Comments on: Portals Are Good http://www.philsteinmeyer.com/80/portals-are-good/ Phil Steinmeyer's rumblings on the game biz, programming, and life Sun, 07 Sep 2008 17:32:45 +0000 http://wordpress.org/?v=2.5.1 By: kim pallister http://www.philsteinmeyer.com/80/portals-are-good/#comment-521 kim pallister Fri, 07 Apr 2006 03:52:04 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-521 I know I'm stepping into the firepit here (dons flame retardant suit) but someone's got to stick up for the portals here :-) While it's true that the developer sees 25-35 points of the sale, that's not to say that the portal takes the remainder, nor that what they take is all profit. - There is often an aggregator in the middle. Many portals (even MSN) don't have bandwidth to do contracts/QA/etc with 200 developers. This is no different from your local grocer who has a distributor come in and stock his magazine rack. He doesn't have a PO with someone from GQ, newsweek, pc gamer... - Credit card transactions seem simple, but they still cost. Visa takes their cut. - there's usually a DRM provider taking a cut. - Support is an issue. An significant number of transactions end up not only not working, but requiring someone to get on a phone or on email. - Bandwidth is an issue. If a title has a 1% conversion rate, that means that there there was 100*20Mb or 2Gb of downloads for that 1 sale. There are other issues too, but you get the idea. Anotehr way to look at it is that if it really were all just massive profit margin, one of the big portals would cut the oxygen off to the other one by offering vastly higher royalties to the devs/pubs in exchange for exclusivity. Truth is, it's not a trivial (nor cheap) business to run. Hope that helps add to the discussion... I know I’m stepping into the firepit here (dons flame retardant suit) but someone’s got to stick up for the portals here :-)

While it’s true that the developer sees 25-35 points of the sale, that’s not to say that the portal takes the remainder, nor that what they take is all profit.
- There is often an aggregator in the middle. Many portals (even MSN) don’t have bandwidth to do contracts/QA/etc with 200 developers. This is no different from your local grocer who has a distributor come in and stock his magazine rack. He doesn’t have a PO with someone from GQ, newsweek, pc gamer…
- Credit card transactions seem simple, but they still cost. Visa takes their cut.
- there’s usually a DRM provider taking a cut.
- Support is an issue. An significant number of transactions end up not only not working, but requiring someone to get on a phone or on email.
- Bandwidth is an issue. If a title has a 1% conversion rate, that means that there there was 100*20Mb or 2Gb of downloads for that 1 sale.

There are other issues too, but you get the idea. Anotehr way to look at it is that if it really were all just massive profit margin, one of the big portals would cut the oxygen off to the other one by offering vastly higher royalties to the devs/pubs in exchange for exclusivity. Truth is, it’s not a trivial (nor cheap) business to run.

Hope that helps add to the discussion…

]]> By: computer games » Blog Archive » portals are good? http://www.philsteinmeyer.com/80/portals-are-good/#comment-502 computer games » Blog Archive » portals are good? Wed, 05 Apr 2006 08:33:43 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-502 [...] In his blog, Phil Steinmeyer’s talks about the fact that portals are good. Those discussion are fun to read as always, but I want to talk more to another aspect of the “problem”. How can you define yourself indie when you’re using a portal? Everyone who worked with them, knows that they often require changes to your product (not all portals do that, but many yes). Isn’t this falling back to the old “boss that tells you what to do” idea? [...] [...] In his blog, Phil Steinmeyer’s talks about the fact that portals are good. Those discussion are fun to read as always, but I want to talk more to another aspect of the “problem”. How can you define yourself indie when you’re using a portal? Everyone who worked with them, knows that they often require changes to your product (not all portals do that, but many yes). Isn’t this falling back to the old “boss that tells you what to do” idea? [...]

