Category: business

So welcome to another exciting episode of ‘fun  with stats’ with your host cliff harris.

Lets examine some stats for changes that are under analysis (using random sampling) with the buy page of a fictional pc political strategy game. Lets assume it sells for $20 to make things simple, and to take into account occasional discounts.

Lets also imagine (theoretically) that the game sells on portals which take a 30% cut and that it has a direct sell option which (theoretically) takes a 10% cut. So a portal sale earns $14 and a direct one earns $18.

The raw before and after the change stats are heavily skewed due to traffic variations, but basically we have this:

3rd October onwards (old buy page)

Direct buy button clicks 427
Buy page hits 3203.
Portal buy button clicks 152
direct sales share = 13.3%

8th October onwards (changed buy page)

Direct buy button clicks 194
Buy page hits 451.
Portal buy button clicks 23
direct sales share = 43%

So far, all this does is say that the percentage of buyers who choose the direct option has gone up. Because we get email details + a higher percentage of the sale, then we can assume this is a boost for us, but it’s not ‘free money’ We are not getting new sales, just converting portal sales to direct ones. So the difference is really only to be found in that 20% difference. To work out the actual difference we need to guess total portal and direct theoretical (assuming all clicks are sales, they really aren’t…) income, and compensate for traffic variation…

3rd October onwards (old buy page)

Portal income $2,128
Direct Income $7,686
Income per visitor from portals: $0.66
Income per visitor from direct: $2.39
Income per visitor overall: $3.06

8th October onwards (changed buy page)

Portal income $308
Direct Income $3,492
Income per visitor from portals: $0.68
Income per visitor from direct: $7.74
Income per visitor overall: $8.42

Holy crap. Have I done this right? And this is with A/B testing so actually only HALF the visitors are getting the new buy page, so the effect is actually double this. Assuming my maths is correct, the percentage of people who visit my site and THEN buy on a portal is actually fairly low, meaning that encouraging them to buy direct (but still having multiple portal options displayed) seems to have very little downside. The income from portals actually even rose very slightly $0.66 to $0.68, which is a statistical irrelevance. That change from $3.06 to $8 is not though. It’s real.

So obviously I need a lot MORE data to prove I’m right, so I’m going to leave my experiment running a few more days. I have some D3 ads running now which will drive in a bit more traffic which will help. You can’t really extrapolate anything from under 1,000 clicks on anything. But it looks promising.

BUT THE FUNNEL…

What this means is that getting someone to my buy page now earns $8 not $3. Now as it happens, the actual; abandonment rate is fairly high, because many people see the price (only on the buy page..) and then don’t buy, but there is value there in the stored intent and later discount-purchases, or second-thoughts and return buyers. Lets assume an abandonment rate of 80%. That makes a visitor now worth $1.68 rather than $0.61. The problem is not everyone gets to the buy page, home page to buy page hits happen at  35% so real values are old system-> $0.21 per visitor, new system -> $0.59.

The difference between the viability of an ad campaign or PR campaign targeting $0.21 and $0.59 per visitor is huge. It’s hard getting $0.20 CPC. It’s easy to get $0.50 CPC.

This is why I care about this stuff. Plus I’m a stats head and I enjoy it :D

 

So apparently you get extra brownie points from google’s ranking now if you have an SSL certificate. I know more about cake-baking than SSL. (Always minimize time between mixing and putting it in the oven kids). I bought an SSL cert for positech.co.uk, and apparently my host installed it, but I don’t really know what is going on. They told me my IP changed as a result, but for what?  just web? FTP? cpanel? who knows…

What it now means is that this address is valid:

https://www.positech.co.uk

Whereas this still isn’t:

https://www.cliffski.com/ and of course none of my other domains are either, by positech is the most popular one anyway. You are probably at it right now.

Which is fine, and the positech address gives lots of nice green ‘this site is trustworthy(ish) reports in chrome and IE, and even very slightly in firefox:

So that’s just lovely, but  does it mean I should add a redirect in htaccess to redirect all http://www.positech.co.uk traffic to https://www.positech.co.uk? Is that what people do?

I know NOTHING. But I do know that if something makes my site more desirable to traffic for $50 a year I’m doing it :D

Things are pretty tough in the mid-tier, as an indie game developer. I see a huge disparity between those devs that have been called ‘triple I’ indies (sorry paul!) and new entrants making their first game in unity. I also see a big gap between those III indies and the AAA developers. It seems game development is collecting into several bands, and I suspect a lot of it is PR related.

At the bottom (financially speaking) you have those indies making their first game, and selling a  few hundred, maybe a thousand copies. They have zero PR budget and Zero marketing. They probably have coder art, and are doing literally everything themselves. They make up the majority of games still stuck in steams Greenlight pages, or have an app on the app store. A lot of them may be working on their games part-time, or are students, or very young. their living costs are young, they are idealistic, and presume their game is about to take off and make money. Statistically speaking, they probably wont, but a combination of youthful optimism and relentless confirmation bias means they are still working at it and are still assuming they will stay in the industry. The only PR they do is on twitter and reddit personally, trying to get people to play their game. The ROI is zero. These people lose money.

