The cooperative future of game development: A phenomenon of collaboration between producers and consumers in the video game industry

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IN

DEGREE PROJECT TECHNOLOGY, FIRST CYCLE, 15 CREDITS

STOCKHOLM SWEDEN 2016,

The cooperative future of game development

A phenomenon of collaboration between producers and consumers in the video game industry

VIKTOR GUSTAFSSON GUSTAV HÖGLUND

KTH ROYAL INSTITUTE OF TECHNOLOGY

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Abstract

Independent developers and largescale development studios commonly seen as the Davids and Goliaths of the video game industry are moving closer together.

Powerful software frameworks, traditionally reserved for professional developers and only available through expensive licenses, are becoming free to use for consumers. By sharing their tools instead of keeping them for themselves, companies can utilize the combined talent of whole communities and monetize on that talent through royalties and other indirect fees. This paper describes how the video game industry has developed in recent years to allow for this change in business strategy and examines how the industry can continue to evolve because of this. The result of a Delphi study based on interviews with game developers both inside and outside the industry point toward a future of increased intermingling and sharing of knowledge and resources, characterized by more producerconsumer collaborations and closer relationships between companies and their communities. By adopting freetouse business models and sharing powerful, proprietary software with their consumers, companies are lowering the point of entry for aspiring developers and thereby dissolving the traditional narrative of “we and them” that has existed between independent developers and established studios in the past.

Keywords: producerconsumer collaboration, indie, modding, business model, game development, game engine, participatory culture, outsourcing innovation, community platforms.

Acknowledgements: The authors wish to thank the respondents of our Delphi study for providing the data and the developer of WERIDE for insightful comments and advice. The authors take responsibility for any errors in this paper.

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Sammanfattning

Oberoende utvecklare och storskaliga utvecklingsstudior vanligtvis betraktade som tvspelsindustrins David och Goliath rör sig allt närmre varandra. Kraftfulla mjukvaruramverk som traditionellt sett varit reserverade för professionella utvecklare och som tidigare endast varit tillgängliga genom kostsamma licenser blir i allt större utsträckning gratis att använda för konsumenter. Genom att dela med sig av sina verktyg istället för att hålla dem för sig själva så kan företag nyttja den kombinerade talangen hos sociala nätverk knutna till sina produkter och generera intäkter genom royalties och andra indirekta avgifter. Denna uppsats beskriver hur tvspelsindustrins utveckling på senare år har möjliggjort denna affärsstrategiska förändring och hur industrin kan fortsätta att utvecklas som en följd av detta.

Resultatet av en Delfistudie baserad på intervjuer med spelutvecklare både inom och utanför industrin pekar mot en framtid av ökat samspel och delande av kunskap och resurser. Detta karaktäriseras av fler samarbeten mellan producenter och konsumenter samt närmre relationer mellan företag och deras konsumentnätverk.

Genom att ta till sig affärsmodeller som bygger på gratisattanvändaprinciper och att dela med sig av avancerad, äganderättsskyddad mjukvara med sina konsumenter, så sänker företag ingångströskeln för aspirerande spelutvecklare. Därigenom löser företagen upp den traditionella “vi och dem”relationen som tidigare existerat mellan oberoende utvecklare och etablerade studior.

Nyckelord: producentkonsumentsamarbeten, indie, modding, affärsmodell, spelutveckling, spelmotor, deltagarkultur, outsourcing innovation, konsumentnätverk.

Tillkännagivanden: Författarna vill tacka de medverkande i vår Delfistudie för att ha bidragit med data och utvecklaren av WERIDE för insiktsfulla kommentarer och råd. Författarna tar ansvar för möjliga fel i uppsatsen.

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1. Introduction

The video game industry is representative of the digital era with its way of growing, changing and converging into other businesses. The changes that has occurred in recent years have caused companies to rethink their organizational structures in order to fit in with their business goals (often designed to maximize profits). This has caused a decrease in innovation and originality in the industry, leading video game developers to produce fewer novel gaming experiences in favor of lowrisk sequels to well known brands (Tschang 2007). A growing dissatisfaction among consumers, caused by the limited supply of innovative games, might explain the uprise of independent games (Arakji & Lang 2007). The profit seeking companies are now thoroughly investigating the independent game scene for clues about how to deal with this transformation (Tschang 2007).

1.2 Background

In this section we present underlying concepts and events that have had impact on the video game industry.

The indie genre

Independent games have yet to find a clear definition but certain common factors are to be found. Our definition of independent games is as proposed by P.Ruffino (2013) in his paper Narratives of independent production video game culture . Independent games are developed without the aid of a publisher and the team usually consists of few members if not a single person. The developer(s) is responsible for the whole development process and thus expected to receive the complete eventual profit. Indie games would also be enriched in a nonbusiness manner with unique features not to be found elsewhere.

Independent game developers (from here on also referred to as indie developers ⁾ have traditionally been people with the time, funding and technical skills required to develop games from the ground up. In recent years however, crowdfunding systems

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such as Kickstarter^, Patreon and Indiegogo have made it possible for indie developers without sufficient economic resources to actualize their ideas. Despite this, the requirement of significant technical skills has persisted. For indie developers, choosing a suitable software framework in which to build the games more commonly known as the game engine has also traditionally meant building your own tools or turning to freely distributed software, as professional game engine licenses can cost several thousand dollars to purchase (Kasurinen et al. 2013).

