At E3, Some Indie Game Developers Are Worried About an Uncertain Cloud Future

The sun beat down on the Los Angeles Convention Center during E3 earlier this month, yet a cloud loomed over the annual video game expo. Consoles, PCs, and handheld gaming hardware have traditionally dominated the convention, but cloud gaming cast a shadow on everything.

Services like Microsoft xCloud and Google Stadia promise gamers access to a library of games for one monthly fee, without the pricey hardware or download times. It’s a cloud streaming future that seems bright for gamers, but darker for the people who develop video games.

In the shadow of Nintendo’s impressive, multi-floor, bright red section of the convention center was the exhibition for IndieCade Festival, one of the largest independent gaming festivals in the world.

IndieCade’s section of the E3 this year featured some 30 booths where some of 2019’s most promising indie games were on display, ahead of its October award ceremony in nearby Santa Monica. It’ll be the event’s 14th anniversary, where judges select 40 of the best indie games from studios around the world. IndieCade is essentially the Sundance Festival of the gaming industry. It’s one of the most densely creative, objectively wonderful parts of E3 and a critical darling. It’s also ground zero for anxiety about what streaming services may do to indie games that rely on the purchase model.

Inverse spoke to 10 people at the IndieCade booth — including game designers, programmers, and marketers. Half of them still expressed concern about how cloud services will affect developers’ livelihoods by devaluing their work despite the exposure and accessibility they guarantee.

"“Well, we’re not making any more money."

“It’s nerve-wracking, because when subscription services have been introduced to most other entertainment industries, indie musicians and moviemakers have been like, ‘Well, we’re not making any more money’,” said Victoria Tran. “I’m not really sure what will happen with indie game subscriptions, but I think [monetization] is going to be based on how long games are played. Would we have to make the game infinitely long?”

Tran is the community developer at Kitfox Games, who was at the IndieCade booth showcasing her team’s latest project, Boyfriend Dungeon. The dungeon crawler will soon go into its beta test phase, and Kitfox hasn’t considered offering it on cloud services. That’s because they could reduce the amount of profit indie studios earn from each title they release, similar to what has happened to the music and film industries.

The Streaming Effect

The effect content streaming has had on the music and film industry are both well-documented and could very well happen to indie game developers. Spotify counts the total number of streams each artist gets and divvies up its revenue accordingly. The company doesn’t disclose the average rate for each play, but CNBC estimates it to be fractions of a penny per stream.

At those rates, artists need to rely heavily on filling venues, selling merch, and VIP packages. Even then, as famed Princeton University economist Alan Krueger notes in his book, Rockonomics, 60 percent of all concert ticket revenue worldwide now goes to the top one percent of performers ranked by revenue in 2017. This has drastically reduced the number of artists who are able to make a living from music alone.

A similar trend has been noted in the indie film industry. Only seven indie films launched on streaming platforms last year earned over $20 million compared to the 11 movies that grossed over $20 million in 2017, according to a Deadline report. The fact that consumers have access to an all-they-can-consume buffet of music and film has quashed the expectation that people need to pay for every song they listen to or every movie they watch.

Streaming services like Netflix and Spotify have hurt the pay-to-own-it market (Blu-ray sales are down but still solid for collectors), and it could very well happen to games next.

The Streaming Effect

Indie video game developers tell Inverse they want assurances that what happened to music and filmmakers in the rise of streaming won’t happen to them, but some say it could be even worse.

John Davis, a Japan-based event specialist who helps developers reach wider audiences, tells Inverse that streaming could hit developers much harder than it did local musicians and arthouse filmmakers.

“Developers see cloud services’ potential for back catalogs of games, but during launch they want their titles to be premium,” he says. “Small artists get cents for every play on Spotify. It’s good for exposure, but not for driving sales.”

“To top it off, musicians can go on tour to make up for that, but developers can’t. It’s a little bit scary.”

Google Stadia tried to calm these fears with its announcement that new games would still need to be individually purchased on the service during its June 6 update. To take that a step further, Stadia chief Phil Harrison said that subscribers will even be able to directly subscribe to their favorite publishers and developers on the service.

But splitting the market into various services could quickly overwhelm consumers. There’s already an endless number of subscription apps that serve people TV, music, deliver groceries, clothing, and even artisanal bacon. There’s also Patreon, a platform for creators to generate their own subscription services. The abundance of subscriptions has even spawned apps to remind people to cut off reoccurring charges, like Trim. It’s easy to see how segmenting the gaming market could lead to the same subscription fatigue.

“Stadia might split the market too much. Just like the TV industry that started with Netflix then turned into Hulu, HBO, Amazon Prime,” Phil Tam, a game designer for Spearhead Games tells Inverse. “We’re basically back in an era where you’re better off paying for cable. Too much splintering won’t be good for developers, either. Only the biggest would come out on top.”

