World of Goo developer 2D Boy believes Xbox Live Arcade "peaked" last year (2010) and that "Microsoft is not yet aware of this".
Studio co-founder Ron Carmel surveyed 200 independent game makers, some of which are responsible for significant - but undisclosed - XBLA titles.
He discovered that more developers want to make PSN games now than titles for XBLA. He also found PSN and XBLA seventh and eighth in a list of target platforms for 2011. The most popular was Windows, followed closely by Mac, iOS, Linux, Flash/browser and Android platforms.
Nearly three quarters of the developers surveyed said ease of working with a platform holder was paramount - followed by installed base and platform suitability.
When asked about specific platform holders, the majority deemed Steam, Facebook and Apple "very easy" to work with. Sony's PSN majority, like Google's Android, was "so-so". Most people found WiiWare "difficult", whereas Microsoft's XBLA was "excruciating".
"Given that ease of working with the platform owner was voted the most important factor in choice of platforms, it becomes perfectly clear why XBLA, despite being a very strong channel with a large audience and huge earning potential, is dropping in popularity among these developers," observed Carmel.
"But if things keep going the way they are, and XBLA keeps losing talented developers, I believe the diversity of games available on XBLA will diminish, quality will suffer, and revenue numbers will drop as players start to move away from an unremarkable portfolio of games. We will see a lot more 'genrefication' and big publisher franchises."
"XBLA is no longer the king it used to be. Microsoft is no longer in a position to demand exclusivity now that PSN has more developers and is growing."
Ron Carmel, co-founder, 2D Boy
"Once players start to leave in large numbers it will be too late to turn things around," he added. "Given that it takes at least a year or two to make an XBLA game, no developer would want to start working on one knowing that XBLA is declining in popularity and could be significantly weaker by the time the game is ready.
Carmel believes full-scale gamer "migration" away from XBLA is "a few years away", which allows "more than enough time for XBLA to change course".
To this end, Carmel shared "10 Things Microsoft Can Do To Improve XBLA".
- Create a fair contract that doesn't require negotiation. "It's the most exploitative, one-sided distribution contract I've seen. We each waste months of our time and Microsoft's time negotiating the same stuff out of the contract, over, and over again."
- Solve the content discovery problem. "The platform owner needs to make it super easy for their users to buy software."
- Stop requiring independent developers to publish through MGS. "Every other distribution channel allows independent developers to self publish, without a producer, and I see no evidence that having a producer on a game makes it better."
- Drop the TCRs, make updating easy. "TCRs add months to a game's development time that could be better used polishing the game."
- Get rid of the exclusivity requirement for independent developers. "XBLA is no longer the king it used to be. Microsoft is no longer in a position to demand exclusivity now that PSN has more developers and is growing."
- Drop the greenlight process and open up development to everyone. "Players judge the quality of a platform by the quality and quantity of the best games available on it, not by the average quality of all games."
- Make every console a dev kit. "It may require a lot of work, but there is nothing stopping Microsoft from doing this as well. This is actually one of the reasons Microsoft is the console maker best-poised to undergo this transformation."
- Automate everything. "With the App Store, everything is automated and a developer can release a game without ever talking to a human."
- Drop the ESRB in favor of a self administered rating system. "It takes weeks, and thousands of dollars, to get a game rated by all the domestic and international ratings agencies needed to launch a game globally. The ESRB in particular is a nightmare to deal with."
- Make avatar related requirements optional. "I don't know a single developer who wants to make toys for avatars. It's not fun and it inflates the game's budget."
"XBLA played a pivotal role in the popularisation of independent games," concluded Carmel, name-checking N+, Castle Crashers, Braid, Limbo and Super Meat Boy.
"Microsoft proved that indie games can be million sellers on consoles, and then sat on its laurels for half a decade as more nimble and innovative companies like Valve and Apple took the lead.
"I would love to see Microsoft rise to the challenge of adapting to new digital distribution landscapes," he wrote. "More healthy platforms means more interesting, creative games that push the limits of our medium."