The XBLA Exodus: Can Microsoft Reinvigorate Xbox Live Arcade?

Microsoft has a mixed track record with indie games on its XBLA platform. As indie developers flock to other platforms, can Microsoft reinvigorate Xbox Live Arcade?

Note: This article originally appeared in Game Informer issue 242.

Brian Provinciano knew he did not want to release his game, Retro City Rampage (above), 24 hours after New Year's Day. When doing his homework almost two years ago at PAX, the independent developer asked everyone he could about the Xbox Live Arcade marketplace, and he didn't hear good things about the release window near the celebratory date.

The developer doesn't know why it is a bad date (though one can speculate that it has to do with the influx of new retail games out for the holiday season, or people more concerned with going out to celebrate than buying a new downloadable game). Unfortunately for Provinciano, his game came out on January 2, and he didn't have a choice in the matter. Microsoft gets to choose when a game releases on XBLA, not the developer. Some games end up releasing during busy holiday seasons, or so suddenly that developers don't have time to put together their own marketing initiative.

Provinciano eventually made Retro City Rampage, his love letter to Grand Theft Auto and the Nintendo Entertainment System, available for the widest possible market. This meant jumping through all the necessary hoops to port the game to WiiWare, Xbox Live Arcade, PlayStation Network, PC, and the Vita. After selling 100,000 units and taking some time to reflect on the process, Provinciano says he won't spend the time and energy needed to put another game on a Microsoft platform. 

"It's just so needlessly difficult to get your game out on XBLA, and at the end of the day your game is feature identical on all of the platforms," Provinciano says. "The XBLA one was over a year total of work, and I don't know how many man-months of work, but it was a lot of time and money. The Xbox sales really got hurt by Microsoft's policies, which were trying to benefit [Microsoft]."

 Provinciano isn't the only developer to feel this way, and it's causing Microsoft – once a mecca for indie developers – to lose games to other platforms such as Steam, the PlayStation Network, and iOS.

THE REBIRTH OF INDIE

Downloadable games didn't hit their stride on consoles until the 2005 version of Xbox Live Arcade on Xbox 360. For the first time, there was a way for independent developers to widely distribute a video game for a console. 

Though a few titles like Geometry Wars found success early on, the moment Xbox Live Arcade found wider acceptance can be traced back to the Summer of Arcade promotion in 2008. Jonathan Blow's Braid
and The Behemoth's Castle Crashers released during this promotion – two of the most successful indie games of all time, both critically and commercially.  Braid turned Jonathan Blow into an overnight millionaire, and more than 2.6 million people have purchased Castle Crashers to date.

Games like these paved the way for more indie success stories such as PlayDead's Limbo and Team Meat's Super Meat Boy.  

"Back then, Xbox was the only console you could make money off of realistically," says Team Meat's Edmund McMillen. "It was the only console platform."

PlayStation Network, Steam, and WiiWare were ramping up at the same time, and though World of Goo did well on the Nintendo platform, the service never found the widespread success XBLA enjoyed.

"The games that did well on the Wii sucked sales-wise compared to stuff on Xbox Live because this was back when Steam was just still building steam," McMillen says. 

XBOX LIVE ARCADE ALLURE 

When everything goes right, Microsoft unearths a gem of a game, finds a good release date for the indie developer, offers the chance to be seen by countless gamers in promotions like the Summer of Arcade, and puts the game in front of millions of console owners eager to buy the next big title. Braid and Castle Crashers were featured in Xbox marketing promotions, and both became popular quickly thanks to the Microsoft-driven marketing and premier placement on the Xbox 360 dashboard. 

Developer Andy Schatz of Pocketwatch Games enjoys crafting games for the Xbox 360 because of these benefits Microsoft offers developers. 

"On Xbox Live [Arcade] what they're trying to do is maintain a high level of quality for everything that they launch so that customers have an expectation that what they get will work with all the features that they're trying to push," Schatz says.

He built his game, Monaco (above), for XBLA because the marketplace is strong and has a big audience. He also likes the prevalence of headsets among 360 gamers, because Monaco is a great cooperative experience whether you're sitting on the same couch or connecting online. For Schatz, releasing the game on XBLA make sense, but it does present unique challenges.

"The big difference is certification," Schatz says. "On the PC and Mac side you have a lot more freedom to push out a broken build, or push out something that's incomplete or doesn't have the full variety of features to support the whole ecosystem. That's really just a different sort of corporate policy on the side of Steam versus XBLA."

Each platform has its own policy quirks, though some are more lenient and friendly than others. But not all developers have good experiences dealing with Microsoft.

ALIENATING INDIES

Though XBLA still receives a number of releases each year, an indie exodus is underway as developers are heading to greener pastures with less strict policies.

The beginning of development is when one of the hardest steps comes into play: getting the green light from Microsoft to put your game on the service. Provinciano says there are really only two ways onto XBLA for an indie developer: get a publishing deal with Microsoft, or sign a deal with a third-party publisher. 

