Category Archives: business

I guess we live in attention deficit times. I’m guessing roughly 95% of people commenting on the various sites that ran my last blog post, most of which had a bucketful of abuse and hatred for me, didnt actually read the article at all. They skimmed it, eager to whine and moan and hurl insults at a game developer, as is the trend, and assumed it said “Sales are a bad thing because I make less money”.

Which it didn’t. it didn’t even come fucking CLOSE to saying that. Sales make me, and many devs a lot of money. I’m not moaning about money, my games sell very very well, but as 95% of people just wanted to hurl abuse at a game developer to deal with whatever issues they have in their lives, then thats what people wanted to read, and thats what people moaned about.

Why bother?

If you won’t read an article, why comment?

The vast, vast majority of insightful, interesting and well-thought out commentary on the games industry I have read has been on invite-only private mailing lists and forums that you will not find or be able to read. Why? because it shuts out the foghorn of internet abuse from anonymous angry kids. I try, in this blog to write stuff of some interest, from a point of view most people do not have (indie game dev) because I feel it might be something other devs and gamers like to read. Quite why people who hate me, and want to insult me even read my blog is beyond me. I think Jeremy Clarkson is a dick, so amazingly, I don’t follow him on twitter!

Let’s try again…

I studied economics at university. One of the things you learn is about maximising market utility. This is basically trying to achieve a situation where everyone is paying for something what it is worth to them (not what they ‘think’ it is worth). That means people who LOVE a game pay more than people who play it for 20 seconds. PWYW bundles kind of achieve this, but only if people are 100% honest about what a game is worth, and because they probably haven’t played it yet, it’s kind of backwards.  F2P kind of achieves it, but it doesn’t take into account different income levels. $100 to me is different to $100 to you.

The reason we want everyone to pay what something is worth, is that this leads to the absolute perfect allocation of resources. Really good games do really well. Really bad games tank entirely and the developer goes bankrupt. That’s the free market, and in theory it works great. it means we get more good games and less bad ones. If you don’t agree with me that this is a good thing, then stop reading.

Given that we want everyone to pay what something is worth, two things come to mind:

1) If you pay less than the value of something to you, then this is a market distortion, the developer is not rewarded in proportion to the products quality, and thus the important market-signal is not sent, so less games like that get made. THIS IS A VALID POINT BUT NOT THE ONE I WAS MAKING.

2) If you buy something you don’t like at all, and do not even actually EVER play, then a developer is potentially rewarded for making a bad game. A NEGATIVE market signal is sent, encouraging the production of more bad games, and taking resources away from making good games. This is the point I was making. Sales of 90% off where people grab 20 supposedly 20 hour games that they will never play lead to this problem.

If you don’t see how 2) is bad for Gamers, then I give up. If you don’t see that the mass phenomena of people buying games they never play leads to 2), then I give up.

More upbeat posts about Democracy 3 coming next :D

 

 

So I didn’t win a BAFTA. I didn’t think I would. I thought Papers,Please would win it, and it did. I did get to drink champagne and listen to carol vorderman and some nobody from hollyoaks though. Quite why some nobody from hollyoaks is giving out games awards baffles me. At least Dara O Brien actually *is* a gamer.. Anyway…

By the time you drive to London & back, park in London, book a hotel room in London, BUY 2 tickets for the awards ceremony and hire special outfits that apparently in 2014 we still need to drink champagne… There isn’t actually much change from £1,000 ($1,600) in being an indie game dev at the BAFTAs. Obviously for a billionaire like me, this is petty cash, but it’s a big chunk of change none the less. Luckily those fine chaps at steam ran a BAFTA sale on the day with Democracy 3 included, which earned me about £12k that day, so woohoo! I win!

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Now I’m back in my sheep-surrounded country headquarters, and coding away, there are probably a number of other updates to mention. Update #1 is that for a LONG TIME, I will be working away on Gratuitous Space Battles 2, and mostly I just *can’t* show you any of the stuff I’m doing now until I reveal the ‘big feature’ in it, and I don’t want to do that until i have some newer art, which will be a month or three.

Secondly, there are firm plans now to bring Democracy 3 to the IPAD. Oh yes. the IPAD. I have not been a huge evangelist for the income-generating potential of the ipad, but I have had such commercial success with D3, and it’s such a touchscreen-friendly GUI, that I have taken the decision to give it a go. There are not enough thoughtful deep strategy games on tablets, so I’m hoping to find a niche there. I’m outsourcing this 100%.

