BUSINESS MODELS

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Show me the Money  Expenses  Direct, software licensing, salaries  Indirect, opportunity cost, garage developers  Revenue  Sales  Licensing  Advertising

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Game Budgets  MMO = $20-40 Million+  Console = $20 Million  PC = $10 Million  Downloadable Console = $250k-$500k  Casual = $20k-$200k  Web = $500-$500k

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Games for less  Low-cost tools doesn’t always mean cheap  Biggest Indie Mistake  Your time is extremely valuable

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Direct Costs  Salary is the biggest  Software Licensing  Torque, Flash, Unity <$500  Director <$1500  Virtools < $10,000  Unreal, Vicious Engine, Others >$10,000+

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Indirect Costs  Opportunity Cost  What could you do if you weren’t doing this?  Garage Developer  After-hours, on the side  $0 development?

SSMIC Game Development Workshop - Brian Robbins June 21,2007 What Makes a Hit?  Console = 1 Million units  PC = 200k units  Casual = 100k units  Downloadable Console = ???  Web = Millions of plays  MMO = Millions of players

SSMIC Game Development Workshop - Brian Robbins June 21,2007 What Makes Success?  Have proper expectations  Console = no go  PC = no go  Casual = 20k units  Downloadable Console = ???  MMO = 1000 players  Web = Millions of plays

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Sales Revenue  PC or Console = 5-15%  Casual = 25-50%  Downloadable Console = 30-70%  MMO = 97%  Web = ???

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Casual Games Revenue  Sale = $20  Transaction costs = $1-3  Portal = $6-10  Distributor = $2-6  Developer = $2-10

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Direct Sale  Sell games direct through your own website  Use TryMedia or roll your own  Keep 80-90% of revenue

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Portal  Shockwave, Real, MSN, Yahoo, Big Fish Games  Keep 30-70% of revenue  Massive built-in audiences  Need relationship with each  100’s of portals

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Distributor  Distributes on multiple portals  TryMedia, Oberon  Necessary to reach some portals (MSN, AOL, Pogo)  Keeps 20-50% of ‘Developer’ revenue

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Agent  Will keep 5-20% of ‘Developer’ revenue  Has relationships with portals  Allows you to focus on the game  Will not provide funding

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Publisher Takes 30-70% of ‘Developer’ share  Provides funding  Provides game direction  May own IP  Fully exploits the property

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Contract Gotchas  Define revenue  net != gross != net Advertising & Other Revenue  Exclusivity  Ownership  Pricing

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Try Before you Buy  Download  1-hour trial  Product must stand on its own  1% conversion is good

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Subscription  Recurring revenue is awesome!  Lots more ongoing costs and maintenance  Game community is key

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Commissioned  Revenue fixed from the start  Long sales cycle  Need to focus on this

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Item-based  Good with MMO/subscription style games  Difficult to craft, but can be very successful

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Ad sponsored  Kongregate, Shockwave  Lots of downloads trying it  Good ancillary revenue, but you won’t get rich

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Skill-Based Games  Don’t bother

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Alternative Platforms  Mobile  SecondLife  Skype  IM apps

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Business ?’s

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Market Overview / Business Models Summary  High-level overview of game industry  Discussed where expenses come from  Seen how revenue is generated  Compared different ways to succeed

SSMIC Game Development Workshop - Brian Robbins June 21,2007 Coming Up  Technology to make it happen  I tell you what to do