[casual_games] selling game online

[James Gwertzman]

This is already done in many distribution contracts in the form of a
per-unit-minimum. Language typically reads something like this:

"Distributor will pay publisher the greater of: (i) 40% of net revenue,
or (ii) $6.99 per unit sold."

This is like having your cake and eating it too - you're guaranteed at
least a certain $/unit, plus you get additional upside for sales in
excess of that figure. Because you cannot legally set pricing for your
distributors, the per-unit-minimum is the ONLY way you have to directly
influence the end-user price, other than setting an MSRP of course.

Contracts will also typically have some exceptions to the
per-unit-minimum, either for specific pricing models, or during certain
"windows" during the year (e.g., 45 days out of every year), or simply
by written agreement. But at least then you know what you're agreeing to
("Okay, you can do a 50% price promotion for the next two weeks.")

---------------------------
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 Brian Robbins
Sent: Friday, February 09, 2007 2:15 PM
To: IGDA Casual Games SIG Mailing List
Subject: Re: [casual_games] selling game online

I think you mis-understand what I'm suggesting.

I'm talking about having a fixed price per unit, say $7.
Portals/retailers/etc are then free to sell that for however much they
want, be it $1 as a loss leader or $50 if they think they can get it.
Either way, they owe the developer $5 for every unit sold.

What this does is evens out the problems in the current model, where
you get percentage of a percentage of a percentage, potentially ending
up with $1.32 per sale (as per Greg's post).

Developers still live and die by the success of their product, yet
they don't suffer when portals start lumping their games into massive
bundles, discounting them to almost nothing, or even try to deduct
tons of expenses off the top.

It's far from perfect, but I think it avoids a lot of the current
problems, before they become crippling to developers.

-Brian

On 2/9/07, Alex Amsel <tuna at tunatech.com> wrote:

> Actually there's a problem with this Brian. We've been in the industry

> for a long time, too long, and what you suggest as a solution is

> actually the beginning of further problems/ Fixed COGS can work in

> certain cases - magazine deals, per territory deals (esp for budget or

> low-profile projects), and long tail.

>

> However, fixed COGS allows profits to stay with the

> portals/publishers/aggregators and they simply don't feed down. What

you

> end up with is almost a work for hire business, and this is not going

to

> get developers far in the long run.

>

> The great thing about the download revenue share model is that you

live

> or die based upon your sales, exactly how it should be. A great

success

> will make you rich, well, well off. That's how it should be, and the

> increased discounting is worrying - done wrong it'll be damaging for

the

> online industry just as it has been for retail. However, that's for

> another thread.

>

> Can you imagine if Virtual Villagers had been sold wholesale?

>

> (BTW: Good to meet several of you in Amsterdam, and hear some of your

talks)

>

> Brian Robbins wrote:

> > The solution right now is to change the business from a purely rev

> > share deal, which worked great a few years ago, to a wholesale deal.

> > In doing so developers will be able to fix their costs and revenues

> > without getting screwed over too badly, while Portals and Publishers

> > will gain a fixed COGS and can continue to compete in the

marketplace.

> >

> >

> >

> >

>

> --

>

> Alex Amsel

> Tuna Technologies Ltd (Sheffield, UK)

> Cross Platform Game Development

> Tel: +44 (0)114 266 2211  Mob: +44(0)7771 524 632

>

>


-- 
Brian Robbins
Executive Producer and Gaming Evangelist
Fuel Industries - www.fuelgames.com
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