Mitigating Risk in Game Development

Introduction

The research process that led us to create our game, Gloobies Lab 2048. Using a process of market research, from google data, to risk management, and concept innovation, into taking action to success.

This article is useful if you are at the point where you can make games, but want to get more serious about running it as a business and not just a freelancer. You have a much better chance of success in the online digital video game industry when you stop seeing game development as a hobby, but treating it as a business! This article focuses on how planning your next game title based on current industry trends and data can help you reduce risk in your business.

About Us

Gamelancer is a young company, started in March 2014, and we are self funded with only 3 individuals from outside the game development industry. One chemical engineer, one civil engineer and one IT jack of all trades. At this point we had done a few small contracts and had about 20+ unpublished game demos on our server, with only one thought, "Can we make smaller games and license them to the HTML5 market in 2015", so we did some research and made 3 prototypes. This article describes the start and research of the successful prototype we took to plan, Gloobies Lab 2048.

Risk Management in General

Figure: Risk Landscape and Management process

I summarised the risk landscape and how you can use a basic process to eliminate risk in the figure above. This information is how we apply it in the engineering field, to any system or process or business structure. Thus it is not specific to the game development industry, but based on general engineering principles. It can get more detailed per business model, but essentially boils down to a simple decision to identify, and assess your risk exposure and then to put decisions, with actions and plans, into place to reduce the final risk of any project or maintained asset. This process is an iterative loop, and can and should be used at multiple stages of any project. For this discussion it was used at the start, to research and plan a project. Risk is mitigated or reduced by focusing on existing markets, and providing better renditions of games in that specific market segment...

Risk management is a broad subject and many models exists to manage it. If I broadly define risks in game development I will compare it to a software development project in a business which wants to make a profit.
Thus, the obvious types of risks that you can identify or try to mitigate is similar to any business and project, namely:

1. Project: Cost / Schedule / Quality.
2. Game Development Business: Existing Market / Discover-ability / Marketing / Popularity / Profit, etc.

The focus of this article is more on point 2, since it is about identifying an existing market, with a popular mechanic, to make sure we have the best chance for profit. At this early stage in our research we assume that the project drivers will always be equal. Once you identify a group of markets, you can compare them on a project per project basis. Since each of the project drivers ultimately can be translated to costs, and this is why smaller mobile games are more popular for small studios with a limited budget, while turn-around time is a huge cost factor.

Apply Risk Management in Game Development Business 

Can you predict the future based on past / current results using Google Trends?

Category: 'Games'

So let us get to the meat of this research, and lets take the portal back in time to October 2014, when I started my research for this game.

Near the end of 2014 I did some research on which mobile games are popular in order to find a good mechanic that could be innovated further. My goal was to make a mobile game with the highest chance of success and with the lowest amount of financial risk. So I pulled some basic readily available data from the awesome free Google Trends tool, see below: (Of course it took a few days to get the correct keywords, which show comparable results. You will need to look broad, depending on your skill set and the market potential, then narrow the search in each market segment. Rely on your tacit knowledge and preferences in the industry, to align to your own passions and resources, as long as you are aware that this may cause you to leave more lucrative markets due to preference. There is no point looking at the multiplayer market, if you or your team do not have the capacity to cater for it!)

 

Figure: Search popularity globally in gaming category.

Figure: Search popularity globally, in gaming category, and rate of change.

From the google trend data above you can see that Flappy Bird dominated the year of 2014, no wonder we saw so many clones of this game.

At this stage I'm not looking for popular games as much as why they are popular in terms of mechanics and game play. The reason I'm looking at other popular games, is to try and reduce my risk, since it is a proven market. Even Blizzard is known to base its success on this methodology.

While everyone was fighting for the podium in the Flappy Bird arena, I looked at what games are in dire need of some innovation and improvement, yet is still popular, and has a good fun core mechanic. Then, using that core mechanics, make a new game with our own twist and improvements. You still need to make a new game, otherwise people will have no reason to leave the current  games in this market! You can also argue players are not leaving the market, but enjoying more content in the same market.

The longer sustained data search trend is desirable; since you have more chance to access the life time value (LTV) of players in this market versus a short hype spike. Thus when you remove Flappy Bird from this trend, it is easier to compare 2048 to other successful games. (see figure below)

Figure: Excluding Flappy Bird. Search popularity globally in gaming category.

Firstly the Clash of Clans data above is what we all should strive for, a long tail with continuous cumulative growth, which equals sustainable revenue - no wonder this game is worth over 0.5 billion dollars! Kudos to them and their huge user acquisition and low churn rates. 

Also you probably notice from the above trends that both the Candy Crush Saga as well as Clash of Clans market data looks so much better than 2048 game, based on my previous statement that a sustained popularity is desirable. Yes you are correct, just remember that these are both very mature markets and very well developed games. You can say they are at the market saturation points. In this scenario I'm actually using them as benchmarks, to show that there is untapped potential in the 2048 game market. If you can figure out how to do with the 2048 mechanic what King did for the match 3 game mechanic, you will be sitting pretty well. The 2048 mechanic (or as my co developers informed me 'Threes' game also) is a much easier and thus lower risk project to tackle for indie game developers. 

Figure: Excluding Flappy Bird. Search popularity globally, in gaming category, and rate of change.