The art of modding

Historically, one of the ways that aspiring developers have been able to interact with professional, proprietary game engines has been through mods direct modifications which build upon or transform the original games. The act of modifying games, known in the video game industry as modding, became popular when professional developers started to release game toolkits together with their original games.

However, the toolkits were often restricted to certain features within the game engine and were only usable on top of the original game, limiting the scope of what was possible to do by modding the original product. (Arakji & Lang 2007)

The game development company Valve, wellknown for their generous attitude towards mods, used the toolkitsstrategy when they released the best selling shooter game HalfLife in 1998. Consumers were given access to about 80% of the code while the other 20%, representing the underlying game engine, was left inaccessible.

HalfLife went on to become very successful on its own but modders (the name given to those who mod games) would increase product sales even further (Arakji & Lang 2007). One year after its original publication, two students wrote the mod CounterStrike which turned out to be even more popular than the original game.

This lead to Valve acquiring the mod and hiring the students, eventually leading CounterStrike to become a separate product of Valve’s and becoming one of the highest selling video games of all time (Remo, 2008). This not only showed the potential effects individual consumers and indie developers can have on the professional game industry, but also that professional game studios can use modders

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and other independent developers as a source of revenue as well as technical talent.

(Arakji & Lang 2007)

The new business model

The American game developer Epic Games ' own game engine Unreal Engine is one of the gaming industry’s most popular engines of the last 15 years. It has been used in the production of several best selling video games with high development budgets, including Epic Games' own Gears of War and Unreal Tournament game series. The latest version of the game engine, Unreal Engine 4, was released to the public for free in March 2015, thereby becoming the first game engine of its kind to be available in its entirety for modders and indie developers. This has enabled small scale development of technically impressive games that do not require the same technical prowess from the developer as before. In exchange for using their engine, Epic Games require a five percent return on all revenues after the first $5000 per quarter.

One year after the release of free Unreal Engine 4 American ecommerce and cloud computing company Amazon.com released their own game development tool Amazon Lumberyard . Together with integration to Amazon’s cloud services and video streaming platform Twitch.tv, Amazon stated that they want to prepare developers for the future of gaming (Schenk 2016).

Unity: the precursor

While this paper focuses solely on Unreal Engine 4 and Amazon Lumberyard, these game engines have a mutual competitor called Unity which also should be considered when discussing these questions . The Unity game engine was originally released in 2005 and from the start it was profiled as a game engine that would

“democratize game development and level the playing field for developers across the globe” and make game development easier than ever (Unity3d.com, 2016). Unlike Unreal Engine 4, and to some extent Amazon Lumberyard, Unity does not have a past of being a proprietary game engine used for highend games. It is this lack of a transitional phase from professional exclusivity to general availability that separates the story of Unity from those of Unreal Engine 4 and Amazon Lumberyard. For the

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reasons stated above, the decision was made to not include the Unity game engine in our study. The importance of Unity and the influence it has had on the industry should not be understated though, as our data also shows. Additional information about the choice to omit Unity, as well as a discussion on the possible consequences this might have had, can be found later on in this paper.

1.3 Purpose of this study

The main question for this study is: “ In what ways are the traditions and relationships between independent developers, modders and the video game industry changing as a result of professional development tools becoming available for the public?”

While there has been a lot of research done about the effects of independent game development on the traditional game industry, not nearly as much has been done on the opposite; investigating how large scale game developers are affecting smaller developers and amateurs, in this case by giving them access to powerful tools traditionally kept inhouse. The goal of our research, then, is to understand how the game industry is evolving because of this change, thereby filling a gap in the literature and provide useful knowledge to aspiring game developers and professional studios alike.

1.4 Structure of the paper

The structure of this paper will be as follows: First, we present the results of a literature study and explain the core concepts that form the basis of our analysis and reasoning later in this paper. We will then present the results of a series of interviews with professional and indie developers. The gathered data is processed using the Delphi method , meaning that the respondents’ answers are structured into a list which is then sent back again. The respondents are then asked to rank all the answers according to their relevance and significance. The highest ranked answers are seen as having the highest probability of being correct by the respondents. More information on why and how we use the Delphi method for our research can be

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found in Methodology, where we discuss the benefits and characteristics of the method in detail.

Second, we conduct a comparative analysis of Unreal Engine 4 and Amazon Lumberyard, providing the reader with a technical understanding of the frameworks and what is being offered to developers. The goal of the comparative analysis is not to go into any great depth on how the game engine works, but to illustrate the different technical features available to developers using Unreal Engine 4 or Amazon Lumberyard. We then go on to present the results of an interview with the developer of WERIDE, an MMO (massively multiplayer online) game being developed in Unreal Engine 4. The aim of this interview is to provide firsthand impressions from an indie developer using Unreal Engine 4. Finally, we discuss our findings and present our conclusions.

2. Theory

In this section, we present the findings of our literature study and explain the concepts that form the base of our analysis later in this paper.

2.1 Usercentered innovation & producerconsumer collaboration

Two key concepts that we will be using in this paper are those of usercentered innovation^andproducerconsumer collaboration^.

