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Opinion: Where Have All The Good PC Casual Games Gone?
Opinion: Where Have All The Good PC Casual Games Gone? Exclusive
June 3, 2010 | By Joel Brodie

June 3, 2010 | By Joel Brodie
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    12 comments
More: Console/PC, Columns, Exclusive



[In this editorial, Gamezebo founder Joel Brodie examines the effects of a vicious price war on PC downloadable casual games, suggesting that the segment is in "dire shape", and may only get worse without major changes.]

Over the past couple of months, it has become painfully clear to me and many of the users at our [digital game review, rating, and community] website, Gamezebo that the quality and quantity of the PC downloadable casual games that we see is dropping. There are less download games being released each week, and of those that are released, many are just not good.

The state of download games is in dire shape. And, unless changes do not happen soon, things will only get worse.

Before I talk about what’s going wrong, let me tell you what is going right in download games.

The answer is, you, the game player.

There are more people playing download casual games than ever before, which is quite a feat during a worldwide recession.

The growth in demand for download games is driven by lower prices, improved broadband speeds, and the fact that the primary audience that loves to play download casual games, Baby Boomers, is the largest demographic in the US right now.

So what’s the problem? While demand is growing (albeit slowly), the supply side is out of whack, moving the market out of equilibrium. Here’s the problem:

- The price of download games has dropped in the past year from an average of $20 to $7 per game. That’s a 65% drop in price, meaning developers need to sell 2.5 more per game to make as much as before. The demand for casual download games is growing, but at a much slower rate to offset the drop in price (my guess is 10 – 15% yearly growth).

- There are less channels for games developers to sell their casual games, both offline and online. Retailers, like Walmart or Target, noticed the price drop online and either dropped their prices or stopped selling casual games altogether. There has been consolidation online. For example, PlayFirst has partnered with Big Fish Games to sell games and Reflexive is closing their Arcade product. Whereas there used to be hundreds of web sites retail for developers to sell their games, now there are only a few.

- While the price per game has dropped, the amount developers earned per game has either stayed the same or in some cases, decreased as margins get squeezed.

It does not take an economics degree to understand the numbers simply do not add up. If developers are making 2/3 less per game and the amount of games sold is not offsetting that drop, the only way for game developers to earn their return on investment is to spend less time and money producing each game.

Whereas a game developer would have been willing to invest $300,000 and 6 months to develop a game in the past, now they can only afford to spend $100,00 and 3 months just to break even. The result is more derivative content (especially among hidden object games), less game play, and poorly tested games with bad English grammar (I had to throw that last one in there).

Moreover, many highly talented game developers are leaving the download space altogether to focus on iPhone and Facebook games. With iPhone, the cost of development is much lower and Apple only takes 30% of the sale. With Facebook, a decent trafficked game can make up to $50,000 – $100,000 per month. Game developers are not moving to the “hot” iPhone and Facebook businesses to make a quick buck; they are leaving Downloads to stay in business.

And that’s a shame, really, because download games are more popular now than ever before. Gamezebo started as an editorial web site devoted to casual download games and even though we have expanded to cover casual games across all platforms, download games remain our top passion. No one wants the download games market to survive and thrive as much as we do.

In a way, the recent drop in quality has given us here at Gamezebo an even greater purpose in our coverage of download games. We understand that game players do not have money to throw away on bad games, and we strive to give our non-biased reviews on games and provide the online tools for our users to share your opinions on whether a game is worth buying or not.

However, we’d prefer to review more good games and give out 5 stars than to rate games with 2 stars or less for being buggy, derivative, too short, or just sucking. And lately, the 2 stars or less have been flying in our Downloads channel.

Fortunately, not all is dire in the world of download games. Companies are starting to re-introduce the concept of higher tiered pricing with Collections and Premium edition games. There are game developers that continue to develop high quality download games (especially those with strong franchises).

New distribution channels and premium services are popping up to offer developers new ways to make money. And, with less competition, this is the perfect opportunity for game developers to jump back into the Downloads business, assuming they can make the math work.

Still, the fundamentals behind the download games market are flawed and we can no longer stay silent. The first step in solving a problem is to admit that a problem exists and for some reason, the entire casual game downloads industry is too scared to speak the truth.

The games need to get better or game players will stop playing. Game developers need to make enough money in order to invest the time and money to create better games as we’ve enjoyed in the past. And yes, game players need to be willing to pay more than $7 to play higher quality games.

I’m not saying it’s possible to get the average price back to $20 per game. There are too many cheap and free games online, on Facebook and the iPhone (that’s a reason why we are covering them more). But, $7 does not work. A desk for $1,000 made by craftsmen is higher in quality than a $200 desk you buy at Walmart made of particle wood. It’s the same with download games.

