2. The afternoon
2.00: What is a self-publishing and who do you need to
do it?
2.30: ARM yourself: funneling users into profits
3.00: Whales, power-laws and the future of media
3.30: How do we get our game out there?
3. Nicholas Lovell, GAMESbrief
Author, How to Publish a Game
Director, GAMESbrief
Clients include Atari, Channel 4,
Channelflip, Firefly, nDreams and
Rebellion
@nicholaslovell / @gamesbrief
7. Who does what at a publisher?
CEO
Development
director
Operations
director
Marketing
director
Finance
director
Sales director
Lots of
developers
Databases
Billing
CRM
Moderation
Web design
Security
Analytics
CRM
Customer
service
Brand
marketing
PR
Financial
controller
Admin
Business
dev
Partnership
8. Some team sizes
Jagex - 400 people
Adds one customer support per 10,000 paying users and 50,000 free
users (currently 1 million paying; 6 million free)
Playfish – 300 people
10-15% of total staff are analytics people
20% of each game team is analytics
A fully-staffed online publisher like the one set out above will
have 40 staff:
This will grow rapidly with customer support
BUT you don’t need to start with this. Just be aware of the
growth path
9. Can we outsource?
Developers have always outsourced the publishing
function – to PUBLISHERS
Most jobs *can* be outsourced
The questions is which ones *should* be
10. Sales
This is all about taking the user’s money
As much technology as “sales”
PSN/XBLA/WiiWare/iPhone:
Already outsourced to Sony/Microsoft/Nintendo/Apple
Web billing:
Yes, but plenty of integration issues
Advertising sales:
Yes, but plenty of integration issues
11. Distribution
This is all about getting games into the hands of users
PSN/XBLA/WiiWare/iPhone:
Already outsourced to Sony/Microsoft/Nintendo/Apple
On the web, this has two elements:
Technical: scaleable infrastructure
Marketing: generating traffic and plays
Although large elements can be “outsourced” to
Facebook
12. Marketing
ARM yourself:
Acquisition: getting players to your game
Retention: keep them coming back
Monetisation: make money from them
Where marketing meets gameplay, keep it inhouse
“Traditional” marketing skills can be outsourced:
PR
Brand marketing
Graphic design
13. Finance
The hardest element to outsource
Only you can determine how best to finance your game
Heavily dependent on your business model
Regional location may matter
Use accountants/lawyers/financial advisors where
necessary
Non-executives are extremely useful
But boot-strapping may be best
15. I’ll get some visitors
Some who visit will register
Some who register will
subscribe
Subscribers will spend an
average of £10 per month
I’ll put my Maserati on order
1% convert = £1,000.00
1% convert = £10.00
Say each costs £0.10
Only if the average user
stays for 100 months!
How most people start
16. ARM yourself
Hoping for the best is not good enough, you need to
ARM yourself
ACQUISITION: How do I get people through the door
cost-effectively?
RETENTION: How do I keep people coming back for
more?
MONETISATION: How do I build money-making
strategies into gameplay
Most developers focus on one of these
All three are really important
18. Feeding the funnel
Unique users
Harness users to
create virality:
• Referrals
• Facebook Connect
• Importing contacts
• Twitter
MarketingPRSEOSEM/PPC
Cross-promote
from other titles
19. Converting the funnel
Unique users
Registered users
Active users
Paying users
Revenues & profits
For your business:
Draw the funnel
Reduce to as few
steps as possible
Know the
conversion rate for
every step
Tweak, iterate, test
until you know
exactly how your
funnel converts
20. Finding the levers
Users are not the only metric
The others depend on your business, but might include:
Page views
Video views
Game downloads
Purchase of a virtual item
A metric that you can’t influence is no good
Focus on LEVERS
21. Digression 1: Calls to Action
On every page, you should know what you want your users
to do
Then SHOW THEM
e.g. Register/Log In/Buy/Subscribe
But also:
Tell a friend
Play a game
Connect with Facebook/Twitter
23. Why the funnel matters
The funnel matters because it is your entire business
To emphasise that, we need Equation I
CPA < LTV = good business
CPA > LTV = trouble
Where:
CPA is cost to acquire a user
LTV is the Life Time Value of a user
24. Harnessing virality
A viral business can be an insanely profitable business
CPA is close to zero, so even if LTV is low, your business is
great
Time for Equation II:
Viral coefficient = A% x B x C%
Where
A% = Percentage of your users who invite a friend
B = Number of friends they invite
C% = Percentage of friends who accept the invitation
If viral coefficient > 1.3, time to order the Maserati
25. But what if I’m not viral?
For most Web businesses, the choice exists between:
Viral: low CPA, low LTV
Monetized: High CPA, high LTV
Either is fine, or even a blend, but keep focusing on the
conversion rate
26. It’s all about the levers
Find the metrics that have the biggest impact on the
bottom line
Try to reduce the metrics to one!
Three is more usual
Make sure they are LEVERS
Laser-like focus on pulling and improving these LEVERS
The result will be a better business and a happier team
31. Great news for content creators
Content distributors, not so much
Ballpark, I estimate 50% of people in content
distribution will be out of work over the next decade
BUT many more content creators will be able to make
a living from producing and distributing their own
content
32. Mythbuster 2: All users are not
created equal
Circulation
Audience
Platinum disc
Units sold
33. Users come in all shapes and sizes
Buyers
Sneezers
Influencers
Browsers
Spenders
Socialisers
Gawkers
Grazers
Recommenders Passers-by
34. The price/demand curve
In an era of physical
distribution, you need to set
a single price
For games, around $40
PRICE
Demand
“That’s too
expensive for me”
“It’s great
value, I’d have
paid much more”
35. DDO revenues up 500%
LOTRO and Everquest II going soon
Now we let users set the price
Hypothesis: Allow users to choose
how much they spend on your
product, and your revenues will go up
PRICE
Demand
$10 MMO subscription
$1
$1
$5
$5
$5
$5
$3
$3
$3
$3
$3
37. Allowing users to choose how little
to pay is not the secret
We all knew that 95% of users played
for free
We now know that 80-90% of
revenues come from 0.5% of users
PRICE
Demand
Free: 95%Paying: 5%
80-90% of revenue from 0.5% of users
Spending $50 - $10,000 or more
40. What happened to music?
Say 90% of users want to pay nothing
10% would happily pay $100
So 90% pirated and 10% paid $10 =
revenues falling 90%
PRICE
Demand
There was no mechanism for the
whales/high/rollers/true fans/kings
$10 album price
It didn’t have to be that way
41. Bands and managers are waking up
Nine Inch
Nails
$300
First 2,500 only
OK Go
$25
Live recording of gig
you’ve just been to!
U2 by U2
$30
Coffee table
autobiography
Mos Def
$40
T-shirt with code to
download The Ecstatic
43. Mythbuster 3: Free players are
freeloaders
Free users are insanely important
They are:
Potential converts
Eyeballs for advertising
Leads for lead gen deals
Influencers through virality and word of mouth
Gawkers
Every single player has value
44. Morph – a thought experiment
Business model 2
Make a free iPhone App
Incorporate ads for a limited edition,
1,000-only print of the original
Morph, framed for your wall for $999
Conversion rate of 0.1% = same
revenue (oh, no 30% to Apple)
Business model 1
Make an iPhone App
Offer a Lite version and a 99¢ game
45. My advice
If you don’t have a way for whales to spend unlimited
amounts of cash, you’re in trouble
Look after the whales
Treat your freeloaders with love and respect; they
never stop being valuable
All users are not equal. Tailor your products
accordingly
Sales, marketing, revenue generation. These are all
part of the creative process now. Have fun.