Finweek English Edition - - INSIGHT -

The in­ter­na­tional gam­ing in­dus­try is huge − big­ger in rev­enues than the US film in­dus­try, earn­ing an es­ti­mated $76bn (R912bn) per year. In SA alone, PwC es­ti­mates that R1.4bn is spent on video games for com­put­ers, cell­phones, tablets and con­soles.

But, Danny Day cau­tions, this is no in­di­ca­tion of the cur­rent state of game devel­op­ment in the coun­try. “Of that R1.4bn, none of it goes into the lo­cal scene,” he says, adding: “It’s all go­ing to big in­ter­na­tional cor­po­ra­tions, big in­ter­na­tional dis­trib­u­tors and hard­ware sell­ers. Very lit­tle of it ac­tu­ally stays in the coun­try, even in the re­tail space, be­cause your mark-ups are so small.”

Make Games South Africa (MGSA), the as­so­ci­a­tion of in­de­pen­dent game de­vel­op­ers, ran a sur­vey this year to get an idea of the size and scope of the lo­cal in­dus­try. There were 40 ac­tive game devel­op­ment com­pa­nies that re­sponded, which over­all have di­rectly cre­ated 253 jobs, show­ing a 5% growth from 2014. To­gether the or­gan­i­sa­tions re­leased a to­tal of 67 games in the 2014, and the de­clared value of th­ese or­gan­i­sa­tions is about R53m, an 82% growth from last year. coun­try. “When PayPal launched we de­cided that we would do pre-or­ders for Desk­top Dun­geons,” says Day, who got on the plane even though the trio couldn’t af­ford the trip. Day took his seat on the plane as pre-or­ders went live. A few min­utes later, he was on his way to the US via Dubai.

“By the time I got off the plane in Dubai, we could af­ford the en­tire trip. By the time I had com­pleted the leg to Los An­ge­les and dashed to E3 to start demo­ing the game, we could pretty much af­ford to con­tinue de­vel­op­ing the game for the next year,” says Day.

“The pre-or­ders worked well for us and we turned this into an open beta [trial testing], and for the next t woand- a-half years we re­leased a new ver­sion of the game ev­ery Fri­day to our beta sub­scribers. Peo­ple could buy the game for $10 [R120], or $20 [R240] if they wanted to sup­port us. Some 13 000 peo­ple bought the game that way, so when we re­leased the game we didn’t need ven­ture cap­i­tal any­more.”


At E3, Day would seal a deal that would re­mark­ably al­ter the fu­ture for­tunes of those in­volved in Desk­top Dun­geons. On the last day of the con­ven­tion and ex­hi­bi­tion, the video games de­vel­oper would ink a part­ner­ship with a dig­i­tal dis­tri­bu­tion com­pany based in the US called Steam. Steam is t he world’s l argest on­line dis­trib­u­tor of video games for per­sonal com­put­ers; soft­ware on a user’s PC con­nects via the in­ter­net to the Steam server, from which games c a n be bought, down­loaded a nd au­to­mat­i­cally up­graded.

Some 4 500 games can be found on Steam, which boasts a com­mu­nity of 12m ac­tive users, with any­thing from 6m to 9m peo­ple play­ing con­cur­rently.

For game de­vel­op­ers, this plat­form is t he dream dis­tri­bu­tion net work. Be­cause there are so many users, and no ma­te­rial prod­uct costs, games can be of­fered to a wide mar­ket at an af­ford­able price. The cut that Steam takes is rel­a­tively small. When Day man­aged to get

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