Both paths are difficult. Going through Microsoft can lead to a months-long procession of pitches before eventually hearing a yes or no. "If they say no, as I've seen [with] many developers, you're screwed, because you just wasted nine months," Provinciano says.

The alternative is going through a third-party publisher and taking a slot Microsoft has allotted it for XBLA titles. With this approach, you have to give the publisher a cut or pay them for services like testing - something indie developers already do themselves on platforms like Steam.

"You're pretty much faced with either timed exclusive and some other strings, or you go through a third party publisher and give them a cut," Provinciano says.

Even once contracts are signed, circumstances can change on a whim.

Team Meat, which launched Super Meat Boy as a timed exclusive for XBLA, learned its lesson the hard way. The developer duo of McMillen and Tommy Refenes now stays away from publishers in general and Microsoft specifically.  

The team faced all the same struggles as Provinciano, but also felt they didn't get an honest deal from Microsoft. Things started to go sour during the final months of developing Super Meat Boy. Team Meat worked hard to get the game done in time for a marketing blitz similar to the Summer of Arcade called Game Feast, a fall dashboard promotion slated to feature XBLA games prominently on the Xbox 360's main menu.

After all Team Meat's hard work preparing the game in time, it didn't get into the promotion because Microsoft cut the marketing campaign short before it was Team Meat's turn to be featured. "That sucked more than anything you can imagine," McMillen says. "From that point on it really seemed like it was out of the hands of the people that we were working with and went into the hands of the people who control the people we were working with, and those people simply don't care. It's a business thing. We never got anything – even though we did everything we were told."

For Team Meat, it was an eye-opening experience that ensured it does its due diligence when signing contracts. By McMillen's admission, the studio was too trusting of Microsoft. "For the most part we got f---ed over," McMillen explains plainly. "We got really f---ed over."

Once a game is released, Microsoft makes it hard for developers to patch their games or release new downloadable content. Fez creator Phil Fish was involved in one of the more infamous examples of this situation. When it launched, Fez featured a number of bugs in need of fixing. Fish released a title update, but some players who downloaded it experienced a save-state bug. In order to release a newer version of the patch without the bug, Microsoft wanted to charge Fish a lot of money to fix it – and this was after they had done testing for him to find such issues.

Fish chose not to release another patch because of the cost requirements. Double Fine's Tim Schaefer once estimated that a patch costs around $40,000 – a significant fee to an indie developer.

Downloadable content is also a major issue after release, with more and more studios relying on it to drive additional revenues. Robot Entertainment released Orcs Must Die! on Xbox 360 before its debut on PC. The studio also created downloadable content, but not all of it made it to the console. Some of that has
to do with the platform not seeing the kind of sales it used to with the growing popularity of Steam. Robot Entertainment didn't even release the sequel to the popular Orcs Must Die! on the 360, keeping it a PC title.

Financial influences swayed Robot's gradual movement away from XBLA. Robot Entertainment CEO Patrick Hudson won't give specific dollar amounts, but when comparing the two versions of the first game, he says the PC one made "many times – multiples" more in sales. The added cost of creating the Xbox 360 version just didn't make sense for the sequel.

"It was difficult, it was time consuming, and it was expensive relative to PC," Hudson says. "We had trouble justifying being back on XBLA for that added effort. So it's those things and the market, as far as number of customers we had, was substantially larger on PC than it was on XBLA."

It's disappointing for Hudson because he believes XBLA "used to be a very outstanding place to find games, and these days it's just different than it used to be.

"XBLA is probably not as prominently featured as it used to be on the console. Microsoft used to do, in my opinion, a really great job of promoting XBLA as a channel for unique and innovative games. It seemed like over time the XBLA games didn't surface to the top of the UI on Xbox nearly as often as it used to and [it] became harder to discover new XBLA games outside of the Summer of Arcade. They weren't promoted in the same way."

STIFFENING COMPETITION

Other platforms have learned from Microsoft's mistakes. While WiiWare and the PlayStation Network were once also difficult in their own ways, both platforms are changing to be more developer friendly.  

Nintendo no longer requires developers to have an office. A developer can also set its own prices and run its own sales for games released on Nintendo's eShop. Steam has become popular because it is an open platform where creators can do all the testing themselves, set prices, and patch without extra costs. In the mobile market, iOS developers take about 70 percent of the profit when their games are sold. Sony has also made drastic changes to the way it approaches independent developers (see Sony Gears Up for Indie Gaming), going as far as letting developers dictate their own release date and pricing strategies.

Provinciano says getting Retro City Rampage to PlayStation 3 and PlayStation Vita was simple, and these platforms made the most money for him. Cases like these are leading many to migrate away from Microsoft to its chief console competitor.

Perhaps Sony sensed the chance for a coup in the indie console space. Recently, developers have taken to Twitter to describe how Sony representatives reach out to them out of the blue to see how they can make their game a reality on Sony's handheld or console. Sony was very open to working with Provinciano, especially on the Vita platform.

