After a lot of Google digging (and no reply from Jambool support, which worries me), I found the slides to a webinar that is strangely no longer available to the public. It turned out to be the best documentation for integrating Social Gold with Flash that is on the Internet. (I didn’t even find any blogs talking about it.) Why isn’t the webinar replay public? The slides are. *shrugs*

Anyway, here are the slides, in case you want to see.

An example is Amazon gift certificates — you could buy them but there’s always a large amount of remnant value on the card that isn’t used. In an economy like [the Facebook] platform, that will lead to developers never seeing the value even though they created it.

…we all know at this point that Facebook is not that straightforward for distribution — we all have to spend money on distribution. So you’re not just paying 30 percent for payments, you have to spend on top of that for advertising.

Apart from some of the things mentioned in the article, there is one big issue that bothers me: I don’t want to be controlled by outside forces. That’s the reason I don’t work at a company, and I don’t want outside funding. I’m freakin’ independent, ya know?! I want to reap the full benefits of my potential, not give it away after all this hard work.

If I exclusively use Credits for my game and Facebook makes policy changes to either pricing, their fees, or how Credits can be used within an app, my business and livelihood becomes subject to their whims. In my game, the currency is integral to the game design, not just a slapped-on form of payment like a PayPal button. Can I risk that being controlled by a third party who doesn’t have my best interests in mind?

There is a counterpoint article which supports the idea of Facebook Credits as a universal app currency, and the main gist is that, overall, this will increase the market size by way more than the 30% fee. I see the logic there, and that sounds great. But my biggest beef is that I lose so much control over my own product by using Credits.

This feels a lot like the argument in the downloadable games world between relying on portals for profit versus staking out your own chunk of territory on your own website for the long term. I’m really tempted to host my game off of Facebook but use Connect for logins and social features to get the benefits of Facebook’s reach.

One solution might be to accept Credits in exchange for hard currency in-game (a separate currency from Credits). Essentially, this would abstract Credits away and still allow me to control the in-game economy. Then, players would not spend Credits directly in the game, but would only use Credits to fund their in-game account. Would that work? I don’t know.

But it’s a tough call. What would you do?

Update: Tangential, perhaps, but with features such as the new behaviors of the Like button that can be used off of Facebook, it seems more and more compelling to host a game on its own site, because you can still leverage a lot of what makes Facebook such a “viral” platform without being hosted on Facebook.

“$40 for lips couch, selling like hotcakes.”
–Sebastien de Halleux, PlayFish, speaking about Pet Society

Whoa. I would *never* have priced a virtual couch at $40. Not because I think virtual goods are not worth money, but because my personal sense of value tells me that it’s not worth that price. But there are a lot of factors in play on that decision: my sense of what is fun, my desire to “show off” to other players, my personal income, and so on.

The big lesson here is, as someone famous said, “Value is what it’s worth to a customer; price is what you charge for it.”

We simply can’t comprehend what our players might be willing to pay or do based on our own judgment. I think, especially as indie developers who might not have as much business experience, it’s really hard for us to imagine the value of our products and then price accordingly. I see this a lot in downloadable games with prices like $3 or $5 or $9. If players love your game enough to pay even $1 for it, they probably will pay a lot more (price wars not withstanding).

Online games such as MMOs and social games implementing a virtual goods business model have a similar obstacle. When pricing virtual goods, pick a price that you think nobody would ever pay, then double it. Heck, I’d probably have to quadruple it! I would find it hard to image someone paying $10 for a couch in Pet Society. But to hear that it sells like hotcakes for $40 shows that I could be losing a lot of revenue.

So, start with a high price. You can always come down. Nobody complains about a price drop. You can also test price points with analytics to find the sweet spot.

Over the weekend Tapulous head of business development Tim O’ Brien announced that the company was successfully monetizing pirated copies of its iPhone game Tap Tap Revenge 3 by selling the pirates virtual goods as in-app purchases. Tapulous estimates that Tap Tap Revenge 3 has been downloaded 2.5 million times, but that 1 million of those downloads are pirated copies.

Ok, first of all, if you’re pirating a $.99 game, that’s pathetic and you are a loser. Full stop.

But, it’s nice to see that you can upsell pirates with virtual goods.

Pirated copies can still communicate with the Tapulous network and their in-game virtual item shops still work. According to O’Brien, this has lead to some pirate users spending far more than the app’s initial cost on virtual items like additional songs and avatar customization pieces.

So, what if–for non-pirates–you offer the app/game for $.99 (or more, if it’s not on iPhone), and then if the potential customer balks and decides not to buy, you could then offer to give them the game for free?

At least then you have a chance to monetize them later in the cycle. Pirates would have nothing to pirate, and chances are you would end up making more money in the long run even if you give away a majority of copies. (I’m assuming, too, that there’s no physical COGs and it’s exclusively digital delivery.) It sounds like a decent idea and a great experiment to try.

