[casual_games] Different Payment Models

Wed Oct 11 00:57:31 EDT 2006

I would add:

3)  Even if you were making more and "only" spending 200K it doesn't 
mean that people should suggest that you are obligated to spend more.  
That's the kind of nonsense that got the mainstream game industry 
painted into a pretty narrow corner.

Thanks to everyone who has for sharing numbers.  One thing that I have 
thought for a long time is that smaller developers such as Rusty Axe 
have to find a way to take more of the ad $ if we aren't going to hit 
one out of the park and make top twenty.

Lennard Feddersen
CEO, Rusty Axe Games, Inc.
www.RustyAxe.com

Lennard at RustyAxe.com
P. July & August 518-863-2317
P. 250-635-7623 F. 1-309-422-2466
3521 Dogwood, Terrace, BC, Canada, V8G-4Y7

James Gwertzman wrote:
> 1) Assuming that these numbers are accurate, the $350MM is end-user
> gross revenue, not net revenue. Assume 60% (or more) goes to the
> distribution channel, leaving 40% or $140M for publishers. 35% of $140M
> = $49M to split among the top 5 games, or $10M each from portal sales.
> That might be a tad high, but not an order of magnitude high.
>
> 2) $200K for a AAA casual game these days is low. It's not enough to
> just look at the dev cost for an individual game (which frankly is
> higher than that) but you also have to look at all the prototyping and
> games that get cancelled along the way. You're going to see some games
> from us later this year that have been in development for close to two
> years and cost well north of $200K.
>
> ---------------------------
> James Gwertzman
> Director of Business Development
> PopCap Games, Inc.
> +1-206-256-4210
>
> -----Original Message-----
> From: casual_games-bounces at igda.org
> [mailto:casual_games-bounces at igda.org] On Behalf Of Adam Johnston
> Sent: Tuesday, October 10, 2006 8:55 PM
> To: 'IGDA Casual Games SIG Mailing List'
> Subject: RE: [casual_games] Different Payment Models
>
> Oh come on.  35% for top 5 games gives 7% of $350MM/year to each of
> them.
> That's $50MM each per year.
> If we guess that the top games cost $200,000 to produce, then after
> giving
> $2MM to Oprah and only 40% on development they still have at least $20MM
> each to spend.  That's 100 games per year.  Where are they?  What game
> did
> PopCap produce this year?  We're in October already. Did Tailismania
> cost
> $20MM?  If PopCap have more than 1 in the top 5 then did Talismania cost
> $40MM?
>
> Adam
>
> -----Mensaje original-----
> De: casual_games-bounces at igda.org [mailto:casual_games-bounces at igda.org]
> En
> nombre de Juan Gril
> Enviado el: Lunes, 09 de Octubre de 2006 01:14 p.m.
> Para: IGDA Casual Games SIG Mailing List
> Asunto: Re: [casual_games] Different Payment Models
>
> I'll step forward, as I wrote the presentation that you are mentioning.
> The
> data is taken from the DFC Intelligence and CGA Casual Games Study.
>
> The report's breakdown was:
> Top 5 Games		35%
> Top 10 Games		60%
> Top 20 Games		75%
>
> Cheers,
>
> Juan
>
>
> On 10/9/06, Christopher Natsuume <natsuume at boomzap.com> wrote:
>   
>>
>>
>> First of all - thanks for the great information, James.
>>
>> As always, you bring some great data to the discussion.
>>
>>
>>
>> "But don't use type mythical "80% of the sales coming form 20-30 
>> games" as proof that the industry is broken."
>>
>>
>>
>> As for my figures, I was recalling a lecture from this year's 
>> Causality talk by Pat Wiley and others: "One Billion Dollars"
>>
>> You can see that slide presentation here:
>> http://www.casuality.org/seattle/html/index.htm - the figure I was 
>> recalling was on slide 3. "75% of those 350MM are made from the top 20
>>     
>
>   
>> games" - I rounded it to 80% and added 10 games (not on purpose, I 
>> just incorrectly remembered it that way J).
>>
>>
>>
>> But the general gist is still pretty much the same. A 42% distribution
>>     
>
>   
>> of income on 20 out of 300+ games a year is one thing. A 75% 
>> distribution - that's another. To be fair - they don't have the data 
>> you have to back up that assert, so it very well may be incorrect, but
>>     
>
>   
>> I would guess it may be that other portals are not seeing as broadly 
>> distributed income as on Reflexive. I believe some of the Big Fish 
>> people are on this mailing list - maybe they can share where they got
>>     
> that
> data?
>   
>>
>> As for your further assessments of % of TV shows/movies/breakfast 
>> cereals, I see your point, and I agree that there will always be
>>     
> winners
> and losers.
>   
>> But my issue is that movies, breakfast cereal, and TV shows that don't
>>     
> "hit"
>   
>> still make some revenue (they aren't giving away free cereal or 
>> advertising space or movie seats) - whereas under a play-then-pay 
>> model, a lot of the "filler" product sees essentially no meaningful 
>> revenue at all, even though they may be experiencing thousands of 
>> downloads.
>>
>>
>>
>> That is the part of the model that I see as broken. Not that all games
>>     
>
>   
>> should be big winners, but that the losers should have some sort of 
>> sliding scale of loss, so that they might recoup a small part of their
>>     
>
>   
>> investment and try again. There has always been a market in "direct to
>>     
>
>   
>> video" movies, generic breakfast cereals, or late-night-filler cable 
>> TV - even B-list budget video games - and they don't make a TON of 
>> money, but there is a revenue model that says they CAN make money, if 
>> handled correctly. I am wondering how we can create such a model in 
>> our industry. Maybe we can't - but I'd like to have the discussion, at
>>     
> least.
>   
>>
>> I am curious what other issues you had with my ideas - as I think your
>>     
>
>   
>> deep experience with Reflexive may put you in a much better place to 
>> see some of this much more clearly than me. I am sure you have a great
>>     
>
>   
>> deal of insight to share on this issue.
>>
>>
>>
>> Cheers,
>>
>> Cn
>>
>>
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>> Casual_Games at igda.org
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>>
>>
>>
>>     
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