Buckle up – it’s GRR time!
Few things get my back up more in this industry than the state of the free-to-play Flash games market. Here’s a very brief run-down in case you haven’t been following it:
- Adobe Flash is an inexpensive tool that lowers the barrier to entry for new game developers
- The install base for the second-to-latest Flash player plugin is over 90% (i’ve been told that the Flash player is the most installed piece of software in history)
- As a result, the Internatz are flooded with game products, and people capable of playing them
- Some of these games are good, and some are not
- Very few Flash developers are charging money for their games, choosing instead to self-publish them either for free on various game portals (collections of Flash games), or by injecting ads into them through a third party service for a very nominal split of the already modest ad revenue (think pennies, not dollars)
- Many Flash developers are young hobbyists with little to no professional experience, who are motivated by honour and noteriety within their online communities, rather than money
- Those Flash developers who are motivated by money find themselves pitted against an army of amateur game developers with theoretically unlimited development budgets who release their work for free
- Numerous third parties are constantly inventing methods to profit from these game developers, from ad-injection services like MochiAds, to sponsorships (usually portals advertising themselves on start-up screens before the game plays) to microtransaction payment systems (HeyZap, MochiCoins, Gamersafe) – virtual wallets where players pay real money for virtual currency, which unlocks in-game goodies
So it was in this climate, and during an economic slump to boot, that Jim Greer and Greg McClanahan from Kongregate took the stage at Casual Connect Seattle 09 this past week. Kongregate is a site that strives to be the “Youtube of Flash games”, where the afore-mentioned Flash development army uploads its games – for FREE – to the site. Kongregate has built a number of goodies around the games, including a pervasive chat window, trophies, ratings and high scores. Kongregate is a VC-funded operation. The initial business model is obvious: build a gigantic user base and profit from ad revenues. There’s an expensive-looking big box video ad on the right side of the site, with various other inventory scattered around.
Their topic was “Fatal Flaws in Flash Game Design and Development.” i missed the talk, but i read the transcript that night and nearly had kittens. GameZebo reports that in and amongst helpful tips like “focus on the fun” and “don’t forget to add polish”, Greg opened his festering maw and spat out this unsavoury gem:
Don’t Expect to be Paid by the Hour
Developers are shocked when they produce a game that they’ve been working on for four months and they only get a $1,000 or $2,000 sponsorship offer on it. The thing is, no one really asked them to make this game. It’s something they did on their own, and reverse logic doesn’t really work when you try to break it down by the hour. It doesn’t matter how long you spent on the game, it’s the final product that matters.
i can hardly express to you the rage that this moment of unbridled douchebaggery has invoked in me. i … i just … i can’t scream my indignation vehemently enough. Let me catch my breath, here. Clutching … heart … waiting for rampaging pulse to subside … hNNggh! There, now. Let’s begin.
Kongregate Does Not Solicit Game Submissions (??)
i can’t fathom how the woodland sprites of utter idiocy possessed Greg to say what he said, but let’s start with his most shockingly ignorant statement:
“No one really asked [the developer] to make this game.”
Here are a few pieces of copy from Kongregate’s site:
To upload your game onto Kongregate, simply go to the upload page and follow the instructions.
Upload your game to share with the world!
In his presentation prep notes, Greg clarifies the point by saying that creating a game isn’t like completing a homework assignment. There isn’t a series of well-defined steps you need to take to succeed – no list of requirements. Here’s some copy from Kongregate’s contest page:
Each week, we’ll be giving away $250 to the top-rated game and $150 to the second- and third- place games uploaded on Kongregate. These weekly contests run Saturday to Friday and must have a minimum of 10 votes to qualify.
Any game first published during this month is eligible for our monthly contest. Voting will last through the deadline, and we’ll be awarding $1500 to the highest-rated game, $1000 to the second-highest, $700 for the third, $500 for fourth, and $250 for 5th, 6th, 7th, 8th and 9th. Games must have a minimum of 30 votes to qualify.
To be eligible for our monthly prizes, games must also implement our statistics API. Instructions can be found here.
So actually, someone did ask the developer to make this game, and it was YOU, Greg. YOU asked people to make games and upload them to your site. Your business wouldn’t exist without people making games and uploading them to your site. Until now, all of the PR coming out of companies like Kongregate, Newgrounds and MochiMedia has been positive and encouraging, because companies who operate parasitically are careful not to bite the hand that feeds them. They just have to keep things moving along, keep encouraging game uploads, keep throwing out shiny trinkets like multiplayer APIs and microtransaction systems, all the while muttering “pay no attention to the man behind the curtain”. Just keep smiling and dancing, and maybe the developers won’t notice that the vast majority of profits are going straight into other companies’ pockets.