In the middle (again, only speaking financially) are the established ‘III’ indies with a few titles under their belts, or the ones who had a proper art and PR budget. They are probably migrants from Triple-A studios, with years of coding experience. They are aged 25+. They may have a small team, be working full-time, and are probably self-funded. They have some actual advertising budget, might hire a PR agency now and then, they attend trade shows with proper booths (not a laptop and a self-printed poster stuck to the wall), and have professional looking trailers. Their games sell 20-200,000 copies. Some of them are millionaires. A lot of them make a pretty decent living, and are likely to weather any coming game-crash or storms. They use google ads, reddit/twitter/facebook promotions etc. The ROI is pretty good, 200-300%? My company is in this tier.

At the top (purely financially :D) are the AAA developers. Their games cost millions to make, and sell millions of copies. They have full-time PR companies, with print-media ads, huge booths with people dressed up as game characters. They have massive site-takeover ads and streaming video ads. They have billboards in the streets, on buses, ads on TV, and their PR people guarantee these are the games that get written about in national newspapers and magazines. They get mentioned on TV in geeky segments in the news. The owners are multimillionaires. The staff are paid whatever they can get away with. The ROI is very good here, maybe 400%?  Activision is in this tier.

Ok, so what’s my point?

My point is that it’s getting hard to move from one to the other. Yeah, minecraft is the mega-exception that proves the rule. I know a lot of people in the middle tier, and I’ve yet to see any of them break out of it in a big way. The gap between them and the AAA is huge. Maybe it’s just that the sheer money involved requires a different mindset? Rather than spend $100-200,000 on a game (I’m calling that mid-tier) then you have to spend $2,000,000, and the likelihood is you don’t have that cash sat there (some do…). That means borrowing, which means proper big investors, VCs, people wearing suits… proper accountancy rules & board meetings blah blah. Maybe it’s too much hassle, or not what those devs want to do.

The good news is that going from bottom to middle isn’t as hard. I think it can be done by angel-investor style funding, or the real plucky confident people who remortgage their house or sell everything they own. I think you probably need to spend $100-200k to make a game that pushes you to mid tier. That either sounds like a good deal, or terrifying depending on your risk-attitude. The good news is there are some indie devs who can fund games to that level, if you make a very good pitch.

It’s hard but I think middle->top is harder still. I pretty much know why I’m stuck in the middle. it’s manpower. I need to find people I’m prepared to hire full-time, or at least on long term full-time contracts. I haven’t done that. Yet.

 

I’m always a bit paranoid about being out of date. I don’t want to be the guy who is putting the finishing touches to his betamax product line just before he hears about VHS. I don’t care so much about coding tech, as I think the costs ofg switching tech to the latest version outweigh the benefits. Especially if you do whatever Microsoft say is cool, which changes every year. Is silverlight still a thing? hell…I remember when VRML was the tech of the FUTURE.

But like it or not, the internet changes, gamers change, and we have to roll with it. Subscription MMO’s are dead. F2P is the default now. That’s a BIG change. iOS games went from being non-existent, to gold-rush, to a great way to lose money in just a few years. Internet ads have gone through so many fads it’s hard to keep up!

So where do we find ourselves? I’d guess we find ourselves in 2014 with these priorities:

• Video content is king
• Social media is king
• Buying your way to attention is getting very expensive
• Huge centralization of online community control.

I am not a youtube user, on the whole. I watch the odd trailer and technical video, but I never watch let’s plays. I am too impatient for that. I don’t want to hear someone talk about the main menu screen for 5 minutes, I might only *play* a game for 5 minutes. And when I’m relaxing, I’m in a room with a TV on, so I prefer text only. But like it or not, video is huge. As a result, I spent a lot more now on producing video content than I did before. I have an actual video camera (a cheap one, but at least a proper one) and a decent microphone, ready for test-driving tomorrow. I’m going to try and release more and more video content.

Social media is a big thing, but tbh I don’t mind. My twitter account seems weirdly popular, and this blog is even more popular. This has never been a strategy, it’s just me being me, so that worked out quite nicely. I’ve made a bit less use of facebook, reddit etc, because I just have so little time, but I can see they are important.

Simply sitting in a dark room without either of those and just buying advertising space is getting harder. Ad-costs are high. A lot of billion-dollar companies are throwing cash at each other in a mud-fight, and us indies can’t afford to get in the middle. Some of the CPC ads can still be worth doing, but CPM is going up and up. Anyone who thinks $5-10 CPM is ‘a good deal’ is smoking something. It absolutely isn’t, unless you are selling accident insurance.

There are very few places now to be heard. A lot of those big gamer sites you enjoy are owned by parent organizations who own three or four or more of them. Big media companies like buying other media companies. I think starting a new site these days is very very hard. You struggle so much to get the slightest attention. Right now there are probably just about enough media outlets for indie PC gaming to keep up a sense of competition, but if things consolidate more I’d start to worry that we are back to 2 or 3 companies deciding your fate as an indie games business.

Interesting times…