If the status quo does not change, we’re going to enter a vicious cycle, where lower quality games lead to less game sales, which leads to less developers creating download games, which lead to even less sales, and so on.

And once the big fans of download games get fed up, bored, and stop playing --- well, then that is when it truly is game over.

[Joel Brodie is the President and Founder of Gamezebo, a leading editorial and community web site for casual games across multiple platforms. Gamezebo features reviews, previews, and walkthroughs for games on the PC, Mac, iPhone, and Facebook. Previously, Joel was head of business development at Yahoo! Games.]


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Comments


Sean Parton
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I think you're being overly alarmist and far too excluding, Joel. Throughout much of the the article, you seem to imply that that games on the iPhone (or really, any game downloaded on a platform that isn't the PC) are not "real" downloadable games, and seem to also exclude comparable platforms that have downloadable casual games, such as the Wii. Even GDC doesn't make this insinuation; the main Game Developer Choice Awards had World of Goo (primarily considered a PC game) win "Best Downloadable Game" while mixed in with other console downloadables, and the Canadian GDCA had some iPhone titles among it's nominees as well.



I think what this all boils down to is that yes, a certain portion of the casual market is becoming smaller, and value is driven down due to increased and supply. However, this is likely because there are more options for consumers. I think it can be surmised that the PC downloadable market is shrinking due to the market diversifying the platforms that they utilize, or are perhaps finding better value in different platforms. You even hint at many developers taking note, in that many downloadable PC developers are either moving or going multiplatform onto devices such as the iPhone, but this also includes DSiWare/PSN Minis, and downloadable content for all of the three primary consoles.

Russell Carroll
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Certainly the article comes from a certain viewpoint, but from those who have been so closely involved in the casual games industry, there are a lot of things that ring true in it. The article was also posted over at GameZebo and saw a tremendous amount of discussion (http://www.gamezebo.com/news/2010/06/01/where-have-all-good-games
-gone).



I think Sean, that your statement that "a certain portion of the casual market is becoming smaller, and value is driven down due to increased supply" is dead-on. There are also other factors (it's never one thing), but your statement is definitely true.



The topic bears merit as many, many so-called "casual game developers" have had to abandon the market, decrease their quality to stay in the market, or simply gone out of business. For them there has been a market crisis worthy of alarm as they've had to change their business to stay alive. Joel's statement "The state of download games is in dire shape" is very accurate as well.



It's progress and change for sure, the way all markets do change, but such things often produce casualties, and this article by Joel describes some of why that has happened. For those of us who've been so involved with the PC downloadable casual games industry for the last 10 years or so, it's an often emotional topic that creates lively debate.

Brice Morrison
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This is what Nintendo's Satoru Iwata has called the "Death Spiral". It's normally found in larger studios and corporations, so it's interesting that it has also become a challenge to smaller casual developers. A game sells for less than it is supposed to --> The next project gets a lower budget --> Quality goes down --> The next game sells less than it was supposed to --> Repeat. Different companies have different strategies for breaking out of this; I recommend the original article: http://www.gamasutra.com/php-bin/news_index.php?story=22907



Also, I'm not sure that I buy the "supply and demand" reason for the price drop is accurate. In digital goods and the internet age, there is no such thing as supply. There are an infinite amount of almost every digital product to complete against. But there is a perception of quality. Companies that can convey incredible value to customers will always be able to charge whatever they want for digital goods. This isn't easy, of course, but it is possible.



I think that what you'll see is a few casual game companies who learn how to create perceived high quality games will stick around, still charging $15, $20+, and the rest will struggle to differentiate themselves around the $5 price.

Stephen Chin
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@Brice



In this case, it's not quantity supply, it's the perceived supply of the games available. An overabundance of games means people are accustomed to going elsewhere. The relative painless way to get and play games means people assumptions and demands are higher (you buy a computer or a car, you put in a lot of time and effort to do so - but your demands are also more in line with reality; you impulsely look at one or two reviews of a game to make a decision, your expectations can be almost anywhere) so they're more fickle (and more demanding of more).

Russell Carroll
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@ Brice



Interesting thought on the supply, but I don't think the comment was in regards to a supply/demand curve per say. It was in regards to the number of a product becoming so greatly available the value of any one product decreases. There are so many PC Casual games now available, that the distribution points can't keep up with them, let alone the customer. This leads to a decrease in revenue per new game, and when added to the ever growing catalog of games available, a very large decrease in revenue per game (with an obvious solution being to equally increase the size of the customer base or increase the revenue/customer to make the revenue/game closer to what it used to be).