The $60-per-game standard seems to be on its way out. Just like how VHS and DVD purchases (along with pay-per-view) were replaced by all-you-can-eat subscription services, cloud gaming platforms seem to be moving the gaming industry in the same direction. But not everyone is convinced.

But Will Streaming Work for Games?

Dani Sanchez, the game director at Novarama, was at E3 representing Killsquad, a game that he describes as a fusion of Diablo, Left 4 Dead, and League of Legends. The studio was once a Sony subsidiary until it branched out in 2016 and began its work on Killsquad. With 16 years of industry experience, Sanchez is skeptical that cloud gaming will be as earth-shattering as Google has made it out to be.

“I’ve seen a lot of things that people say will change the industry forever, and they’ve never happened. New markets have appeared, but they don’t kill the other ones,” he tells Inverse. “I remember when mobile games arrived everyone said they were going to kill consoles, and that never happened. Those changes resulted in additive platforms, not substitutes. What Stadia is going to do is create new ways to play, not replace existing ones.”

"I remember when mobile games arrived everyone said they were going to kill consoles, and that never happened."

A few of the people interviewed echoed Sanchez’s sentiments, especially those who make arcade games meant to deliver real-time response. Joshua DeBonis, a game designer for BumbleBear Games, tells Inverse that he does the utmost to reduce game latency. Stadia comes with built-in latency since its games are run on Google servers, which then need to be streamed over the internet. That process would make his titles less responsive, and he believes less appealing to gamers.

Developers Inverse spoke with at E3 seem to be banking on a plan that a dedicated audience will continue to generate revenue.

“I think PC — especially the culture — is so strong that there will always be options for us to sell the game at a premium price,” said Jed Dawson, a game designer for Australia-based Affable Games. “Of course, a couple of years down the line, I could be putting my foot completely in my mouth, but that’s just my hot take.”

Cloud Gaming Could Stunt Creativity

Microsoft xCloud — which is working with Sony’s PlayStation — and Google Stadia could force the hand of developers to become more like YouTubers or Twitch streamers. Through the creation of shorter games, more developers could profit from more serialized releases instead of dedicating years to one product.

“I would love to see developers turn into their own personalities instead of relying on their studios,” indie developer Aquma tells Inverse. “There are brands for streams and individual video creators. If developers can crack that nut, it would be hugely beneficial in the future market.”

Aquma, who only wanted to be referred to by his pseudonym, was exhibiting Wrong Box, a 20-minute game he created in collaboration with New York City-based artist Molly Soda. It was a short but sweet, a kitchy call-back to being online in the early 2000s, with nods to MySpace and AIM Messenger.

Wrong Box is his vision of the bite-sized titles that could get Stadia subscribers to play more indie games regularly. But a shift like that could be seen as a fall from grace for many developers.

This logic suggests that game creators could only stay afloat in the cloud gaming era by essentially becoming content farms. Instead of refining every last pixel of a game they love, they’d have to release a new 20-minute game every month to maximize how many hours their games are being played.

It would be like asking David Lynch to pivot to vlogging. It would work for some creators, like Aquma, who pride themselves on concise virtual experiences. But it would restrain countless other creatives, who, when given enough time, can make breathtaking games.

An Uncertain Future — or a New Golden Age for Video Games

If the market shifts so that more game developers are convinced that churning out more “gaming content” will put them on a path to success in the cloud era, an environment may be created where development of the most thoughtful video games is less of a priority. Ultimately, there might be fewer of those intricately crafted epics, relative to the number of games designed to gin up subscribers numbers.

Alliteratively, we also may enter something like a golden age of video gaming, similar to the past twenty years of TV, where there are more amazing video games than there is time in a day, a result of more subscription services popping up, and their need for attractive, addictive titles. As any customer of Hulu, Spotify, Amazon, or Netflix knows, there is a lot of great content. The future could be very bright for indie developers, who will have more platforms on which to share their creations with curious gamers.

One of the most thoughtful games at E3’s IndieCade exhibition, and my personal favorite, was Manifold Garden, a puzzle adventure game that William Chyr has spent six and a half years creating. The game challenges players to traverse a geometric crypt by bending the laws of physics and solving puzzles. The game has been announced for PC and PlayStation 4, but has yet to receive a release date.

"As an indie, I have a little boat … maybe a raft out on the ocean."

Chyr, who has a bachelor’s degree in physics and economics from the University of Chicago, told Inverse that developers will adapt to the market. Like others at IndieCade, and at E3 more broadly, he cannot predict the future of the industry with absolute certainty. Instead, he’s focused on tending to Manifold Garden. The platform on which gamers experience that game is what’s uncertain — and a little exciting, if you’re optimistic about the future of video gaming technology.

“As an indie, I have a little boat … maybe a raft out on the ocean,” Chyr told me. “These larger companies, they’re the winds and the waves, and I’m just trying to not sink and land. I have no idea what’s going to happen.”