Making a game that will sell well on Steam is typically much harder than finding a bunch of boring business leaders and pitching them a SaaS or consulting package. On the surface it might seem simpler to do a game, but once you get into the mechanics of building, testing and publishing something for the masses, the fear of cold calling or emailing total strangers begins to evaporate quickly.
About 99% of the work you do on a game will wind up in the trashcan. Doesn't matter what kind of work it is. Code, audio, textures, models, map layouts, multiplayer balancing work, etc. are all susceptible in the same way. No one is safe from the chaos. It takes a lot of human energy and persistence to produce sufficient 1% content to fill up a player experience.
I'd estimate for a B2B SaaS product, the ratio is approximately the same, however you don't need such a broad range of talent to proceed. One developer with a desire to do the hard things constantly can be all you need to make it to profitability. Going from one employee to N employees in a creative venture is where things go bananas. If you absolutely must do an indie game and you need it to succeed or your internet will get cut off, you will want to strongly consider doing it by yourself. Figuring out how to split revenue and IP with other humans when you can't get the customer on the phone is a nightmare.
Many people agree that being a video game founder is harder than being a tech founder. Staying small and being as resourceful as you can is a good way to mitigate risk.
As a YC founder turned gamedev, I can tell you that failure is the norm in both pursuits. As with YC, the question is: can we create more outsized outcomes when we succeed?
I don't think that's possible and frankly I'd much prefer capital not even try. To the best of my knowledge, the only games which generate the really outsized outcomes you'd need for a VC portfolio do really gross, anti-player shit (gacha, lootboxes, whale fishing, etc.) to get it. Or they become distribution monopolies like Valve, which is fine-ish when Valve is private but would be a ongoing catastrophe if it had been VC-funded. I'd rather not encourage that.
I agree. I'm not the moral police, but video games ultimately have to walk a line where they serve up entertainment that is engaging/addictive without being all-consuming and abusive, and do so for an amount of money for which there is general consensus is "reasonable".
Trying to ride that to the moon is a very different proposition from a B2B play where you sell some service that concretelt delivers $X/mo recurring value to each customer for a $Y/mo price tag, and X > Y, but Y - your costs still turns a healthy profit. If you do that right, everyone is winning and the economy as a whole grows, not at all the same as the zero-sum game that is soaking a few whales and ruining their lives.
I appreciate this perspective.. but I think there might be a false dichotomy here. Some of the biggest gaming success stories didn't rely on exploitative mechanics - Minecraft, Among Us, even Fortnite's initial success was based on solid gameplay before the monetization kicked in. The question is whether you can build sustainable platforms that create genuine value rather than just extracting it. Steam takes 30% but provides real distribution value. Maybe the trick is focusing on companies that help other developers succeed rather than trying to create the next Genshin Impact
> Fortnite's initial success was based on solid gameplay before the monetization kicked in.
Fortnite is a bit of weird backwards example because the early PvE iteration had paid lootboxes, but they were scrapped in the Battle Royale spinoff which actually got popular, and eventually removed altogether. They still do things like engineering FOMO to drive sales but ironically the games monetization was the most exploitative when nobody was playing it.
Agreed. It is possible to make money in video games while treating customers with respect. This is the way! (and what EGG looks for because it builds stronger IP and longterm retention and good will)
I helped Indie Fund Hollow Knight back in the day and look a them now!
I think it is possible to be successful in games without being predatory. Humble Bundle was a demonstration of that.
I don’t believe that ultra-predatory mechanics are long-term sustainable. They usually yield a “ring of fire” effect that creates a growing ring of users for a while but really you’re burning out all your core users and will implode. This is how many describe the original Zynga model.
Supercell (founded around the same time) has cultivated longterm ecosystems and IP by respecting their players.
>I don’t believe that ultra-predatory mechanics are long-term sustainable
I don't think they're trying to be. I think they're whale hunting, find a few high spenders, and milk them for all they're worth. Then they spin up a new IP (or license one out), rinse and repeat
Yes they are. The implementation tends to differ from how eastern-developed gacha games work, but they're making billions from virtual slot machines nonetheless.
Yeah, I still indulge in video games, and understand that on the surface CSGO skins feel different than Genshin summons, but from 100 feet up it's all the same crap, imo
I do kinda get what you mean, though. Gacha mechanics feel expected in anything western, while 'loot boxes' are still a 'feature' of some games in the east. Eastern studios have definitely noticed, though, and are running the same playbook.
I see. You can remove 'Overwatch' from my original comment and the point still stands, but I do appreciate the fact check. I know Blizzard from HearthStone and Diablo....not great experiences with gacha there haha (Diablo Immortal, atleast), but those are far from the most popular Eastern games
You're right though. Industrial software/hardware in general always has money in all times. But gaming is essentially entertainment and people only spend on entertainment last. So gaming industry has a lot of failure but even if you're successful in a huge way, you won't earn huge money. There's a big cap there.