That speaks to your pricing comment, but it's more complex than you note. The casual game companies don't control the selling price, the distribution point does. If Walmart decided to sell all new and old X360 games at 1/3 the price ($20) and if the developer received a percentage of the sales price instead of having a wholesale price (like retail does), than the developer would simply make less money that would have to be made up by increased sales. However, the developer couldn't just decide to sell the game for $60 anyway, the retailer is the one making that decision, and that is the case with casual game developers in regards to the portals. A new developer, making quality games, has to sell on the portals at the portal price, or create their own customer base (which is more difficult than making a game and uses a different skill set).



I love the death spiral thoughts, they are definitely well in play here.

Benjamin Solheim
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I think the problem is more that casual players can play free games on facebook, and driod/itunes phones that meet or exceed the quality of the download games. I can log into steam and find plenty of cheap to expensive games that are casual friendly so why should I go to some site that reviews the same games it is promoting?



The other thing to think about is that time is major factor in casual players, if the game is on my phone I can play while doing laundry, or other things that take me away from my computer but have downtime.



On last thought is that casual games used to sell well because you play till your bored then you find something else. If the next game is boring sooner you look elsewhere, if it lasts longer you keep looking there. The ratio of diamonds in the rough to just plain rough will decide may people to keep looking there or going elsewhere. So anyone dropping quality is shooting themselves in the foot. Games can be simple to make and thus cheaper but as soon as you drop the fun factor people will remember and stop buying games from you and many will not bother to check if future games are any fun. Look at the Driod market and Itunes apps store both are doing well with casual games.

Tomiko Gun
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The paying casual PC target audience just shifted to Facebook and mobile phones. The market doesn't adapt to the dev, the dev adapts to the market. The crux for casual games now is micro-transaction or volume related sales for phones. You'll get the same amount of money anyway, if not more, the portals that host these casual PC titles get a significantly larger revenue percentage (60%-80%) compared to the 30% that the AppStore and Facebook take.

Jeremy Reaban
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Well, I think same problem as with non-casual gaming - games have become disposable, with no replay value. You play them for a few hours, then uninstall and move onto the next.



And so games like that kind of push out the quality games with replay value out of the market, because what's the point in making those? Since they are priced the same, a game that delivers 100 hours (or infinite) replay actually makes less sense to make than one that gives the standard 4-5 that now seems to be the industry standard.



At least with casual games though, you don't have to hear developers/publishers whine about delivering games with little value and then see players trade 'em in at Gametop after a few days.

Shawn A
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Benjamin, I have no clue what you are talking about and I have a feeling you don't either. Can you please give me an example of a Facebook game that has the same production values of PvsZ or Return to Ravenshurst?



More DL games are being played now than ever. The problem is that at $6.99 it is impossible for developers to make any money from their cut ( which is $1-$2 ). The thought from the price drop from $19.99 to $6.99 is that conversion rates would quadruple. They hardly doubled. Couple this with the fact that the "long tail" has disappeared because of the flood of crap games to fulfill the "Game a Day" mentality. This feeds into this "death spiral" that's been talked about a few times in this thread. If BFG had a tiered pricing structure so that games of high quality could be sold at a higher price point, this wouldn't be a problem. BFG wanted to corner the market and in the process has almost killed it. Yes, there are other portals out there but BFG started this mess and the other portals had to follow suit to remain competitive.

Keith Nemitz
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If I were BigFish and the other casual portals, I would be culling my catalog. It's time for venders to sell only the best games they carry. This is a non-trivial proposition, as it requires careful consideration for each game culled. For example, just culling poor selling games would not be wise. As many good games sell poorly but have a strong, long tail. Keeping the good poor sellers around increases diversity, as they tend to be oddball games. Diversity of games keeps your customers diverse, but diversity is what is lacking, and that is the real death-spiral here.



HOGs are a problem. They've sold so well, they've pushed the other birds out of the nest. Developers mostly make 'safe' products, replicating the games that sell well. Now developers don't know what might sell other than HOGs! Also (repeating Joel here) HOGs dominate the portals such that many customers are leaving to find other kinds of games. Sure, the casual customer base is growing overall. Thank Facebook games for being such lowest common denominators, that some of their fans may be exploring downloadable portals for games. But if only HOGs await them... only a certain number will download games. Portals need to greet new customers with a wealth of gameplay options.





Oh, and they need to raise prices! :-)

Michael Smith
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This article bothers me on several points. Just take the title, for example; it seems there's more great casual games than ever, much of which was spurred by strong digital distribution services. Perhaps using "supply" is your word for getting around the proper term: competition.

Benjamin Quintero
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This is all very interesting. I'm curious to see where it all goes. If the fall of casual games sparks a revival of $20 mid-sized core games again, I'll be in hog heaven. It's not likely, but a man can dream. I just want to play a $20 game that doesn't involve managing some service industry company or hunting for items hidden in plain sight while I solve the mystery of _____. =)


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