Business, Games

Calculating the Game Engine Market Size – Determine the Market Size for Game Engine Software

U-Boat Diesel Engine

This question on Quora “How do I determine the consumer market size for game engine software?” peaked my interest. Here’s my reply:

Determine the game engine market size


Before we start estimating the market size for game engines, let’s decide exactly what we want to find out – is it the VALUE game engines generate, or the REVENUE?

REVENUE is the about of money spent on game engines, VALUE is how much value, in dollar-terms, game engines create. VALUE is the REVENUE potential for the game engine industry. (Note: it is possible for REVENUE to exceed VALUE if the value chain around the industry has the capacity for it.) REVENUE is determined by how much of that value is captured by game engine companies today.

For example, you hire a personal assistant to help you draft an email. You pay the assistant $25 for drafting the email, which would have taken you half an hour if you were to write it yourself during your work day. If you make $120 per hour during work hours, the personal assistant has saved you half an hour – which has the value of $120×0.5hr=$60 (VALUE generated by assistant). However you only paid the assistant $25 for the work (REVENUE).

So in this example, for the “email drafting market by this PA” is:

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Three Stages of Playing Zynga’s “Running with Friends”

Running of the bulls
Stage One: No, thank you.

My first thought when learning about the new iOS game “Running with Friends” from Zynga:

“Another endless running game, really?”

Running games on mobile are popular; Canabalt, Temple Run, Mirror’s Edge are great examples of the genre (we even prototyped one ourselves in 2011). The basic premise of an endless running game is simple. You run sideways or forward continuously, and avoid obstacles by tapping and swiping to jump and turn. The game is over when you run into an obstacle, and it gradually gets harder with increasing speed. The goal is to survive as long as possible and collect as many shiny objects as possible.

A lots of games have come out on mobile platforms to capture the value from this popular genre. Most add minor tweaks to the core gameplay with new skins on top. I rarely find them better than the originals.

Stage Two: Why can’t I stop playing?

But Running with Friends had been prominently featured on the App Store and I couldn’t resist giving it a try. (Yes, the marketing power of an App Store feature)

I was hooked. What it does really well is creating a sense of in-the-moment accomplishment. The narrow escapes. You’re still tapping to jump over various things and swiping to turn and move, but the arrangement and placement of obstacles (especially the moving ones) and collectibles allows you to FEEL more skillful at the game. You might think you were simply moving left to collect more stars, but you also just dodged an incoming motorcycle right before it hit you.

Avoiding obstacles is only the start. Once I discovered that destroying obstacles and jumping on bulls gives you more stars, the game got even more interesting. Now I’m no longer avoiding other runners and bulls, I’m looking for them to take them down! A crate is in my way? Now I have to decide if avoiding it and collecting stars in the lane to my left will give me more stars, or if I’d get more stars by sliding into it.

Then there are the combos where the clever arrangement of moving bulls allows me to jump from one to the other and create a combo. Again, a great sense of accomplishment when I pull one off. The items are where you spend your virtual coins (gems). Running with Friends is a Free-2-play game and the coin economy is key to monetization. Monetization discussion aside, the way items work in the game actually provides a huge incentive for players to try different strategies in the game – the items monetizes the game while keeping the game fresh.

Of course being a “with friends” game, there’s the social aspect of competing with others, too. The part I like the most is seeing other players’ “ghost avatars” when you are running – giving the game a real sense of competition in an otherwise pretty solitary experience.

Stage Three: Ok I am done with this.

After two weeks of daily Running with Friends, I lost interest. I opened up the game this morning, finished the remaining rounds that were waiting for me, and decided to uninstall the game, which was surprising to me (and my wife) since I had been playing it quite a bit.

It’s still a fun game to play, but it stopped offering anything new or interesting to me. I felt like I’d seen 90% of the game, and getting a higher score is never motivating enough for me to keep playing a game. Playing it started to feel repetitive, like jogging but without the physical and mental benefits.

Here lies a problem I find in current endless running games – sooner or later they all run out of steam. Could an endless running game, especially one that focuses on playing with others, be more like Chess, with simple rules but expansive moves? I’m sure someone will come up with one that does that. But until then, I am hanging up my sneakers.

Games, Media

Time to Get Rid of “Gamers”

Everyone games. From Wii Sports to Scrabble to Temple Run to Draw Something to Clash of Clans, games are being played by more people than ever.

Yet we are still stuck with the term “gamers”.

We don't call people going to the movies “filmers”, We don't call people listening to music “sounders”, and we don't call people reading books “bookers”. Why do we call people playing games “gamers”?

It might have made sense to use a term to refer to a small group of people that played games 30 years ago. But when's the last time you’ve spoken to someone who's never ever played?

Everyone games. It's time to stop labeling people and start recognizing it as an activity. Stop asking people if they play games, ask them what their favorite games are.

And if they don't have an answer, you've found an underserved audience. Go make games for them and win their hearts.


