Category Archives: business

I recently released Production Line update 1.29, so that’s 29 updates since the original release of the game, which was back in the pre-early access days, and just for people buying direct from my site. In that time, what’s happened?

Well, we have more than doubled the players of the game since going into Early Access, which is cool. Not surprisingly most people now buy direct from steam rather than through the humble widget, which means we earn noticeably less per sale, but that’s to be expected. Income from the game is ‘ok’, in that compared to Democracy 3 it hasn’t set the world on fire, but then the game has already paid for its dev costs (minus my salary, which I don’t count directly), and if I do the maths, its paying me a reasonable income for a senior software developer, so from a financial POV, things aren’t that bad at all.

Plus its still in Early Access, so I’m expecting a nice fat bump when we eventually declare it released, a second bump for the first time its discounted in a steam sale,  and so on.

Working out what to do regarding promoting the game has been very tricky. Take a look at this, at first seemingly interesting chart:

The trouble is, that big spike is a steam sale (we were not even discounted, but extra eyeballs etc…) that final peak at the end is the first steam visibility round which I triggered yesterday. I’m trying to work out if its worth spending money on ads right now. There isn’t a strong correlation between ad spend and higher profit, but it does result in higher income overall (as you would expect), and there is an argument that higher overall player counts will lead to building virality and higher long term sales.

My gut instinct tells me I need to nudge the games approval higher (currently 84% positive in last 30 days, 78% overall), and also include my own internal in-game metrics reporting which gives me this:

Which is good, but could be better. Especially stability. I need to see roe examples of crashes and fix them. Essentially what I’m getting at is that the game feels ‘good’ but not ‘great’ in terms of how people respond to it, and I want to save my marketing firepower for when the conversion rate is really high.

That brings me on to the whole pricing strategy debate. There has been some interesting and well-argued talk lately about indie games being under-priced lately. I have a lot of sympathy with this view. I am a bit biased in this area due to being relatively cash-rich and time poor, which is the opposite of many gamers and mean basically I all-but-ignore the price of a game if it looks like I’ll enjoy it. I own the premium edition of Battlefield one (enough said :D).

The trouble is, when I browse games on steam in the top sellers for the categories that interest me, I do not see acres and acres of crap, which is how many devs describe indie games new on steam these last few months. Granted, there are a lot of poor quality, unplayable, useless titles in steams bargain bin, but what do I care? I’m not trying to compete with someone’s first unity effort, I’m a guy with 36 years of programming experience, and multiple million-dollar selling games under his belt.

To be blunt, I’m competing with Factorio, RimWorld, Prison Architect, and their ilk. These are my competitors. I don’t give a damn about the price of other titles.

And given the huge feature-set of some of those games, and their long development history, and their current prices, and the fact that Production Line is still in development…could I really increase the price yet?

I don’t think so. Its still $15.99.

On a related point however, I always felt, from the very first time someone did it, that having a sale on a game during Early Access seems a bit weird. Its like the game is not even properly on sale yet, and you already don’t think its worth what you are asking. It sends, in my opinion, a signal of ‘we just cant wait to discount this game! just you watch!’, and I think that can be unhealthy.

Production Line entered Early Access at $15.99 on May 18th, and 3 months later its the same price and has not been discounted a single cent. I’m fairly happy with this as a pricing strategy and have absolutely no plans to run a discount on the game in the near future. I think this sends a bit of a quality signal, even if its a small one.

Anyway… Patch 1.29 is under my belt, Sports Cars and Design studios will be coming soon. Eventually it will be time to do Hybrid/Electric engines, Quality and Defects, along with more marketing. Still plenty to do, and still in early Access for a while yet. The main thing is that I enjoy working on it, and its not causing me any actual stress. I also really enjoy playing it myself, which is always a good sign :D

 

 

 

 

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More messing with marketing stats

August 12, 2017 | Filed under: business

Its very frustrating to not know if your ads work. I also know that you can never truly correlate these things, but I guess I enjoy trying. With that in mind lets look at 8 days of Production Line sales and marketing

Sales Marketing Net profit
$1,140.00 $351.94 $389.06
$1,283.00 $306.24 $527.71
$1,453.00 $362.78 $581.67
$999.00 $583.09 $66.26
$934.00 $0.00 $607.10
$796.00 $0.00 $517.40
$916.00 $0.00 $595.40
s$936.00 $0.00 $608.40

