Category: business

Something I put together for fun…(Click to enlarge)

Take a look at this:

Thats a gold bar currently selling for £330,000. Thats roughly $475,000. Thats also roughly the price of an average house in Bath, UK.

Apple recently posted their profits. They made 18 billion dollars in a quarter and have $142 billion in cash reserves. 18 billion dollars in 3 months is $200,000,000 a DAY. Thats 421 gold bars, or roughly 17 an hour. A gold bar or average house every 3 and a half minutes. Like they are on a conveyor belt. Someone, somewhere is feeding the conveyor belt. And if you are entering the unwinnable war of trying to get in the app store charts its probably you.

How many app store games haven’t even sold enough copies to justify apple making a payout? How many have made less than the unjustified yearly fee apple charge just to even play the game? The app store is a casino where they charge you just to walk in the door.

There are HUGE profits to be made with a hit game on the app store, especially in the F2P business. We never bore of hearing stories about the fabulous riches to be won. The problem is, with all the apps chasing the same users (basically ‘everyman’), your chances of getting a decent return with your sub-one-million marketing budget are zero. Why are you still playing?

Democracy 3 is on the app store and does nicely. I make a few thousand pounds here and there, and thats great. I price it at $5 and there are 3 optional DLC purchases. The thing is, the whole dev cost was paid for by the PC build anyway, so the sales only have to cover porting and marketing.

Forget the app store. Lets look at PC.

I said about a year ago that we were going to hit some indie meltdown when everyone realized they can’t be notch. Its happening right now, but indies don’t admit it, because most people don’t like to admit failure, so lets look for third party evidence. How many bundles have you seen selling 10 games for $1? I’ve seen loads. TEN games. Those games are getting ‘their cut’ of $0.10. Lets be honest, thats insane. There is no point in putting a decent game in such a bundle, its silly.

If you really think shovelware works as a strategy, ask yourself who the shovelware billionaires are. Anyone? Whereas Activision Blizzard seem to do VERY nicely with their policy of extreme polish and high quality. I don’t see any blizzard games selling for a dollar.

The shovelware billionaires are not the people making the products, they are the stores. Like The Dollar Store or PoundLand. Selling stuff other people have inexplicably made for a dollar is very profitable, just ensure you are the store, not the producer.

Niche games command higher prices. That is a fact. So why is everyone trying to sell the same product, and then getting knocked down to $0.10 a copy? because….  It is SO MUCH EASIER to make a bad game now. You don’t have to learn C++ or DirectX or how to code a web store, and you get an asset store, and simple exposure through steam, so everyone’s first game looks AMAZING and they assume it will make money. So they sell it, and it makes fuck-all, so they discount it. And again, and again…and again. Note: Some of these people are kids, with zero living expenses. Some live in the developing world, with VERY low costs of living. You CANNOT compete.

The real problem only comes when actual talented  and experienced game designers who made something cool, interesting, original and special see all those cheap games and think they have to compete on price.

You don’t. Those games are nothing like yours. Ignore that price war, don’t commodify your game. Right now the steam sale is on, and this game of mine:

Is sat there selling very nicely without even being in this sale. I bet there are lots of 95% off games in that sale earning a LOT less per day even today.

TL;DR: If you sell your game to a generic audience at commodity prices you are making someone rich. Its just not you.

GoG, of ‘good old games’ fame, are very very clever, in a way it took me AGES to discover. Like many indies, I have to go through a number of different reporting sites and tot up how much money my games have made on them all now and then, primarily so I can give myself huge endorphin rushes and waves of serotonin boosts that can only ever come from pie charts.

Anyway, something that I used to regularly roll my eyes at and go ‘for fucks sake’ to, was the way GoG report sales. They report the amount of money a game has made, and ALWAYS report it as if the game was sold at full price. This is infuriating, because you think you have made more than you have. The next column is called ‘marketing deductions’, and thats where you find out how much of that was ‘given away’ in discounts.

Thats fucking genius.

Because when you think about it, thats what a discount it. Its a marketing expense. You are forgoing some revenue in order to get more sales. What, in any real sense, is the difference? I guess its true to say there is ‘less risk’ to some extent, because you are not putting money up-front. You cannot come out of a sale with less money than you went in with, that is true, but psychologically it *is* a very interesting way to think about it.

Put it this way, assume a big sale on GoG or Humble, or Steam or your own site is about to start. You normally sell 100 copies a week at $20. You discount the game to $10, in the hope of selling more. That *may* work, and you may make more money overall. However, the alternative strategy is to keep the game at $20 that week, and instead of a sale, spend $1,000 on promoting the game. That $1,000 might be in online ads, it might be promoted tweets, it might be hiring someone to do some new art or add a new feature you release to the game ‘for free’ to get press…there are a lot of ways to spend $1,000. The thinking is, you sell more copies, and that compensates you for the $1,000. There really isn’t much difference.

Now the obvious flaws are firstly you need money up front this way, and secondly, you still are not able to reach customers that will only pay $10 for the game. Although the first point has clear merit, I’m not *that* sure the second one is as strong as it sounds. There are VERY few people who cannot, when they need to, find $20 for a PC game they *really want*. I’d love to know the percentage of steam gamers, for example who have *never* spent $20 or more on a single title.

Our way of capturing those sales is often to just cut our price, but the alternate strategy is to spend money to elevate your game into that niche of ‘games people *are* actually prepared to pay $20 for’.

In some ways, thats still marketing. And it makes for interesting maths. If you have sold 10,000 copies of your game at $5 which was 75% off, you just ‘spent’ $150,000 to get those sales. Imagine the PR campaign or huge free expansion you could have added to the game for that money :D

Food for thought maybe.