But to say something as obtuse as this, Greg … i mean, just give your head a shake, will you? For all your spin about offering a service to the Flash game development community, you need to remember which side your bread is buttered on. Flash developers butter it. And those knives, while dull, might some day soon be used for stabbing when the community finally wises up.
Time Spent Does Not Equate to Game Value
“It doesn’t matter how long you spent on the game, it’s the final product that matters.”
This statement is echoed by ReverendAnthony (likely not a real Reverend) in his rant, “Donate”:
In the rant, ReverendAnthony (who is probably not legally licensed by the state to perform marriage or funereal rites) implores gamers to donate money to indie games after they play them, if they enjoyed the games.
i’m not sure what galaxy ReverendAnthony (who is, again, not holy by any means) or Greg McClanahan inhabit, but in the good old U-S-of Milky-Way, goods and services cost MONEY. You can’t walk into a restaurant and order a meal, and then scarf that meal and donate to the cost of the food in the event that you enjoyed eating it. In certain rare cases, most of which involve either rat poop or severed fingers, you’re within your moral rights to skip out on a bill. But apart from those circumstances, you’re on the hook for that money. Certain restaurants even make you pay the money up-front, before you eat. ReverendAnthony’s assertion that big development shops like UbiSoft “trick” players into buying big-budget games using big-budget trailers is silly. It’s called “advertising”, which is a polite synonym for “lying”, and we’ve been doing it for a very long time.
i’ll buy THAT for a dollar.
Movies use trailers to dupe people into buying tickets all the time. i can’t TELL you how disappointed i was after watching xXx, only to find that it starred Vin Diesel, and he keeps his pants on. But could i have watched the whole movie, and then marched down to the ticket booth demanding my money back? Nay. Media consumed. i paid for it to be inside my brain, and if there’s one thing i know about Vin Diesel movies, it’s that his stuff stays in your brain. You can’t get those two hours back no matter how hard you try.
i agree with Greg on his point that not every game developer should expect to break even on his game. Of course not. To use another parallel from the film world, the Kevin Costner-with-gills saga Waterworld cost $175 million dollars, and it earned $88 million back – just over half. And that was gross. The Blair Witch Project cost $750k at the high end, and pulled in $249 million. i haven’t adjusted for inflation, but you get the idea.
Maybe if the view was straight up Costner’s nose, the movie would have made more money?
Did movie-goers ascribe more value to The Blair Witch Project than to Waterworld? Perhaps. Is one movie better than the other? It’s hard to say … movie awesomeness is subjective. But here’s the most important thing, and the thing that should make all of us – Flash game developers, portal owners, payment providers – search our souls and give this all a really deep think: the ticket to see The Blair Witch Project and the ticket to see Waterworld cost the same amount of money. There was a baseline cost to consume the media.
Movies and Ad Support
Moviegoers paid $x dollars to see both movies. Were the movies ad-supported? Yes, of course. The portals (read: theatres) showed ads for Coca-Cola and Skittles and Tampax before the movies started. Then they showed trailers for other movies. And they put out free copies of magazines in the foyer with movie ads thinly disguised as editorials and interviews, which were sandwiched between more ads for automobiles and perfume and hamburgers. And those people who purchased concession stand items may have had their combos subsidized by other movies – “Buy the Deliverance combo – it’s a buttload of popcorn!” More ads. And while they may not have purchased any candy, they may have noticed little stickers on the concession stand selling them bags of Sour Patch Kids. More ads. And on their way in and out of the theatre, the hallway was lined with movie posters promoting upcoming movies. More ads. And sprinkled in between those posters were posters about beef jerky and Bleach for Unbleachables and smartphones. More ads.
i’m not sure how much of this considerable ad revenue the developers of The Blair Witch Project and Waterworld saw. That might be up to the portals. But i know that the portal did share a cut of the ticket sales with them, and that tickets were required of anyone wishing to enter the theatre and watch those movies.
How do i know this? Because i just up on the box office receipts on Wikipedia. Did Waterworld break even? No. Did The Blair Witch Project break even? Yes, and then some. Was the customer charged money in both cases to consume the entertainment? Yes.