There are taxes, distributors cuts etc which explains the lower amount you see as net profit. In any case, is there *any* correlation here? A fairly crude approximation shows average profit when I have no marketing running is $582 versus $391 when I’m running ads. Yikes. Obviously its not that simple. Firstly the ads could be adding to my wishlists and thus further sales. Or I could be generating more facebook likes. Its so complex.

if I look at visits to the steam store page for production line and add that in I get this:

Sales Marketing Net profit visits
$1,140.00 $351.94 $389.06 357
$1,283.00 $306.24 $527.71 295
$1,453.00 $362.78 $581.67 342
$999.00 $583.09 $66.26 515
$934.00 $0.00 $607.10 122
$796.00 $0.00 $517.40 86
$916.00 $0.00 $595.40 96
$936.00 $0.00 $608.40 122

Which suggests that I am at least successfully driving traffic with the ads. However, the percentage of visits to the store page that come from external sites over that period is only 22%. In other words, I really should be scaling any boost in sales (if there was one) by 0.22 anyway. I can see that I’ve managed to peak that share of visits from external sites to 38% on the 7th August, at a cost of about $480. Hmmm

So what can be learned?

a) My suspicion that direct attribution of ads->sales is difficult to correlate certainly seems true.

b) You can probably double your visits to your steam store page for about $600/day.

You really can’t learn much from 8 days data. I’m trying to resist the temptation to advertise more for a few more days so I have a better dataset (I have ad-spending data going back about 30 days before I stopped).

I have a suspicion that the cost to generate enough ‘loss-leading’ traffic to push the games popularity up to the point where it gets noticed by steams algorithms and thus starts to generate sales from within steam at a higher rate is quite high.  I’m digging into the stats of all of my games to try and work out how many extra sales I need to push PL into the top 10 ‘topsellers’ among indie strategy games…

 

Yup, this is all very small fry. I’m trying to find a winning strategy before I start shovelling wheelbarrows full of marketing dollars at it :D

I’m running on-going promotional campaigns for Production Line at the moment across a variety of sources. My plan is to work out the current best value for money in terms of cash paid per impression and per click/like, and then to ramp up in that area. Getting a decent click cost is proving tricky though.

After a lot of fiddling, and narrowing of audiences, I’m still struggling to get a Facebook like for Production Line at less than $1.00. I’ve seen my costs wave from $0.83 to $1.95 over a period of a week, even after cropping the lower performing ads out of the equation. The CPM on facebook is currently $13.06, which even as a really targeted demographic, is way too high. It could be that my ad copy sucks, although I have tried variation there. My relevance is  4 or 5.

Switching to AdWords promotion of my trailer gives me different results, The CPM there is £0.33 (roughly $0.44) which is tons better, but possible less effective? The cost per view is just £0.12 / $0.16, which is very attractive…

On reddit I’m seeing roughly $0.66 CPC for ads that lead directly to the steam store page. This is very direct, but is it really 4x as good as getting people to see my trailer?

What I don’t like about ad-words trailer promotion is that its 99% branding with very little engagement beyond that. Viewing my trailer is fine, but how long will that memory persist? When advertising my trailer, I got 642 steam store visits from youtube, and spent £1,500 to get them. If I look at the period before (no ads), I got 506, so effectively I’m paying £1,500 for 142 visits plus general brand awareness. The game is £12, so if all of them bought it now, I’d still make a slight loss under steams cut. How much is brand awareness worth to me? And how annoying to not know the actual real conversion rate of those steam visitors…

There are pros and cons all over the place to thinking this way. there is also the Uber/Tesla/Amazon strategy of really not giving a damn if you are losing money on ads, as long as you can spend enough to get 50,000 players one way or the other, and hope that this then becomes self sustaining and viral. This sounds nuts but it might not be, as lets be honest, you *do* get paid for the games, its only the difference (the loss per customer) that is actually an expense…

Looking at the adwords example.. £1,500 for 142 visits is a loss of £2.17 per sale, or $2.82. Lets imagine I could scale that up in a linear fashion to buy another 12,000 production line steam buyers (doubling its current steam sales, and making 34,000 players in total. The cost of that would be $33,840.

Thats a lot of money, but not impossible. I’ve certainly risked similar amounts on share dealing on a regular basis.