Presented by Erik von Hippel and Lars Bo Jeppesen, von Hippel (2004) states that:

“[Usercentered innovation] is becoming both an important rival to and an important feedstock for manufacturercentered innovation in many fields.” This observation is developed specifically for the video game industry by Jeppesen (2004) who concludes that: “Manufacturers can establish a process of user innovation and profit from the outcome by opening up their product to facilitate innovation on the part of users and combine this with organizing user communities.” While more than ten years old, these papers provide meaningful insight into the underlying factors powering the recent shift towards a more generous attitude on producerconsumer

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collaborations highlighted in this paper. The industry trends recognised by von Hippel and Jeppesen in 2004 also provides historical context to our research, leading to a better understanding of how the producerconsumer relationship in the video game industry has evolved throughout the years. As we have stated earlier in this paper, indie game development being facilitated by professional developers is a fairly new phenomenon. However, authors like von Hippel and Jeppesen prove that the related concepts have been understood for years. Research done by Arakji & Lang (2007) also shows that the potential benefits of producerconsumer collaborations are well known within the video game industry. Indeed, the previously mentioned game company Valve has been making money on usercentered innovation in the form of mods since 1999 with the first release of CounterStrike.

2.2 Outsourcing innovation

James Brian Quinn begins his paper Outsourcing Innovation: The New Engine of Growth with the bold statement “Innovate or die”. He stresses the fact that in order for big companies to stay ahead in their respective markets they need to grasp the concept of outsourcing innovation . As Quinn (2000) explains, staying innovative in a rapidly changing industry is a lot like surfing. With many changes happening at once, companies cannot be sure that they are riding “the right wave”. According to Quinn, companies can lower innovation costs as well as risks by outsourcing, effectively letting others scout for the next, big wave. He calls strategic management of outsourcing one of the most powerful tools in management and claims that outsourcing innovation is at the frontier of company management (Quinn 2000).

From the available literature we have also learned that outsourcing innovation to consumers is profitable for most companies within an industry that needs to be innovative (von Hippel 2004). The question, however, is why the users would want to be receptive of this practice. von Hippel (2004) states two core reasons for this:

(1) Users can’t find what they are looking for on the market that fits their specific needs. This reason makes it more profitable for the users to create the product on their own and at the same time (2) find enjoyment in the creative learning process.

We have found that these two points presented by von Hippel can form a strong

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incentive for users and consumers in the video game industry to develop their own games. This is supported by examples showing that the opening up of products to allow modding in fact many times has been initiated by users and not the manufacturers themselves (Jeppesen 2004).

2.3 Intellectual property rights

von Hippel (2005) and Jeppesen (2004) both describe the opportunities of usercentered innovation and producerconsumer collaboration when the producers can make use of intellectual property rights arrangements that block user innovators from commercializing their mods. This business model relied upon von Hippel’s two points where users help the consumers broaden the games for free, thus generating more diverse and rich products which also benefits the user community as a whole. As the rapidly changing industry has evolved companies have had to reevaluate their strategies. In March 2014 Epic Games’ founder Tim Sweeney introduced a new business model together with Unreal Engine 4, giving indie developers access to the exact same tools as Epic Games use when they develop their games, for a fee of $19/month (the fee was scrapped a year later). Sweeney explained these changes as a necessary adaptation to the video game industry which has grown into an open and democratic place. What this means in terms of licensing is that Epic Games still remain the owners of the game engine and complementary tools but the users hold the commercial rights to the products they develop. A similar licensing agreement can be found in the case of Amazon and their game engine Lumberyard.

The difference between von Hippel and Jeppesen’s findings and the newly introduced business models by Amazon and Epic Games is that instead of keeping the whole share of intellectual property rights, game companies might now be looking for even deeper forms of collaboration with their users, in a sense, making them their business partners and letting them commercialize mods and independently made games.

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3. Methodology

In this section, we discuss our choice of methodology and explain how we use the Delphi method as a forecasting tool to identify possible new trends and traditions using experts within the game industry.

3.1 The Delphi method

Our study was partly based on a prediction of the future where we used the Delphi method. This is an investigation technique suitable for rapidly developing fields such as those within the information systems discipline where one might benefit from extrapolating new advances. We primarily based our application of the Delphi method on a paper by Skulmoski et al (2007) called The Delphi Method for Graduate Research which examines how, why and when to use Delphi at a graduate level.

“The Delphi method is an iterative process used to collect and distill the judgments of experts using a series of questionnaires interspersed with feedback. The questionnaires are designed to focus on problems, opportunities, solutions, or forecasts. Each subsequent questionnaire is developed based on the results of the previous questionnaire.”

 (Skulmoski et al. 2007)

Since Delphi is an iterative process researchers are able to use the number of rounds to determine which precision they would like their research to have. However, according to Delbecq, Van de Ven and Gustafson (1975) most studies will suffice with two or three rounds. Skulmoski et. al (2007) notes that even fewer rounds can return satisfactory results depending on the number of respondents.

We used the Delphi method by reaching out to experts (a term which we discuss later in this section) with the goal of conducting interviews in person. Our backup options to this was using voice services or email. We collected answers from all experts in a first round and then evaluated their responses, sent the questions out once again formed as statements, now to be ranked by these same experts. The figure below

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shows the basic format we used for our Delphi study. Note that the figure only shows one round of respondents ranking each others answers, while in reality there is a possibility of more iterations between the third and fourth step of the process. For our study, only one round was used due to time constraints.