Business, Games

Stop Trying to Make an Angry Birds. Build a Rovio

Jaakko Iisalo, Senior Game Designer at Rovio Mobile

You see Angry Birds generating millions of downloads, becoming an international sensation out of nowhere. You say to yourself, heck, I can make that too. So off you go, building the next physics based puzzle game with cutesy animal characters. Three months after the release, you realize your game is not going to be the next Angry Birds. You run out of steam and capital and close up shop.

“What went wrong?” you ask. “I did everything right, followed exactly how Rovio built Angry Birds.”

Except Rovio didn’t set out to build an Angry Birds. Rovio built out their team and talent in the mobile game space several years before they had Angry Birds.

When you try to build an Angry Birds, you set short term goals, take short-cuts, and dream of a quick payout.

It’s a great plan to make a lot of money quickly when it works. But for the majority of us, it won’t work out that way. You won’t have downloads in the millions, maybe not even thousands. The market will crush you like an angry tide over novice surfers.

Build a Rovio. Have a long term goal. Have a vision. Set a direction and build out a team you can continue working with – internally and externally. Counting on one game to make it big, you’ll only have one shot. Counting on a group of talents, you have a lifetime of opportunities.


Business, Games

The Opportunists and the Craftsmen

Graffiti Artists at Work 1

I had an anger inside, much like Nick in the sitcom New Girl with a persistent, almost comical, fire burning internally.

It took me some time to realize what I was angry about – an anger stemmed from the sharp contrast I’ve observed between the Opportunists and the Craftsmen.

I operate in two related yet different worlds – the passionate, enthusiastic intellectual developer community, and the financially motivated fast-talking business world. Each group has its own sub-groups and individualities, and some developers are very business-savvy while some business people are very product focused. But if you pick one person from each group and put them in a room, it wouldn’t take you half a second to know which world they belong. In the developer community, people talk about technology, tools, interaction and experience design. In the business community, people talk about money, markets, and opportunities.

When you get people from both worlds working seamlessly together, it’s a wonderful sight. The craftsman-like developers work their magic in creating the best products the world has yet to see, while the businessmen find the markets and convince the world to get behind the ideas. It’s the pairing of Steve Jobs + Steve Wozniak, Masaru Ibuka + Akio Morita. It has made their companies a fortune, and the consumers satisfied.

The matching of the best craftsmen and the best businessmen doesn’t happen often. The matching of profit-seeking Opportunists and the perception of opportunity however, is plenty. With every new platform and marketplace, a new wave of marketers comes in for the gold rush from eBay, mobile apps, eBooks, Facebook apps …etc., often armed with cheap products and knockoffs flooding the market.

Some of them make a fortune from it by exploiting the inefficiencies in the marketplace and the labor market. There is demand for cheap alternatives to LV handbags, Grand Theft Autos, Angry Birds, and a skilled Opportunist can extract value by hiring the cheapest labor and creating low-quality products to serve the low end of market.

There is value in that. This is why we have dollar stores and fast food chains. Low barriers to entry commoditizes the market. This has been happening in game development, especially on mobile app stores, in the past few years. And just as you wouldn’t hire a Michelin 3-star chief to manage the kitchen at a McDonald’s, to make more of the same games and apps, you create an assembly line for development and hire cheap.

“I see developers as commodities.” said one marketer I met recently. I will be the first to admit I am biased towards the creatives and developers, but the change brought upon us from globalization cannot be ignored. The problem is; it pains me to see clones and copies in the marketplace, most of them much worse than the games and apps they try to clone in the first place. When you see developers and the products you are creating as commodities, you create crap that the world doesn’t need.

And yet, they are making a killing. A marketer showed me his latest game – a terrible clone of a game on the top chart but with added ads and IAP spam. It’s a game that I would be embarrassed to show fellow game developer friends. However, he is making a living creating these games, while many game developers that are creating new and unique games couldn’t even buy coffee with the amount of money they make from their games.

The hollowing out of the middle-class means we are going to see a lot more rich people and a lot more poor people, and not many in-between. This is the force behind Citigroup’s Hourglass theory, where investors focus on serving the super rich and the super poor.

Is The Middle Class Dying


Look at the three lines at the bottom – the majority of people (gamers) are poorer than they were a decade ago! Then of course we are going to see the rise of the equivalent of “Dollar Stores” of games. Cheap and uninspiring, games you play once and regret the minutes spent.

So is it time to put away our loved SDKs and Wacom’s?

Quite the opposite I’d say. More than ever, now it’s the time to go all-in. The Opportunists make their fortunes finding the best opportunities. The Craftsmen will then have to make their fortunes perfecting their crafts.

Go back to the chart above and look at the line at the top. Pay attention to these folks – they are hungry for quality content. In fact, they are hungry for the absolute best in the world. When is the last time you saw a millionaire buying paintings at a swap meet? No, they are at Sotheby’s, competing with each other to be the one who pays the most to the craftsmen.

