Games Are A Difficult Investment Proposition, But Crowdfunding Could Change That | TechCrunch
Ottway Ducard stashed this in games
Stashed in: World of Warcraft
The thing is, the belief about games being hit-driven is somewhat misinformed. When we say “hit-driven,” we often mean a piece of content that grows hot very quickly, but also cools off and (hopefully) leads to a long tail of revenue. The music industry is the classic example of this with its charts and hit parades, one-hit wonders, Gangnam-style sensations and rapid turnaround. In music, the pressure is always on to generate new hits and to remain relevant. The games industry is similar to music and film in that hit games tend to spread quickly. It’s also sometimes true that a hit game can tail off (such as Draw Something) if it proves to have no depth. However where games differ radically from both film and music is in their development and their fan relationships.
Games are developed like software. Iteration and experimentation are vital, as are fairly flexible delivery times (Blizzard is famous for its “done when it’s done” approach to making games). This does not sit well with the fixed production schedules and milestones that mezzanine financing schemes bring and usually results in bad games (hence defeating the whole point of financing them in the first place). However well-iterated games show much more staying power than the vast majority of films or music could ever hope to achieve.
Great games spawn franchises, leading to increased sales for release after release. They commonly show multi-year growth patterns, whether at retail (Borderlands 2 is likely to sell far more than Borderlands) or online. Fans usually find a game type that they love, play the hell out of it, evangelise it and then buy the next one. Loyalty and continuity across multiple years (or even decades) is very important, and (if the game is great) that loyalty can potentially last forever. That’s why Grand Theft Auto can sell 15 million copies every couple of years, Call of Duty sells 20 million units every year, and World of Warcraft, whose salad days are probably gone, retains around 9.1 million subscribers. It’s why most of the geek world is patiently waiting for Half Life 3.