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Thirdly, I continue to throw money at advertising, despite nobody ever agreeing with my theories there :. Right now I have a pretty steady $400/day spend on facebook ads. My tracking (which I’m improving today) shows that getting someone to visit the BUY page on my site for D3 costs between $3-4. The game is $25, DLC can take that higher, and of course there is extra viral + future income. Right now, I’m content to continue with that experiment, having chalked up $4,541 on facebook ads this month. The direct+steam+apple app store sales of D3 are very good, so I’m still somehow making a daily profit on this, and as D3 has paid for itself happily, I’m looking at this process as a general ‘raising my general site profile’ expense right now. I’d stop if it ever hit 50% of my revenue.

There are also TWO other projects in the works under the positech umbrella. that probably sounds mad, but I’m slowly expanding in little dribbles, and I’m not working on either of them, so I still have plenty of time to concentrate on spaceships. yay!

 

Facebook advertising

March 08, 2014 | Filed under: business

I found it to be fairly effective. it’s another weapon in the armory of getting noticed. I know some people hate facebook and twitter ads, but those people forget that facebook and twitter are FREE. And nothing in life is free. Gmail isn’t free either, they both show you ads, and data-mine your email to build up a profile on you they can sell to people. This is why I like paying for stuff. ‘Free to play’ is anything BUT free. It means you are paying in time (artificial grind) or in personal data, or you are providing a service (cannon fodder to the whales). Absolutely nothing out there is free.

It does surprise me that you can’t buy a paid subscription to twitter or facebook to remove the ads. I’d pay $20 a year for each happily. Would you? Maybe the income from ads is way higher than that. I suspect so.

In an interesting development, I have found that facebook will let you target ads purely at desktop users, and ignore mobile but only *if* you edit this setting through the ‘power editor’ that seems to require you using google chrome to do so. This seems a bit strange, but at least they provide it as an option which is a relief, given that googles adwords service insists that limiting an ad to only being shown on desktop PC’s is somehow a technical impossibility, which is pure bullshit, and another reason that adwords ROI for me is lower than facebook. Do these hipster smartphone obsessed google-glass wearing kids not realize that there are still companies out there that make and sell (quite profitably) products that are aimed at the PC? like PC software maybe? Not everyone agrees that mobile apps are the way to make money…

Anyway, I’ve found facebook to be quite effective. Yes, you are helping to build up a presence on a service that you don’t control, and which is right now free (but how long until it costs you $100 a year to have a non-personal facebook account? a year? 5 years?), but I consider it a trade-off worth making. You have to draw a balance between contacting your customers in the place where they are (facebook, twitter etc) and ensuring you don’t hand over your entire community and social strategy to third parties. Also, you never know when you have it right. Commence much stroking of chin…

I’m dumping my brain here in case it’s interesting to review strategy, from a business POV. I’m looking at the last 14 days of positech, as if I’m playing a strategy game.

The income over those 14 days is roughly $60k, taking into account direct sales, Steam GoG and the apple app store. there are some other relatively trivial sources too. This is pretty high, because obviously Democracy 3 is relatively newly released, and was just coming out of a sale.

Spending on marketing & PR during this period is relatively tiny. about $2,600 in adwords, another $1,000 ish on another network, and some PR costs, put the whole promotional cost at about $4,600 or roughly 7% of revenue. I could clearly spend more if I saw a decent opportunity to grow the customer base for my games. With this in mind, I just plonked down another $2k today for a splurge on reddit ads coming up.

So how does this all translate into growing the direct-sales juggernaut? well… Direct traffic at positech.co.uk over this period is 54,000 visits compared to 71,000 visits to steam (you get to track this data now). The average steam visitor duration is 31 seconds compared to 82 seconds on my site. This suggests steam is pretty leaky.

In terms of those users I get coming to my site, what are the best sources? The biggest chunk is ‘organic search’ which you don’t have much direct control over, other than trying to get more reviews and doing some SEO, which is a nebulous goal. The most analyzable category is ‘referral’ which is 24.6% of traffic, so quite small. They ‘convert’ in terms of hits on buy pages etc at 11.7% compared with 52% on organic search….interesting. If I narrow this down to people who show up on the Democracy 3 homepage, that figure goes up to 23% of referral visitors converting.