Figure 1: Our application of the Delphi method

3.2 Choosing suitable experts

The respondents of a Delphi study should meet a certain level of expertise within the given field to ensure the validity of the gathered data. Almost as important is a willingness to participate in the study. The most knowledgeable experts also often lack the time to participate in these types of studies (Skulmoski et al. 2007). With that in mind we decided to contact different individuals within the video game industry by email, ranging from developers and executives to industry analysts. To complement this, we also contacted independent developers outside the industry.

Since the limited time scope of this study made it hard to conduct a large, multiround Delphi study, we limited the selection of respondents to assure a

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homogenous sample, as they can yield sufficient results at smaller numbers (Skulmoski et al. 2007).

3.3 Questionnaire

The questionnaire was designed to allow the respondents to answer freely with the goal of capturing qualitative data, something the Delphi method is well suited for (Skulmoski et al. 2007). Questions 13 were targeted toward identifying and understanding business decisions, while questions 46 formed the basis of our forecast. Specifically, these two questions were designed to draw on the respective knowledge and experience of each respondent. The last question could be seen as more narrow in scope and was included to determine if the video game industry has seen an influx of new developers in recent years.

● Question 1: What audience are Unreal Engine 4 and Amazon Lumberyard attracting?

● Question 2: Why are Epic Games and Amazon adopting this business model?

● Question 3: Do you think more companies will follow suit and release their game engines to the public as well?

● Question 4: What kind of games will be developed using Unreal Engine 4 and Amazon Lumberyard?

● Question 5: How do you think the modding scene will be affected by the release of Unreal Engine 4 and Amazon Lumberyard?

● Question 6: How do you think the indie game scene will be affected by the release of Unreal Engine 4 and Amazon Lumberyard?

● Question 7: Do you feel like there has been an increase in people developing games the last two years?

We made a distinction between modding and independent game development based on the description given of modding in the introduction of this paper. While the

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activities do not have to be mutually exclusive, modding and indie game development have some fundamental differences. Modding occurs in the context of existing games, usually with the aim of improving the original product. A study done by Hector Postigo (2010) also shows that modding has been used as a way into the video game industry, with modders becoming professional developers within a studio environment. Indie game developers, on the other hand, are by definition separated from that area of the industry and instead preside over their own intellectual properties and games. To us, these differences in tradition and motivation warranted the need of two separate questions, one targeting modding and the other targeting indie game development.

3.4 Case study

Our research also included a case study of the game WERIDE, developed in Unreal Engine 4 by an independent game developer well known to us. We carried out a semistructured interview with the developer and thus gained insight into the creative process. This gave us a series of firsthand impressions of working in Unreal Engine 4 from an indie developer’s point of view.

3.5 Comparative analysis

To visualize the technical possibilities and capabilities of Unreal Engine 4 and Amazon Lumberyard, the analysis was primarily based on the official documentation and information found on each engine’s official website. The case study complemented the analysis with a walkthrough of how the developer of WERIDE use the tools being described. With our comparative analysis we wanted to understand in greater detail what is being offered to developers, which similarities and differences that exist between the game engines and to understand the companies’ business models.

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4. Results

This section will present results from the questionnaire, our formalized statements and how the respondents ranked them. We also present our initial conclusions based on the respondents answers and the rankings of the statements.

Furthermore, we present a comparative analysis of Unreal Engine 4 and Amazon Lumberyard, as well as the result of our case study with the developer of WERIDE.

4.1 Delphi study

The study is based on data collected from 7 experts and included both hobbyists, independent developers and professional developers . With these different groups of individuals representing distinct points on the spectrum we conclude that the respondents were evenly spread along it, except for a minor predominance of professional developers. The respondents were of different backgrounds with some having experience from the modding culture and got into game development during the Half life/CounterStrike era while others more recently had started out with the help of the new game engine tools.

Questionnaire answers

The respondents' answers are presented in one table for each question, ranked in descending order starting with the highest scoring answer. As stated in the Methodology, each one of the 7 respondents were asked to rank the answers based on relevance and significance. The final rankings shown in the tables below were then produced by compiling all of the respondents individual rankings. The final score of each answer is presented as a number between 010, where a perfect score of 10 is only given when an answer receives the highest ranking by all respondents.

Conversely, a score of 0 is only given if an answer receives bottom rankings across the board.

Given a study with (1) distinct answers that share very few similarities and (2) a high level of expertise within the group, this means two things: Answers that receive a

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high score can be said to have a higher level of veracity, while the opposite would be true for low scoring answers. Furthermore, the difference between the highest and lowest scores would indicate how strong the consensus is. To clarify, a perfect consensus is only reached if every respondent gives the exact same rankings, mirroring each other. This would then result in evenly spaced scores starting at 10 and going down to 0.

As the reader will notice however, our data mainly consists of multilayered answers which often overlap, making such conclusions less meaningful. Consequently, we draw attention to broader patterns in the answers which can be gauged by looking at the overall rankings instead of individual scores. Nevertheless, answers with scores approaching the extremes can still be considered for their truthfulness, or lack thereof.

What audience are Unreal Engine 4 and Amazon Lumberyard attracting?

Rank 1 (4,43 p)

Unreal Engine 4: Big and medium studios as well as indie developers.

Amazon Lumberyard: Too early to say, CryEngine (which Lumberyard is based on) was mainly used by bigger studios in the past.

