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To be successful we have made decisions. We developed our own activities:

1. Sponsorship and licensing because it is our current form of monetizing our core business and our core business is creating games.
2.  Collaboration projects as an low-risk extension of #1.
3. Contracts as a very-low-risk activity that would allow us quick and steady monetization.

Everything we did, was done with a purpose. There are a bunch of things you can do as a flash or game developer. Some devs operate portals, some devs create software that helps other devs, some devs have a day job, all is fair game, but doing things with a purpose allowed us to set goals and each goal that is achieved is a step forward into that purpose.

It boils down to this:

Do whatever you have to do to be able to do whatever you want to do.

Less than that it’s either a hobby or a bad model. What you need to ask yourself is:

1. What do you do best? Capitalize on that.
2. What do you want to do? Improve on that.

Never stop moving, choose what you have to do and choose what you want to. Be smart, create value, raise the bar, raise your worth.

To finish, keep in mind that you, like us, are probably small fish in a world of sharks. Here’s something worth reading: The Bootstrapper’s Bible. That should put it in a wonderful, motivating new perspective.

1. We determine cost, scope and time frame. Only once we were given a budget and it worked alright, but we prefer to determine the cost ourselves.
2. Cost to the prospect client is directly related with scope and time frame. If we assume we do the contract it is because we have the skill to do it and it is not our content, this is purely engineering/design work, nothing else. This means that any other related factor is irrelevant for us. We don’t care what is the content or entertaining value, we don’t care if we are considered cheap or expensive and we don’t care if anyone thinks we are having too much profit.
3. We care about the end result and will not charge extra if any requested change or additional feature is within scope and time frame.
4. Larger projects will be paid by milestone while smaller projects will be paid on delivery.
5. Payments on delivery are not dependent of anything, like developers getting their game sponsored. We delivered, if it is accepted we expect immediate payment.

Sounds a bit harsh doesn’t it? That’s because our core business is creating our own games. A client-centric company needs the clients to survive since they are dependent of contracts. A flash game developer creates (or should be able to create) its own content, therefor its own value. If we have an agreement, we will do the project as if it was our own, the client is not treated as a client (in a bad way), but as a partner, unless of course they treat us as supplier (in a bad way also). The problem with a couple of contracts or contract discussions was exactly this: some clients (or prospect clients) tend to consider flash game developers as a lesser entity, like they were amateurs. Our experience says that this is more evident in the flash game space where prospect clients started the discussion by saying “I don’t think you are good enough”. Great, find someone else that is…

Bottom line is that contracts, if not done with the right people are problematic. The right people are the ones that are don’t consider to be in a higher position because they pay but that consider hiring us as an added value to their project. These are the clients we want to deal with, the ones that the points raised above are “nothing special”.

Still the worst part of contracts is getting started. We feel that announcements (blog and forums mostly) served very little for getting new contracts. On the other hand, word of mouth was what brought us more contracts. I think I won’t be far from truth if I say that all contracts started by either our games being known which led to good collabs or by speaking with people directly thus creating network. I can recall a couple of emails we got from our forums, but those never left the proposal stage.

Now you know how the activities of our business model work to us. I’ll finish this series by wrapping it all up, drawing some conclusions and babbling on how you can adapt your own reality to your own business model.

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.

And that is the main problem… the activity is documented, but usually on the upper end of it. Meaning that what developers find when they look around is the success stories, from slight success to major success. I wonder what is the success percentage in the whole Sponsoring and Licensing activity. I’m betting, lowish… developers get information from these sites and blogs and until they face the hard truth and get themselves into the statistics.

Flash Game License has promoted a lot of data sharing about their system. The data FGL provides is a very important tool but it needs to be put into context. For instance, we can look at a $2000 average sponsoring value and everyone jumps into the idea of making a game in a week and getting those $2000 average. By doing so most developers neglect several facts:

1. A small percentage of games sell for much more than the average
2. A high percentage of games sell for much less than the average

What percentages are we talking about? I don’t have enough data to know that, I do know that (again looking at FGL data) the 100th most successful developer at FGL (and that has paid commission) is now Market Level 4, so that developer made something between $5000 and $10000 and paid commissions for it.

That’s the 100th most successful… there are thousands of developers registered there. I spoke with many developers that say they don’t do what they expected from Sponsoring and Licensing. Most developers also say they slack and that they are not good enough and that they don’t care about improving.

