I'm thinking of starting off an indie game publishing company. Basically, what we do is deal with things like marketing, hype, and price analysis to get you the best price for your game.
How it works
1. You finish a game you want to sell.
2. You come to us with the game, we look at it, toss it to a bunch of people who are interested.
3. We look at its potential. If we like it, we offer to market it for around 16% of the profit. We make out how much we expect to sell and work out the ideal price (see later). If we don't like it, we could still publish it for you, we just won't spend any money marketing it.
4. Publishing. Generally, we have the publishing facilities. We could burn discs at a cheaper cost and we already have the code to handle online selling and shipping, so you don't have to do that stuff. We only make an estimate of how much we plan to sell, it's up to you to decide how many you want to try and sell. Because most of the time we'll be wrong.. your game could be a hit or it could be a total miss, so you take responsibility for it.
5. If you decide to pay us the 16%, we put a budget for marketing on it. This budget goes into things like putting your demo on another game CD, trying to get it on gaming magazines, blogs, etc.
6. If it turns out that you're good enough at this game making thing, we offer you a permanent job to make proper, high-budget games in a proper team. Scholarship included.
Pricing system
Pricing is pretty much what keeps us apart from the competition. It's hard to explain, harder to believe, and nearly impossible to explain while keeping the patentable bits secret, but I'll try.
Marketers like to delude themselves that games are spread through all kinds of things. But really, they're spread through word of mouth. Try and name your favorite games.. how did you hear about them? After a few sales, other people start to learn about it. If even one person really likes the game, he'll mention it to like 20 people, and you get marketing worth about 20 people right there.
The trick would be to price it really cheaply when it first comes out, like in pre-ordering, to encourage more people to get the game early. The sales price then increases to a profitable level once the sales goes up fast enough to maintain its own momentum. So, it's quite dynamic. The problem is sort of in getting to the point where it goes up fast enough (if it's a bad game, it'll actually go down as word of mouth will tell everyone that it's bad).
Sooo.. any comments?
Disclaimer: Any sarcasm in my posts will not be mentioned as that would ruin the purpose. It is assumed that the reader is intelligent enough to tell the difference between what is sarcasm and what is not.
My first thought on reading this was that most indie game developers do just fine without paying someone to do internet marketing for them. But then again, there are plenty of others who are pretty awful at marketing. Good luck getting a 16% profit slice from anyone for it, though. Not saying that it wouldn't be deserved, but it's a lot to ask people to part with, especially if they're hoping for decent sales.
Well, yeah, there's been some argument on the profit bit. Some think that we could get away with 35%, because of standard consultation and publishing fees. Others say that 5% should be enough, because we're not actually taking any risk aside from the marketing. I guess that's up to negotiation, 16% is the middle ground, and a % cut of the profit, rather than a solid fee, is just to motivate our side to work harder on trying to get more sales.
Thing is that we're not actually going to pay for the publishing, just marketing, so, some people argue that it's not much. But then, the difference between getting your game out to 1000 people and 20,000 people is in marketing, so... yeah, it's in the gray area. There's a full professional marketing team for it though, it's not just one guy on some part of the interweb
Disclaimer: Any sarcasm in my posts will not be mentioned as that would ruin the purpose. It is assumed that the reader is intelligent enough to tell the difference between what is sarcasm and what is not.
I think its more of something you'd just negotiate on a per-project basis, not have to put it up front that you're going to do 16%. I mean, a flopperoonie, that gets 300 sales, at $5 a pop. Thats only $250 for you to have invested in marketing. Meanwhile if a project is already fairly large and well known, taking out 16% of the profits might be far too much, if its going to reach say 100,000 people at $20 a pop. I'd gladly release a cruddy project like gridquest at 50% takes, but something that took a serious development cycle it would be out of the question. Its why I think its really more of a negotiable thing
But yeah`I guess its nice to post up a figure for people to get an idea.
The hardest part about developing an indie game is, imo, the marketing and hyping. I can make a game on the scale of gridquest, redo it with amazing graphics and all that jazz, and it might only reach 1000 people tops. Compare that to professional shovelware like ninjabread man. I think having a company like this, if you get your name out there well enough, might actually capitalize on what I predict will be a fast growing market. Indie game development has relatively exploded recently, due to the generation growing up in the VG boom, and the abundance of entry level languages like MMF & Game Maker and such. And if you could ride along with some of the higher quality projects, its a very good idea.
If my current platformer ever gets off the ground...
Well, I don't think we'd want to market anything we expect to sell only 300 copies. That's the whole point of "looking at the potential". But seeing how stuff like Ninjabread Man, Evony, and Atari games sell so well, it could be possible that anything with aggressive enough marketing would make it
Hmm.. this plan could come into trouble, because investors won't be so happy with the predicted growth, even though there's very little loss. After all, you only get like one game worth publishing a month, and even that would take some time to sell well. I think the indie publishing would end up being a side business, but maybe I'll ask around TIGSource for opinions first.
