The game is simple. The villainous Dr. Competent awaits you on a dark city street. A frantic, funky soundtrack plays out in blips and beeps on your smartphone's tiny speaker. Dr. Competent doesn't actually seem that bad: he's short and lab-coated, and looks imported from a G-rated comic strip. Nevertheless justice must be served, and you're just the superhero to do it.

When your power meter spikes, you start punching by tapping and swiping your screen, sending Dr. Competent spinning into deep space on a parabolic flight that eventually brings him back to earth. That's it. Game over. Maybe 30 seconds have passed.

That's Super Punch, one of the latest entries into the casual game market for mobile devices. Besides being simple, it's pointless and enough fun to make it one of the top apps on your smartphone or tablet.

Or at least that's what NAIT Digital Media and IT (DMIT) student Tyler Ste. Marie (above, second from left) is banking on as one of the founders of Bitshift Games Inc., the Edmonton startup responsible for Super Punch, available soon in the Windows Marketplace.

From a business perspective, the game is already an enviable success. This spring, its earliest form earned Ste. Marie and partners Pieter Parker (above, second from right), Jeremy Burns (left) and Stephen Baden (right), the $25,000 top prize at the Great Canadian Appathon, an 48-hour coding contest that drew 100 teams from across Canada.

That has put the group in the unusual position of being a startup with its bank balance in the black.

The prize funded the founding of the company following the Appathon, but the competition also highlighted other advantages. In 48 hours, the team created a working prototype with nothing more than laptops and workspace at the home of Rudy Janvier (Computer Engineering Technology '08; above, centre), a friend who has since joined Bitshift. In other words, overhead is exceptionally low.

And as "big video game nerds," the talent is already in place, says Ste. Marie, one of the artists behind the game. "Learning to be entrepreneurs: that's going to be the toughest thing."

Despite that knowledge gap, developers like him are shaping into a formidable threat to an industry based on elaborate, expensive games. Super Punch and games like it are proving to be a disruptive technology. They're giving rise to a new generation of game-makers who, despite growing up with cartridges, controllers and cathode ray TVs, are no longer convinced the console is king.

Impact of casual games on the video game market

The traditional U.S. video game market, worth about $18.6 billion in annual revenue in 2010, is showing signs of contraction. This spring, May sales dropped 14 per cent year-over-year, the worst hit in almost five years. June represented a 10-per cent drop.

In contrast, the mobile app industry is steadily, even rapidly, growing. By 2010, the major app stores were collectively generating more than $2 billion annually - more than half of it through games.

"It's these casual games that are sending shockwaves through the industry," says Armand Cadieux, a DMIT game design instructor.

One reason is the scaled-down production, illustrated by Bitshift's 48-hour code crunch, and the resulting higher return of investment in the case of a homerun app. On the consumer side, he also points out that the games are easy to play, accessible through a platform undergoing steady adoption, highly addictive, and appeal to a broader audience, including women, who account for about half of users.

Maybe most importantly, they're cheap. The hottest game apps - dominated by the Angry Birds franchise - cost about a dollar; quite often, they cost nothing. In-game advertising or purchases of new levels or features provide the bulk of revenue. Overall, for a new developer looking to get a foot in the industry's door, even as a freelancer or startup, casual games might seem the ideal point of entry.

But competition is fierce. Like much of the entertainment industry, this is a hit-driven business that measures success in volume sales, particularly because of how it has embraced the user-entitlement culture of the Internet. Bitshift's Parker, who has gravitated towards the business's management role while keeping a hand in development, understands that, but doesn't like it.

Early game apps were valued higher, he says, until developers undercut each other to boost sales.

"Now everyone expects that. [Developers] are still thinking, 'How can we get the best $1 app out there?' and I think that's the wrong attitude." For now, Bitshift's plan is to buck this trend by charging a price reflecting the game's value, possibly joining a minority of game apps that cost $3 to even $10 for HD versions. "If it has to take some punches along the way, we think it will be better in the long run."

He's probably onto something. The Apple App Store (which takes 30 per cent of an app's revenue) recently raised prices in keeping with demand. This July, the company announced that more than 200 million users had downloaded more than 15 billion apps. Analysts see prices rising higher still, as no doubt numbers of users will, too.

The Office Jerk effect

As a recent hit on the iPhone and iPad, Office Jerk can claim a relatively small but significant share of those numbers.