VC math follows a power law and expects almost all investments to flop, and the one winner to pay for it all. The question here is not about the flops it’s: are the winners big enough?
Isn't this the exact logic behind the stagnation in media right now? The risk aversion/stakes is so high that real risks aren't taken and we get bland sequel/remake slop.
Ironically when media culture is at is at its healthiest is when winners are diverse and common, and more importantly smaller shows that try out new things can still break even, with periodic flops being generally tolerable. That low risk culture for attempting new ideas is precisely what creates legendary franchises later when a few of these hit everything right.
And now that they're eliminating diversity in their investments are you still certain they will pick the next generation's winners? All they're investing in are AI companies...
Once upon a time someone like me for whom engineering competence is a core aspect of my identity would have never considered turning my back on YC. But now I'm just embarrassed by them. The things they now think are the only things worth investing in mostly make me want to vomit, like the vibe coding casino-IDE startup. As someone who still espouses their old values rather than their new ones, I'd rather succeed on my own.
Both Mark Andreessen and Andrej Karpathy say AI is unique as a new technology in that small teams and individuals seem to be the earliest and most cutting edge adopters. (unlike computers and the internet which were used by government and then large companies)
YC just so happens to invest super early in small teams.
So the overlap of YC and AI is inevitable. AI is not an investment genre per se but it can be used to accelerate or improve any ecosystem if used carefully and cleverly.
Since my Humble Bundle days, I’ve always been partial to small companies and small dev studios. Not all EGG companies use AI but they are all keeping tabs on the technology. Mitch Lasky has said that AI may have opened a window in which small studios may have their best shot at outsized success in recent history. Eventually the big dogs will catch up and adopt the new tech themselves but right now David has a shot at Goliath.
It's funny, because in my industry it's the slavish attention to AI by goliath-scale companies like Microsoft that is leading them to set fire to quality, innovation, and consumer trust, when then gives me and my tiny startup the opportunity to jump in and eat their lunch.
Over the next 10 years, no, I think the market will course correct within that time frame. AI is the sauce that's being slathered on everything right now and demand for it is driving record valuations, particularly for AI startups and their founders. That demand is all investor-driven though: investors are falling over themselves to make AI investments, while consumers are not actually especially eager to have all human contact progressively stripped from their lives.
> That demand is all investor-driven though: investors are falling over themselves to make AI investments
Largely true.
> while consumers are not actually especially eager to have all human contact progressively stripped from their lives
Hmm… I agree with this sentiment, but I think it’s mostly a straw man. There are many things that AI can do well that people will end up embracing directly or indirectly.
Medical scans is one big one, imho.
Mundane but important legal services is another.
Skillful mediation of scutwork is definitely embraced.
Good and fast simple customer service via phone or text will end up being very welcome (at least in some contexts). I realize that most people will prefer superlative human customer service, but that’s currently not a widespread available reality, especially for simple tasks.
All sorts of learning (great and essentially free tutors).
All sorts of practice (e.g., language, speeches, debates, presentations, etc.).
All of the above (and more) are things that people are using AI for right now, and they seem to be loving it.
I realize that some folks use AI tools in regressive and sometimes dehumanizing ways, but that’s not the fault of the tool, imho.
I dunno, I see problems with every one of those things.
You could make a customer service AI that was an advocate for the consumer, but it would likely spend the company's money liberally. So instead you'll end up with AI agents incentivized to be stingy and standoffish about admitting the company could improve, just like the humans are.
You can tutor with AI, but there's no knowing what it will teach you. It will sound as convinced of itself when it teaches you why the earth is flat as it does teaching you why the earth is round. The one thing it will certainly do is reinforce your existing biases.
You can practice with AI, but you'd learn more by posing yourself the questions.
A doctor can have AI look at medical scans, but they can't defer to AI judgement and just tell the patient "AI says you have cancer, but I don't really know or care one way or the other". So again, the skill in reading results needs to be in the doctor.
On some level it's the role of the publisher to pick winners and guide them over the finish line. See for example the hit machine that is Devolver: https://www.devolverdigital.com/games
I'm not an indie dev, but if I was I would happily give up a chunk of my potential profit to be listed on there, knowing the size of the market that says "oh yeah... a Devolver title, I would blind-buy this, it's probably pretty good."
I suspect games are like movies: for every 100 movies, around 20 of them make enough money to cover the losses of the other 80. But predicting which movies those will be is extremely difficult (Goldman's Law: Nobody knows nothin'). Any studio / label / distributor which can do better than the average is probably headed for greatness.
The thing is when a game flops it can be popular in the future. It is still a game that does game things. When $dumbapp flops though, it is a stronger signal that whatever it is trying to do may have no market at all. Like giving a fish a skateboard.