The trends above shows how the 2048 game had most change in search volume % in the gaming category and even at the low end of the tail it is comparable to a huge company's game like Candy Crush by King. Also the successful game is based on the puzzle category of games, which is where I know my company have the skills to easily deliver. This tells me that it has not yet reached market saturation point yet, like the other more mature games.

Now things are starting to align well for us.

We have a puzzle game mechanic which is trending, and it is time for it to be reinvented. Thus there is a market with less competition, since cloners are distracted with other false positive data of Flappy Bird. We are not concerned about competing against cloners in 2048 puzzle mechanic, since we plan to come up with a completely new game for 2048 game fans. (Review: It seems that one developer managed to still innovate in the Flappy arena, with Crossy Road, and emerge the winner in the second quarter of 2015. See figure added below)

Figure: Compare '2048' game with 'Crossy Road' game search popularity.

(Review: From the 2015 data trend above, even the popular Crossy Road is still not overtaking the 2048 game genre - fantastic. I'm I just lucky, since they say nobody can time a market!)

After this we have a few meetings to discuss ideas for a new concept, and the one we choose was a morphing mechanic. Basically we get rid of the boring numbered square tiles, and replace it with cute cuddly friendly creatures whom can combine into higher level characters. Our target market is Mom's and children and the cute creature characters would appeal to both. Another criteria we wanted in a game is to allow short, but frequent sessions during the day, with a low stress level. Thus, we decided no timers! 

We did some quick research online, to make sure nobody else has already done this. Then we made a prototype in HTML5. As we published our prototype demo, someone else did something similar with dragons from eggs, which lead us to conclude two things:

1. It is not as novel as we thought, thus we need to push the envelope and add 'Story Mode' with new puzzles on top of the mechanic. So we decided we will keep innovating, and add more game loops eventually to support our F2P (Free to Play) model.

2. The morph mechanic makes sense as the next step for 2048 numbers game, and thus our choice is validated. I'm sure if you search '2048 evolution or morph' now, there will be a few other developers trying this. Luckily we were first and have stayed one step ahead with new content and improvements to the game, and we decided to make the best game out there! (Review: So now our risk is probably marketing and thus budget, but it is a fair bet this is the same for everyone. If someone else has more money for marketing, then it will be hopefully be easy for us to get an investor or publisher since we already have a proven published game. Something we could not do, with just an idea.)

Validating Research Results

Google's Own Data Review of 2014

Then in early 2015, after we published our HTML5 demo of Gloobies Lab 'Vanilla', and just about to publish to the Google Play store, Google trends released this article on their main page of the year of search in 2014, titled "The world of gaming - Independent developers in the spotlight". Which of course put a smile on my face, but also added some competition!

Quoting google on their own summary of the data:

"Games are now easier to access and build, as independent developers take on the big studios. Seven years in development, Destiny made record sales upon its release, but despite ruling the second half of the year, it was outdone in total searches by Flappy Bird and 2048 – games made by one person in no more than three days."

Figure: Image source and article source: http://www.google.com/trends/2014/story/flappy-bird.html

So let me discuss some of the points this article makes, and the figure above from it...

The data above is beautiful and again validated our own research and efforts! In the rest of the article you will read that large 3D AAA games like 'Destiny' and 'Titanfall' was 3rd and 4th after 2048, which just shows you how the market is shifting away from console games and that you can win with smaller 2D games. Therefore we believe that the mobile platform can reduce our risk, even though a lot of Indies choose to ignore it. (They tend to focus on PC and steam greenlit games, which are typically larger and more complex games.) Mobile is great for independent game developers, since it means shorter turn around times for programming and art. Ultimately this means less risk, and more time to play with innovative new ideas.

It took us a month to build the core engine, test it and publish it on HTLM5 and Android. Then over the next 2 months we did at least 3 iterations and 2 overhauls of the game's mechanics and graphics. Almost all (99%) of the art was redone and updated by us at GAMELANCER. We are very proud of the fact that we developed the Google Play version of Gloobies Lab 2048 in less than 3 months, with a team of only 3 people doing everything!

Google also says:

"We search more for 'games for girls' than we do 'games for kids' or 'games for boys.' Game on, girls."

So I'm happy that we decided on making a game with the target market being "Mom's and kids playing games together". Children (kids) will ask their mom how to play it, and in the process the moms play it more. Also making it child friendly means moms will be more confident to allow their children to play our game. Also puzzle games teach problem solving skills which is great for developing young minds. Removing some advertising categories, and for the time being IAP (In App Purchases) is also part of our strategy to sell the game to parents, and lower the entry level. We cannot afford to have high drop off rates when launching our first game as a small studio. If our product is of good value, we can always monetise later.

Hopefully this method I used, to forecast game development market opportunity, will help you with your next game plan. It is not really rocket science, just effort. Now you know where I placed my bet in 2014, and now in 2015 it needs to pay off. We are already excited about new business contacting us due to this portfolio piece!

The next set of data I'm working with is how to focus our marketing efforts to improve conversion rates, so you may get an article on that in the near future.

Please feel free to leave me your opinion and comments below. I would really like an open discussion on the topic. Most of this article was based on my own opinions and approach to solve problems, and in no means the ultimate authority on the matter.

I would really appreciate it if you support us, and download and play our free game called Gloobies Lab on the Google Play store now.

[UPDATE: Trend for 2015 taking on 13 January 2015]
Trend stayed horizontal, and Candy Crush Saga declined to same natural level as 2048.