One of the best things about living in Boston is being able to attend PAX East each year. As someone who has exhibited, attended, spoken, and volunteered at the show, it has become one of my favorite shows to visit. In 2019, encouraged by several members of the game development community and driven by the lack of research on game developers in general, I interviewed independent game developers to gather sentiment and insights on indie game dev marketing.
Most years, I give a talk at PAX East and, in 2019, myself and three expert panelists - Jen MacLean, Kelli Dunlap, and Rachel Kowert - led a discussion on the ethics of loot boxes. During that talk, it was obvious that we knew - not just assumed, but had proven research on - very little about how our game dev community viewed topics like marketing, monetization, or microtransactions. The State of the Game Industry put out by GDC each year is an excellent resource, but didn’t go into a lot of the sentiment analysis and detailed questions that I thought needed to be asked so we could have more informed discussions.
I plan to continue researching and surveying game developers in the coming months and years to continue building a game development research base. My hope is that surveys like this one will lead to better understanding on topics that are important to our game dev community. At the beginning of each survey, I will summarize the key findings and conclusions, followed by more detailed analysis.
Summary
Forty game studios were interviewed at PAX East 2019. The majority were independent game developers who were bringing premium games to the PC/Mac or console market. A majority said that they were confident in the game industry, believed they could make a living wage, and were optimistic about releasing a financially successful game. In general, they believed that microtransactions, DLC, and expansions were not an important part of the games they were making. Most of them did the marketing themselves, but a surprising number also hired external marketing or PR groups to help them out with sales or shows. Only a third were working with a publisher.
There were a number of exploratory questions asked of developers, including statements around loot boxes, monetization, and items that provide an in-game advantage. The results are difficult to quickly sum up and are heavily biased by the survey’s sample group. Please read the final section for insights on those topics.
Given that studios were chosen from the independent game developers at PAX East, we should be extra clear that the responses only reflect the opinions of studios who chose to exhibit as independent game developers at a major video game convention in the United States. The results should not be applied to game developers as a whole, to AAA game development, to mobile game development, or other areas outside of independent game developers who chose to exhibit at PAX East 2019.
Audience
Respondents were selected from booths present at the 2019 Penny Arcade Expo East, an annual video game convention that is held each year in Boston, MA. While there are no formal estimates of attendance in recent years, attendance has been estimated to be between 80,000 and 100,000 attendees. During the 2019 convention, 366 unique exhibitors attended, with many exhibitors being part of the “indie game” movement. While the indie game definition is widely debated, it is generally understood to mean smaller titles that are funded outside of the traditional publisher-studio relationship, and focus on genres or gameplay that is under-represented in traditional game development.
A total of 40 game studios were surveyed, with respondents being pulled predominantly from independent game studios. Approximately 90% of respondents were development studios representing games they were actively working on, while approximately 10% of respondents were publishers representing games they were supporting or funding. This likely creates a skewed sample, in which the results are biased towards developers who had the means and desire to travel to a show and show off their project. The majority of responses were answered by two or more people, typically a member of the core development team as well as a key member of the business team (CEO, studio head, or business partner). All respondents were surveyed in-person during open hours at the expo hall.
Respondents were selected from among the independent developers who were staffing and running a booth at PAX East, attending as part of the Indie Mega Booth (including the Indie Mini Booth), or attending as part of the PAX Rising section. An effort was made to randomly select respondents from the highlighted areas shown in Table 1, while also taking into account whether the booth staff were currently engaged with attendees. Respondents were interviewed during three of the four days the convention was running.
65% of respondents indicated their studio was an independent studio with no publisher, while 35% indicated they were a studio with a publisher or, in the case of independent game publishers, that they were publishers themselves. The majority (62.5%) indicated that their studio was primarily located in North America, with the next largest areas being Europe (15%) and Australia or New Zealand (10%).
There are some potential biases that should be considered when looking at the survey results:
An effort was made to approach booths when they were relatively uncrowded and the developers were not actively speaking with attendees. It is possible that approaching only booths that were relatively uncrowded may introduce a bias into the results.
In some cases the respondents answered as a group of two or more members of the same team, and in others respondents were near their team members. It is possible that having team members nearby or contributing to the results may bias some of the answers.
Respondents may have been biased by giving the answers in person. Unlike online surveys where responses are completely anonymous, I was present for all responses, and typically other members of the team or attendees were in the area as well.
The sample itself may be significantly biased. Given that studios were chosen from the independent game developers at PAX East, we should give special care to be clear that the responses only reflect the opinions of studios who chose to exhibit as independent game developers at a major video game convention in the United States. The results should not be applied to game developers as a whole, to AAA game development, to mobile game development, or other areas outside of independent game developers who chose to exhibit at PAX East 2019.
