Category: business

Lets say you run a business. The business makes $40k in a year. You are used to living on $40k, so you spend it, and have a reasonable life. Then suddenly things go well, and you make $50k the next year. Do you

a) Have a better year, buy better donuts, drink more beer and enjoy the $50k

b) Have a slightly better year, buy a few more donuts, spend $5k of the surplus and invest the other $5k in making the business better.

c) Stay as before and invest the whole $10k on making the business better.

I think most people are like a). I think a lot of people who work for themselves are like b), including me. I suspect that a lot of the dotcom billionaires are like c). I read once that valve basically took all the money from Half Life’s success and invested it in Steam and Half Life 2. I suspect this is true. I would guess that when World Of Warcraft was making tens of millions in profit, Blizzard took ALL that money and reinvested it. Then did the same when it made hundreds of millions. It turned out to work very well for them…

The problem is, no matter how much I may intuitively see this, and would even recommend it as a policy to others, I find it difficult to do myself. Maybe I’m just not as obsessed with running a bigger company as the dotcom guys, but when positech has a good year, I tend to bank some it (paranoid about having a bad year), spend a little bit more on the business (ooh look! some professional spaceship art), and buy a new TV. I tend to fear that if I don’t spend some of the company profits when there are some, it might crash and burn one day and I’ll have nothing to show for it, whereas with my current policy, at least I have a new TV.

I read Duncan Bannatynes autobiography, which is a great read. He made an absolute fortune from ice cream sales once. he then invested ALL of it in making retirement homes. he sold his car, re-mortgaged his house, even sold his TV to make the final payment on the first home. He had multiple maxxed out credit cards at that point. James Caan did the same. They went from having a good income to being penniless and in debt, because they could see the return in the long term being a whole step-change higher.

I don’t reckon I could ever do that. And even if I could, I’d be a nervous wreck doing it. What about you? Are you risk-averse? or a dotcom dude?

So Apple are looking to tell google where to shove it and sell advertising directly, I read. One of the thinsg that sprung out at me from this article was this quote:

“Every time a user sees a banner ad from Apple, it will charge advertisers a penny. If the user taps the banner and the full ad expands Apple charges $2. Large ad buys would reach $1 million from the taps and views.”

Wha?

So lets re-visit that a bit. For a single mouse-click (less really ebcause it just expands an ad, doesnt go to a site), the advertiser pays TWO DOLLARS. So that’s at least two dollars per click.  I currently pay around $0.10 a click, so this would eb twenty tiems as much money. Now obviously, not everyone sells indie games. I’m sure some megacorps selling high price items have money to burn, (oh and by the way, if you are a small advertiser with an ad budget under a million dollars, apple have told you to f**k off already. Thanks guys).

I do wonder how the discussion goes in the megacorp head office though:

“Dude, there are lots of people with iphones. Maybe we can advertise our high-value product on there?”

“Yes, but dude, they are charging at least five times what anyone else charges for the ads.”

“Sure, but from what I hear, people with iphones are not at all price-sensitive and will happily pay a premium for everything!”

“So why are iphone games considered overpriced at $1.99?”

I don’t think google should be worried at this stage. For them I’m sure it will be business as usual. Business time…

I’ve been away for 2 days, on holiday. Yippee. First time I’ve been away this year, and indeed, since I moved house. It takes me about 24 hours to switch off from work, even once I’m 100% away from a  PC, so that gives me 24 hours of relaxation proper before I’m back in code mode. I still occasionally find myself thinking ahead though.

I actually started thinking post-GSB very briefly. I’m still a little way off from that, but I need to set a date for when I ‘move on’ and pack away the star wars and star trek DVDs and sound-tracks and dig out the <********* spoiler ***> which will get me in the mood for my top secret next game. With a new race expansion pack under way right now, and the campaign add-on in full development, it feels a bit weird to already be planning ahead.

However, I know that it takes me roughly a year to make a new game. That means having to start on the next one at the point where I think I can finish it before you I out of cash. If I plot a graph of Gratuitous Space Income, it tapers down pretty steadily to about now, and bumbles along at a livable rate. In a years time, that will (if it follows my other games) be just below that. Luckily I’m a bit paranoid and always stick some money aside when things go well. My plans stupidly assume that the next game is at least as good selling as Democracy 2 / GSB. If it sells like Rock Legend instead, I’m probably eating from Asda rather than Sainsburys. If it sells like Kudos 2, I’m eating from bins :D.

So my current business plan (not as exciting as my game design plan) is that the 3rd (likely final) race expansion pack comes out next month, and hopefully the Campaign turns up in June. Those should bump up sales of the main game a bit, and hopefully pay for themselves over the next year. I have a feeling the campaign may slip a bit due to feature creep, but I’ll assess the likely interest in that after the next expansion goes on sale.