Mobile has become an indie-hostile market

From the advent of what we might consider modern game consoles in the 1980s through to the point when standard budgets for individual games topped $10 million took around 25 years. Budgets spiked significantly when the PlayStation shifted the industry from 2D to 3D, but that merely drove them from six to seven figures; it wasn't until the last generation, with Xbox 360 and PS3, that $10 million became the baseline for developing a AAA game.

From the advent of modern smartphones, in mid-2007, less than a decade has passed; so when Kabam CEO Kevin Chou talks about budgets of over $10 million for mobile games, and easily twice that when launch marketing costs are taken into account, it's a sign of how quickly the world has accelerated.

Only a few years ago, mobile was the platform recommended to anyone starting out in game development; it was a new, exciting and fertile land waiting to be discovered by anyone with a smartphone, a copy of Xcode and a flash of genius. The very lure of mobile was that it was fast, it was cheap and it had no gatekeepers; you could prototype an idea, try it out in the marketplace, and either discard it or iterate upon it in a matter of weeks or months, even with a tiny indie team.

It would be wrong to imply that there's no room in the mobile space for small teams and indies any more - an inspired game and a bolt of astonishing luck could still create a cultural phenomenon and a smash hit for something developed on a shoestring budget. Short of winning the development lottery in this way, though, it's pretty clear that the big opportunities for smaller developers on mobile aren't just shrinking; they're actually gone entirely.

"Mobile games have become an enormous business, but most of the activity in the sector is no longer focused on game development"

What Chou is saying merely reiterates what's been clear to those watching the industry carefully for the past few years. Mobile games have become an enormous business, but most of the activity in the sector is no longer focused on game development, per se; it's an incredibly marketing led business. The games that dominate mobile in 2016 are, with the notable exception of Pokemon Go, the same games that dominated 2015 and 2014. They've been updated somewhat and are constantly tweaking their formulas based on the data fed back from the playerbase, but the real efforts that drive consistent chart-toppers like Clash of Clans or Candy Crush Saga are marketing led - and very, very expensive marketing at that.

Indeed, while Chou's comments on development budgets may seem intimidating to an indie creator, they're the part of his message that deserves to be taken with a pinch of salt. Sure, moving to 3D has boosted development costs in mobile, but high quality 3D is not a hard and fast requirement for a successful game - and his claim that mobile games will be running with a graphical quality comparable to today's home console titles within two years is pure fantasy (and not even desirable, were it possible; any game attempting such graphical quality will crucify its own retention statistics by being an unforgivable battery hog). Mobile development is unquestionably more expensive than it has been in the past and I don't doubt Kabam's budget estimations - they're in line with what I've heard from others in the mobile sector recently - but this level of budget is still a nice-to-have, not a must-have.

In two areas, though, budget is non-negotiable. The first is network services. The reality is that even if a small independent developer came along tomorrow with a Pokemon Go beating game (which won't happen, because Pokemon Go's primary strength is in its license, but humour me anyway), the game wouldn't survive a month. Either the game wouldn't scale to match its audience, and would abruptly fall over and lose all market momentum; or it would scale, but the bills for the cloud services used in the process would reach unsustainable levels before the revenues from players actually started to roll in. Without good financial backing and the ability to sustain some high up-front costs, a runaway hit could be more likely to bankrupt its creator than a mediocre success.

"The sheer volume of TV, outdoor and online advertising space occupied by mobile games dwarfs the marketing for even the biggest console games"

The second area in which budget is non-negotiable, or rapidly becoming that way, is the aforementioned marketing. Chou suggested that Kabam is putting around $10 million in marketing behind its launches, which is a huge figure that's still dwarfed by the amount big players such as Supercell and King are spending on "player acquisition" (which is just another way of saying marketing, in mobile game parlance) on their behemoth games. The sheer volume of TV, outdoor and online advertising space occupied by mobile games dwarfs the marketing for even the biggest console games, for the simple reason that the equation is different. Mobile game operators know that their existence relies on acquiring lots of players (which costs marketing money), holding on to as many of them as possible for as long as possible, and ultimately making more money out of each player than it cost to acquire them.

As the mobile market has grown, the cost of getting a player to try your game (Cost Per Acquisition, CPA) has risen enormously. That's a cost that's right there from day one of a mobile game's existence; if you don't have an acquisition strategy, which means expensive, high-profile advertising, you don't have a mobile game with any chance of commercial success. Far, far more than any boost to development budgets, that's what's locking small teams and indies out of the mobile space. There are workarounds to some degree - like getting someone at Apple to love your game and feature it on the App Store frontpage, for example - but they're a million to one shot.

It is, bluntly, long past time that we called time on the romantic myth of the indie mobile developer. If you're an indie with good skills and a great idea, you're far better off peddling that idea elsewhere. PC remains fertile ground for indie developers, of course, but one of the wonderful things that mobile has done for game development is the role it's played in forcing console platform holders to open up to indies. If you're talented and creative, getting access to a console development kit has never been easier or cheaper - in some cases, such as Microsoft's ID@Xbox program, platform holders actually give dev kits away for free to just about anyone who wants one. It's a far, far cry from the walled gardens of only a few years ago.

"The opportunities for a small studio to succeed on mobile have narrowed rapidly to the point of nothingness, while opportunities on PC and on traditionally more "closed" platforms have boomed"

At first glance, mobile still looks like a more open platform than console (or even perhaps than PC, where Steam and its dubious Greenlight program act as de facto gatekeepers); everyone has a smartphone, the development tools to make games on them are free and anyone can upload a game to the App Store or the Play Store with ease. In reality, though, the opportunities for a small studio to succeed on mobile have narrowed rapidly to the point of nothingness, while opportunities on PC and on traditionally more "closed" platforms have boomed. Short of finding someone with a genuinely amazing, eye-opening idea for a mobile title, I'd be hard-pressed to recommend mobile development to any indie studio in 2016.

The wheel may yet turn again. Mobile game audiences, if nothing else, are still very new and very fickle; their tastes and desires may well shift, and more commercially viable niches may grow within the mobile space. As these devices get more powerful and capable, they'll enable new experiences and consumers may come to demand more diversity from their gaming. For now, though, mobile has gone the way of console games around a decade ago; rising costs and an escalating arms race in marketing have killed, or are killing, the low-cost end of the market entirely. Unless you've got millions you don't mind losing on a risky gamble, consider the mobile space closed to new entrants for the time being.