Platform Distribution
The most popular distribution platform for the respondent’s last released game was PC/Mac (75%) followed by the Nintendo Switch (39%). When asked what platforms respondents planned to release their upcoming game on, the vast majority (95%) reported PC/Mac, followed by the Nintendo Switch (57%) and Playstation 4 / XBOX One (37%). When discussed with the respondents after the survey, many developers indicated that the ease of development and relative friendliness of the Nintendo Switch and Steam platforms influenced their decision on which platforms to develop for. Despite accounting for over half of all global game industry revenue, developing for mobile (27.5%) was an uncommon option for respondents.
Respondents were asked to rate the statement, “We need to release our games on as many platforms as possible to succeed financially.” Nearly half of respondents (52%) agreed or strongly agreed with the statement, while a minority (32%) disagreed or strongly disagreed. Anecdotal discussions after the survey indicated that those who disagreed did so because they specialized or had seen prior success in a specific platform. 71% of respondents who were neutral or disagreed with the statement developed their last game for PC/Mac, with a minority also developing for Nintendo Switch or Playstation 4.
Marketing and Monetizing Games
Nearly half of respondents (47%) reported doing their own marketing in addition to being core developers of their games. Most developers who chose this option emphasized that they marketed the game as a secondary role in addition to their primary role as a Producer, Designer, or Founder. A minority (22%) indicated that they had an internal marketing team working on their next game, while nearly half of respondents also reported working with an external marketing team or contractor (45%). It was uncommon for respondents to have more than one organization (internal + external marketing team, publisher + internal team, etc.) marketing their game, with an average of 1.3 marketing options chosen per respondent.
When split by publisher / no publisher, independent studios with no publisher reported doing their own marketing internally in addition to being core developers of their games at a higher rate (65%). Independent studios working alongside a publisher either reported having their own internal marketing team (45%) or working alongside their publisher when marketing their next game (40%).
Despite the relative lack of internal marketing support from our respondents, respondents were very optimistic about their chances of selling their next game. When asked, “How pessimistic or optimistic are you on selling the game you are currently developing?,” 70% of respondents indicated that they were somewhat or very optimistic about selling the game they were currently working on. 57% also agreed or strongly agreed with the statement, “I understand what is needed to market and release a financially successful game.” It is possible that respondents’ sentiment was skewed by the environment and audience of the survey, respondents had been exposed to attendees who may have affected their confidence (positively or negatively), and the action of paying for and staffing a booth at a major industry show may have biased exhibitors to those that were more confident of their success.
A hypothesis going into the survey was that most developers would view social media (including game streaming) as one of the most important ways to market their games. If that hypothesis was validated by the results, future surveys could be used to learn more about social media marketing for game developers. When asked to rate the statement, “Social media is the most important way to get the word out about our games,” the majority (64%) agreed or strongly agreed, while only 18% disagreed and none strongly disagreed. Future surveys and research will investigate how this breaks down into specific types of social media, and what channels those who disagree see as more important than social media.
The vast majority of respondents (92%) reported one-time premium sales as very important to the success of the game they were currently developing. A minority (40%) said that expansions or DLC were neutral to very important to the success of the game they were developing, and no developers reported microtransactions as being important to the success of their game. 10% of respondents reported ad views as being neutral to very important to the success of the game they were developing. One area of further research is rank-ordering the sales channels for a respondent’s games. All sales are important to a game developer, and the questions asked in the survey did not provide any insight into the relative importance of channels against each other.
When asked to rate the statement, “(Microtransactions / Expansions or DLC) are critical to the financial success of our games,” responses changed to reflect a moderately more positive view of those models. 17% of respondents were neutral to strongly agreed with microtransactions being critical to the success of their games, while 45% of respondents were neutral to strongly agreed with expansions or DLC being critical to the success of their games.
Sentiment Around DLC, Expansions, Microtransactions and Loot Boxes
Respondents were asked several questions around microtransactions and “loot boxes.” Loot boxes are the generic term for the randomized delivery of in-game items, with most loot boxes placing items into categories like common, uncommon, rare, etc., with each category having a smaller chance of being randomly selected. For example, it may not be uncommon for the rarest individual items to have a 0.00008% (1 in 12,500) chance of coming out of a specific loot box: the item may have a category that is chosen at a 1.2% rate, and that category may have 150 possible items in it, of which the specific item is only one of the options.
Respondents were first asked how important each of the options were to the success of the game they were currently developing. All respondents reported that physical or digital one-time sales (“premium games”) were somewhat or very important to the success of their current game. When asked how important DLC or Expansions were to the success of their current game, 17% reported that they were somewhat or very important, while 22% were neutral and 60% said it was not important to the success of their current game. This number is significantly lower than the number of top selling indie games on Steam that contain DLC or Expansions: 32% of the top 100 selling indie games on Steam had a form of DLC or Expansions added to their base game. A later question asked respondents to rate the statement, “Expansions or DLC are critical to the financial success of our games.” 15% of respondents indicated that Expansions or DLC were critical to the success of their games.
