Converting Web Traffic To Sales
A lot of indie developers still scoff at the portals and sell their games primarily or exclusively from their own websites.
Some developers have had success with this, including Thomas Warfield, who sells Solitaire games, Positech, maker of detailed strategy sims like Democracy. Other casual developers, like PopCap and Retro64, derive a lot of their revenue from their own sites.
Still, I was skeptical that my own site would be much of a revenue driver, and, after a bit of data gathering in the last couple months, I’m now even more convinced.
On the surface, selling from your own site looks great. You have complete control over the marketing experience, get to capture nearly 100% of the revenue (minus maybe 10% for order processing and 1-2% for bandwidth costs), and you get to ‘own’ the customer relationship.
But the problem is volume. When you start your superfragilistic game company, nobod knows you exist. They’re not googling for your game. 100% of $0 is still $0.
Yes, others have drawn some traffic to their web sites and built a business. But they were generally pioneers of their genre, and have been going for 5-15 years. The half dozen-ish indies that can make a living this way are dwarfed by the hundreds who try to sell their game from their web site and fail (see some of the examples I posted yesterday).
I wouldn’t recommend (or try myself), to sell a game on your own, without external distribution (portals or otherwise). But assuming you are going the portal route, can you capture extra revenue on your own website?
I do have a website for my company, New Crayon Games, which sells my own game, and a few others. But it took a bit of effort to set up.
To sell my own game, I first had to make sure that in my negotiations with my publisher (PopCap), I carved out a right to do so. Fortunately, they went along with this readily (they probably knew my own site’s sales would be a flyspeck). Then I had to buy a copy protection system (Software Passport), for about $300, then set up an account with Plimus (an order processor), then set up a website with Dreamhost, and design a website with Dreamweaver. I would probably have done the website even if I wasn’t selling, but I certainly spent more time on it because I was selling from it.
All told, I spent at least 2-3 days of effort, plus a few hundred dollars, on my website.
Results so far? Well, relative to sales through my publisher’s site, my own site has generated less than 1% of the sales (in units and dollars) that my publisher has generated (and paid me for). And that’s not counting sales through 3rd party portals (I haven’t gotten those reports yet). So bottom line, my own site hasn’t paid off.
About a month ago, I signed up with Reflexive Arcade, which allows you to sell other people’s games from your website, earning about a 30% commission. It’s somewhat easy to use, though probably not as easy as it should be (and their documentation is poor). Because I’m only earning 30% of sales, rather than the ~90% I earn from selling my own game, the sales are certainly going to be less valuable. But will it generate any sales volume?
It’s been weak so far. For every unique visitor to my company web page, I generate 0.23 downloads of Bonnie’s Bookstore, and 0.08 downloads of all the other games combined (originally I had 2 Reflexive games up there, now I’ve got 3). The volumes are too low to make really firm statements about conversion rates, but assuming they hold at about industry standards, I’ll generate about 10% as much money from the 3rd party games as I generate from selling Bonnie’s Bookstore on my site. And as I said, I’m not generating much selling BB. Perhaps the 3rd party game sales will grow, and I admit I could probably invest more time and do a better job selling the 3rd party games, but there’s just not enough value there to justify it for me.
Some may point out that my site only has 3 3rd party games, and I’m not hooking to the whole Reflexive library, as some sites do. Perhaps more revenue is possible that way, but running a site that clones Reflexive’s own site, but with smaller margins and much less traffic than Reflexive own site, just doesn’t seem like a great business model to me.
The one thing I do consider valuable from the 3rd party games is the opportunity to gather a bit of data. Once you get a handle on it, Reflexive has a decent data reporting system, and I’ll be able to see which of my hosted games draw the most downloads, the most completed downloads, the most sales, and so on. This data is rarely disclosed for front line titles, so there is some useful information value there.
March 15th, 2006 at 12:15 pm
Good article Phil. These are the sorts of questions that people who make and sell games need to think hard on.
I guess it depends on what you want your business to be and where you want to spend your time. Each person will have their own answer to this. Building an audience on your website can be a time-consuming and expensive business. In your case, you are making casual games, so it makes a lot of sense that you would focus on making great games and then letting your distribution/publishing partners do the selling. You get less per sale, but as you stated volume is the key factor. You still retain your IP, so using distribution partners is not necessarily as evil as some in the indie game dev community would have you think.
And do you really want to be selling someone else’s games from your site? To what purpose? Do you plan on being a full-blown distribution channel? Or a publisher? Or both? I’m not looking for answers, per se, but just noting that those who are considering selling other people’s titles from their website need to answer these questions for themselves and consider the implications of their answers.
If you were selling a niche product that doesn’t really fit well into the existing game portals, then it’s obviously a tougher road. You might be able to get gaming press to pay attention, as they are always on the lookout for something to print. If it’s a good game, and gets good word-of-mouth, it might work out well regardless, but I would hazard an educated guess and say that in the long-run 99.9% of these games, no matter how good, will have a tough time making enough money for you to pay your bills.
March 15th, 2006 at 12:24 pm
Agreed. I think it’s hard to serve two masters. Either you’re in the business of selling games of all kinds (i.e. a mini-portal), or you focus on developing games (i.e. a casual developer selling mainly via portals, like me), or you make a niche game, and sell to a niche customer that you can identify and reach via some kind of marketing.
In the latter case, you probably have to really commit to that market and make a series of games, so that you can leverage the (small) customer base you reach for your first product, and turn it into a medium customer base for your next product, and so on. Pretty much all the successful niche players have been doing it for 5+ years, turning out roughly the same kind of product geared at the same audience, with new products every 3-12 months.
March 15th, 2006 at 3:25 pm
Hey Phil,
Regardless of the numbers you pull out of your own site you have to keep in mind that no one else is going to push your company, products, and vision for you. While you may not get as many sales through your own website, having a web presence is key in establishing a name for yourself. Otherwise you are completely dependant upon others to push your name and product for you… and in my experience it is highly unlikely that any other company is going to go to bat for you unless you are offering them something in return.
A problem I have been seeing with portal sites like Real Arcade is that there is a real conflict of interest going on. Similar to the retail market, publishers will always push their games ahead of yours unless they think it is in their interest. Often they will even take a good game and duplicate it and re-market it in big ad spots while the original title remains hidden amongst the other games.
I am getting off the subject but I don’t see any way out of this mess really except for publishers getting out of the development business altogether and focusing on um… publishing. =) I am not holding my breath.
So anyway… I highly recommend keeping your own website. It is fairly inexpensive to maintain and should pay off over the long run in an established web presence (ie: people and search engines which recognize you and your products). Just don’t rely on your site to pay the bills for a while unless you are a master of web marketing.
Besides… since online distribution is based upon conversion rate the point is to get as many copies out there in as many different channels as possible, yah?
As for the portal thing… I have considered running one in the past also but it seems to me like a major distraction from game development unless you are partnering with people that can run that side of the business for you. Focus on your strengths.
-Unk