Sotheby's auctioneer Adrian Biddell

“But video games isn’t art” some might say. That’s besides the point. Games HAS to be art so it can be both Takashi Murakami and Toys”R”Us.

This is where I calmed down from my anger. The Opportunists making cheap knockoffs isn’t wrong. They are merely doing their job. What about the struggling developers? Keep your heads down and keep pumping out unique ideas. No one can copy what’s inside your creative mind. And if you are not doing that, you are making commodities that didn’t get made fast enough nor cheap enough.

Games has to be art, and it only becomes art when the Craftsmen perfect the craft.

Games, Life, Unity3D

Community, Happiness, and The Selfish Reason to Start the Unity3D User Group

A little more than a year ago, I started the Unity3D User Group in Seattle (link). And I must first admit that the reason I started the group was rather selfish. 

Seattle Unity3D User Group  Seattle WA  Meetup

Let me start the story from the very beginning. After I left Sony and started Studio Pepwuper in early 2010, I soon realized a big problem I hadn’t considered before making the leap – that I was no longer in a herd.

I was working alone for 99% of the time – just me and the trusted laptop. It never bothered me that I wasn’t working with anyone else. I wanted to do everything myself and learn the ins-and-outs of every aspect of making an iPhone game and building a business around making games. I was excited, focused, single-minded. 

Than I hit a wall. About three months in, I became really grumpy. Work started feel tiresome. I was still psyched about the game and the learning and the future, but it was getting harder and harder for me to go on when I sat down on my desk facing the screen.

I felt tired, and I couldn’t figure out why as I was still enjoying the work. Until one day Laura said to me “you talk about the birds in the garden an awful lot” – I didn’t have a consistent social group, and the birds became my closes colleagues because I often looked into the garden from the desk I worked at. 

I was lonely at work. I didn’t interact with people who were working with the same tools, who spoke the same language, who were going through the same challenges and obstacles. I had been active in online forums and chatroom for game developer (and got to know some really talented developers). But I didn’t have any face-to-face interaction with humans. I didn’t have a community.

And having a community, I later learned (from this documentary), is a key ingredient to Happiness. Humans are social animals. We hunt in groups. We get energy from each other. We seek comradeship. And the long stretch of not having company drained my energy.

So when we moved to Seattle, one of the first things I did was looking for a group of people who were in my shoes. I started the group to find people with similar aspirations and interests, people who I can talk about Unity and game development with, ask questions to, so that I don’t have to feel so alone on this journey.

It’s been a wonderful year with the group, and I appreciate everyone who shows up at the gatherings (especially when the weather isn’t cooperating).

I always come away happy and inspired after each event. For those of us who work with technology and computers all day, we tend to forget the human side of the equation. But for your own happiness (and the sanity of those around you), don’t ignore our innate desire of belonging to a social group and Find Your Herd! 

p.s. Game development communities in Seattle:

Seattle Unity3D User Group


Games, Life

What is Indie?

“What is indie?” the younger boy asked.

“Indie means you have to work harder.” the older brother answered.

Arcade Boat 2011

I watched a Japanese film called I Wish in July. It’s a story about two little brothers trying to re-unite their separated parents – an uplifting film that made me smile.

In the film, the dad of the two kids was a singer/guitarist in a small band that had just published an indie album. The boys didn’t really understand the meaning of indie, and had the conversation quoted above. 

We place romantic connotations to the world indie. We proudly call Studio Pepwuper an indie game studio, participate in the local indie community in Seattle, and pre-ordered Indie Game: The Movie months in advance. 

But what is indie? 

It’s hard to create a definition that everyone can agree on to determine who is indie and who is not. Can we define it with financial structure – studios with corporate financiers (publishers, investors) do not apply? We’d be excluding some of the so-called best indie studios this way. Is it determined by the size of the company? The location? The age? Is it how the developers define their lifestyles? No matter how we try to define it, we can find examples of brilliant indie studios that sit right outside of our definition. 

A universally agreed definition of indie somehow seems too mainstream or corporate or un-indie-like. It lacks the independent thinking the indies adore. 

In fact, independent thinking is the only common ground for everyone who considers themselves indies. The indie spirit is to be different, to embrace the creative freedom of being independent from restrains and restrictions and expectations and deadlines and milestones and hierarchies and corporate politics…etc

Then, is the indie spirit stemmed from… the escape of responsibilities? 

Quite the opposite. 

Being indie doesn’t mean we are free from responsibilities. Being indie means we are 100% responsible for everything – every decision and mistake we make. There is no one else to blame.

We can no longer blame corporate politics for project delays. We can no longer blame marketing department for interfering with production. We can no longer blame financiers for shifting their focus to the next cash cow. Because, well, we are the politics and the marketing and the financiers ourselves. If anything isn’t going the way we’d planned, we have only ourselves to blame. 

True independence comes from 100% responsibility. I read that from somewhere a few years ago right before I started the studio, and I jotted it down and put it on the About page.

Our responsibilities define us as indies.

“Indie means you have to work harder.” The little boy in the film is right after all.