Fund All The Things! right now I fully expect crowdfunding to more frequently be used merely to bootstrap things, or for focused, specific reasons, rather than for everything.

The explosion has only begun.

[1]: http://en.wikipedia.org/wiki/Hype_cycle

> This is the harsh reality for most independent game development teams, except for a few super-star-teams which are able to negotiate non-cut-throat contracts. The publisher pays production cost in advance, and recoups production + marketing cost before the developer sees any royalties

i don't understand this.

isn't the definition of an "indie developer" a developer without a publisher?

That's why I used "independent developer team" instead of "indie developer". Think Crytek, Crystal Dynamics or Yager. These are all medium sized companies (couple hundred to a thousand people) which are independent from (not owned by) publishers, but still need publishers to finance, market and distribute their projects. This in contrast to DICE or id Software which are no longer independent and now owned by EA and Bethesda.

ah! got it. thanks, man.

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