[casual_games] "Don't Roll Over" Casuality Slides

[Adam Martin]

On 30 Jun 2006, at 21:18, Joe Pantuso wrote:

> A couple of the people on the advisory board think I'm nuts.  "The  
> question isn't how much it costs you to run it, it is how much of  
> the game payment can you keep?" one of them kept repeating to me.   
> My reply to him was that if we're really going to grow this market  
> in interesting ways, we have to keep up a steady supply of games  
> that pay the bills of the people making them.

This is the basis of all pricing, though - it's all based on the  
"what is something worth?" "whatever someone is willing to pay for  
it!" mentality. I skipped getting an MBA, so I don't know what the  
percentages are on this, but I've worked with many SMEs and startups  
(and founded some), and of those that got past the startup stage the  
thing that normally killed them was not making enough sales or  
getting their pricing wrong (usually too low). There are so many  
threats to any business that are out of your control but that can be  
headed off simply by spending cash that you pretty much need all the  
cash that your product is worth.

There's competitive advantage to competitive pricing, but in a free  
market where any developer can go anywhere, IMHO price gouging won't  
work (speaking generally, not accusing you in particular of this).

> So that's what we're fighting against.  The 'grey hairs' and biz  
> types who come at it from a strictly "what can we keep" attitude,  
> rather than seeing this industry as an ecology to be nurtured.

Don't nurtured economies tend to have problems surviving in the real  
world? :).

Seriously, despite being a developer wishing that portals were more  
reasonable, I don't blame them for the current situation: they're  
running their businesses properly, and small variations in pricing  
and product offering allow us to choose who its worth spending our  
time pitching to. Developers failing to distinguish good games on  
pricing (because they're accepting deals irrespective of what other  
deals are possible) is a much easier problem to solve than portals  
voluntarilty trying to maintain profitability on considerably less  
cash but similar levels of volatility. Fundamentally, if its only  
random luck whether your portal gets the next big hit or a megaportal  
does, but they get three times the profit out of it, you're going to  
be buried by them in the long run.

And if we don't, then they will continue to squeeze, whilst the  
offshore companies step in and fulfil at the low prices because of  
their lower costs. Whilst I'm sure that won't work in the long run -  
I've worked with outsourced developers before and although they are  
very good at fulfilling precise specs they are very poor at creative  
redesign or innovative exploration of the subject - I can see it  
keeping the portals in decent money for some time to come.

---
Adam Martin
CTO Mind Candy