Interesting…

In the meantime here is today’s production Line video in which I wear a hat:

Production Line, my latest game released on steam on May 18th 2017. Thats 77 days ago, and according to steam spy, its sold 13,055 copies. We had a prolonged alpha test off steam where we sold another 10,000 copies. The game currently retails at $15.99 but was cheaper during our pre-early access direct sales period. How do I feel about that, how did I do that, and how can I sustain this?

Firstly some perspective. assume I have earned on average $10 per copy, thats roughly $230,000 income from the game. Development costs are not high on an art & music basis, but they aren’t trivial either. I’m looking at a raw profit, before I get paid anything of about $150,000. Theoretically pretty good, although I worked a LONG time on the game before going public with it. it looks like I have earned roughly $38 an hour from developing the game so far.

A lot of this is ‘front-loaded’. Games can continue to sell well long after you finish development of them. Despite my pessimism shortly after its launch, Democracy 3 Africa has gone on to earn a reasonable profit (nothing earth-shattering, but a surprise nonetheless). Although there is a lot more to spend on PL (sound effects are barely in, more art is to come, also trading cards and a LOT more code support), I suspect there is more to earn too. So far the game has not been discounted a single time, not even at launch. Its final price may creep up above $15.99 towards the $20 mark, and we haven’t actually had our version 1.0 release yet.

So how to ‘keep up momentum’ and continue to stay afloat and profitable with the game?

Regular readers of my blog will know that I advertise, and do so fairly extensively (for an indie). I’ve advertised in many places, but my preference in 2017 is social media. I don’t do that much chasing of press any more, as press coverage seems only very weakly correlated with sales these days. I think what matters is eyeballs, eyeballs, eyeballs. A lot of new indies rely entirely on exposure through steam. That strategy is doomed. Dead. Passed-on. Ceased to be. Expired.

So far, Production Line has spent 17.84% of its revenue on marketing, or put another way 25.64% of profit. I believe this figure should be higher to get any sort of real awareness, and am currently trialling 8 different facebook ads to see which one has the best conversion rate to page likes before ramping up that spending. I’ve spent roughly 68% of my ad budget on facebook, 16% reddit, and the rest split between adwords and twitter.

The place where I am arguably being really slack is trade shows. I have a 2xPC booth coming up at EGX, and me and Jeff will be there handing out flyers. I have badges ordered, some PL stickers, and a silly yellow hat and jacket to wear so I stand out a bit. Its all a bit meek though. Really I should be appearing at other game shows too, but there aren’t many within the travel distance and date-range that I require, not that get any actual traffic, anyway. Appearing at a show can be expensive, I put the total cost, including hotels, travel, swag and booth at roughly £3,500.

So is any of this promo stuff worth it?

Very hard to tell. Conventional year 1990-2010 thinking was that its all about conversion rates and track-able sales. In 2017 I no longer think this is true. I think all that is desirable is awareness. There are a TON of games out there on GoG, Humble Store & Steam. The sales events can be big, and the store traffic enormous, but what matters is getting YOUR game noticed. In a sea of game logos, you want to be the one that gets clicked on, and thats much more likely if the logo or game name/image has been seen before.

Why?

Well actually its science. We have, hard-coded in our brains, a connection that says ‘familiarity == desirability’. Why? because basically if we have seen something before and we see it again, we know it didn’t try to kill us last time. Its a basic survival instinct. So what you need is people to see your game name, screenshots, video, logo, etc as often as possible, for the lowest cost. Making that work is tricky, not least because thousands of other people are trying to do the same thing. In a perfect market, all costs would level out exactly to match their effective impact, but we know that no market is perfect.

For example, is a view of my production trailer worth 10 ad impressions? or 50? Is it worth 10 at 10 seconds view until skip, and 50 at a full watch? This stuff is guesswork, we have no real idea, so we have to develop our own crude guesses. I once carried out a very exhaustive (and expensive) month of testing where I tried a whole bunch of ad media, and tracked conversions of all of them. I concluded that one media was vastly, vastly better than the others (facebook), but I now suspect it is not that simple. Facebook may be good at driving engagement in the short term, but I want long term name recognition, not just short term clicks and buys.

And that thinking brings us back to EGX and shows, and similar shenanigans. Is handing out a badge or leaflet to someone worth the same as a like on facebook? Are show-visitors more engaged online and more vital in terms of social network graphs for telling people about your game? I strongly suspect so, but there is little data or science on this. Unfortunately, as indies, we do not have the option of saturation marketing, where you spend ten million dollars and EVERYONE knows about the game. We know that works, we have to see if you can get 1% of the effect for $100k. I doubt that equation is linear, but does it skew in favour of size? Who knows.