Media is Worth Money
What about teevee? Are the shows ad-supported? Yes. Do the portals (channels) pay teevee producers to air their shows? Yes. Do all of those shows break even? No. Do some? Yes. Does anyone, ever, in the history of Lord-loving All Time, spend hours, effort and money producing a teevee show that they then give to the channels? No. Not ever. Ever.
Yes, even THIS show is worth money.
So if we look at teevee and movies, two entertainment industries closely related to gaming, we see that:
- The content has value. It is not free.
- Subjective viewpoints aside, “good” content (Battlestar Galactica) is equally as not free as “bad” content (Andromeda)
- Every content producer gets paid. The profit margin depends on a number of factors, including development time (as Greg points out), but the rule sticks: every content producer gets paid
So the strategy is, was, and has always been, to structure your development costs around what you project you can reasonably earn. The producers of low-budget Kevin Sorbo vehicles like Andromeda know they’ll never sell their shows onto network prime time, and they’d never blow CSI’s per-episode budget on one of their half-hour steamers. But they also know that there are a lot of Sunday afternoon hours to fill on a lot of stations. So they tailor their development budgets according to what they can reasonably expect to earn in off-peak, low-viewership hours.
But Games are Different! Because … ?
So developers can do the same thing with Flash games, right? Wrong. Thanks to rock-bottom CPM rates and fluctuating ad rev splits based on volume (and the whim of the ad providers), there is no established baseline for Flash games in the free-to-play model. i tried to determine one by distributing a mediocre game from our library (read Pimp My Game), with no luck. i don’t know if Two By Two‘s annual ninety dollar earnings are above or below average, but i DO know that i can’t safely develop anything for the free-to-play market if i want to continue living in swank downtown Toronto luxury with my two pet leopards, diamond-encrusted toothbrush and robot wife.
An actual Google Maps aerial view of my neighbourhood.
Are you a Flash game developer? Do you live in your mom’s basement? Do you desperately want to earn the “‘spect” of your “peeps” on Newgrounds or AddictingGames? In flagrant opposition to Greg’s inane assertions, i say this to you:
Worry about your hourly rate.
In the real world, you ARE paid by the hour. Physiologically, you NEED to be. Your body is a furnace that requires fuel in the form of food in order to function properly and to keep you from becoming dead. This is an hourly requirement that you have, regardless of your industry. If no Sugar Mommy is giving you food for free, you need to ensure that the amount of energy you expend getting either food or money for food is less than the amount of energy that the act of chewing the food puts back into your body.
If you are a cow, you actually have a four-chambered stomach to worry about, so get programming.
Greg McClanahan worries about his hourly rate, because like you, his body eats food. Greg doesn’t go home, look at his paycheck, and think “gee … i’m not getting paid much to work at Kongregate. But then again, no one asked me to work there. It’s something i did on my own. It’s not the number of hours i worked at Kongregate – it’s the quality of the final product. So my paycheck should reflect the quality of the Kongregate site, not how many hours i spent working on it.”
Mom’s not going to foot the bill forever. You need to know that you can spend an appropriate amount of time on an appropriate result. This will be useful to you whether you work for yourself or for someone else. If you land a job at a company, no one is going to pay you to work weeks and weeks polishing the left big toe of your giant robot avatar. Learn where to spend your efforts in the right places so that you can get in, get out, and take home the right amount of money proportional to your effort.
Charge for your work.
Never release your work for free. Always, always inject ads or charge microtransactions, or add a Donate button, or sell T-shirts, or cook up some brilliant new method of earning money for your creations. Why? Because you’re screwing the rest of us. You’re using your own or your parents’ money – ARTIFICIAL money – to train gamers that games are invaluable – that they do not cost money to play. You are undermining the value of an entire industry. It’s you, Apple, Amazon, and Greg McClanahan, charging us so fast off the cliff that i’m positive in ten years’ time, we’ll be paying gamers to play our games. And that’s when i give it all up and become a mad scientist and develop a robot to laser-target you and evaporate your dumb ass. So straighten it out today, for a happier and robot-laser-evaporation-free tomorrow.
For real, guys. Don’t make me bust this bad boy out.
To read Greg’s prep notes for his Casual Connect talk, which come off far less audaciously than what was said at his session, check out his Gamasutra blog:
And to read a collection of GREAT articles on game monetization (new!), including our own experiment (and our sub-$2 revenue take on Kongregate), read Pimp My Game.