[When's the right time to begin developing for a specific platform? Digital distribution consultant David Edery writes explaining factors like market behavior and platform qualities, offering essential guidelines.]

In my experience, one of the problems that most seems to bedevil game developers is the problem of timing; specifically, understanding when is the "right time" to begin developing for a specific platform.

To understand why this is such a challenge for developers, you need to understand how a games platform tends to evolve.

Here's the typical scenario: A platform -- for example, XBLA, or the iPhone App Store, or Facebook -- comes into existence. Most people regard the platform suspiciously, for a variety of reasons. It's an unproven market, for starters.

The platform owner's commitment to growing the platform may be unclear. The pros and cons of working with the platform owner in this context are unknown. There are lots of other platforms to choose from. Etc. Most developers take all this into account and decide to pass on the platform for the time being.

Then the platform begins to take off. The inevitable articles in respected publications such as Gamasutra and Edge appear; developer ABC claims to have made a million bucks; game XYZ has sold half a million units; average conversion rates are through the roof; etc.

Lies, Damned Lies, and Statistics

The platform's owner is probably out there cheering more loudly than anyone. They publish statistics which are 100% true, but which may or may not actually convey a complete picture of what's actually happening on the platform.

(For example, I've noticed that PlayStation Home presentations are full of great-sounding statistics which tell you almost nothing about your chances of actually generating a profit on that platform, or even your chances of indirectly generating profit via secondary effects -- like the buzz that platform helps generate for your IP.) But please don't take this as Sony-bashing, because as far as I know most platform owners are guilty of this.

Even if the platform's stats really do paint an accurate, unexaggerated picture of what is happening on the platform, those stats likely reflect a past that has no bearing on the future competitive nature of the platform. Remember the early days of XBLA on the 360? Remember 20% average conversion rates? All that positivity was totally legitimate, but it reflected an ecosystem that was benefiting from an extreme mismatch between consumer demand (which was high) and content supply (which was low -- back then one game a week was considered a very large amount of content for XBLA, and even the retail ecosystem was still pretty short on content.)

And that's where the first big wave of developers get themselves in trouble. They rush to develop games for this wonderful new platform, not realizing (or simply disregarding the fact) that everyone else is doing the same thing. Content supply explodes, because even on a closed platform internal and external pressures push platform managers to lean towards distributing more content rather than less. After all, it's hard to predict hits, so why turn away something that has a chance of positively surprising you? There's also the tricky politics of rejecting content from your long-time partners, which can be a painful thing for any platform owner.

Equilibrium's a Bitch

While content supply is exploding, consumer demand also increases, but not nearly enough to keep pace with the content explosion. Consequently, the supply/demand imbalance quickly corrects itself, and in some cases even over-corrects. Worst of all, many developers (some new entrants to the platform, but also some veterans) fail to realize that greater competition means a higher bar for success, and as a result they fail to increase the quality of their games and/or their marketing efforts and ultimately get lost in the crowd. The easy money is gone, and while some developers continue to succeed, a large number fall flat on their faces. Many do not recover. Sierra Online's stunning fall from top XBLA publisher to total irrelevance is a good (and sad) example of this.

As the pain spreads, the general buzz about the platform begins to sour. Reports of games flopping appear everywhere. Developers complain loudly that the platform is being mismanaged, that there's too much content, that pricing pressure is too great, and any other number of complaints. (Piracy? Cloning? Favoritism? 1st/3rd party politics? You name it!) Some developers get scared away. Some stay engaged but never figure out how to compete effectively. Does this sound familiar? It should, because it happened to XBLA and it's happening on the iPhone even as we speak.

But if (and here's a big if) the platform's economics are fundamentally sound and if the platform isn't being too badly mismanaged, some developers ultimately will find a way to raise the bar and stand out from the crowd. They create remarkable games; they market themselves effectively; they adopt more profitable business models where possible; they establish a good relationship with a key publisher or the platform owner itself. These developers benefit from the fact that while the platform has become dramatically more competitive, it has also continued to grow and attract new consumers who still want to download games! (Even if, as is often the case, the new consumers download fewer games on average.) Basically, the ecosystem has inevitably evolved into a hit-driven ecosystem, and while that sucks for most developers, it's a truly wonderful thing for the few companies that actually manage to crank out hits!

Hope Springs Eternal

And now something funny happens: the new hits inspire new confidence in the platform. Bigger players, who may not have taken the platform seriously in the early days, or who experimented with it and failed, begin to show their faces -- perhaps even in force. EA's recent releases on XBLA (Battlefield, Madden, etc) are a great example of this. Some truly enormous hits (examples: Trials HD, Battlefield 1943) are launched to great fanfare. The buzz cycle turns positive again!

So, can you guess what happens next?

Nobody knows how long it will take, but eventually the cycle will turn negative. Too much higher-quality content. Too much content with higher marketing budgets. Games that “should” have succeeded start to fail, for any number of reasons. And the wheel keeps turning.

Of course, there may be aberrational moments which disrupt the cycle. For example: a big price drop in the price of a console which causes many new consumers to flood into the market. Or a big change in a console's dashboard (i.e. NXE) which improves merchandising or introduces features that drive consumers to certain content. But the wheel never stops turning entirely… until the platform dies, that is.

Enough Storytelling… What's the Punchline?

So if you're a developer, what can you actually do about all this? One answer: try to time the cycle; start investing when everyone else is cutting back! Unfortunately, timing a market has never been easy -- if it was, we'd all be stock market millionaires wouldn't we? And remember the "big if" I mentioned earlier: only fundamentally sound platforms ultimately recover from down cycles. Others languish or fail altogether. (Can you imagine the pain that developers who doubled down on WiiWare must be feeling right now? Who knows how long it will take Nintendo to truly fix that platform's many problems?)

So if timing the market is tough, how about trying to earn the "easy money" by focusing on new platforms that haven't yet become very competitive? Unfortunately, that's also quite difficult, because you just don't know which platforms will ultimately succeed. Just ask all the Android developers who were sure they'd be rolling in cash by now.

The truth of the matter is there's simply no magic answer -- just lots of little rules to keep in mind. Focus on platforms that demonstrate reasonably high upside for hit games, even if the competition is rough. Avoid platforms with terrible merchandising and apathetic management (or worse, management that is actively hostile to third parties.) Develop a good relationship with the platform owner. Market the heck out of your game for months (if not years) before it is released. Keep your costs reasonable. Develop something that stands out and delights people. No matter how competitive a market gets, there is always room for a Braid. Or a Crayon Physics. Or a Flight Control. These were not expensive games to develop.

And above all else, be ready to try, try again. Predicting hits is hard. Developing hits is even harder (especially when it comes to original IP!) Odds are, you're going to fail. But whatever doesn't kill you makes you stronger, right?

[David Edery is Principal of Fuzbi, an independent consulting firm focused on the business and design of digitally-distributed games. Prior to founding Fuzbi, David was the Worldwide Games Portfolio Manager for Microsoft's Xbox Live Arcade service. He regularly writes for his personal blog, Game Tycoon.]