There may be no industry as saturated as the video game industry. Competing on the world stage, let alone finding success, is cut-throat. But as Daniel Visser of Wicked Witch Software explains, it is possible.
Starting up and powering on
Programming has always been in Daniel’s business. After going from development studio to development studio, including Atari, Daniel decided to start Wicked Witch Software out of his own garage. He convinced a high school friend to leave his current job to come work for Daniel as an artist.
Since then, Wicked Witch Software has found itself developing across major video game consoles and handhelds, smartphones and tablets, and PCs.
The games themselves are a balance between original titles and titles based on a licence, with the majority of those involving the AFL or the NRL.
“Traditionally, we were 100 per cent work for hire, and maybe then eventually 10 per cent original just here,” Daniel says.
Currently, Wicked Witch Software focuses 70 per cent of its efforts on licensed projects, which then help fund the remaining 30 percent on original projects.
In order to assist their current projects, Daniel receives support from the Victorian state government through grants, and believes that support is a large reason why Wicked Witch Software has remained so successful.
“One of those grants, for example, kind of got us started in the mobile sports, developing our mobile sports tech,” Daniel says.
“We've since done over 10 titles using that technology, so if it wasn't for that grant we probably wouldn't have made that move [to larger work spaces] at that time, and they enabled us to do that, and it's been very helpful and profitable for us.”
Despite this, Daniel says it is difficult for a video game studio to gain support from the Australian government.
“Some government sectors or departments think of us as the arts and creative. Others think of us as IT and tech, and we definitely are a blend of those two. I feel like we do fall through the cracks, but … [that] side is often grossly underestimated,” he says.
“It is bigger than the film industry, it's bigger than the music industry; the video game industry is larger than any one industry in the world, and I think, particularly older generations, kind of look [at] computer games as kind of just a plaything that's distracting kids from their homework, and it gets a bit of a bad rap from time to time.”
Although Daniel says he is grateful for the support he receives from the Victorian state government, he also says that the Australian federal government should increase the amount of funding to distributed.
“What is really needed is funding for all-size studios – the small studios, the medium-sized studios, the large studios – whether that is in tax breaks, or whether that is in production offsets, or whether that is in straight up production funding; the return on investment potential is massive,” Daniel says.
“Like I said, we wouldn't be around if we hadn't got those little bits here and there.”
Being number one in a 90,000 product race
In order to increase the chance of success in the video games industry, video game developers need to focus their efforts on exporting their products available internationally. In order to find that success though, video game developers need to come out on top of an incredibly saturated market.
To give an example, Daniel uses the curated Apple App Store, where games are made available for Apple’s iPhone, iPad and other devices.
“On the [Apple] App Store, [with] the last stats I saw a little while ago, there [were] about 300 games that had come out every day, … [and] in a year, you're probably looking at about 90,000 games that would come out,” he says.
“In a year, if you want to be in the top hundred out of 90,000, you're looking at the 99.9 percentile of quality that you'd want to be in if you want to be in the charts.
“And you pretty well have to be in the charts to make some money back, so ... very, very competitive. But at the same time, the rewards are massive as well if you do have one of those big, successful titles. There are games out there that are making $1,000,000 to $3,000,000 [million dollars] per day.”
As well as facing an oversaturated market, development studios like Wicked Witch Software have to face big international businesses that spend millions of dollars a year.
“[Popular video game soccer franchise] FIFA has had about a hundred million sales in the past 20 years. They have a version every year, and their development budgets are between US$50,000,000 and US$150,000,000 per title, so I often say that we make a game that is as close as possible to FIFA to somewhere around 2 per cent of the budget,” explains Daniel.
“If I'm making an AFL game, it's really only for half of Australia, and it's not going to sell 100,000,000 million copies because that's impossible; there aren't that many people in the country.”
Selling something for nothing
Trying to find success, at least in the Apple App Store, means that video game developers like Wicked Witch Software need to conform to market trends.
“I believe 97 per cent of games on the App Store are the free to play model, where you don't pay to download a game. Really, the only way to compete is to be free,” Daniel says.
Wicked Witch Software’s Catapult King (pictured right) is an example of a free-to-play game that has found success by reaching the number one position in the App Store charts for a few weeks, and within the top 100 for a year, which has helped then fund the development of other original games.
In these free-to-play games, Wicked Witch Software allows for a number of different ways to earn a profit: through being paid to show advertisements, providing the ability for players to remove advertisements altogether by paying, and in-app purchases that allow players to purchase in-game bonuses. In addition, Wicked Witch Software’s licensed sports games use the premium model, where players need to purchase the game upfront.
While some business owners may feel that it is best to ignore competitors and to focus on your own offerings, Daniel says this is not true for the video game industry.
“Selling a game for nothing is hard enough in itself, but [with] 97 per cent of those 90,000 games a year being free, you have to compete. You put your game out on the App Store, and no one will really see it. Even if it's really good, no one will see it.”
Fast Facts: Wicked Witch Software
Industry: Video Game
Location: Melbourne, VIC
No. of employees: Approximately 60
Customer base: Worldwide
- Opinion: Religion and business – should they mix?
By Adam Zuchetti
- Analysis: Employer/employee divide constraining growth
By Adam Zuchetti
- Helping employees back to work after illness or injury
By Adam Zuchetti