VR market fallout may lead to lots of new indies - Adelman

In August 2014, after nearly nine years at Nintendo convincing numerous indie developers that the company could actually be welcoming to games like Cave Story, Shovel Knight, Retro City Rampage, and World of Goo (to name a few), Dan Adelman set off on his own to become a champion for the indie crowd. He prefers not to be called a consultant, but he's become a top resource for indies who need some marketing and business assistance. His first project in his post-Nintendo days was the excellent Metroidvania title Axiom Verge from Tom Happ, and more recently he's been working on Chasm (Bit Kid) and Mages of Mystralia (Borealys).

In a wide-ranging interview with GamesIndustry.biz at GDC, Adelman described a lot of the problems indies are facing today, and with the VR buzz practically palpable at the show, he also commented frankly on how he just doesn't see all the VR hype turning out well for many involved.

"My thinking on VR is I am very bearish on it," he said. "I think we've got a lot of industry insiders who have thought about this stuff for decades and finally the technology is getting close. But outside of our little sphere of people who are really geeky about this stuff, I'm not sure Joe Schmo in Kansas is going to get one. I've tried some of the best demos, the Vive demos and several others. Every time I've really enjoyed it and then I take off the headset, which is uncomfortable, and then I put it down and then it's like, 'That was great. I'm really glad I experienced that. I don't necessarily want to do it that much more, or do all my gaming that way. It seems like a lot of work.'

"I think there will be opportunities [in VR]. I'm just not sure it's a consumer opportunity"

"So what I think it would be really good for is location-based entertainment, where you go in, you pay 20 bucks, and you do a whole VR experience. And then you put it away and you go home. And of course that doesn't scale as a business, so actually I would not want to invest in a business like that, but that is probably the best, most attractive way to do this business because I don't think it's going to be a mass market thing."

While others in the industry may not be as pessimistic as Adelman about VR, many have already started tempering expectations. Chair Entertainment's Donald Mustard told us recently that mainstream VR adoption might actually be as much as 10 years away, and he cautioned that over-investment in the space could push that to 15 years. Moreover, in just a few months span, researchers at SuperData have lowered their overall VR revenues for 2016 twice. The firm now expects total revenues to come in under $3 billion this year.

The problem, if Adelman is correct, is that a number of studios are banking on VR to take off. Some are even committed to VR experiences as the only types of games they'll now develop. If the market doesn't see an uptick as quickly as they'd hope, the sad fact is that numerous developers will be looking for new jobs. "I predict a lot of new indies will be born," Adelman said.

That's potentially great for someone like Adelman, as his client pool could get wider, but he isn't looking at it from that selfish perspective at all.

"I'm actually pretty much at capacity so I want everyone to do well, I really do. I don't wish doom and gloom on anyone. Maybe I'm just old and I'm like 'I don't get this newfangled technology.' I could be totally missing [something], like 'The internet? That'll never take off.' But I don't see VR being a scaleable thing that people would want to play for hours a day every day," he continued.

"I think augmented reality has more potential in that it's a little less cumbersome, it's less intrusive. I think that could have a lot of applications. One thing that VR people will be able to bank on, if not games, there's a lot of enterprise applications and engineering and NASA stuff. So I think there will be opportunities. I'm just not sure it's a consumer opportunity."

"Many developers have got a barely working prototype and they're like 'Let's just put it up on Early Access, we'll make some money off it so that we can continue development'...They don't realize that they've just launched their game."

Regardless of what happens with VR, the indie scene is probably more vibrant than it's ever been in the game industry's relatively short history. Similar to the separation you have between Hollywood films and independent work at festivals like Sundance or Cannes, indie games have made an indelible mark on the industry. "AAA games actually started to bore me years ago. So most of, almost 95% of, what I play is indie," Adelman acknowledged.

Not only that, but indie games may actually be at an advantage as compared to indie films because of the infrastructure that's been built up in the last decade. "I think the access to distribution is a lot better on the games side because of services like Steam, the PS store, eShop, Xbox Live, etc," Adelman said, adding that while Netflix helps indie movies, people still gravitate towards the better known content.

The digital revolution has certainly changed the landscape dramatically, but calling what's happened an indie renaissance might be overstating things in the other direction. The fact is, while it's never been easier to get a game out into the digital world, it's never been harder to actually succeed.

"It's kind of like Economics 101. You see very low barriers to entry, so you're going to get a flood of new entrants into the market and they're going to bring down profit until it's zero. Compound that with that fact that video games, and really all entertainment, is a hit driven business. So you'll still have the same number of hits a year, maybe 10 big hits a year, but now there are thousands of games. So you still have the same number of games at the top - if there were 100 games and only 10 did well, then only 90 didn't do well. If there are 1,000 games and only 10 did well, now you've got 990 games that didn't do well. So it just seems like your chances of success are a lot lower, just on a pure percentage basis," Adelman observed.

"That said, I noticed when I was working at Nintendo, a lot of times I would be talking to developers and I'd find that they'd made some irreversible decision that's really going to jeopardize their chances of success. So a lot of what I try to do when I notice that kind of thing happening is before anyone is going to shoot themselves in the foot I try to grab their hand and point the gun somewhere else so at least it's not going to shoot them in the foot. Because you can do things that are of no benefit to you and only do harm, so avoiding those things is step one."

