Do low game prices spell a 'mass extinction' for game developers?

This is the golden age of independent game developers, who, by their own ingenuity are able to make the games that they want to make, sell them via outlets like Steam, and promote them cheaply via social media.

Many developers have become famous, at least within gaming culture. But according to one developer, the party is over.

Earlier this week, Caspian Prince, co-founder of Puppy Games, delivered a provocative and controversial blog post, called 'The Dark Side of Indie PR,' bemoaning the decreasing prices of games sold via online retail portals. He said that a "cataclysmic event" had overtaken indie games, in which bundles and sales events had brought the value of indie games down significantly.

"Our games are meant to be $10, but nobody buys them at $10. They buy them when a 90 percent discount coupon lands in their Steam inventory," he wrote. "We survive only by the grace of coupon drops, which are of course entirely under Valve's control. It doesn't matter how much marketing we do now, because Valve control our drip feed."

Puppy is best known for retro arcade games like Titan Attacks and Ultratron. Despite significant blowback from critics of his post, Prince is unrepentant. In an interview with Gamesindustry today, he said that the "spiral of price erosion" is damaging small game development teams.

"I think the next thing that will happen is there will be a mass extinction event, basically," Prince said. "There's got to be a consolidation. Another year of this and a whole load of studios are just simply going to give up because it's a waste of time. A lot of people are going to have to stop making games because they can't afford to do it anymore."

Steam has been an enormous boon to indies, allowing direct access to a large and active audience of gamers. A promoted game on Steam can make a developer's reputation, almost overnight.

Digital distribution has changed the gaming ecosystem, from one almost entirely controlled by marketing-led boxed AAA games to one that is infinitely more varied and interesting. And yet, for Prince, the power of retail outlets like Steam to create hugely popular sales events is damaging to his business.

"Where once you [customers] were worth $20, and then you might have become a fan and bought another four games off of us for $20, you were worth $100," Prince said. "Now you're worth $1 to us. If you buy every one of our games, you're worth $5. After Valve and the tax man and the bank take their cuts, you're not even worth half a cup of coffee."