When asked how important microtransactions were to the success of their current game, an overwhelming number of respondents (90%) indicated that they were somewhat or very unimportant. This mirrors the data from the top 100 selling indie games on Steam: very few titles had in-game purchases, loot boxes, or other forms of microtransactions present. When asked to rate a broader statement, “Microtransactions are critical to the financial success of our games,” 15% agreed and 85% were either neutral or disagreed.
Exploratory Questions
Several questions were asked that are intended to inform future research questions. These questions tended to generate thoughtful responses and required more time than the demographic or informational questions in the previous sections. While the responses are interesting, I want to caution that they only touch the surface of complex issues that are actively being discussed in the game development community. There is a lot of context and background going into the responses, which was not captured in the survey, though will be in future surveys.
One statement the respondents were asked to rate was designed to help inform research on the role game developers have in informing or controlling player behavior. Respondents were asked to rate the statement, “It is up to video game players to know whether they have spent too much on video games.” No guidance was given to respondents on whether this meant any of the specific areas of concern (e.g., purchasing loot boxes in video games, potentially allowing children to buy microtransactions, customers making purchases they cannot afford, etc.) Overall, respondents were mixed in their answers, with 42% agreeing, 32% disagreeing, and 25% neutral. A significant weakness in the question was the ambiguity around the words “too much.” In future surveys, this question will be broken down into constituent parts or specific situations to dig into the context or background behind the responses, including helping to define “too much.”
Respondents were asked to rate the statement, “I am optimistic about the video game industry for the next five years.” A majority (65%) agreed to strongly agreed that they were optimistic about the video game industry in the next five years, while only a small minority (10%) disagreed or strongly disagreed. Similar to the questions around marketing, it is possible that respondent’s sentiment was skewed by the environment and audience of the survey.
Another statement asked respondents to rate, “I feel I can make a living wage in the video game industry.” 70% agreed with the statement, while 16% were neutral and only 13% disagreed. This statement was built to help inform research around game developer sentiment, confidence, and overall excitement to be in the game industry. It is difficult to draw any conclusions about the results of this statement because of so many possible biases, including the respondents were at an event with significant sunk costs (booth costs, travel, etc.), which may have biased the results; the respondents, as independent game developers, may only now be entering the game industry as a whole and may be unable to accurately predict their future; and the attendees of the convention may have given hope or improved the respondent’s outlooks on their current projects. Further research is needed to answer how long respondents have been in the industry, whether they are currently making a living wage, and to see how results change based on standard of living or geographic location. Another significant weakness in this question is that respondents may have a very different idea of what a living wage includes; one respondent may believe a living wage provides only for rent and utilities, while another may include mortgage, childcare costs, car payments, etc.
The last two statements touched on in this analysis were, “Purchasing loot boxes is no different from online gambling,” and “It is unacceptable to sell items that provide an in-game advantage to players for real money.” Both statements were at the end of the survey and generated a significant amount of discussion and thought. Similar to the question on video game spending, no guidance was given outside of clarifying the statements (if needed). A significant number of respondents (47%) agreed with the statement that loot boxes were no different from online gambling, while 27% were neutral and 25% disagreed. A majority (70%) of respondents agreed with the statement on selling items that provide an in-game advantage, while 17% were neutral and 12% disagreed. A weakness of both questions is that no effort was made to disentangle moral or ethical objections over business or financial requirements. Anecdotal reports from some game studios indicate developers may feel that loot boxes or “pay-to-win” mechanics are “wrong,” but “required” by their publishers or by the needs of the business. Future surveys or research will look into defining and providing insight into these areas.
Both of the above statements and their responses are also likely biased due to the respondents being independent game developers and exhibiting at PAX East. It is uncommon for independent PC / console game developers to sell DLC or Expansions, and very uncommon to sell IAP or microtransactions. Given that the majority of the respondents were independent developers making premium games for PC or console, it is likely that their responses reflect their target market and experience. Anecdotally, those developers who had also published mobile games said that their responses may change had they been working on a mobile-only title.
Lastly, in my experience as an attendee and exhibitor, PAX East itself rarely hosts mobile game studios with microtransactions and is generally seen as an event for PC and console games. All of the above may mean that the results here would not be replicated across the broader game industry. Further research is needed before any broader conclusions may be drawn.
Next Steps
As Forked Lightning's inaugural survey, the results raise a number of questions that cannot yet be answered. Our next steps are to survey additional respondents and gather existing research to investigate how the responses here differ from or complement what's currently known around game development and marketing / monetization.