So?… What is our take on it? What does our experience say? I’ve said many times that from the revenue point of view, sponsoring and licensing is potentially the highest paid type of activity we have. Like I also say keyword is “potentially”. The risk, as showed before, is huge, so some factors must be met:

1. All games must sell. We hope that all games are profitable but to lower the risk, all games must at least sell.
2. All games must have the highest possible quality for its cost. This is the hard part.
3. All games must be a step forward in terms of partnerships, visibility and IP value.

By doing this we try to position ourselves in the upper tier of developers. Until now we have been able to do that, except when we are not actively selling licenses. Right now… it’s been a year or more since the last one and I bet we are still in the mid-top tier in terms of revenue. So it’s not that bad as it seems. It’s a matter of understanding risk and cost.

What do we know about the revenue streams? Some stuff that boils down to this… the better the game, the higher the revenue! We need some indication about how good the game will be.

The higher offer is usually a good indication of how good the game will do. Our decisions are usually based on that and a lot of number crunching. For instance, we if we get a $100 bid on a game, we don’t expect much from it, so what’s the point in forcing a discussion around using advertising or not? If you have a $150 offer with no ads, it will probably be better to take it even if no ads are allowed.

On the other hand if a game is having $1000 offers, that usually means we will get at least 3 million plays. After that, it depends on the eCPM of the countries the game gets played the most.

So you can say that our business model activity based on Sponsorship and Licensing is all about:

1. Creating value for us (through our IPs) and for portals (through entertainment).
2. Creating strong relationships by being available to do everything that doesn’t mean loosing money.
3. Be consistent in our offer. All our games have sold, all our games have beat the 1 million mark by far. This is sort of our seal of quality.
4. Be visible, through our blog, our Twitter, our engine, our games, our contacts and so on.
5. Make every game the best game possible, make every game a stepping stone in terms of development, market and networking.

The weird part is that we learnt all this by not doing games to license. Talk to you all soon.

As I think it notices in other posts in our blog, I still feel that developers are not fully aware of where they are positioned in the flash game market. I’m not 100% sure but I think that what I spoke most with other developers was about business. I admit I feel quite comfortable with the business side of things and I understand that with the average age and work experience of most flash game developers, business is not something they feel comfortable or knowledgeable.

On the other hand there’s the problem of developers that feel they have a life of experience because they sold one game for $100. They use the word “noob” like there were no mirrors left on Earth. I would add to these a significant number of developers that advice others not to do something that they haven’t tried.

And where does a business model fit into this? Well, most of what defines a business model is well known by developers. What is relevant to discuss, in my opinion, is what are the options available in terms of activities and revenue. Many developers ask me how did Vortix achieve this or achieve that. How do we do it? How much do we earn… stuff like that… I can only be theoretical about it because I’m not fully aware the most sensitive piece of information: THE DEVELOPER!

You need to know yourself, you need to understand, not business but your business and you need to neglect all opinions that are negative in nature to what models, activities and revenue streams that are available to you as a flash game developer.

In the next few days I’ll address Sponsorship and Licensing, Collaborative Projects and Contract Projects as activities and their revenues but I feel that what is important is how do these activities affected us at Vortix so you can relate to your own business model. Because there is no perfect or good business model, there’s only YOUR business model.

Saying you believe in your own potential and in the quality of what you do or create is a huge measure of your own success and value. The rest is proving it. This is true when you want to improve everyday of your professional life and it is damn difficult to prove it. Bottom line is that no one takes your word for it, you have to prove it by showing your potential and quality, therefor your success and value.

Nothing is more a reflection of this than it’s exact opposite. If you say you don’t believe your own quality and potential people around you will take that for granted! No one needs prove of the lack of value, quality or success of someone that says it! Everyone will take your word for it!

Now transpose this to a reality where money is involved, let’s say, for some reason, I’m talking about the flash game market reality. The portals want to buy content at the lowest possible cost, which is only natural. The developers want to sell that content for the highest possible margin.

Portals do their best to have a professional behavior. Portals excel at saying they are good and to prove it. Obviously if it’s proven, we all know they are or at least they do their best to be.

But I just read that developers are not professionals said by a developer and the context of this is unprofessional behavior. What I read (and it’s just my opinion) is that the developers as a whole have a low potential, low quality and that they do it for the love of games. A developer said it… no need to prove it.