One of several titles produced by Fluik Entertainment Inc., located in a pink stucco walkup just off downtown Edmonton, the casual game represents the success Bitshift has set its sights on.

As of this summer, the free app (which makes its money on advertising, in-game purchases and, recently, branded merchandise, including mugs and iPhone covers) reached 9.5 million downloads and had hit No. 1 in 50 countries.

That made room for the full-time additions of programmer Justin James and junior game artist Matt LaRose, both freshly minted DMIT grads (class of '11).

Office Jerk is another simple game. The "jerk" sits at his desk and you throw stuff at him: muffins, staplers, even the fan that creates the wind current - the physics, as gamers call it - that affects your toss.

LaRose worked on animating things including the jerk's facial expressions, the supplies on his desk and the objects thrown at him, while James reconfigured the game for Android, Google's fast-rising operating system. They work with a team of less than 10, coding and designing together in a space the size of a master bedroom.

At lunch they can play console video games on a big screen TV in front of a pink leather sectional, approximating Silicon Valley casualness.

"It's still kind of like school," says James of the atmosphere and the learn-on-the-job guidance he receives.

Apart from James's experience developing a PC-based game called Goobers that paid his way through school, and LaRose's freelance work, this is the pair's first view of an industry they didn't expect to crack so soon. That said, the veteran gamers aren't surprised by the market shift that opened the door.

"There has been a huge explosion of casual gamers," says LaRose. He attributes that to the iPhone and, surprisingly, a console. "Wii has made gaming accessible to all sorts of people. Before, gaming was just for a hardcore audience - 30-, 40-hour-long campaigns that you'd play through." James agrees, suggesting a stigma around video games in general may have lifted. "Now your mom can pick up a Wii controller and bowl."

Though they're both nostalgic enough for those immersive, console-based games to want to one day make them, they're not interested - not yet, at least - in taking that leap of faith into entrepreneurism and setting up a shop like Bitshift. This is a risky market (none of Fluik's several other titles have performed as well as Office Jerk).

In fact, their work cycle is based, essentially, on trying to outpace user fickleness. After downloads of a new version of a game plateau, a slight dip signals the need for yet another. You repeat this "until you get that freefall," says James. "Then you abandon ship and go to the next game."

Though Office Jerk is far from those twilight metrics, Fluik is busy planning for another hit, the nature of which remains a trade secret until release.

"I've been sitting at my desk working on another game," says James. "I'll just say that."

Super Punch swings for a knock-out

If all goes well, Super Punch would likely work according to a similar model. "The way I want to see Bitshift is definitely as the indie game developer," says Ste. Marie. "Just a small team . . . . We're not really making a company to sell it to Google. I want to have a say in what's happening."

Parker feels the same. "I don't want to be managing something that's so huge it takes up all my life. The main thing that drives Tyler and myself and a lot of game developers is passion. It's something we enjoy. We just want to create a scenario where we're doing it full time."

And he's convinced now is the time to try.

The future Cadieux describes for this industry is, for new developers, both good and bad. A low barrier to entry, for instance, in terms of startup costs, means the potential of a rising flood of competition - giving gamers plenty of options. "The customer's going to give you two minutes to evaluate your game," says Cadieux. "As soon as there's any frustration they're going to go, 'This is crap. Next!'"

On the plus side, however, is the uncharted vastness of the playing field. Mobile casual games represent a market in its infancy, Cadieux points out. Smartphone penetration in Canada and the U.S., for example, is just 30 to 35 per cent. As well, since good games tend to be non-linguistic, they're virtually borderless. Even the way developers make money on games has plenty of room to evolve, he adds.

But the biggest advantage rests in the mobile devices themselves. While the industry called 2011 "The Year of the Tablet," Cadieux also believes the smartphone shouldn't be overlooked. "The technology is way ahead of what we're producing. There are so many things we can do with this." His eyes go wide as he lists features like motion-sensing and 3D technologies. "Pretty trippy stuff."

The team at Bitshift knows it's going to be up to companies like theirs to discover just what's possible with these devices, thus ushering the video game industry into its next phase. "You won't be able to just release one game, make millions and go live on the beach," says Parker. "There's a lot of work to do."

That's fine with Ste. Marie. As he finishes his diploma and prepares to advance to his own next level in life, he couldn't ask for a better game plan. As a kid, he says, "That was the best way I could connect with my friends: through video games. It's probably been the biggest social aspect of my life." Now, to make that a career, and "to turn my silly little sketches into a game - into something that works and moves - it's actually quite magical."