PinkuBentoBox

As some of you are probably aware, the expected production cost for a best-selling game in the next few years is expected to rise to at least $20 million US dollars. This is predicted to be the death knell for a lot of small developers who lack the agility to adapt to changing circumstances. One such possible change is the whole idea of Episodic Content.

Microsoft with the X360 material are really the ones who’ve brought this idea out into the open. They’ve been pimping the new features of Xbox Live for X360, one of the most significant being their new ‘Marketplace’ idea. The idea here is that there would be an area of Xbox Live devoted to downloadable pay content, such as small games made by smaller developers, allowing them to save on all the production costs and still get their game to the public. One touted application here is that of episodic downloadable content, where every few weeks/months, the developer would release a new installment into their story.

How viable is this idea, really? At face value, it seems like an excellent idea - imagine starting out an RPG franchise with a short, 10-hour game, then say every 6-8 weeks getting the option to download a new 4-5-hour installment (of course, for an extra fee).

The idea isn’t really that new. Bioware tried it out with Neverwinter Nights, but they weren’t as successful as they could have been, likely because their installments were too little, too late. The attraction here is that the X360 is technically closed hardware. Downloadable content would be a lot harder to pirate, and the X360’s been designed from the ground up to make this sort of thing possible.

What it comes down to is price. I’m in no way claiming to be an expert on the economics of game development, but I can do some maths based off some assumptions. The first assumption we’d need to make would be the style of game. For an episodic system to work, you’re going to need to set up characters, a game world and basically build a reasonably deep franchise. You’re going to want to have a lot of flexibility with your characters and your game setting, but you’re also going to want to steer away from being generic. Additionally, even though it’s downloadable, you’ll need eye candy. Finally, because it’s got to be downloadable, you’ve got to make it reasonably small.

Games are very rarely tailored to be quickly and easily extensible. When you encounter downloadable bonuses, they’re almost invariably tacked onto the main deal. What’s being proposed here is that the entire thing would need to be modular. Each ‘episode’ of the game would need to be self-contained enough that someone could download and play them out of order. It will need to be flexible, but not too much. If you make the plot too dynamic, then it becomes a nightmare. If episode 1 diverges into two paths, then you have two possible branches to deal with in the second one. If that also diverges, then you may have 3 or more for the episode which follows and so on. In other words, a large degree of linearity will be almost a given. As such, you’re going to need to offset this drawback with play time, otherwise the customer will feel cheated.

The focus on having interesting characters and a setting with a decent level of depth leads me to assume that the ideal genre here would be the RPG. It’s also most likely to be the genre to take a hit from increasing costs. RPGs rely on story, not graphics (Final Fantasy is an exception) so you’d expect that it would be quite acceptable to not have the latest cutting-edge graphics. This does limit you to the RPG market however, and that market isn’t as big as others. It would depend greatly on the style of RPG.

Anyway, let’s say for example that we’re making an RPG. The first episode is going to be the biggest, and you’d expect that further installments would be the same length at the maximum. The first episode would need to come bundled with the game itself - note that I’m assuming that the game would just be an engine plus a collection of global sounds, graphics etc. Each episode would then be a collection of scripts (on-screen text, camera movement and orientation, model data, movements etc) plus any episode-specific models and sounds. This means that the bulk of the initial outlay will be spent on making the actual game engine. This would be a good area to use an exisiting engine for, but because this is a console, engines aren’t something people have available in the same way as they do on PC. Once the game itself is ready, creating an episode would be reasonably simple. I’d expect that a decent-sized team (maybe as few as 4-6) would have no problems. This is different to making a sequel every few months, where you need to somehow make each game better than the last in some way. Of course the downside here is that the gameplay itself would stay static, which puts the onus on the developer to actually make things interesting. Or to include gameplay patches, but that would cause major headaches unless you force the episodes to be downloaded in order.

So, in the end it comes down to price. What’s being proposed here, in order to be successful, will need a reasonable initial outlay and on top of that will need to actually get the sales.

Let’s do some maths. If we assume an (extremely conservative) initial outlay for the game and first episode of $1,000,000 USD, to break even we would need to sell

- 66,667 units @ $15 profit each
- 50,000 units @ $20 profit each
- 40,000 units @ $25 profit each

50,000 units is not that many, but it’s also not an insignificant number. Also note that I mention ‘profit’ - I’m assuming that listing stuff on this Marketplace won’t be free, and am assuming $5 on top to cover costs. The upside to a system like this is that the developer skips out the publisher completely, and takes the profit themselves. However, my assumption of $1 million given what’s going to be needed to make the game successful is going to be a pretty conservative outlay, you’d probably end up needing more. In other words, this is not going to be something which a small developer is going to be able to pull off unless the games are incredibly simple or they manage to get backing from a larger publisher or investor, and if that was the case then they’d probably not be interested in going this route anyway.

Now, let’s say that the game is successful. Producing extra episodes and possibly putting out the odd bug fix will take a hell of a lot less than the original game, though probably not quite as little as might be thought, as there’s still a significant amount of work that would be necessary, plus the reliance on characters would necessitate at least some spoken dialogue and you’re probably going to need new art resources. Let’s say that a new episode costs to produce a conservative estimate of $200,000 USD. Additionally, let’s say we turned a profit from the first game, and sold 80,000 copies. Of them, let’s assume we get half as repeat customers - 40,000.

- 40,000 units @ $5 profit each = $200,000 (break even)
- 40,000 units @ $8 profit each = $320,000 ($120,000 profit)
- 40,000 units @ $10 profit each = $400,000 ($200,000 profit)

What I have here are quick figured based off wild assumptions. Really, it would need a great deal of market research to see if it was economically viable. Also, it would have to be done once the X360 was actually mature, and it hinges off that console being successful. Most importantly, it relies on there being tens of thousands of people who are online and are in your target market, have the money to pay for your game and the capability to get it. It might be that an alternative DRM-style system on the PC might work better for the idea, for example this would be something which a system like Steam would be suited to. Either way, it is an interesting concept.