Lost Sacred Gems: The State of Indie Games in 2022 and Beyond

In January 2021, Steam welcomed a game called Dyson Sphere Program to the platform. The inaugural game by Chinese developer Youthcat, it was an unassuming yet ambitious entry into the factory management subgenre, pioneered by big indie hits like Factorio and Satisfactory. Less than a year later, Dyson Sphere Program is poised to make a big splash all its own — still in early access and with significant features not yet implemented, the game nevertheless racked up 1.7 million confirmed sales by September 2021.

Suffice it to say, Dyson Sphere Program is a hit — not just by the standards of the burgeoning Chinese indie scene, but by any standard you care to apply. For an indie/retro snob such as myself, it’s very tempting to hold up cases like this as a sign that the Age of the Indie has finally arrived. After all, we’ve seen plenty of small teams produce million-selling games, not to mention that some of those games — the so-called “triple-I” titles — have production values that rival those of the biggest companies around.

Yet the major successes and big media stories tell only part of the tale. For every big hit in the independent space, there are hundreds of titles that didn’t quite make the cut — everything from outright flops to modest successes not significant enough to justify a follow-up. Small development teams have seen plenty of changes in recent years — new platforms, old platforms with new rules, shifting business models, inscrutable algorithms, even cultural shifts — and most of these have not been to their benefit.

The truth here is nuanced, as it usually is. The past five years have been rough ones for small teams, but they were also years full of new opportunities that a few devs were able to exploit. The next five years will be no different. But what will those next few years actually look like, and who stands to benefit? It would be irresponsible not to speculate.

Going by the numbers alone, the indie game market looks positively enormous. The overall market is over a billion dollars, with indie games having generated 5 billion dollars on Steam by 2019. Depending on how one classifies an “indie game,” that’s an average of well over $100,000 per title.

But there are a few significant caveats there. First, on a global scale, a billion dollars isn’t as large a number as it may seem. The entire market was estimated at $137.9 billion as of 2018. At a billion dollars, that means that indie games are less than 1% of the entire market. That’s about 2% of the entire PC gaming market, or about 10% of the revenue generated through game-related video content.

The other caveat is that the word “average” does a lot of heavy lifting there. The indie market is buoyed by a small number of massively successful titles generating millions of dollars each, which doesn’t necessarily reflect the outcome of the average independently produced game. The reality is very feast-or-famine. The median revenue is just $3,947, with just 18% making over $50,000.

This actually might not be a dealbreaker for every developer. The independent game studio doesn’t have a long story, but for much of that brief history there was a sense that these smaller games were stepping stones to something bigger. If one’s goal in designing a game is simply to create a proof-of-concept that can lead to higher reaches in the industry, then the money is beside the point. But with the catalog of high-profile indies growing by the year, there’s no question that many devs wish to remain independent and build a sustainable career outside of the big companies. For these people, the numbers can be daunting.

But as far as the numbers go, money might not be the scariest.

When speaking with developers about the challenges facing them and their peers, one hears a familiar refrain.

I first heard it from Fali Ronda of Pixelatto, the team behind Reventure: “It’s really hard to predict the impact of your game on the market and for small teams without contacts or big budgets it’s really hard to make your game visible.”

I picked up a variation on it from Ryan Lee from Cellar Door, of Rogue Legacy fame: “So if I had to narrow it down to just one single challenge, I would have to say it’s increasing the discoverability and exposure of our game, as the lack of conventions, trade shows, and gaming events make it that much harder to network with press, media, and promotional opportunities; and to increase foot traffic in general to our game(s).”

It’s a familiar problem, not just among video game developers but from anyone working on the outskirts of their chosen industry. If no one knows you’re there, then no one’s going to buy from you. And as much as we might like to think that the internet has leveled the playing field, in many ways it’s made things worse by magnifying the competition.

According to SteamSpy, there were 9,777 games released on Steam in 2020, more than triple the number released five years prior and a 29-fold increase over a ten-year period. 2021 is looking to see at least as many games hit the platform. With literally dozens of games coming out every day, it’s easy to be lost in the shuffle.

