Category Archives: business

If like me, you have an interest in tech business and marketing in general, then the name of Scott Galloway is probably familiar to you. he is the guy who gave an excellent talk called the four horsemen and also another brilliant one about the death of the industrial advertising complex. The way he sees things (and he is pretty well informed), brands are essentially on the way out, taking advertising with them. the reason? user-reviews and review-aggregation by platforms such as amazon (and more relevantly to me: steam) means that the value of a brand is no longer what it was. Advertising to build a brand is essentially pointless in an age where you can bypass the PR spin and look at the real data about what customers think of your product.

I find thinking about this to be very interesting indeed.

Essentially you advertise for two reasons. 1) To inform the potential customer about your product and 2) To build up positive associations about your product. I would suggest that 2) is totally dead, but 1) remains viable. There are reasons why 2) can still work, if you are associated with external signalling, in other words your target market for the ad is actually not the customer.

That might sound weird, but its commonplace. Its a phenomena associated with luxury brands. You might occasionally see advertising for a luxury brand you cannot possibly afford, and wonder how the hell it can be targeted so badly. The first possibility is that they are building long term value by hoping that 1 in 20,000 viewers of that porsche ad will one day buy a porsche. that’s true, but they also get indirect value from the other 19,999 viewers of the ad, because they perpetuate the belief that a porsche is driven by winners. When someone buys a porsche, they get a relatively low performance expensive to run and unsafe, expensive to insure car (compared to a tesla :D), but what they are really buying is status, and a projection of jealousy/admiration onto others. This has real value.

Porsche aren’t really selling cars at all. neither are Rolls Royce or Rolex. they sell status and luxury. These things cannot easily be quantified in a user review, so the ‘brand’ still has value. What they are selling is the knowledge that everyone knows you can afford the expensive product. In a way, by buying a branded luxury product you are a time-share owner of a PR team that tells the world how successful you are. its outsourcing of bragging and status.

Thats perfectly reasonable in some ways, I sound snarky but I’m actually not. I have a stupidly flash car myself. Humans are humans, and success is something people like to have recognized. Most scientists *do* collect their nobel prize, most successful business people *do* buy a flash car, most athletes *do* put the medal on the mantelpiece.

When it comes to something like a video game, we can’t really sell luxury and status and bragging rights, although top-tier kick-starter rewards and ‘premium’ accounts do their best. I notice that buying ‘premium’ so I get the DLC for battlefield one puts a little ‘p’ next to my name. I don’t give a fuck, but that P is there because some people will. In this case, you are advertising WITHIN the game. The ‘premium’ feature is so you feel you have a higher status than the other players, but thats still within the ecosystem of already-paying customers. F2P does this really effectively only it includes non paying customers too.

For most game developers, making money from top tier kickstarter rewards and premium accounts isn’t really going to be your bread-and-butter, so is advertising still an option for us?

Absolutely, but you have to be aware of what you are doing. Essentially your advertising exists (and so do appearances at shows, youtubers etc) purely to announce to players that your game exists. You are essentially buying name-recognition, logo-recognition and shelf space. Logo recognition is a valuable thing. lets pause for a word from our sponsors…

…and were back.

Where Scott Galloway is absolutely right, is that for non luxury near-commodity goods, advertising that builds brands is now pointless. Do I buy a Sony TV next or a Samsung? or LG? I don’t give a fuck, and nor should you. I can look at the reviews on amazon/other stores and pick the top rated one. The products are similar enough that I really don’t care. As long as the TV is available, and listed on the store, and *has some decent reviews* it will get my money. In other words, its 100% about the quality of the product. he has interesting points about voice-ordering on alexa that relate to this topic too.

To some extent this is true on steam as well. if I search for indie strategy games, then as long as production line has top tier reviews, and is a quality product, I should do well. The only problem here is that there are a LOT of indie strategy games, and a LOT of them have high reviews. I am hoping to *not only* get some sales from people generally browsing steam, but also from people who actively search for my game by name. Not only that, but I want my name/logo to pop out to people as some game they have heard of, so my game gets clicked on, when other games do not.

