Gaming business models, like games themselves, are split into a number of genres. For example, there is free, there’s advertising based, there’s the virtual goods model and of course the traditional pay and play (and that includes sub-genres like Jon Hare’s brilliantly named “Free for Freaks” model, based at heart on the old coin-op model).
Dave Jones is now infamously, and probably forever, tied to his quote on the subject:
“If a game is built around a business model, that’s a recipe for failure”
To be fair to Dave here, I think he may have said this before the fragmentation of business models became as well known as it is now. But, and it’s a big but, even if there was only one business model available, your game would still be built around it. It has to be. We’re not yet in Roddenbery’s cash free utopia so if your job is the production of a good or service then your job is ultimately to sell something. Understanding how what you’re selling is affected by the way you’re selling it is key and should have implications on the design of the product.
For example, a friend of mine prints around 100,000 magazines each month and then dumps them in great big piles at the entrance to supermarkets in the South Wales area, people then pick them up without paying a penny for them and take them home. Obviously I’m being a bit cute here, there’s a very well thought out process here. The magazine aggregates all estate agent properties in the area into a single format brochure. What they really sell is an advertising and distribution channel for the estate agents (to potential buyers) who consider it part of their marketing budget. This translates into a free magazine for the public and a solid revenue stream for the business. The product is designed specifically around a model to make money. How long this model lasts for is probably debatable.
Conversely there’s something like TweetDeck. Last night as I read through some tweets, Tweetdeck (iPhone) continually crashed on me which it got me thinking that it’s a bit shoddy really. Then I remembered I never paid for it in the first place. Would I? No (crashing aside) as I also have the free official Twitter client, which logically brings us to the very free Twitter. So what are the business models here? My guess is that at the moment they have a ton of very very smart people trying to figure that out. How is TweetDeck making money, I can only assume at some point we’re going to see advertising interspersed with tweets (which will probably have Twitter’s own paid for tweets in also).
It’s all a bit flakey for me. Especially if you’ve got a lot of overheads to build and maintain those things. This is the old and bad trait of the web that I’m very familiar with. We’re back to ‘build it and they will come’ territory and you need very very deep pockets for that sort of thing (tied to a zealous faith in that you’re doing will eventually pay off). Having been there and done that, I never want to return to it.
My options at the moment look like this (these are the ones that best fit with my project):
– Variable download price (with some premium ‘gifts’ for the fanatical/family/friend users)
– Free with in game monetization and advertising
Both have attractions for me and ideally I would love to run the project on a hybrid of the two but I need to speak with some much smarter people than me on whether that’s possible or just confusing to the consumer. I love the idea of removing the barrier to entry to increase the numbers of users you can monetize but at the same time I feel it’s folly to lose revenue if some people are willing to pay something. This would be crucial to a small project like this, to get a return on some costs very early on – say a few thousand followers, friends and family would pay more etc. The development plan for the project is to run it in small iterative phases – the perpetual beta product =p With the first public release in 3 months. The take-up numbers on that first release will probably decide its future. We aim to fail fast.
As a (naive and very rough) example, I have around 160 friends on Facebook of those I think around 50 are family and very close friends who would, out of loyalty (and badgering), buy a copy of my game for about £10. The remainder are good friends and I think about 50% (say another 50) could probably cough up a fiver (£5). Then there’s my twitter followers who are less close but have invested some of their time following my ramblings hopefully by the time of release would provide another 200 or so that would pay perhaps a £2. So we could probably grab a £1000 on the first few days of release. That figure would be multiplied by any others that are involved in the project.
In my view not all consumers are equal and if possible it would be great to have the model cater to all of them i.e. have the game available to buy for the early adopters, perhaps a premium price for the friendlies which would include otherwise unattainable inventory items, then provide a free version with in game monetization (discounted for those that purchased) and then lastly bring in advertising if you get traction. Essentially the price structure would be to have the highest price you can get away with at the start which eventually declines to 0 but has a reverse increasing curve from 0 upwards for in game monetization.
This feels a bit like having your cake and eating too but I believe this is where my project lives and dies. I also think this, somewhere in all this stuff, is where the future of selling games lies.
I must give huge credit to Nicholas Lovell who, for my money, is like the Seth Godin of Games Business. His blog gives focus and clarity to these ideas, ideas that I think a lot of us have had bubbling away as suspicions but not had the nouse to define. Check out his blog here: www.gamesbrief.com and in particular this set of slides: