Independent Game Developer CoOps and CoWork Spaces
Over 90% of independent game developers make less than minimum wage on their titles. The average independent game will make less than $30,000 in sales in its first release year. While there have been some notable exceptions, generally, the initial investment cost is traditionally too high to compete with larger game developers. Time is the tradeoff for lack of cash resources, which means indie game developers have a longer development time. This is a risk in the world of fast-paced, ever-evolving gaming trends, leaving their work vulnerable to becoming stale, irrelevant, or beat by an essential clone by the time they are able to release. Independent game developers have much more riding on the success of a single title than a large, diversified developer with marketing budgets and established distribution channels.
Platforms like Steam have created some opportunities for indie game developers, but the current glut of titles creates a noisy marketplace for the truly solid titles to cut through the garbage. Indie game developers are a fierce and passionate community. Therein lies an opportunity beyond the value of the titles they produce. Imagine the ability to bring together, focus, and stimulate activity from a braintrust of indie game developers. They can help each other refine and improve their work. This can create a focal point for marketing and promotions of those titles through a coalition when large marketing budgets are not available to them. Larger companies can even leverage their expertise in the form of professional consulting services. While against the whole point of independence, this would also be a place to recruit talent.
An in-store, co-work space for game developers could be a differentiated experience for brick-and-mortar retailers. Building a community of independent game developers creates an ecosystem of opportunities. While the reality of the market dictates that streaming is the only practical distribution channel, there is a place for IRL to play in the lifecycle of game development. In-store experiences could give consumers access to exclusive titles that are still in alpha or beta development. This is a win for both the retailer and the game devs. This creates valuable in-person customer feedback, as well as organic brand and loyalty development. Brick-and-mortar retailers could become patrons to indie game developers; conceivably, one could imagine branded developer co-ops. Imagine game dev clans and tribes being formed with retail brand patronage.
Why brick-and-mortar retail outlets as opposed to an obvious choice like Valve/Steam? Because brick-and-mortar retailers need it more. They need to fight for survival and find a way to diversify monetization the significant cost of real estate. They need new ways to create customer loyalty that is differentiated and difficult for online retailers to duplicate.
Ideally Suited For
Microsoft and GameStop. While it might seem strange to consider Microsoft—what many would consider the antithesis to independence just a decade or two ago—its recent contributions to open source and commitment to cross-platform interoperability make it a consideration one should dismiss too quickly. Microsoft is ideally positioned to do this given their Microsoft store retail outlets are already designed to accommodate in-store competitions and presentation spaces. In addition to retail, Microsoft’s business and innovation centers create additional space opportunities. Add in Microsoft’s XBOX platform and Azure Services, and you could have a compelling value proposition for gamers and game developers.
GameStop is a dark horse entry here. While it doesn’t have the resources and tech that Microsoft has, it has built a loyal community-based following. There is something familiar and intimate here that might resonate with indie game developers. This could be a radical disruption that creates a new expansion path for GameStop’s business. Similar retail brands in Japan—once the undisputed leader of video game development—could breathe new life into the Japanese market as well. The new powerhouse in online gaming, South Korea is also an obvious market to consider.