Basically, you are either hoping for traffic ‘within the store’ by having a decent product, or you are hoping for additional traffic *to* the store because you have established yourself as a name. I’m trying to drive traffic *to* my game, and am prepared to spend some marketing $ to get people there. Five years ago, steam was sparse enough to make a living from ‘just being there’ but now…not so much. Now you have to drive some traffic that way.

Conclusion? Advertising is changing, a lot. but it might not be changing for you. as a game developer.

 

I’ve been stuck with the same web host for a billion years, and a home internet connection thats probably older than my parents (that last bit is probably true). Its time to upgrade the shit out of this.

Back in the dark days, I registered my awful company name (positech.co.uk) and then went on a silly spree where I would register domain names for my games, like kudos, democracy, gratuitous blah blah… Those days are gone. I didn’t bother getting a new domain name for Production Line. Nobody cares these days, and why should they. Plus when you move server hosts, domain names are a PAIN. Even now, after my switch-over, I’m only 95% sure everything will work at the end of the month when the old server gets switched off…

The new server (again, a dedicated one, not a VPS), is very slightly more expensive than the old ones, but it hosts multiple sites, this blog, forums, and some backend stuff for the minor web integration of some of my games (high scores, upgrade checks, challenge-sharing etc). Under $250/month for all that seems a good deal to me. The best bit is that with a dedicated server you aren’t at the whim of anybody else, you can reboot it whenever you like, install whatever you like. its freedom. The host change means better tech support, and less worry, and for under $3k a year. For an established indie selling lots of games, its not a major expense by any stretch.

I wish things were so simple for my own home internet.

Thats on a GOOD day, and thats when its connected. The 7.54 down is not bad actually. I can stream TV (but not in HD I assume, my eyesights crap enough not to be 100% sure), the 0.57Mbps up is depressing. This means that uploading a 300MB game installer (like big pharma) can take ages. Assume 3 builds (3 platforms) and 3 destinations (humble, BMT, GoG), thats 9 x 300MB. It takes me about 2 days (I don’t leave it overnight). What a drag. There are games I don’t download during free weekends because it would actually take the whole free weekend to grab them. And this is with my new, spangly business ISP that has truly unlimited bandwidth. When I was paying £45/month I had a 110GB/Month cap.

I know right… its literally medieval.

Why is my internet so bad? We have FTTC (fiber to the cabinet) but the nearest cabinet is further than the exchange, so ADSL is actually faster (madness). Because I live in a field, BT (the monopoly on internet here) refuses to lay fiber to the village unless we pay (at least) £40,000. That is not going to happen.

Can you see the nearest fiber cabinet?…. me neither.

The only solution is what they call a ‘leased line’. This is effectively a dedicated piece of fiber from my office to wherever the best exchange to connect it to will be. This is expensive. This is very expensive. This is almost ‘send your kids to private school’ expensive. And the net result would be 20Mbps down, 20Mbps up.

If, when they do a survey, they can do it in under 3 months and with no additional install fee above the £600 already quoted, I’ll probably do it (BTW I’d be locked in for 3 years). On the one hand its insanely pricey. On the other, I’ve lived here 7 years and there has been NO change in internet speeds here. Also totally reliable, uncontended and symmetrical upload/download does sound appealing. 24/7/365 support also sounds good. As a business cost, its slightly more affordable due to being an expense against tax, and frankly, being able to stream on twitch, to upload HD 60FPS videos easily, and generally live in the modern age is something thats kind of non-optional for an indie game dev in 2017.

Of course the real story is the ripoff prices of BT openreach, effectively a private monopoly that charges a fortune to rent a piece of plastic cabling after its installed. I’m all for hefty install fees, but surely once the cable is in the ground, its in the fucking ground. What am I paying for here? defense against mole attacks? c’mon. We get water through pipes in the ground too, but I don’t need to sell a vital organ each month to rent the pipe.

Oh well…you have to speculate to accumulate. Now I need to save up for botox and moisteurizer as HD streams of me pimping my games will show off just how old and uncool I really am.

 

 

This blog post was partly inspired by this story, where a business decided someone did not fit their corporate culture because she asked how much she would earn. Yup, let that sink in for a minute, and lets talk about the myths that a lot of tech startups perpetuate, that are complete and utter nonsense.

Myth #1: Forget your salary, its all about the exit strategy!