Disclaimer: Any sarcasm in my posts will not be mentioned as that would ruin the purpose. It is assumed that the reader is intelligent enough to tell the difference between what is sarcasm and what is not.
I agree, you should not drop everything and try to work solely on the business as your primary source of income. It would take some time to get the clients that want you to publish and market their games, and then more time for those to sell and for your publishing name to get enough recognition that draws people in to games that are published by the company. So yeah, side business for maybe even a long time. But with the work and dedication, I'm sure it could get off the ground.
Originally Posted by alastair john jack I'm not sure what you mean by point 6.
Well, some indie gamers are doing it as a way to go professional, so if you show potential, we'd like to get working on a full, professional game. Instead of some simple hand drawn games made in MMF and Paint, everyone makes a bit more profit with high budget games. It's all part of the big plan to rule the world
Disclaimer: Any sarcasm in my posts will not be mentioned as that would ruin the purpose. It is assumed that the reader is intelligent enough to tell the difference between what is sarcasm and what is not.
You going to get investors for this idea, or pay with your own money? Going to hire a few people in marketing and business to help along? An Indie publisher sounds cool, but it would be some work to get established and show your capability so that people will want to be published through your company.
Which is exactly what Jthongbai said.
Edited by OMC
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28th September, 2009 at 07:01:01 -
The whole point of publishing someone else's game is that you take on all of the risks and costs associated with the marketing and distribution of the product. For this reason, I don't think it's a good idea that you should ask the client "How many do you want to try and sell". I think that people should come to you, as the publisher, with their game and you say: "Yes we will do everything in our power to market this game as much as possible and to try and sell as many copies as possible." The reason you are taking that 16% cut is because you will be getting the client more sales than they would be by themselves. The 16% cut is a form of delayed payment. The client should not have to pay anything upfront. If the game is a failure then that's part of your responsibility to bear the costs of producing 2000 disks that nobody wants to buy.
In that same thought, this is why digital distribution is a much better option (for a publishing company who is starting up). Digital distribution means that you have little to no overhead and you do not have to invest money to make money. I think that if you seriously want to do this, then you should bring in the CD publishing facilities later and focus purely on online sales.
The pricing system is interesting. At first I thought it was a bad idea because it would only serve to make people annoyed when they realised that they're being charged double what someone else paid for the game, however I see now that it makes the game more viral as people will be saying: "Get it now while it's still $4, next week it will be $10!". I think it could work both ways, so it would definitely be unique and interesting to try.
If you look at the publishing deals with any major game portal you will see that they take an extremely high percentage of your profits, in the range of 65-75%. That is, if I make a game and my publisher sells it, I only get 25% of the total profit. However there is a very good reason for this. These publishers can justify this high percentage because they provide the client with a high return. In many cases these game portals get 2-3 million hits per day and will have the demo of your game downloaded millions of times in a week. Even if your game wasn't very good and you had a conversion rate of 0.05% (ie 0.05% of people buy your game) with 300,000 downloads that would still be $15,000. A client can say that this is good value because if they had just sold the game on their website, with maybe a higher conversion rate of 1% but only 6000 downloads, they would only receive $600.
So you see, if you are a publisher, the reason you are charging for your services is ideally because you will give the client a greater return than if they had tried to sell their game by themselves. As a publisher, you should be phsyically distributing the game at cost to your company, not the client. If you aren't distributing the game and taking the costs yourself, then you're a marketing service. Which isn't a problem, it's just that you need to be clear to the client that you're not a publisher.
What you've said so far seems to be a little bit of both, which in my opinion isn't really enough. I think you should specialise in one or the other OR both. You can't really say that you will market their game and you will take a certain cut, but if their game fails then they are the ones who have to pay for all those CDs sitting around that weren't sold.
tldr; Good idea, but be clear on what you're doing and make sure there is an obvious benefit for the client where you bear some of the cost.
Another angle is one we take with bookkeeping: Lots of sole traders can do their own bookkeeping, but it's just so time consuming that it's worth outsourcing to someone else. That way the plumber or the builder can spend his time doing paid work rather than accounting for old work he's already been paid for.
It's similar here, development can take so long that many indie devs just don't have the time to throw themselves into marketting, even if they have the skills required to do it.
OMC: Yeah, the original idea was to actually just do this part, but hey, small companies don't last long. So, we're starting bigger, as an actual game making company, and branching out to use the facilities to publish games.
AA: Very good points. I didn't really think about focusing purely on digital distribution for some reason.
But what I did want to do differently was to keep it "indie". More like keeping the choice in the developer's hands, but riding along and making some side money. Some people do want more control and won't want some 60 min limit on their demo, and that's who it caters for. And then, there's the type who actually expect to sell 10000 copies without advertising, these certainly wouldn't want to lose 60% of their profit, but would probably pay 17% to ensure they get the most they can.
But it's something to really think about. I guess it's all going to come down to how greedy everyone gets
Disclaimer: Any sarcasm in my posts will not be mentioned as that would ruin the purpose. It is assumed that the reader is intelligent enough to tell the difference between what is sarcasm and what is not.
