Retro City Retailers: Why Steam is important, and how competing services need to offer more to devs
Retro City Rampage is available on Steam, the PlayStation Network, Xbox Live Arcade, and it’s on the way to WiiWare. You can also buy it directly from the official web page using the Humble Store. I spoke with the game’s creator about what you need to look for when finding places that are willing to sell your game, and what to avoid before you sign the contract. Indie games have many choices when it comes to how their games are sold, and there are some traps you want to avoid if you’re a developer.
Focus on Steam
“Lots of people are trying to get a cut of the PC portal market, bundle market and cloud markets. However, the vast majority of PC revenue is made on Steam, so if you’re lucky enough to have a game on there you really need to think about the time spent vs. reward in signing with other distribution partners,” he explained.
“Odds are that you’ll make more money throwing a one-day Steam sale than having your game up for months on another PC portal, and you’ll save a lot of paperwork. You’ll draw more purchases with a 50% off Steam sale than a 90% off sale on some other site. A tiny capsule with your game on the main Steam page will do far more for you than a full page splash on another site. You get the idea.”
Even if you throw in extras for non-Steam purchases, or throw in a Steam key while selling through other methods, most copies will still be sold through Steam. It’s where PC gamers are the most comfortable spending their money.
Steam’s competitors need to offer more to get your attention
The good news is that Valve is, according to damn near every developer I’ve spoken to, an easy company to work with. “In fact, Steam, Sony, Nintendo and Apple all offer very good terms and revenue share to developers right off the bat,” Provinciano told the Report. That means if someone else wants to sell your game, they have to offer some aggressive terms. Unfortunately, they often go too far in the other direction.
“Many other companies are trying to compete and new ones spring up all of the time. However, more often than not the wannabe competitors offer lower revshare to developers or more aggressive contract terms which can waste a lot of your time and money in legal fees to negotiate,” he said.
“It’s quite perplexing, really. Anyone wanting to compete with them needs to, at minimum, offer similar or better terms. Much better in fact, in order to compensate for their small market share. In most cases that I’ve seen, the competitors present terms in the contract which handcuff you as an attempt to give them the upper hand against competitors, with no benefit to you. It really makes me glad that I’m in the spot that I’m in, to be able to walk away.”
What advice does he give to developers weighing multiple offers? “The biggest tip that I have for developers or publishers who choose to release their games across multiple portals is to never agree to terms which bottlneck your flexibility on other platforms or sites,” he said.
The fine print, and how to avoid falling into a trap
“Some contract terms may seem fine upon first glance, but if you actually map out a potential outcome matrix, they aren’t quite as harmless,” Provinciano stated. “For example, let’s say a distributor is allowed to match any sale you run elsewhere and you need to notify them in advance. If a last minute spot opens up for a 12 hour flash sale, you might be unable to jump on it. Add onto that a clause which allows them to run sales of their own, they may put it on sale on their site first to get the upper hand.”
But wait, there’s more! “As another example, you may be prohibited from releasing your game on other platforms first and this one platform also controls the release date. This is a recipe for disaster in itself, but gets worse. Let’s say that they wait until their competitor’s offices are closed for the holidays to give you your release date,” he said. “Not only do you end up missing out on the Christmas shopping season, your other SKUs become delayed, your release schedule becomes fragmented (damaging your marketing plan) and you’ll be faced with a lot of negative PR from fans waiting for their preferred SKU.”
The trick is to go through the contract and decide whether each provision benefits you, or the distributor. “If it benefits them and negatively impacts you, think twice. An agreement should be mutually beneficial. A huge red flag is when you ask them to explain how something greatly in their favor benefits you and they respond that they or their platform ‘adds value.’ This is a common response from publishers, almost as if they all went to the same business school. In every case when I’ve been fed this, none have been able to elaborate on this ‘value.’”
“There are great distribution platforms out there and more good publishers than bad. However, the bad do exist and it’s easy to get trapped by them when starting out. Remember that your first offers will usually be the worst, so take your time,” Provinciano said.
“One publisher for example wanted 3.5 times more revshare than another. Yet another dropped their revshare to almost 1/3rd of what they originally attempted to squeeze out of me once I made it clear that I knew what the market rate should be,” he continued.
“I was in talks with a dozen publishers for Retro City Rampage before finally selecting the best one. It’s worth spending the time shopping around and the best ones usually start with good offers and require little to no negotiation, making them the best of both worlds. At the end of the day, it’s about having a good working relationship, so if they start off on the wrong foot, it’s likely a warning sign of things to come.”
These are deep waters. Monaco is being published on consoles by Majesco, which allowed the game to launch on the Xbox Live Arcade on the same day as Steam. If Microsoft had published the game, there likely would have been temporary exclusivity to Xbox Live. Skulls of the Shogun is available on Xbox Live Arcade, Windows Phone, and Windows 8 only, and it’s very likely Microsoft paid for that exclusivity upfront. Sometimes you have to decide if the guaranteed flat payment for that sort of exclusivity outweighs the lost sales. The Humble Store only asks for a 5% cut of sales, but there is no storefront, it’s up to you to promote the title.
Right now it seems like there are piles of bundles, stacks of storefronts, and reams of retailers all hungry for games to sell. Some will treat you better than others, and sadly this is an area where you have to be a businessperson as much as a developer.