Making decisions that can't be unmade is a big issue, especially with platforms like Steam Early Access, Adelman said.

"Many developers have got a barely working prototype and they're like 'Let's just put it up on Early Access, we'll make some money off it so that we can continue development.' Meanwhile, they don't realize that they've just launched their game. It's really tough two years later - a lot of times people will come to me and be like 'We've been on Early Access for two years, we're not selling very well, but we think we haven't been marketing because we haven't really launched yet so we're gonna be launching next month and we need your help.' [They don't get that] press are really not interested in a game that people could have bought two years and didn't and chose not to and just because you arbitrarily increased the version number from 0.9 to 1.0, that's not a news story. So it's always strange to me when people say, 'We're about to launch,' even though you can buy it right now," he explained.

The same goes for Kickstarter or just choosing which platforms to target. Adelman continued, "If you do a Kickstarter, your Kickstarter has to be a launch. When you announce which platforms you're going to do - a lot of people I know are like, 'Yeah, we'll probably do this, this and this," and meanwhile maybe a platform was interested in negotiating for some kind of exclusivity and you've already announced that it's on other platforms. So those are decisions that you should think through before you jump in and announce stuff without thinking, 'By my taking this action, what doors are going to close now?'"

The biggest thing for most indies is that they need to either learn about business or they have to find someone or some company that's actually trustworthy to assist them. Adelman didn't want to bash publishers, but he did say that indies should only look to sign with one "if they're really struggling."

"The problem is that there are a lot of business people out there who give the business side a bad name. And in a way, business people tend to look for opportunities; and for certain opportunists innocent indie devs who are completely clueless about business are a ripe target. So I've heard of some 'publishers' who will take 30 percent of the revenue and all they'll do is send out an email blast to their mailing list. And that's about it... maybe they'll send out a couple tweets. So there are other people out there who I know who are doing good work, who are giving good advice and trying to really coach the developers in terms of how to handle their business. I think everyone would benefit if they could chart their own future and be independent. So I think that should be everyone's first step if they can do that," Adelman advised.

While a number of indies in this industry represent the new crop of young talent, there's also a fair number of AAA veterans who've gotten fed up with the big companies. Montreal-based Mages of Mystralia developer Borealys is mostly comprised of former Ubisoft talent that's worked on big projects like Far Cry and Prince of Persia.

"I don't think anybody decides to go into game development because they want to be the guy in charge of, like, rocks in the world. There are some people whose full-time job it is to design trees for massive world games and it's like, 'I'm the shrubbery guy.' Nobody goes into games because they want to design shrubbery. So a lot of people felt like really interesting design decisions were being made at a level higher up than them. They wanted to contribute to that. They had ideas. It was really hard to sell those ideas up the chain. A lot of people are coming to the realization that there was no path before where you could say, 'I could make a whole game from beginning to end,' and now there is," Adelman said.

The other side of it is that a number of veteran developers go indie because they are sick and tired of being squeezed out by greedy corporations.

"It has always been characteristic of the industry that once a major studio or a large publisher finishes a project, they lay off all the staff that worked on it, which really sucks because you have no motivation to finish because you're really like, 'As soon as I finish they're going to axe me,' and every time a major studio shuts down, it's like 100 new indies were born," Adelman commented.

"There is a little bit still of a 'We are primarily a first-party company' kind of mentality that people have to get beyond [at Nintendo]"

While some developers temporarily go indie to support themselves and their families, there are others who are creatively driven above all else. "Those people are the ones that I'm most excited about working with, the ones who are like, 'I would do this even if I have to take a major pay cut just because this is what I want to do.' That said, in an ideal world, they shouldn't have to take a pay cut," Adelman said.

As the interview drew to a close, we also asked Adelman to reflect on his stance on Nintendo. Back in January 2015, he remarked that his former employer was run by people out of touch with the modern gaming industry and that Nintendo's lack of third support had become a self-fulfilling prophecy.

"They're definitely making a really big effort on that front," he acknowledged. "So the team I used to work for... they've always wanted to do more to support indies. There have been some key executives who have left the company who were less supportive, so I think actually it's going to open up a lot of possibilities."

That said, "There is a little bit still of a 'We are primarily a first-party company' kind of mentality that people have to get beyond," Adelman continued. "Take a game that's released on the eShop. If Nintendo sells a first-party game, they get all the revenue. If they sell a third-party game, they only get X percent of the revenue... So there are certain pockets [within Nintendo] who don't necessarily care about getting a broad swell of [content] - that's not their primary motivator, it's more about, I can sell this one and make this much or I can sell this thing and make less. So of course I'm going to sell the one that has a higher margin."

Ultimately, if Nintendo wants to improve its third-party standing, "it's going to be increasingly important for someone to be looking at the overall portfolio," Adelman noted. "Nintendo has people who are really there advocating strongly for third parties and there are other people who are making decisions based on 'What's this going to do immediately to the bottom line?' And I'm not sure there's really anyone whose job it is to think purely on a portfolio basis. And I could be wrong. A lot has changed in the last year and a half. I've heard there's all kinds of reorgs and they're trying to align themselves better for a more positive direction. So I'm cautiously optimistic that now there might be someone in that role."

Indeed, how the portfolio for the NX will be shaped in the next 12-24 months will be telling. Hopefully, Nintendo will heed Adelman's advice and make the NX a viable option for indies.