Rank 2 (4,00 p)

Unreal Engine 4 and Amazon Lumberyard attract many different companies and indie developers. Studios will continue using proprietary game engines for big budget, tripleA games.

Rank 3 (3,57 p)

Amateurs, hobbyists, indie developers and small studios.

Rank 4 (3,43 p)

Both experienced developers and beginners who prefer Unreal Engine 4 or Amazon Lumberyard over Unity. Probably if they are building a 3D game and not a 2D game (Unreal Engine 4) or if they want to utilize Amazon web services like cloud based servers (Lumberyard).

Rank 5 (3,14 p)

Unreal Engine 4 (and Amazon Lumberyard) have tools that cater more to the development of PC games, while Unity is better suited for mobile games.

Rank 6 (2,43 p)

Total newcomers that want to learn the basics, as well as experienced developers.

High scores were given to answers which claimed that the game engines attract a diverse crowd of both newcomers and experienced developers. The second highest ranking answers mentions that so called tripleA games , a commonly used and

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established term describing games with the highest development and marketing budgets, will continue to be developed exclusively by bigger studios . This is a recurring theme throughout our results and answers highlighting this have generally received high scores by our respondents. Overall, answers to this question were similar in both wording and opinion, reflected by the tight spread of high and low scores.

Why are Epic Games and Amazon adopting this business model? (Freetouse with monetization through royalties/distribution/hosting etc.)

Rank 1 (4,86 p)

To get smaller developers on board and making them use their game engines. Earlier, most of the revenue was generated by big publishers and studios. Today, indie developers make out a larger share of the market.

Rank 2 (4,29 p)

The more people using your game engine, the more advertising your product gets. Strength in numbers means you can accomplish things that a single studio cannot (or at a much faster rate).

Rank 3 (4,00 p)

Indie games have gained a lot of momentum lately. Since the advent of modding, communities have shown the capability of creating great content.

Epic Games and Amazon want to monetize on that talent.

Rank 5 (3,00 p)

They are forced by the competition. Also, they want to reach down to new, talented developers and introduce them to their tools.

Rank 6 (2,43 p)

It is because of the popularity of Unity, and they (Epic Games and Amazon) want to stay competitive.

Rank 7 (2,43 p)

They want to maximize their profits. By adopting this business model, they can buy content from the community that they can’t create themselves.

Here we can clearly see a prevailing trend among the collected answers, with the majority of respondents identifying similar key issues. As shown by the data, two common concepts that are driving these business decisions are communitybuilding and the reservation of talent . More specifically, one of the respondents stated that “if Epic and Amazon create a large user base for their engine, and a large collection of content, they'll be able to monetize later from that success, either directly or indirectly.” Another respondent also noted the increased market potential of indie games: “Earlier most revenue was probably generated by bigger publishers and studios,” the respondent stated, adding that, “today the market has shifted and indie

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devs are responsible for a bigger market share.” It should also be said that even though we excluded the Unity game engine (which we mentioned in an earlier section of this paper) from the questionnaire, several respondents identified Unity as a predecessor to Unreal Engine 4 and Amazon Lumberyard which pioneered the business model and set a new market standard that Epic Games and Amazon subsequently have followed.

Do you think more companies will follow suit and release their game engines to the public as well?

Rank 1 (5,14 p)

Hard to say. Unity is arguably the main reason we are seeing this business model. Unreal Engine 4 and Amazon Lumberyard have followed, but the industry still needs the traditional option of licensing which will suit some developers better. Unclear which other game engines could become free to use.

Rank 2 (4,86 p)

We have already seen most of the major players that will adopt this business model. Some more will come, maybe with smaller engines that targets a specific niche or feature which will then be implemented in the bigger game engines.

Rank 3 (4,57 p)

It entirely depends on the engine and the infrastructure. Engines that require less maintenance or support could follow suit, like Valve's Source Engine, but the likelihood seems quite low. Unity and Unreal Engine 4 have saturated the market, uncertain if even Amazon Lumberyard will survive for more than a year.

Rank 4 (4,57 p)

That could be the case. However, most game engines used by companies are not as generic as Unreal Engine 4, Unity and Amazon Lumberyard and would need modifications.

Rank 5 (4,00 p)

Since the concept depends on a large user base, some of the companies that has been slower to adopt this business model might be hesitant to go down the same path. The market will allow both open and closed engines in the future.

Rank 6 (3,00 p)

No, most remaining companies will keep their game engines inhouse.

Rank 7 (1,86 p)

Yes, but the added number of users makes it harder to support the engine.

As long as the game engine is used inhouse and by a few licensees it is easier to keep up with bug reports and stability issues.

Most of the respondents were sceptical of the idea that other professional studios will release their proprietary game engines . However, as the three top ranking

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answers show, answers which highlighted the possibility of more companies adopting similar business models also received high scores, while still including the respondent's reasons of scepticism. Looking at the highest ranked answer, Unity’s success was once again mentioned as a potential factor behind the business decisions of Epic Games and Amazon. Respondents also highlighted the continued need of proprietary game engines and monetization through licensing, stating that both business models will exist in the future. Finally, the bottom ranking answer should be noted for its low score compared to many of the other questions lowest scoring answers.

What kind of games will be developed using Unreal Engine 4 and Amazon Lumberyard?