There is a myth that every ‘startup’ is the next facebook, or twitter, or snapchat. As a result, you should not give a damn how hard you have to work or what you earn. Living on peanuts and sleeping under your desk is frankly an honour, and you will get to write a book about it one day on your yacht, after the company IPOs and you get your share of ten billion dollars. Thats the myth. The likelihood is that you will either burn out long before then and have to quit, that your significant other will leave you and you will have a meltdown and get fired, or far, far more likely: it turns out that making a toaster that connects to the internet isn’t actually a billion dollar idea after all, the company burns through cash, crashes and burns and everyone gets a tweet informing them they are unemployed.  In the idea is really good, it will raise some money, if it raises money, it can pay its workers.

Myth #2: We are the brightest and best in the world!

No you aren’t. You are probably a bunch of relatively well off middle class white guys from California who read a lot of books about steve jobs and now think you are a genius because you understand a bit of java. Whoopy do. Unless the company is Deep Mind, and a bunch of you have phds in artificial intelligence, or maybe quantum physics, and unless you have a few people with nobel prizes and fields medals, you are NOT the brightest and best. And frankly, that would be deeply embarrassing. if your startup does contain ten of the cleverest people on earth and you use those collective skills to develop a bluetooth enabled cat feeder…then what a terrible, insulting waste of your vast abilities. Get some fucking perspective.

Myth #3: Get users now, revenue will follow!

Really? Ask twitter how that went, or maybe myspace. Having a lot of users just means a lot of server costs and admin. The point of a business (and I feel it sad that anyone has to type this) is to make profit. Note that the word is profit, not revenue, which is totally different. Its amazing how many people think that a big userbase automatically generates revenue ‘somehow at some point’. Ask ANYONE in the games business if you can just bolt on Free-To-Play to an existing game, and they will laugh you out of the room. NO is the answer, you need to build that business model in right from the start. This is common sense, but companies like twitter and snapchat ignore it. Building a vast network of people who love your service because your service has no ads….yeah thats not going to be easy to monetize is it?

Myth #4: Our company is just like amazon. We will get big fast.

Well done, you have learned a buzz-phrase, and totally failed to understand the underlying business model. Amazons get big fast worked because they had an actual business model that they knew made a profit AT SCALE. Selling over the internet is highly profitable, and the economies of scale are vast. This does not apply to snapchat or instagram or twitter etc Amazons system had to be big because ‘every book in the world’ was compelling, and because books sold for MONEY. You can waffle all you like about how your business model has network effects, but unless there is a statement at the end of the company business model explaining where the profit comes from, its just a fortune cookie. The only thing that will get big fast is your debt.

Myth #5: We are making the world a better place.

Fuck you. Fuck you and the horse you rode in on. Do you know how a business can make the world a better place? by creating quality long term jobs that pay decent salaries and benefits. By contributing to the local community. By building things and solving problems that make society better. By paying their god-damn taxes. By setting an example of fair treatment to their employees, and ensuring a welcoming business environment for all races and genders and backgrounds. If your idea of making the world a better place is making billions of dollars so you can become another internet cliche with your bright orange Lamborghini and a swimming pool, then do us all a favour and just give up now.

Wow, that was angrier than I thought it would be. :D

I’m still shorting snapchat. YMMV.  Pics are from the televisual genius of HBOs Silicon valley.

 

Legacy Business

March 08, 2017 | Filed under: business

Having a long established business brings benefits (FWIW Positech was formed in 1998, as I recall). You get tons of experiences, and contacts yada yada. It also has a negative side.

British Airways used to be a really major force in UK aviation, but got hammered badly by ‘low-cost’ airlines and is struggling to compete. One of the many reasons it finds it hard is that BA has been around long enough that it has a bunch of retired pilots 0n decent pensions. Thats a considerable cost that its new upstart challengers do not have, and its just one example of the negative side of legacy business.