Even if one developer thinks that his unprofessional behavior won’t affect him because he is not a professional, it will, hard but I’m not worried at all. What worries me is that it is extended to the whole flash developers present in that community as if it was cool not to be professional. The value of the whole community will lower if that mentality spreads, thus lowering the potential for margin. Professional developers will do their best to prove they are not part of the pack, and probably will manage to do so, but the idea that actions don’t affect hobbyist developers will at least affect all hobbyist developers, some of them amazingly talented.

Rant mode off…

In the beggining there was darkness…

Most developers dream of adding multiplayer games to their portfolio and the less wise or experienced often run to embrace a multiplayer project from any tool that offers a tiny bit of ease of use and more than often they either fail or face the fact that their game is not half of what it could be and already took twice the amount they thought it would take.

A good idea: Nonoba’s MP API

Sometime ago Nonoba offered a great API for multiplayer games. We tried it and technically we loved it. It was easy to implement, server-side code was written in C# (which brought tears of happiness to our eyes) and we did a rather small but entertaining game in a couple of days. Enough to say that from a technical point of view, Nonoba proved its point.

Unfortunately from a commercial point of view this API was not interesting for developers such as us, that want to license games. All multiplayer games powered by Nonoba’s MP API showed Nonoba’s branding, which is only natural: they support the servers, they have the service, so if we want it, we have to stick with it, after all, it’s free! All in all Nonoba’s multiplayer API is amazing for developers that do it simply for the love of it with no commercial interest.

So I must say that for all this time we were on a strange position: we love the technology, we hate the branding! Good thing about Nonoba is that they have people that want to hear from developers and believe me I wasted a lot of their time explaining why that didn’t work for us, hoping Nonoba would understand that if it didn’t work for us, it wouldn’t work for many developers.

Player.IO: A Huge Step Forward

Someone once told me:

Do you know what really works? McDonald’s! Everyone can go home, make a big burger and eat it! But for $1 you can eat the burger, without having to cook it and without having to wash dishes.

Let’s translate this to multiplayer game development…

For a given amount of money I can code multiplayer games without having to setup and maintain infrastructure… makes sense? Good, let me present you Player.IO!

All I’ve mentioned above regarding the technical aspect of Nonoba’s API probably stands. I say probably because we haven’t done any code with it for a long time, but I believe that if it’s any different, it’s because it’s better, not the opposite.

The good part is that no branding is present, at least no portal’s branding. As we speak, the free version (yes, there is a free version) will show Player.IO branding, but that’s not competition for any portal, so it’s ok I guess. Moreover, if you sell a license for your game, you’ll probably should consider a plan.

We haven’t touched Player.IO, we just have an idea of what we’ll get from it because of what we tried from Nonoba’s API. What I really like about all this is not the technical part or the branding being gone, but the great feeling that someone was smart enough to hear from developers and take a huge step forward with a strong commercial offer that can fit pretty much any development need.

Player.IO looks very solid and promising, we’ll try it as soon as possible and hopefully confirm it.

So all the hype is now in the flash microtransaction deals. It looks like it is the next big thing. Everyone wants to get in. Well, what will happen is one of two things: everyone will get in and it won’t work or some will get in and it will work.

I used the expression “triangle of trust” a couple of days ago while discussing microtransactions has a new possible model opposed to the current sponsorship model. That triangle is made of player, portal and developer.

The player

The player must trust the portal because to the player’s eyes, the one selling something is the portal, not the developer. A player that trusts the portal and enjoys the game will be the target of the deal.

The portal

The portal must trust the developer and the content the developer creates to allow their game to go into their service, thus generating revenue.

The developer

The developer must trust the player is loyal enough to the portal and willing enough to put money in his game.

If the trust crosses the triangle, microtransactions as a model are very doable if the provider has very strict quality control standards. Content must be of excellence, implementation of the system must be obvious, clear and trustworthy for the player. This means a lot of hard-work from everyone involved.

So we need to come forward and close this triangle of trust between the portals that work with us and the players that play games in these portals. An extra mile is needed by the developer to have something that is worth playing and worth spending money on.

I don’t believe that this is the next big thing. I do believe it’s a fantastic value added to our poll of monetization resources, one that is struggling for fresh air.

Vlad out!

A good and honest debate started sometime ago on a comment in FFG’s blog, moved later on to a FGL chat, then to a post here and the circle closed with The Ideal Flash Game Sponsorship.

I hope it does not end here, honestly. I’m a strong believer that developers, portals and services should be closer and agree that we must at least have a wider discussion about our industry.