And of course, this is why its so hard to effectively promote a game like Production Line. However, it can also be fascinating, and even fun.

 

 

At the time of writing, a quick check of stats on steamspy for player unknown:battlegrounds reveals this chart:

A very basic analysis suggests 500,000 copies this month, at $30, minus maybe 40% for refunds/taxes/steams cut gives us:  roughly $9million this month. Total sales stand at 3 million, for a total estimate of $53 million so far since release 3 months ago. Assuming a lifetime doubling of that 9conservative) that gives us about $100,000,000. income.

The developer is listed as bluehole inc, who apparently have about 90 staff: https://en.wikipedia.org/wiki/PlayerUnknown%27s_Battlegrounds

So the average income per employee there is a million dollars. original team size was 35, so assume that half the money goes to equity holders and its split equally between the 35, that gives them roughly $1.4 million each. In practice thats bollocks, because more likely 80% would be going to the equity holders and I’d guess 90% of that belongs to maybe a handful, at best 4 people? (I have ZERO idea, this is my guesswork), which means company founders are probably getting about $22 million from the game. Include sequels, potential DLC, merchandise and so on, and you can probably round it up to 25 million.

Thats a fuck-ton of cash.

But the problem is, the chances of Joe Indie game developer achieving this are close enough to zero as makes no difference.  There are 348 pages of ‘top sellers’ on indie games on steam. Taking the mid point, and looking at the top game (I wont pick on it publicly, so lets not name it). Its an RPG with Zombies in apparently (that shouldn’t narrow it much :D). Steamspy says…. *drumroll*

3,500 owners. Top price has been $9.99, been out 9 months. Maximum conceivable income is $20,979 to the developer. In practice, as its been on sale, lets multiply that by 50% and get about $10,000.

This game isn’t exactly World Of Warcraft but it has a proper 3D graphics thing going on, positive reviews and a decent capsule graphic. lets depress ourselves with the numbers:

Assume the developer is a single person with no other costs and keeps all the money: $10,000 a year, or roughly 1% of the revenue/employee as PU:BG.

Assume they are the founders/owners/creators and keep all that sweet cash, they earned roughly 0.04% of the equiv person behind PU:BG.

Yes…these figures are very very rough, but I didn’t deliberately pick something bad, in fact I picked half way through the indie top sellers. Are we really thinking they sound so out of whack? This is a WINNER TAKES ALL market. You are either in the top 0.1% of indie game developers, or you are unemployed, with an expensive hobby where you make effectively free games.

This is nobodies ‘fault’. Steam didn’t cause it, Unity didn’t cause it. games got easier to make, and more people got access to PCs, development kits, computer skills and broadband. Its really no different from waiting tables whilst pretending to be an actress, or avoiding admitting you are unemployed by claiming to be a writer. There is virtually nothing I can do about this, and nothing you can do about this, but there is something we can collectively do to at least minimize the collateral damage:

Lets admit that the default position for an indie game developer is pretty much poverty. If you want to make money, maybe one day buy a house, start a family, have a pension, why are you making indie games? You KNOW you are almost certainly screwed right? or to put it another, simpler, TL;DR way:

YOUR INDIE GAME WILL FLOP AND YOU WILL LOSE MONEY

Now, *some* people don’t flop, and do well. And that *might* be you, but I urge you, go into this job (like any other) with your eyes WIDE open. Your chances of success are incredibly, incredibly small. This is not a sensible career. This is not a wise career move. This is almost certainly personal financial suicide. You may (like me) feel compelled to make games regardless of success or failure, but ALWAYS know the odds. ALWAYS. (Han solo is wrong about his topic). I know people get inspired to make games by reading about the success of some developers (including me), and that’s great, but always know what you are doing. Do not remortgage your house to do this. Do not both quit your job and live off savings to do this when you have kids to support. Do not assume you are different or special.

Treat this as a disclaimer for my blog: You are reading the thoughts of a guy who was coding since age 11, has 36 years coding experience, has shipped over a dozen games, several of which made millions of dollars, got into indie dev VERY early, knows a lot of industry people, and has a relatively high public profile. And still almost NOBODY covered my latest game (in terms of gaming websites). Its extremely, extremely tough right now.