Luckily I can analyze further…

if I look at the Democracy 3 search campaign on adwords, that cost me £266 in that time, or roughly $441. For that, I got 618 clicks, at £0.43 a click ($0.77). This resulted in 72 confirmed buy page hits. I doubt all 72 bought the game. If we assume half of them do, and split the direct & steam takes to get roughly 80% of the money, then I got maybe 36*(0.8*24.95) which is  $718, or a profit of $19 a day. Pretty pathetic.

However, if I assume of the half who didn’t buy the game (but had visited the buy page), two thirds of them are prepared to buy the game next time it’s 50% off, then I can add on another $9.50 a day, which is still kinda crap, but better. Further to this, there is the viral effect, where word of mouth from those buyers might lead to additional sales. This involves even more guesswork….and there is more stuff I don’t know…

So the key variables I need to juggle here are:

  1. Percentage of people who bought the game directly attributable to this spending (some of this is known, but with considerable error margin)
  2. Percentage of people whose exposure to the game ‘stores up’ a purchase at a later date.
  3. Percentage of people whose exposure to the game ‘stores up’ a purchase at a lower price.
  4. Virality multiplier from new purchasers of the game.
  5. Potential upsell from new customers for future games.
  6. Cross-promotional effect of people visiting for Democracy 3 but buying GSB./Redshirt/GTB etc…
  7. Sales income through all channels from people who saw the ad, and had the brand re-in-forced, but did not click, or whose clicks were not tracked due to privacy settings/javascript disabled.

The trouble is there are just too many variables here, and this is where it becomes alchemy. My gut feeling is that I am underspending on promotion. Possibly massively so.

P.S.If you are an indie dev and read all this, and you are new to the industry, I wonder if you noticed the big amazing factoid buried in all that, that defies general assumptions by almost everyone in the industry? Let me type it again: Direct traffic at positech.co.uk over this period is 54,000 visits compared to 71,000 visits to steam. Yup, this is doable. it takes a lot of time and effort and patience and risk.

 

 

Capitalizing on the portal effect

February 23, 2014 | Filed under: business

My website looks more like a games portal than many indie developer sites. the reason for this is simple, I have more games. Depending on your screen resolution, you currently see images of GSB, GTB, Democracy 3, Redshirt and Kudos 2 on the front page. This is a huge advantage for an indie. It basically means I have five times the chances to capture a gamers interest if I can get them to my site. If you have ONE game, and you run an ad, or have some PR that drives traffic, you need to be 100% sure that visitor is interested. Sometimes they don’t like the look of your game, and they leave. In my case, if they see that big GSB image and think ‘meh’, they might be attracted to Redshirt, or to Democracy 3. That makes the site less leaky, and that’s awesome.

This is why it makes sense for indie like me to fund a game like Redshirt. I’m also hoping to fund another game. It basically doubles my output, and means each year Ideally I get two new games up there. This means halving my leakiness, and potentially doubling the return-per-click on any marketing efforts. My stats show me a lot of people bought redshirt after visiting my site direct from the main menu of Democracy 3. And vice versa. This is awesome. It’s also another reason why Steam is a billion-dollar success.

I tried to do a free thing for indies to get the same effect. It’s here. it didn’t take off. Indies are very interested in ‘someone else’ doing stuff like this, but by definition, we are indies, we like to work alone. This is a pity, but it means it’s even more important for me to continue building my own mini-portal of positech-published games. I reckon I need a game a year to stay even, as older games will eventually lose their appeal.

The maths of this are very interesting. Even assuming the ‘I was here for X but bought Y’ effect only works in 25% of cases, then previously me bidding $0.30 for a click means I can suddenly bid $0.37 instead, if I have one extra game. If I have 4 games, then I can double my bid. That’s a huge bonus. It also explains why, if you have a single niche indie game, and advertising isn’t making an ROI for you, that you may lose faith in it. Each year my PR budget goes up and up, and each year the stock of games it’s selling goes up. they are clearly related.

So I’ve just dusted off the trusty old Google adwords campaign for my site which I experimented with years ago, and will try again. Not for any specific game, but for GSB,D3 and Redshirt combined. I suspect it will do well.

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