Rank 1 (4,86 p)

Both game engines will be used for everything from small games to big budget, tripleA games. This is already true for Unreal Engine 4. Hard to see how Amazon Lumberyard fits into the market.

Rank 2 (4,57 p)

No limitations in genre, but huge tripleA games will continue to be developed exclusively by professionals using proprietary game engines.

Rank 3 (4,29 p)

Everything from low effort mobile games to tripleA indie games released through established publishers.

Rank 4 (4,00 p)

The vast majority of games developed in these free engines will never be released. The average hobby user will try some tutorials, buy some assets and experiment with the engine until another idea pops up, and then start over again.

Rank 5 (3,86 p)

Most games will still be developed within the competency range of the engine and the developers. However, the limitations between game engines are more blurred out today than they were before.

Rank 6 (3,86 p)

All kinds. Except 2D games, which are still better done in the Unity game engine.

Rank 7 (2,57 p)

More freetoplay and downloadable games than full blown tripleA games with physical distribution.

Like with previous questions, all but the lowest scoring answer are grouped closely together, with scores ranging from 4,86 to 3,86. Some conflicting opinions between the two highest scoring answers can be found concerning the aforementioned

exclusivity on tripleA games. This could be explained by the fact that Unreal Engine

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4 has been widely used for tripleA game development in the past. Similarities can also be found between this question’s answers and those of the first question regarding potential audiences. Taken as a whole, the respondents believe Unreal Engine 4 and Amazon Lumberyard will be used by a wide variety of developers to create a plethora of games^.

How do you think the modding scene will be affected by the release of Unreal Engine 4 and Amazon Lumberyard?

Rank 1 (4,33 p)

It depends on how well the companies handle and encourage modding. At least for Unreal Engine 4, there seems to be a conscious strategy to

encourage modding of their games, if not the main purpose.

Rank 2 (3,83 p)

The modding scene will grow even bigger and we will see even more games like Minecraft, where it is up to the community to create content or even create the game itself.

Rank 3 (3,67 p)

The modding scene has been dead for half a decade. Modding used to be for hobbyists and people looking to get into the industry, but there is no need for large mods when people have so many resources available to them.

Rank 4 (3,50 p)

Total conversions are dead. If CounterStrike was developed today it would be developed as its own product. Mods becoming separate products will continue to exist but will be developed using different engines.

Rank 5 (3,33 p)

Not much. You could argue that the step from modding games to making them is smaller and that some people will skip it entirely. However, the modding scene will remain strong. Modding games will always be easier than making them yourself.

Rank 6 (2,33 p)

We have already seen the modding scene explode with Unity on a few of the game releases there and there is no reason not to think that the same will happen with Unreal Engine 4 and Amazon Lumberyard.

Unlike some of the previous questions where the answers have been very similar, respondents appear more split in their answers regarding the modding scene^. Looking only at the overall ranking, our data would suggest that respondents believe Unreal Engine 4 and Amazon Lumberyard will have a positive effect on an already healthy modding scene. However, the latter part of that statement is clearly

contradicted by the following two answers which questions both the vitality and continued need of the modding scene. Again, we would like to remind the reader of

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what was said earlier about the complex nature of our data and the implications that has on rankings and scores of individual answers.

How do you think the indie game scene will be affected by the release of Unreal Engine 4 and Amazon Lumberyard?

Rank 1 (5,57 p)

The indie game scene will benefit from it. In particular, it helps designers and beginners with bringing their game ideas to life. Developers with ideas for certain functions, features and designs will be able to do business selling assets, avoiding the process of finalizing an entire game.

Rank 2 (5,00 p)

Unreal Engine 4 and Amazon Lumberyard will accelerate the growth of the indie game scene and will help the creation of more and better content.

Rank 3 (4,43 p)

More developers will get into the indie game scene by creating small games for their portfolios. It will be cheaper and there will be fewer prerequisites to developing games. There will be more knowledge available through the community. The competition will be higher.

Rank 4 (3,86 p)

Both Unreal Engine 4 and Amazon Lumberyard will make the indie game scene grow even more.

Rank 5 (3,43 p)

More developers will have access to high quality platforms which will make more developers go independent.

Rank 6 (3,14 p)

The more competition the better. Unity is a great platform and has done amazing things, but the more choices people have the better quality of games we will see.

Rank 7 (2,57 p)

The big change came with the release of a version of Unity that increased the quality significantly. The amount of games in development will grow.

The skills required to develop a decent game has been lowered.

The respondents believe Unreal Engine 4 and Amazon (as well as Unity) already have had and will continue to have positive effects on the indie game scene. A lower point of entry for new developers, both economically and skillwise, is mentioned as a result of the game engines becoming free to use. This optimism and positivity permeate both high and low ranking answers.

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Do you feel like there has been an increase in people developing games the last two years?

Rank 1 (3,57 p)

Both yes and no. There are more small studios and independent developers today that are developing small games. However, there is a possibility that these developers would have existed within the industry anyway, working for big studios and companies on the same game.

Rank 2 (3,29 p)

Yes, because the point of entry is lower than it has ever been. Anyone can download the required tools and start developing their own games today.

Rank 3 (3,29 p)

It feels like it. We are seeing more independent developers and small teams developing games; teams of one or two releasing a game without leaving their living room.

Rank 4 (3,14 p)

Yes, definitely. Especially in Stockholm where there has been a huge increase in teams of seven or eight developers these last years.