This isn’t to say the marketing is the end-all be-all for small teams. However, everything else the counts — community relations, sales and budgeting, even the game itself — is for naught if no one find it in the first place. “If it’s a small team’s first time launching a game; I would advise them to have had the marketing & promotion of the game in mind from the start of development of the game,” says Lee. “Marketing & Promotion should always be considered throughout all the phases of game development, as it could be as simple as defining your target market in regards to age ratings.”

So what are those indie devs to do? Fortunately, they have a few very promising opportunities.

Mega Crit’s Slay the Spire is an interesting case study. Today, the game is already considered very influential, with many other deck-building games following in its wake. However, the game had a pretty dire beginning, moving only about 2,200 copies in the first two weeks of early access.

What tipped the scales, and turned the game into a hit, was an appearance on a Chinese livestream. “The global market is huge and increasingly important!” says Mega Crit developer Anthony Giovannetti. “Developers that ignore the potential of China do so to their own detriment. If you localize your game in only one additional language (foolish though that would be), make sure it is Chinese.”

While this is yet another point in my ongoing case about the importance of China to the industry, it’s also a reminder of how the current media environment functions. Community relations are important to everyone in entertainment from musicians to authors to journalists, but video game developers have an especially close relationship with content creators. The AAA companies have entire teams to manage these relationships, but for smaller developers — who likely lack the resources for a conventional marketing push — these connections are life and death. “Embracing content creators is only going to help you as a developer if you do it right,” says Giovannetti. “Create stream friendly games!”

There’s no question that many devs are taking that advice. Pixelatto’s Reventure is a good example of a game designed with livestreams in mind — it features special features when run in “streamer mode,” even allowing the chat to call the shots in the game.

Even here, though, there are obstacles at play, not the least of which is catching the attention of those content creators. Mega Crit distributed keys prior to the launch of Slay the Spire, but they received no responses. Why? Perhaps the game was too unorthodox; perhaps the content creators wanted higher-profile games; perhaps it was just bad luck and all the emails were ignored.

It’s enough to make some devs look for other ways around the ever-growing Steam congestion.

In 2008, Microsoft ran the “Summer of Arcade” promotion for their Xbox Live Arcade (XBLA) service. XBLA had featured small indie games since its launch alongside the 360, but for the Summer of Arcade, Microsoft opted to specifically promote three of them: Geometry Wars 2, Castle Crashers and Braid. The promotion paid off in a big way for those titles: Castle Crashers moved 2.6 million units just on XBLA and would go on to sell a whopping 20 million copies across all platforms, while Braid became a critic’s darling and an object of obsession with the games-as-art crowd.

Perhaps the biggest outcome of the Summer of Arcade (as well as XBLA more generally) is the reputation it gave to Microsoft. Ever since then, the Xbox family has been seen as one that’s friendly to small developers, and that reputation has only grown.

I’ve been exclusively talking about Steam throughout this article for a reason. The PC is home turf for indie developers, and Steam is the king of PC. But with Steam becoming ever more crowded, some developers are looking to new terrain. Why wouldn’t they? The days of small companies having to beg, borrow or steal a development kit are behind us, or so it seems. Some devs who struggle on Steam have found success on the consoles.

These days, it’s Nintendo who’s seen as the friend of indies, with the Switch serving as something of a promised land. There are plenty of success stories to go, whether it’s Shovel Knight selling 110k copies in its first month on Switch or SteamWorld Dig 2 and Wonder Boy: The Dragon’s Trap moving more units on Switch than on all other platforms combined.

Of course, if it were easy to get a place on the consoles, they might not be so promising. The biggest advantage these companies offer over Steam is that they are selective, meaning that there’s less internal competition and more visibility. Even leaving aside the technical issue of porting the game — a big hurdle for many small teams — there’s the matter of catching the notice of such a big company. Many of the indie titles that succeeded on Switch were high-profile games that had received ample press coverage, often from companies with a history of working with Nintendo.

“Major consoles are massive corporations, where at the end of the day, market share and return-on-investment is something they’re all trying to achieve for all their shareholders and stakeholders,” says Lee. “There’s nothing wrong with this, but it appears that the major consoles have taken notice that having a) an extensive library of games available on their console; and b) Having notable/popular indie titles available on their platforms, have both been increasing their market share within the console/platform competition.”