Having been around for so long and shipped so many games, I have a lot of legacy crap to deal with too. I get emails (often) from people who have lost their Kudos or Kudos 2 download link. Its a 1 or 2 minute distraction at best, but it involves mental context switching that is expensive for a coder. I even get the odd request from someone to buy/re-register their shareware demo of Asteroid Miner/Star Miner (my first commercial game). FWIW, don’t email me, the serial code for every copy is the same (what a n00b huh?) its the serial number of the trash compactor in star wars, if that helps…

Emails about long dead games are one thing, but it also means you have communications about long dead publisher deals and other biz stuff. I am owed tiny amounts of money by at least 4 different publishers and payment providers which are below the threshold for paying out, yet spam me each month with an automatic royalty report. (RealGames, I can guess I’m not selling any copies next month, so lets give it a rest shall we?). This sort of stuff is long redundant and could probably be spam filtered out, but actually its not the ‘really’ old stuff that is the biggest legacy distraction.

Believe it or not, Democracy 3, a game which still generates comfortably enough for me to live on, and for which we will soon release a Unicode update with exciting new language support… is now considered legacy in my mind. This is partly because Jeff now deals with it, but mostly because I have moved on to do other stuff. We did D3:Africa, then Political Animals, and Shadowhand is coming, and of course I code Production Line. Frankly, in my mind, Democracy 3 is history, at least in terms of day to day concerns.

Yet to loads of people, it absolutely is not history, but a current, new game. I get emails from publishers wanting to discount it in sales, I get more requests to do academic stuff around it than you would ever guess, I get a bunch of interesting emails about modding it, I get requests to bundle it, requests to list it on new stores, obviously I get some tech support (not much now, happily), and so-on and so-on.

I know this sounds a little ‘first world problems’ but actually, you don’t realize how much this stuff builds up. If you are working on your first indie game, or have just released it, you have 100% focus. When you get an email about ‘your game’ you KNOW which one. You never get confused as to whether its Democracy 3 or Production Line that has a fix for certain sound card bugs. You never forget which game you are running an ad campaign on, or confuse which one is in a sale this week. (FWIW several of my games are likely in this weeks GoG sale. Off the top of my head…no idea which ones).

I am beginning to think there is a very good argument for restricting the game output for a single-dev studio to below my current level. Make a few games, make them long-form hits. There is definitely a diseconomy of scale when it comes to multiple projects over time.

 

 

Should you go to GDC 2018?

March 02, 2017 | Filed under: business

You definitely get a skewed view of GDC from general media and social media. If you are a penniless indie dev, or just someone who hasn’t been to GDC, you might think it is an exciting wonderland full of product releases, wild parties, great deals being done, and venture capitalists throwing bags of cash at grateful developers. The truth is, its much more variable.

GDC Tweetage is generally “Just had an awesome meeting, so excited” and “So amazing to meet up with so many talented people again #GDC17” and so on. The non-tweeted thoughts are more like…

“Sat alone in hotel room eating crisps again.” “Can’t afford the pass to go to the cool talks :(”

The reality is a mix of the two. I’ve had some great times, met with nice people, and some kinda dull, boring, miserable times. All my real ‘biz’ stuff is done now, so its just the nice socializing with buddies stuff ahead of me, then the inevitable long flight home. At this point, I think I have enough data to provide some pseudocode to determine if you should attend 2018:

bool ShouldIAttendGDC()
{
float ValueOfGDC = 0
float relative_cost = CostOfAttending / IncomeFromGameDev;
if(relative_cost > 0.5f)  return FUCK_NO;
if(relative_cost < 0.01f) return HELL_YEAH;
ValueOfGDC += (0.02f * NumFriendsAttending);
if(CanAffordBusinessClassSeats) ValueOfGDC *= 2.0f;
if(NeedFunding || LookingForFirstIndustryJob)
{
 if(IsExtravert) ValueOfGDC += 0.2f;
 else return FUCK_NO; 
} 
if(HasNeverAttendedGDC) ValueOfGDC += 0.20f; 
if(AboutToReleaseGame) ValueOfGDC += 0.05f; 
ValueOfGDC += (0.075f * NumConfirmedPartyInvites);
if(WorksForMiddlewareCompany) return WHO_CARES_BOSS_PAYS; 
if(YouGetAFreePass) return LOL_YEAH; 
if(ValueOfGDC >= 0.5f) return MIGHT_AS_WELL;
else return NAH_FUCK_IT;
}

I hope this is helpful.

 

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