Hey up everyone, I'm new to the forums and launching a binaural audio based game on here pretty soon. I managed to wrangle one of my University essays to being about Itch.io's position in the industry, but I'm pretty new to the scene so there's probably a lot I've missed. I'd dig it if some of you hardened indie devs could critique :D.
1. Porter’s Five Forces
Porter’s Five Forces is a means of analysing a business’s current position by determining how strong of an effect each of the following five influences have, and how that affects the company in question (Cadle, Paul and Turner, 2010).
1.1. Competitive Rivalry
The independent game distribution market is becoming highly competitive, with an average of 21 games releasing on Steam (the largest online distribution website) every day in 2017 (Steamspy, 2019). This saturation of the platform does provide a motivation for developers to explore other release platforms and therefore may be more of a benefit than a detriment to itch.io.
1.2. Supplier Power
One of the main issues with independent game distribution, and a more general issue in the creative sector, is the devaluation of the product provided. Sites such as the Humble Bundle, infamously cheap Steam sales, and general large reductions on price of indie titles has meant that the pricing of independent games typically needs to stay relatively low (around £11) to do well. This leads to a perceptual shift in the minds of the general public who now expect cheap or free content (Bycer, 2017)
1.3. Buy Power
The humble bundle offers ridiculously cheap bundles, and Steam sales are notorious for being incredibly cheap too. This hurts first day sales of both AAA and indie releases as many fans just choose to wait until the game is on offer rather than buying on launch day. To counter this argument however, these sales may happen months or years after a game releases, bringing in otherwise untapped revenue.
1.4. Threat of Substitution
The most obvious threat of substitution facing Itch.io is from fellow game distribution platforms (discussed in greater detail later). A broader level threat however is that of console and mobile gaming taking a larger percentage of the market, although statistics say the PC sector of the gaming market is closer than ever to that of the console market, taking up 25% of the total market share (Strickland, 2018).
1.5. Threat of New Entry
Due to the constant array of new titles released by game developers worldwide there will always be a demand for new distribution platforms, as such the threat is that should a AAA games company such as EA and Ubisoft start expanding their online offering to support indie games, the marketing budget available to them may threaten to smother the smaller distribution platforms. Secondly, new companies may be able to offer better perks due to fresh technology. Their website might be more appealing to developers or to fans, because of being easier to use, offering quicker download speeds, or some new way of better engaging fans with the game development process.
2. Itch.io
Itch.io is an innovative game distribution website that is created for developers to have more control over their content and release strategy, and also includes community building tools such as development blogs and forums. These tools can be vital for creating a community for an indie title, who will then become your main customer base come release. With that being said, there are a number of competitors that offer online distribution, each with their own strengths and weaknesses (Tavrox, 2018).
2.1. Main Competitors
2.1.1. Steam
Steam is by far the largest online PC game distribution website. This means that it has the most traffic of any of the below companies, as well as being a trusted and well regarded service. Its size is also its main weakness from a publishing perspective, as it’s incredibly easy for new releases to get lost in the deluge on new titles released every day. It costs developers $100 to get published on Steam, who then receive 30% of all sales revenue (Steam Direct, 2019). This 70/30 split, whilst previously industry standard has now been undercut by other sites looking to attract developers.
2.1.2. Kartridge
Kartridge is relatively new to the marketplace (going online in 2018) and allows developers to have complete control over their game pricing, including supporting pay-what-you-want models. Secondly, for every sale leading up to $10,000 the publisher keeps 100% of the revenue, after $10,000 this reverts back to 30/70 split that is the industry standard (Costa, 2018).
The tone of Kartridge is far more indie friendly, with the website having a ‘retro’ feel, which tends to align with the style of game found on there. One interesting difference is the inclusion of a website interaction based XP system, where players can level up their account and earn free tokens (worth $5). This is a very interesting way to improve player engagement with the rating system and community as a whole and is unique to Kartridge (Kartridge, 2018).
2.1.3. GoG.com
GoG offers a typical 70/30 split to the developer, and whilst does offer new games, its niche is making old games run on new PCs and Macs, and selling those to a very nostalgic and therefore typically older audience. It does however have a curation process which acts as a quality control and stops an over population of games, which is an issue for any non-curated platform (GoG, 2019).
2.1.4. Game Jolt
Game jolt is another distribution platform that consists of mainly free games. This, similarly to Kartridge and Itch is a great place to grow a community via providing regular updates to your game and asking for feedback via development blogs. Along with Kartridge it also has a retro feel, although is perhaps more developer focused than the player focus of Kartridge (Game Jolt, 2019).
2.1.5. Epic Games Store
Epic Games offers an 88/12% spit to developers, besting that of Steam and GoG. It’s also new to the market place and is a curated service, meaning that it avoids the issue of saturation that plagues none-curated platforms (Steam, Kartridge and Game Jolt). In doing this it does position its curators as gate keepers, but also keeps the standard of games very high, and the number of games manageable (Epic Games Store, 2019).
3. SWOT Analysis
A SWOT Analysis is (Pietersma, et al, 2008) an evaluation of the internal strengths and weaknesses a business currently has, and what external opportunities and threats may affect it in the near and far future. This is an important method of analysis as it gives an over-arching view of how strong the position the company is in currently, and where it may be in the future if the company doesn’t adapt.
3.1. Strengths
Itch.io’s strengths lie in its reputation as an excellent place for developers to grow their communities via development blogs, and due to the blogs providing interesting content, is frequented by other game developers creating a very supportive community for new developers to grow their skills and refine their game. It is also unique in allowing developers to determine how much of the revenue Itch.io received from sales. The default revenue split is 90/10% but developers can alter this so that they receive 100% of sales revenue.
3.2. Weaknesses
3.2.1. Community
Itch.io is seen as a developer focused community. This means it attracts mostly developers and so is always going to be a much smaller market place than a player focused platform. Secondly, there are very few wealthy indie game developers and if they’re the target market, this is going to generate fewer sales than targeting an average member of the public, or indeed an average gamer who is used to spending $60 on a release.
3.2.2. Inconsistent Game Quality
The fact that anybody can upload a game for free means that not all content is of a good quality, this may create a bad user experience with new players having to trawl through a lot of bad quality content to find the gems. Luckily there is a ‘curated’ page on the website where itch.io owners find what they consider to be most interesting uploads, which goes someway to negate the issue.
3.2.3. Relatively Unknown
Itch.io is not as well-known as Steam, unless you are a fan of indie games of looking for new release platforms you are unlikely to come across Itch, whereas Steam is the first place you’d find. For those who do follow the gaming industry however, itch.io is slowly becoming more commonly known and is regarded very highly by those who do know about it.
3.2.4. Low Budget
It doesn’t have the budget the Epic Games Store, EA’s Origin, Steam’s Valve or Ubisoft’s Uplay stores do, as it isn’t backed by a multinational AAA game company. Therefore it may not be able to compete when it comes to paid advertising and exclusive release deals. It does however fill a different niche than these larger platforms.
3.3. Opportunities
More and more independent games are being developed, all of which need to hosted somewhere. As Steam becomes ever more crowded developers will look to alternatives to launch their game. Likewise, as independent games become more popular consumers may look further afield than Steam for their gaming content.
3.4. Threats
The main threats facing itch.io are those from competitors such as the ones mentioned above, but more specifically those that fill a similar niche such as Kartridge and Gamejolt, as they may pull developers and therefore traffic from Itch.io’s website, limiting its viability as a release platform.
Copied from the work document, hence the fancy numbering, thoughts?
Keep is greasy (so it goes down easy),
Harry x