]]> By: A Shareware Life http://www.philsteinmeyer.com/80/portals-are-good/#comment-439 A Shareware Life Mon, 27 Mar 2006 05:46:28 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-439 <strong>The Carnival of Marketing...</strong> Welcome to the Carnival of Marketing! This is a selection of seven of the best blog posts on marketing from the past week. Here are this week's selections: China's New Statue for Brotherhood and World Peace. Jack Yeost posts about... The Carnival of Marketing…

Welcome to the Carnival of Marketing! This is a selection of seven of the best blog posts on marketing from the past week. Here are this week’s selections: China’s New Statue for Brotherhood and World Peace. Jack Yeost posts about…

]]> By: Phil Steinmeyer http://www.philsteinmeyer.com/80/portals-are-good/#comment-419 Phil Steinmeyer Sat, 25 Mar 2006 04:02:39 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-419 No, I'm from St. Louis (hence the silhouette of the arch at the top). I just know that all the publishers are in New York, and figured their printing/warehousing is in Jersey. No, I’m from St. Louis (hence the silhouette of the arch at the top). I just know that all the publishers are in New York, and figured their printing/warehousing is in Jersey.

]]> By: Andrew http://www.philsteinmeyer.com/80/portals-are-good/#comment-418 Andrew Sat, 25 Mar 2006 03:56:29 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-418 So Phil, why NJ to get books? You from around here somewhere? I have a small wireless game development company in NJ (and Samara Russia actually) and have been on the lookout for any game related folks in the area to hook up with. Really getting alot of the the blog, thanks! So Phil, why NJ to get books? You from around here somewhere? I have a small wireless game development company in NJ (and Samara Russia actually) and have been on the lookout for any game related folks in the area to hook up with.

Really getting alot of the the blog, thanks!

]]> By: Cliff http://www.philsteinmeyer.com/80/portals-are-good/#comment-417 Cliff Fri, 24 Mar 2006 23:29:47 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-417 Portals aren't the antichrist, it's true. but they have as many downsides as upsides. They maintain price control, and often slash the price (and perceived worth) of peoples games down in vicious price wars. They go out of their way to appear as if they made the titles themselves, denying any recognition for the real developer. They almost always provide inferior customer support and tech support relative to the developer. Portal business models rely on developers saying in their place and not getting brand recognition. When people know the name 'introversion' they can quickly find Darwinia direct, ditto with Positech. By definition, the portals have it in their interest to prevent developers getting recognition or any real tangible success. At the end of the day, a portals top 10 can be based on what games it wishes to see selling, based on what royalty cut it arranged, who developed it, and what target market the portal wants. Amazon is a different state of affairs, where practically all products are listed regardless of subject matter, and its trivial to find even obscure niche products. Over the years I've seen portal royalty rates drop lower and lower until they are probably now at the level (or worse) than retail publishers provide. On the whole, I'd suggest the balance sheet is negative. Portals aren’t the antichrist, it’s true. but they have as many downsides as upsides.
They maintain price control, and often slash the price (and perceived worth) of peoples games down in vicious price wars.
They go out of their way to appear as if they made the titles themselves, denying any recognition for the real developer.
They almost always provide inferior customer support and tech support relative to the developer.
Portal business models rely on developers saying in their place and not getting brand recognition. When people know the name ‘introversion’ they can quickly find Darwinia direct, ditto with Positech. By definition, the portals have it in their interest to prevent developers getting recognition or any real tangible success.
At the end of the day, a portals top 10 can be based on what games it wishes to see selling, based on what royalty cut it arranged, who developed it, and what target market the portal wants. Amazon is a different state of affairs, where practically all products are listed regardless of subject matter, and its trivial to find even obscure niche products.
Over the years I’ve seen portal royalty rates drop lower and lower until they are probably now at the level (or worse) than retail publishers provide.
On the whole, I’d suggest the balance sheet is negative.

]]> By: StGabe http://www.philsteinmeyer.com/80/portals-are-good/#comment-411 StGabe Fri, 24 Mar 2006 19:11:28 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-411 I think it's a mistake to go too far either way -- either being too forgiving or spewing too much vitriol at the portals. Yes the portals fill are useful for consumers. However, they also take most of the revenue, market to a narrow subset of the potential audience and aren't great for developers. I think it's in our best interests as developers to push as much as possible for alternatives and make the portals work for us instead of the other way around. I think it’s a mistake to go too far either way — either being too forgiving or spewing too much vitriol at the portals. Yes the portals fill are useful for consumers. However, they also take most of the revenue, market to a narrow subset of the potential audience and aren’t great for developers. I think it’s in our best interests as developers to push as much as possible for alternatives and make the portals work for us instead of the other way around.