Rank 5 (1,71 p)

No, but it is very likely that it could be the case.

Despite this being more of a closeended question than the others, answers were ranked evenly except for the lowest scoring answer. Even though no answer scored higher than 3,57 out of 10, both the overall ranking and the low score of the bottom answer suggest a strong consensus towards there being more active developers today than there were two years ago^.

4.2 Case Study

In order to get a deeper understanding of what it is like to work as an independent developer and how they have experienced the changes in the industry we carried out a semistructured interview with a developer well known to us.

WERIDE is an indie production created solely by one developer. The developer is a 30 year old male living in Stockholm working a fulltime job at a medium sized digital technology agency. Before working he studied a two year programme called Digital Graphics where he learned basic 3D modeling. He has always considered himself to be a builder and remember his childhood days constructing skateboarding ramps, tree houses and pinball machines in paper. He was also interested in building

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computer games from an early age and started off his game development interest in a then simple logic and pixel based editor called Games Factory.

A key quality for being successful in game development is something he calls personal leadership. This essentially means that you take responsibility for your own progress and do not rely on anyone else doing the work for you. The developer also claims that being result oriented and creative are important proficiencies for finishing an unique and innovative game. In addition to this set of skills he mentions some generational qualities that he has benefited from. People born in the 1980s got a "we can do anything"mentality and was brought up in a rapidly changing digital society, giving a spark to this new industry, he argues.

Most of his professional qualities are selftaught while working his first job at a small web agency where he was responsible of frontend web development and art directing. Frontend web development involved learning Javascript and gave him a fundamental knowledge of programming. Learning Javascript turned out to be an important factor in his game development interest because one of the first free game engine editors, Unity, had support for this scripting language. For further details on the developer’s answers see attachment #1.

The game WERIDE

The developer explains that he is building WERIDE because it gives him a sense of creating his own world. Here he can dictate rules as he want without anyone intervening. He is inspired by his favourite game Ultima Online which is one of the first released MMOs (massively multiplayer online games). In this game you could run around in an open world without loading screens and if you met someone outside town it was a "kill or get killed"situation where the killer would be able to

“loot” the other players equipment. This is a key factor in WERIDE as the developer describes his passion for building this game as "a frustration of the modern MMOs lameness". However, his goal is not to build the next hit game, but to get a player base of about 100 people that will enjoy the game as much as him.

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Summary of case study

The developer is a builder person with a deep digital technology interest with a strong will to recreate his all time favourite game. He started off with Unity where he learned the fundamentals of game development and then later advanced to Unreal Engine for further functionality such as Blueprint (a visual scripting editor that lets you program by dragging and dropping nodes connecting variables and functions), free graphic editors and network support. He has no particular interest in Amazon Lumberyard but has heard about it. The game he is creating is for personal purposes rather than professional in the sense that his goal is to create a game directed towards a small target group instead of reaching out to as many as possible.

4.3 Comparative analysis of Unreal Engine 4 and Amazon Lumberyard

To get a better understanding of the game engines respective technical features and how their respective developers are profiling them, we have conducted a comparative analysis of Unreal Engine 4 and Amazon Lumberyard. As stated earlier, the comparative analysis will not go into any greater depth on specific technical features pertaining to each engine, but will mainly serve as a comparison of features. The goal of the comparative analysis is to guide the reader and to provide context to some of the questionnaire answers presented in this section. If no other source is mentioned, the information presented in this analysis has been collected from the game engines official websites. Data for this analysis has particularly been collected from the

“frequently asked questions” section of each website. All relevant website addresses can be found in the reference list at the end of this paper.

The biggest similarities between the two game engines can be found in the technical features of each engine. Both Unreal Engine 4 and Amazon Lumberyard are presented as technically advanced game engines , capable of producing

“photorealistic 3D environments” (Amazon Web Services, Inc., 2016) and “stunning highend visuals” (Unrealengine.com, 2016). Both engines are also presented as flexible and suited for a multitude of different projects , ranging from 2D mobile

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games to big budget 3D games. The hardware required to run the game engines are nearly identical, with Amazon recommending a slightly faster processor than Epic Games (4.0 GHz clock rate and 3.5 GHz clock rate respectively). The key takeaway here is that the hardware recommendations overall are high from a consumer standpoint. Looking at the platform availability, both Unreal Engine 4 and Amazon Lumberyard support PC, consoles and mobile devices. Currently, virtual reality hardware support only exists for Unreal Engine 4, but will be added to Amazon Lumberyard at a later time according to the official website. Both game engines can thus be said to have good platform availability . Both engines also provide full access to the underlying source code in C++, albeit with heavy restrictions to distribution.

Perhaps of most interest and relevance to this paper is the fact that both Epic Games and Amazon allow for modding of games made in Unreal Engine 4 and Amazon Lumberyard. While the source code cannot be shared publically for neither of the game engines, special editors can be used instead to create mods.

Another area where great similarities can be found is the community forums and tutorial sections. Both stressed by the information on the official websites and mirrored in the answers to our Delphi study is the importance of a lively and active community. There is a clear focus on sharing content and knowledge between developers, creating a richer community with the capability of creating even better games. One big difference between the two is that the Unreal Engine 4 website hosts a marketplace where developers can distribute and sell their content to the rest of the community. At this point in time, no such feature exists for Amazon Lumberyard.