In short, the best way to catch the attention of the consoles is to have a high profile to begin with. For most devs, that means focusing on PC in the short term, but preparing to go multi-platform in the long term.

Let’s revisit the money issue for a moment, because there’s a downright insidious obstacle that, I think, will become even more significant than visibility over the coming years.

Price has always been a sticking point for small teams. There’s a wider range of price points for video games than most other media, and while we all generally know what a AAA game should cost, it’s more difficult when it comes to indies. The result has been generations of games that are probably underpriced.

Per SteamSpy, the median price of a game released on Steam in 2021 is $4.99. From a consumer standpoint, that’s a strong case for the PC — I certainly love that I can buy a full game for less than the price of a cheese pizza. From a developer standpoint, it makes less sense. There’s little evidence to suggest that pricing a game this low increases sales, and it may actually do the opposite. But it has created something of a race to the bottom, and that’s before factoring in 90% off sales, $1 bundles and free downloads. There have been people warning for years that these practices run the risk of devaluing smaller games.

But in the end, this isn’t the main problem. The bigger issue is the major shift in the economics of video games that’s currently impacting everyone.

It’s no secret that the industry has been shifting over to a more service-oriented model for years now. Whatever you may think of it, the live service model isn’t going anywhere, not with free-to-play and monetized premium games making up an ever larger proportion of industry revenue. Even more conventional titles are adoption live service-like features such as regular content updates, the better to win over uncertain consumers and keep content creators interested.

How does this affect small teams? In some cases, it may actually more of an opportunity than an obstacle. Some of the biggest earners in the indie space are niche, F2P or budget-priced MMORPGs, which are well suited to a live service model and can generate large profits from a relatively small player base. Those more conventional titles have adapted, too — games like Hollow Knight and Shovel Knight have seen numerous free updates in the mold of a live service game.

Of course, those are high-profile titles with the money necessary to keep developing the game after the initial hype. What this will mean for new teams — or, for that matter, consumers — awaits to be seen.

Making predictions is a fool’s errand. It’s one thing to draw a projection from existing trends, but one always takes a risk going beyond that. Then again, it is almost a new year, and what’s a new year for if not taking risks?

So here’s what I see coming in the next five years:

1. As more media companies move into the gaming space, there will be an increasing need for games to fill out streaming and download libraries. Many small developers will attempt to attract the attention of these companies by maximizing short-term sales and visibility, such as by offering their games at rock-bottom prices or for free. However, the profit to be gained by working with these companies will be insignificant for the foreseeable future.
2. It will become harder and harder for indie developers to make inroads with large content creators, who will be ever more tightly connected with the industry. This will increase the importance of smaller creators, including those working in narrow niches and in non-English markets, particularly Chinese, Korean and Spanish. Eventually, a loose network (or networks) of developers and creators will form, and working with this network will be key for new developers.
3. A new type of marketing service will arise catering to independent video game developers, particularly targeting the larger and more storied studios as they begin to compete with AAA companies. These marketing firms will utilize a combination of more conventional tactics and more unorthodox measures, such as paying for cross-promotion in non-game spaces. Unfortunately, most of these companies will prove to be incompetent or even outright fraudulent, leading to some minor scandals.
4. Increasingly, AAA companies will spin off teams into quasi-independent studios as they continue to experiment with smaller, less labor-intensive games that can be produced quickly at a predictable profit. This experiment will also include an acceleration in these large companies buying out smaller dev teams, with the most desirable teams being those producing games that have proven console appeal, such as platformers and arcade-style games.
5. Live service-like features will become more and more common in indie games. This will include a greater proportion of titles released in early access, “road maps” with regular scheduled updates and integrated social media features. Devs will initially resist microtransactions, but after a small number of major financial successes, an increasing share of companies will begin to add cash shops and low-cost DLC. Monetized features with random mechanics will remain taboo for all but a handful of teams.
6. The indie scene will produce yet another new genre / subgenre — a reimagining of a traditional genre with features made for the current media environment. Most likely, this will develop among studios in regions such as mainland Asia, Russia and Eastern Europe. The first few teams to jump into this genre will be well-placed to clear a million units sold, at least before everyone else jumps on the bandwagon and gluts the market. Yes, I am essentially predicting that something that already happened will happen again — and again, and again. Call it the safest bet on this list.