]]> By: Phil Steinmeyer http://www.philsteinmeyer.com/80/portals-are-good/#comment-399 Phil Steinmeyer Thu, 23 Mar 2006 22:18:58 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-399 Yes, the analogy isn't perfect. The portals carry a smaller catalog and take a much higher cut than Amazon. But I think it's reasonably accurate, insofar as the type of customer who plays casual games. They don't want to deal with a fragmented marketplace with many vendors, and products of widely varying quality. The portals serve as winnowers - they set a minimum bar for quality, and as aggregators. That's a valuable combo to the typical consumer, and one all too often overlooked by those who rant against the portals. Yes, I'd like to see either a single Amazon-like uber-portal that branches beyond 'casual games', or a series of portals with different specialties (like, say a mystery book store). Perhaps Manifesto will be one or both of those things. Yes, the analogy isn’t perfect. The portals carry a smaller catalog and take a much higher cut than Amazon. But I think it’s reasonably accurate, insofar as the type of customer who plays casual games.

They don’t want to deal with a fragmented marketplace with many vendors, and products of widely varying quality. The portals serve as winnowers - they set a minimum bar for quality, and as aggregators. That’s a valuable combo to the typical consumer, and one all too often overlooked by those who rant against the portals.

Yes, I’d like to see either a single Amazon-like uber-portal that branches beyond ‘casual games’, or a series of portals with different specialties (like, say a mystery book store). Perhaps Manifesto will be one or both of those things.

]]> By: Dan Macdonald http://www.philsteinmeyer.com/80/portals-are-good/#comment-398 Dan Macdonald Thu, 23 Mar 2006 22:05:57 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-398 I won't dispute that the game portals are good for casual customers but I wouldn't put them in the same level of relevance as Amazon. The biggest difference is that Amazon is mainstream (appealing to a huge demographic) and the portals are niche (despite their best efforts). As a general rule the games that do well on portals are those that best appeal to women ages 18-35, anything else fails to sell. Where as Amazon has something for everyone at virtually any age, any background, and any generation. Ironically Amazon is good for and treats fairly it's suppliers but portals are bad for and exploit third party developers. I'll let others elaborate on why... I won’t dispute that the game portals are good for casual customers but I wouldn’t put them in the same level of relevance as Amazon. The biggest difference is that Amazon is mainstream (appealing to a huge demographic) and the portals are niche (despite their best efforts). As a general rule the games that do well on portals are those that best appeal to women ages 18-35, anything else fails to sell. Where as Amazon has something for everyone at virtually any age, any background, and any generation.

Ironically Amazon is good for and treats fairly it’s suppliers but portals are bad for and exploit third party developers. I’ll let others elaborate on why…

]]> By: Mark http://www.philsteinmeyer.com/80/portals-are-good/#comment-397 Mark Thu, 23 Mar 2006 21:41:33 +0000 http://www.philsteinmeyer.com/80/portals-are-good/#comment-397 I think using Amazon as an illustration of your points is not a terribly good choice. Amazon doesn't act like a publisher. They don't try to pretend that the products they are selling were made by them. They don't handle support for the products - beyond taking returns of defective products. They're a retailer. Their shelves are large (infinite almost), so they offer every product under the sun. The portals, on the other hand, are acting somewhat like publishers and somewhat like retailers. It's not good for the consumer because they only see the products that get sifted through the "publisher" side of the portal, and it's not good for the developer because the portal eats all the money. Do you think Amazon get's 70-80% of the money? No. I think using Amazon as an illustration of your points is not a terribly good choice. Amazon doesn’t act like a publisher. They don’t try to pretend that the products they are selling were made by them. They don’t handle support for the products - beyond taking returns of defective products. They’re a retailer. Their shelves are large (infinite almost), so they offer every product under the sun.

The portals, on the other hand, are acting somewhat like publishers and somewhat like retailers. It’s not good for the consumer because they only see the products that get sifted through the “publisher” side of the portal, and it’s not good for the developer because the portal eats all the money. Do you think Amazon get’s 70-80% of the money?

No.

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