CasualInsider.com

Over the last several years to months some of the biggest names in the casual world have began to competatively price their game libraries lower and lower in a vicious price war. Nearly all of the major portals have a subscription service which requires their users to promise to buy so many games in exchange for cheaper prices, but now Amazon has changed this all and now offers most of their games for the same price as all of the other portals; however, they have done something drastic and not tied their price to a membership, instead choosing to let anyone buy the games for value prices.

Consumers (and portals, but more on that later) win in the short term, but may be one of the ones that suffer in the long term, as diminishing returns will stifle innovation. Developers won’t want to risks, and so more of the proven seller genres will be made, further saturating the market with those kinds of titles, and limiting the time available to more original games. This will make it harder for consumers, who are bored with the status quo, to find good games, and reduce sales for everyone.

 Developers are the ones who will suffer the most from this war. Some have already tested selling games at lower prices, and their results have never been anything more than disappointing, slightly more sales, but never twice the amount of sales required to make the same amount of money, which means it just doesn’t work. With portals now selling their games at super discounted prices,  developers get even less per sale than before, making it impossible for some developers to recoup what they spent on development let alone get any profit.

Why are portals doing this? Portals want value customers, they want loyalty, and they want to ensure that consumers know to buy from them. They are willing to sabotage the industry in exchange for what they see a crucial move to make profit, but how soon before the war pushes the price so low as $0.99 a game? When that time comes, only the developers that have established themselves with a solid customer base on their own site will survive (this is a case where PopCap saw this coming and decided to do the right thing: diversify). Any developer who has solely relied on portals without any consideration for building up their own site brand will simply die out.

What can be done to stop this price war? Portals need to take responsibility for their actions. If the big players allow this to continue, there will be consequences for the industry, and no one will win. For example, if Amazon’s next move is to reduce the price of their entire library to $0.99 the best thing all of the other portals can do is simply to reject any game that has been added to Amazon’s library. As much as exclusives hurt everyone’s profits, they will be the deciding factor in this war too ( how bad would it feel if your game is on every portal if you’re only getting $0.30 per sale?).

Is this just portals catching up to an “industry norm” of what consumers expect to pay? After all other downloadable solutions such as Live Arcade and the iPhone store offer games for low prices. The difference is in the games, and what people are willing to pay for the games.  It’s proven that people are willing to pay for games that they can’t get anywhere else for a fair price, and there are even examples of developers selling games as high as $24.95 and still making plenty of profit. This is a price war, and the portals are the ones instigating it.

What can developers who are not yet established do to ensure they stay afloat? Sacrifice short term profits, and sell your games exclusively on your own site. Build your community up every day, and do things to make your customers happy. The guys at Wolfire games are a prime example of a company that cares about its user-base, and it shows: their community is very active, and word of mouth is helping them to see growth every day.

So, developers, do you want to ensure long term growth and success? The best thing you can do is keep your game exclusive to your own sites, keep up advertisement campaigns up on sites like Facebook, and do your best to make your community as active and loyal as possible.

Exclusives are when a game developer signs a contract with a portal to sell their game exclusively on the portal for a period of time. BigFishGames is the hungriest portal in terms of quantity of exclusives, but they are not the only ones who want them or get exclusives. Even Reflexive, which doesn’t competitively seek out exclusive deals, still has exclusive titles in their library. Amazon may one day decide to attempt to get a few exclusive deals to attract the already established casual market to their site, because otherwise their portal won’t be too compelling to people who are already comfortable with their game clubs on other portals such as GameHouse (which sells their games for $5.99 on their club, $1 less than the cheapest game on Amazon).

What do exclusives mean for portals? Exclusives drive traffic, and demand the loyalty of consumers. Game brands like Mystery Case Files, or Mortimer Becket both have had games that consumers knew were exclusive, and because of this they went to the sites that sold the games: they didn’t have the opportunity to shop around and look for the best price.

What do exclusives mean to developers? They allow developers to strengthen relationships with portals, and can also mean a higher percentage of profit from portal sales. This can be good when your game is a perfect fit for the audience for a certain portal, but can also mean that you will likely earn less money overall. First of all, there are portals that don’t accept games that were once exclusive on any other portals. Second, the market is still in its infancy, and many of the portals have their own wide base of users. With that in mind, for developers the best thing they can do is try and get their game on the top portals all at once, to maximize profits. If you want to maximize long-term growth and long-term profits, then I recommend publishing and distributing games exclusively through your site, for at least a period of a few months, so that you have a chance to build up a loyal user base, instead of just letting portals gain even more customers through the popularity of your game.