Is the pricing that unusual/patentable?
Sounds like a "drink exchange" to me. For those who don't know...
Basically, you have TV screens around the bar, showing live the cost of all the different drinks on offer. The more people buy a particular drink, the more the price goes up. If nobody is buying a drink, it becomes really cheap. If you're smart, you end up getting absolutely wasted for next to nothing, by drinking loads of different random drinks that you'd never normally touch. It's a good system
I can't help thinking that word of mouth leads to piracy rather than sales (especially on small pc games). A lot of people would only buy a game if they thought it looked good and didn't know anyone who already had it.
I'm just playing devil's advocate here btw - I do not in any way condone or wish to encourage such unlawful behavior.
I don't think a flat rate of 16% is workable. Depending on the amount of work the author has put into the game, marketing may be a small or very large part of the overall "value" (for want of a better word).
I also agree that you should forget about burning discs. Noone has a problem with mp3 downloads, and the average indie game would take less time to download than a music album (that's certainly true of klik games at least). Plus, PC games players are likely to be more computer/internet savvy anyway. If you're going to have some other games with huge filesizes, then perhaps offer disc burning as an extra option, but let the author choose.
Anyway, I don't want to sound too negative, because I like the general idea, and wish you every success.
Simply put; it's not a great idea if you actually expect to turn a profit and prevent losing it all in a lawsuit.
It sounds to me like you're suggesting treating game developers like profit instead of business partners. There's far too much bickering over profit cuts so far. Keep in mind that you will need to form a relationship with the game designers, play each game until it's completion, and scour the source. Only then could you determine if the game is endorsable and marketable. If not, you've wasted a good deal of unpaid time simply to turn the game designers down.
Review is absolutely necessary, and each game will need to be held to ESRB-like standards. Without review, it's only a matter of time before some design company brings a Tetris clone to you that features hidden pornographic images, secret obscene text, or overly-gory violence(block on block blood fest, anyone?). Then you have some soccer mom throwing a lawsuit at your ass.
I'm simply saying that's a lot of very necessary work to be charging 16% on a $5.00 web-purchasable game. If you charge more, you'll draw fewer clients. If you charge less, you'll lose money in labor costs.
The only way this would work out well for both you and the game producers is if the game sold for far more. $40 to $60 for instance. Unfortunately, with the promise of high profit, it's likely doubtful a professional game design company would come to you for marketing, rather than trying to market the game themselves.
You'll need to find a way to offer and market the game so that it's no loss to you if the game in question doesn't sell well or isn't appropriate for all audiences. The simplest way I can think of is creating an actual "pay-per-game" download site. Rate games by content, allow buyer interaction, and place disclaimers on games which are still waiting review.
That would allow you to quickly review a game without having to be horribly critical. After the game is uploaded to your site, throw a "Game has not been rated" disclaimer on the page, and begin quasi-marketing it. By quasi-marketing, I mean marketing with the understanding that you really don't want to sell the hell out of the game just yet. The profits you pull in should be enough to pay for the man hours spent extensively game testing for content later on. Drawing fewer customer downloads at first may help prevent legal issues from occurring, too. Purchasers will do a lot of your early game review for you so long as you allow them a place to leave comments.
Once enough interest has been collected, you'll already be making your 16% profit on every download, and the flat-rate cost will cover site upload. The profit you've made from each download thus far can be utilized to fully review the game officially; playing it through until completion, and scouring the source code.
Then you can rate the game to categorize it's appropriateness, or talk to the game developers about changing features to suit consumers. Once rated, use some more of that 16% profit per download to market the hell out of the title. If the title sells well, increase cost until profit plateaus. If the game doesn't sell well, reduce cost and cross your fingers.
That's the only "safe" method I could offer. Most of it's pretty Captain Obvious stuff, and I figure I'm just filling in the blanks.
Edited by The_Antisony
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Originally Posted by Sketchy Is the pricing that unusual/patentable?
The whole supply/demand thing's been around since the start of commerce; I prefer to compare it to budget airlines Anyway, ideas, formulas, and concepts are not patentable, it's the usage of them. I could tell everyone about how it works, but you can only patent how you implement it. Anyway, some negativity is all good, better to be negative than to act like you agree.
@Antisony: Anyway, yeah, I calculated everything and considered what everyone said, and I don't think we'd make a good profit on 16%. Better to charge a flat rate for it, like $2 per sale, with the developer keeping the rest of the profits. That other stuff you wrote, well, the marketing team would do it first. Once things get heavy, we could hire some professional gamers to play the games through and comment on them. And the lawyer should be able to handle whatever trouble developers may bring up; if you try to sell malware, he'd make sure the soccer moms bite the responsible developer first
Disclaimer: Any sarcasm in my posts will not be mentioned as that would ruin the purpose. It is assumed that the reader is intelligent enough to tell the difference between what is sarcasm and what is not.
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Edited by Pixelthief
