Business Model Activity #2: Collabs

Following the Business Model series that started some days ago and after rambling about Sponsorships and Licensing, it is now time to ramble how and why we see Collaborations as an activity separated from Sponsorship and Licensing.

Most flash game developers, be it coders or artists, usually lack the other side of the coin. Many coders don’t have design and/or artistic skills and many designers/artists don’t have coding skills. This gap became deeper with Actionscript 3 for well known reasons.

Collaborations the activity that we planned the most. The main goal was to monetize schedule holes. To do this we started by marketing it at FGL. First slowly and carefully, we were absolutely clear that we were not looking for “any game”, but rather targeting potentially high profile projects. We behaved a lot like a sponsor, checking every proposal we got by email, discussing the pros and cons of each. About a handful of projects never started, one was never sold (or put to sale as far as I know) and a couple did well.

Now it is important to determine what “doing well” exactly means. Maybe you are imagining that doing well is getting 5 million plays or we earning $5000 per game. It isn’t. We clearly defined the objectives we wanted from Collaborations:

1. Our collaboration must create enough value in the game so that the developer that proposed the game makes more money than he would if it wasn’t for us. All games that were sold achieved this.
2. Our percentage of the collaboration must cover our cost. I didn’t crunch numbers on this one, but I think we rarely achieved this. It is always a win situation for us since like I mentioned earlier, our initial motivation was to monetize schedule holes that would never make any money.

It was a bit disheartening that as soon as developers create a hit game with us they prefer to hire us. I admit that from a commercial point of view that is the right call and we say from the beginning that we don’t won the IP in any way so we really have no take on the subject. But from a personal point of view, I feel sad that our share of risk and support is left behind and given a lower priority against money… I don’t let these personal feelings get in the way and I share the same amount of respect and even friendship, but it’s a bit… sad…

Final thoughts on collabs and why we did it this way: we monetized, created value for ourselves and developers that worked with us which was exactly what we wanted to do. To achieve this we didn’t consider this activity as part of sponsoring and licensing since we never owned the process of production and sales. Collaborations are half sponsorship and half contacts. That was the only way to fit it into our business model.

Posted: August 2nd, 2010
at 12:26pm by Vlad

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Categories: Business

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