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Today I’m going to say a few things about our beloved PopCap. I’m sure we all remember way back, when we played some of PopCap’s earlier games, and thought that they were shiny and the best waste of time ever. Times have changed, and now we can plainly see that PopCap has been resting on their laurels for far too long.  PopCap could once be called the de facto leader in the casual games market, but are they anymore? I’ll let you decide based on the following illustration:

What you are about to read is akin to a roast, except it won’t be funny.

Their last game (Bejewled Twist) was a clone of the first game that made them popular, and it didn’t include any new, never before seen, gameplay mechanics  even though PopCap promised that the game would be revolutionary. It was also space themed: the worst selling theme statistically. Someone at PopCap needs a serious talking to.

Their Peggle Nights game is a direct port and re-skin of Peggle. It introduced no new gameplay (at least not until the very end), and nearly everyone who bought it felt like it was a game they had already played (ripped off). That’s not shiny.

PopCap didn’t get in early on Amazon’s new portal. You would think they would want to get in early and attempt to claim the top spots, to guarantee that sales channel, but apparently PopCap doesn’t want more money (more on that below).

PopCap was sort of revolutionary ( Zuma is a direct clone of PuzzLoop, Astropop is a direct clone of Magical Drop, Peggle is glorified pachinko, and many of their other games are derivative as well), but now they are just bloated and lazy, living fat and happy off the name of their well known brand (which is getting stale). They can sure sell at retail, but retail is dying, and, online, PopCap is just another developer, which means PopCap is just another developer.

PopCap is a friend to the media. If they have news, everyone hears about it. This is awesome for them because it means more and more sales. Only problem is that they have continually disappointed recently, and will continue to do so unless something drastic changes with the way they do business. Popcap is becoming the naked king of the casual space, and no one wants to have to be the one to tell them to put some pants on.

Their business plan is to ignore everyone else and do their own thing. This has worked for them in the past, and that’s fine, except that they totally missed turning into the largest portal in the world. They have also decided to ignore any and all trends in casual gaming, instead, in the past, allowing third party developers to fill some genre gaps on their site. Only problem is…

PopCap is not a portal, and has no intention of becoming one. They are in a very specific niche that’s very specific to their brand, and that’s it. They have no interest (anymore) in third party games (them actually growing), and they have no interest in acquiring new IP unless PopCap happens to get lucky and some dumb developer, with a super good game, who actually wants to publish with them instead of making more money self publishing.

They bought Spintop… and then what? Amazon is smart, when they bought Reflexive they monetized it, and are going to continue to monetize it until they make their bank back and then some. In contrast, not much has happened with Spintop. PopCap’s purchase of Retro64 I can understand, that dev studio has already produced a hit, but what is Spintop supposed to be doing? Is it just another affiliate site with the same old games. Yes, yes it is.

PopCap employes 180 people, and yet they can only barely manage to publish one or two games a year. My dev team is nearly done making our next game in only about four months and we’re only two people! What the frak are they doing up there in Seattle?!

Is PopCap still doing anything right? A Bejeweled game is sold every ten seconds. They dominate retail (forget that this is a well that will dry up eventually, they are still printing cash), and will continue to, totally bypassing portals for their profit needs. Their games have high production values, and they are notorious for how well they playtest and iterate their games. Simply put, their approach to customer friendly games is the best in the business. Still, they could do better, they could be more. We’ll see in the future if they change their ways, or continue on their path toward becoming fish food.

My advice to PopCap ( Jason Kapalka, Brian Fiete, and John Vechey) : downsize, pay more attention to the casual market, focus on building smaller, more agile teams, and  stay away from scary Big Fish.

Our goal is to be the number one news source for the casual space. Last month saw an increase of 9,066.67% so I think that’s fantastic!

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Today marks the launch of Amazon’s new casual game download store, which it plans on pushing to its massive userbase in its bid to take over the world.  As I see it, yes.

What’s so special about Amazon getting into the casual space? Well, for one Amazon already has a massive userbase of customers that trust the Amazon brand; not many portals get a starting perk like that. Second, Amazon is selling premium games at discounted prices, with $9.99 being the highest price for downloadables on the site. Also they do not have a club/subscription service like many other portals, which means everyone can enjoy the same games that they can get on any other portal, except that with Amazon they can get many games at the $6.99 price without any commitment to buy more games. That’s smart, and I think a key element to Amazon’s success with selling casual games. Another thing is that Amazon is not too interested in exclusives/will not likely accept game that have been exclusive on other sites, and that shows that they want to play fair and make sure everyone is able to make the most cash possible!

Will Amazon take over the casual space? That’s yet to be determined, but my bet is that they will quickly become one of the top three portals, number one if they choose to be even more competative. I’ll bet the folks over at BigFishGames are sweating a storm today!

( Oh, and want if you want to get on the site you’ll need to contact the kind people at Reflexive, who Amazon bought recently, and is where Amazon is getting the game library from, directly: submitgame@gamecentersolution.com )