 "I was actually pretty happy with how they approached it because they didn't pressure me to add any touchscreen-specific stuff or whatever to RCR, and that was something that I liked," he says. "As a gamer I remember the first-gen DS games: they were kind of taking GBA games, canceling those, putting them out on DS, adding touch stuff, and kind of ruining them. From my experience on my end they've [Sony] been really open about just saying, 'Do what makes sense.'"

The change in approach to the indie scene comes as a surprise to some developers, but is welcomed enthusiastically. "Both Nintendo and Sony have changed a great deal," McMillen says, having had experience with both.

"They're going above and beyond," Refenes adds.

Both Team Meat developers agree that these kinds of forward-thinking business practices are needed to make it easier for indie developers to acquire the means to develop for the respective platforms.

"The result of that [is] it makes it easier for everybody," Refenes says. "They're making smart, progressive-thinking moves in order to stay relevant in this market that's now dominated by Apple."

McMillen admits he didn't expect the platform holders' approach to mature after seeing what he's seen during his years in the industry. "It's been honestly surprising, especially after the past X amount of years that we've been working in the industry, seeing how things go, seeing how hard it was just to get Meat Boy on Xbox; and then what happened with that and everything else, how hard it was to get a kit, all the requirements that went into that," he says. "With Microsoft it's still the same, but with Sony and Nintendo it's such a drastic change. From some of the stuff I've seen with Sony and hear with Sony, it's pretty surprising. It seems like Sony really focuses on getting games." 

Refenes says that he's hopeful about the change started by the two Japanese giants, but says plainly that it all really depends on how well their consoles do, or how much a PlayStation 4 costs. Indie developers need people to own consoles before they can sell their games.

"As much as Sony is pushing for, 'Hey, here's a kit, just mess with it and make something for us'...it all hinges on the final business decisions up above those people that we're talking to as to whether or not it will be a success or not," Refenes says. "Hopefully it all works out, but time will tell."

YOUR MOVE, MICROSOFT

Microsoft plans to announce the new Xbox later this year, and soon after the world will likely learn how the company intends to transform its approach to the downloadable game platform. Hudson thinks it's a big opportunity the console giant needs to get right.

"I think from a player's perspective and from a developer's perspective, there's a massive opportunity there," Hudson says. "I don't know if Microsoft is willing to embrace that with the next-generation console that's coming. I hope they do, because if they do, I think there's a very ripe market for it."

Microsoft senior director of marketing for Xbox Live Craig Davison says the digital platform has always been one of the Xbox's pillars and will continue to be an important part of the future.

"Microsoft has been a pioneer in the digital distribution space, and our digital games and video business on Xbox 360 continue to grow," Davison says. "Our members love Xbox Marketplace and we're investing to improve the service – that includes continuing to support Xbox Live Arcade as well as many other game genres, ensuring we continue to be the best place to purchase games, add-ons, consumables, and more from the comfort of the living room. We encourage all developers to create the games they've always imagined by ensuring they have the resources that will help them be successful. Some indie developers have achieved success in securing Xbox Live Arcade contracts to enjoy a wider release of their games."

With all the talk of Microsoft not being the go-to place for indie games anymore, Schatz thinks that maybe the positive aspects of XBLA sometimes get lost. In fact, he thinks the platform really isn't losing as many developers as people think.

"I don't think that there's really strong data on that," Schatz says. "I think that there is this kind of groundswell opinion that the PC is the place for downloadable games right now. I don't necessarily think that that's the case."

Schatz says the PC has an advantage because it's more likely connected to the Internet, thus linking gamers to a store page much easier. He also points out that Minecraft, an insanely popular PC title, has become one of the best-selling XBLA games in the platform's history, selling six million units as of last March.

"I think that it would be wrong to assume that there's any sort of fade in the console downloadable market," Schatz says. "It will definitely get stronger as time goes by because more big-budget games will be coming out as downloadable games as well. I would not say that consoles are declining in any way whatsoever, but I do think that there are some aspects in which they're probably playing a little bit of catch-up because they're not an open platform. I think that there are certainly things from a store perspective that all of the console platforms could do better."

The stark reality of indie development on consoles is that it has been difficult and expensive compared to more open platforms. Though the PC is currently flourishing, it too faces stiff competition from tablets and phones.

"You're just reaching more people when you design and make something for tablets and phones," Refenes says when explaining why Team Meat's next game, Mew-Genics, will be on iPad.

"When you make a game you want as many people to play it as possible," McMillen adds. "You want to make it for the system that the majority of people are going to play."

That philosophy may not be shared by every indie developer, and that's why the diversity of platforms available is something that Schatz says is good for them. "Do I want everyone to look like iOS? Do I want everyone to look like XBLA? Do I want everyone to look like Steam? No," Schatz says. "I think that there's room for all of those platforms because there are customers that want everything just to work. There are customers that care more about their Xbox Live presence – they care about their achievements. Yet there are people that would prefer to have rougher products with more updates, and those people will play on Steam."

No matter what platform a developer chooses, Provinciano has advice for them: Don't release a game near New Year's Day.