The greatest differences between the engines are found in the business models, which differ in a few fundamental ways. As we have explained before, Epic Games monetizes Unreal Engine 4 by taking a 5% royalty from the gross revenue of each product, provided the gross revenue exceeds $5000 per quarter. Amazon Lumberyard, on the other hand, is completely free as long as the games are played offline or confined to local network multiplayer only. However, should a developer wish to release a game with online capability or cloudbased functionality, official Amazon web services have to be used which come with their respective fees. Thus,

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Epic Games and Amazon are both adopting business models without initial costs ^, but the way in which they profit from successful projects differ. Add to that the possibility for Unreal Engine 4 developers to become pure content creators for the community by using the official marketplace as their platform.

5. Discussion

As presented previously in this paper there are beneficial effects for producers to form relationships with their consumers, taking advantage of their innovativeness, in order to withstand competing on a global market. With the video game industry dynamically evolving almost in phase with new digital technology breakthroughs such as cloud based networking and virtual reality technology, producerconsumer collaborations are bound to take new forms . Our scope in this paper has been to point out key factors which might impact the producerconsumer collaborations between independent developers, modders and the video game industry when the professional video game producers begin sharing their proprietary tools. By analyzing these factors we provide a glimpse of a possible future direction the video game industry is heading towards, both in terms of independent and professional game development, as well as contributing to a sparsely documented field in the literature.

Leveling the playing field

Our empirical study suggests that Unreal Engine 4 and Amazon Lumberyard attract an audience ranging from complete beginners up to (but not necessarily including) tripleA producers. Within this span, the majority of developers will build private games for their personal pleasure, which will not generate any direct monetary value to either the tool supplier or the developer. The span is however vast and the number of profitable small indie studios should not be overlooked. The developer in our case study is representative of von Hippel’s two core reasons in the way that he was unsatisfied with the supply of games and instead took the matter in his own hands, solving his demand for these type of games and at the same time found enjoyment in the working and learning process. Games like WERIDE are examples of how Unreal

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Engine 4 has attracted developers who began with Unity but needed more functionality and better documentation. While some developers might replace Unity for Unreal Engine 4 many have started with this program and learned the fundamentals of game development in it. Our results points toward the possibility that since Unity was one of the first game engines to adapt this business model, and turned out to be successful, it put pressure on their competitors to rethink their business strategies . In a general sense it is most likely that the primary values of applying this business model lies in the producerconsumer collaboration, where the producers utilize the collective creative potential of the community, and in familiarizing potential future employees to their tools thereby “locking up” future talent. The former value is one of the reasons behind several successful products that in the expansion of digital technologies relied upon voluntary actions of the opensource communities.

Community platforms

One way to look at the effects of the transformations of the video game industry can be to compare it to the music industry and how it changed due to tools such as Pro Tools and Logic becoming available for widespread use. These digital audio software programs enabled anyone with a home computer to create and spread their music relatively easy and lowered the point of entry to become a music producer, much like how the threshold of developing a computer game is becoming lower and lower. A similar situation can also be observed in the film industry today, with affordable video editing software like Adobe Premiere being used by amateurs and professionals alike. What makes the video game industry somewhat unique is the remarkable potential for success that the available tools and software can grant those who learn how to use them. Unvetted game developers can emerge seemingly from nowhere and reach untold success, much like how Marcus “Notch” Persson did with his sandbox blockbuilder Minecraft. Contrast this to film, where access to advanced editing software does not remove the cost and knowledge required to create the raw footage to edit. In game engines like Unreal Engine 4 and Amazon Lumberyard a developer can find everything necessary to go from game idea to finished product.

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The lowered point of entry and products like Minecraft that prove that success is possiblewillnaturally generate an increase of eager novices wanting to learn ^{. This} in turn creates a demand for support, tutorials and documentation, which often takes the form of community platforms. These platforms are seemingly already becoming an important component of how Epic Games operate. CEO Tim Sweeney frequently visits the community forums answering questions regarding programming features as well as company related questions. In a post with the topic “Does Epic make money from games or games engines?” Sweeney responded that they do not share their numbers publicly but that their “top revenue source fluctuates between engines and games yeartoyear” and that for them “ games have been #1 in several key years when we have released major games, but engines has been #1 more frequently including in 2014 and so far in 2015” (Forums.unrealengine.com, 2015). ^This presence provide a collective relationship between producers and consumers and the fact that Epic Games frequently use the slogan “We succeed when you succeed” in their advertising is suggestively proof that they consciously support producerconsumer relations . But the former quote itself also reveals that the engine is an important component for generating revenue to Epic Games.

5.1 Method critique

The process of writing this paper has required us to frequently iterate how to clarify definitions and terms that are important for grasping the context of our study.

During the course of our work some major changes occurred in the video game industry. Amazon Lumberyard was released and came as a surprise to many in the industry. This became an important verifier for our initial underlying hypothesis that Unreal Engine 4 was doing something new and interesting. The Game Developer Conference in San Francisco also took place during this time period where both Unity and Epic Games released new updates for their game engines (Unity3d.com 2016; Unrealengine.com, 2016). With the industry being as volatile as it currently is we suggest that our results are to be interpreted as a snapshot of the time frame in which this paper was written. These changes and updates within the industry might have had an impact on the respondents in the Delphi study as it is no guarantee that