(P.S. My time is being consumed with a non-game business venture right now, but I want to try to blog short little ones like this to keep myself in touch with my most beloved game development universe.)

I personally think that it is worth it to build your own system (and I’m usually the guy saying, “Use the middleware, fool!”). But I think it depends on the scale of what you are planning. In my case, I want total control, and I want to own access to my customers so that I can continue to communicate with them. I also don’t want my games to become advertisements for a payment service.

I don’t view virtual item sales as just a sales channel. It’s also a gesture that means a player cares about and is emotionally invested in the game, and I want to maximize that relationship to make my players happy, long-term customers. Without access to my customers, the payment service is crippling my business. I don’t know that all these systems insulate the developer from his/her customers, but that is a major issue to bear in mind.

These Flash-specific services could be really useful to someone who is making much smaller scale games and wants some add-on sales or someone experimenting with virtual goods in an effort to diminish reliance on ad revenue. I’m not reviewing any of the services, just announcing that they exist. I haven’t investigated them all very deeply, but I will be poking around.

75% – andrograde.com
70% – www.nonoba.com
60% – www.gamersafe.com
60% – www.mochimedia.com
50% – www.heyzap.com

Which is best? It depends on your goals and plans. If you’re just making little quickie games (90% of Flash games), then any of the above would work. If you have a more broadly scoped business plan, you might want to steer clear and look into services that are not Flash-specific and spend the time/money to do the integration yourself.

1. Game licensing can be lucrative, but it’s not perpetual, so for the long haul it’s not a great approach. In fact, I think it can harm your income (see below).
2. Ads are certainly not a great approach, either. The earnings are perpetual, though, so ads make a good supplementary income stream. But that’s not going to feed the kids.

For some reason, lots of Flash developers I’ve run into seem to think those are the only ways to make money with web games. *shrugs*

Why would licensing your game harm your income when you an get paid to do it? For one thing, it diminishes your brand’s exposure.

But more importantly, it funnels your players to the wrong place! You want them at your site, not at someone else’s site. Traffic, my friends, is the key to this whole mystery of how to make money. Your traffic is precious. Don’t sell it or give it away.

While getting traffic is pretty easy with Flash because of the decentralized distribution system that evolved, bringing in revenue will always require work and creativity in your products and your business. (I blogged about Flash game distribution in regards to my shift from Flash towards Unity a while back.)

I’m not specifically a Flash supporter. I use the best tech that will allow me to achieve my business goals. For now, that is Flash because it’s got more reach than any other technology. However, if Silverlight or something else overtakes Flash as a web platform in terms of audience, then that’s what I’ll be using. Because getting people to your site is how you make money.

Some people expect to make a game in a couple weeks, slap ads in it, then rake in money. It doesn’t work like that. Ads are supplementary, remember? For some exceptions, yes, you can get rich from ads. For 90% of us, no, you will barely make anything from ads.

Bottom line is that it is possible to make good (or even obscene) money from Flash games. But not from a bubble popping game you made in three days with some Mochi ads in it. Get creative with your game and your business plan.

Amazon (mega online retailer that we all know and love) purchased Reflexive (small casual game publisher/developer), and they repriced all the games to about $10 a pop.

It seems that there are two camps now: one says that casual games should be $10 and remain simple and brief, while the other camp maintains that indie games are worth more because of their uniqueness and craftsmanship. The significance here is that not long ago, casual games were considered to be indie games (mostly). By any standard, if you are making downloadable games, this is news.

But what is really changing is the business models. “Try before you buy” has been the dominant choice for downloadable sales for many years. Clearly, that is not as cut and dried now.

We little people can’t compete with Amazon on price. And I firmly believe that we should not compete on price with anyone, ever. Lowering your prices is rarely the right thing to do when you need more income.

Competing on price only works for commodity goods. If you have to choose between toilet paper from company A and toilet paper from company B, well, usually you are looking at the price difference above all else. It’s folly to use that strategy for selling games–unless you are Amazon so that you can afford to eat the tiny margins and try to make it up on volume. But listen to what I’m saying!! Are we talking about rubber flanges for a sink drain or video games?! It’s suffocating my soul just to write about it.

So the real shift here isn’t about casual or indie games. It’s about sales models.

Luckily, I am not planning to use a single sales model for my future games, and I think that is something that even downloadable developers need to examine: you can’t compete on price if it’s of the “try and buy” model. Find other ways to monetize and give value to your customers that they can’t get from a big shop like Amazon. Sure, it might be cheaper there, but they won’t get one-to-one interaction with the developers or personal service or a “deluxe” version with extra features.

It’s kind of exciting to read about how others are interpreting these changes. What’s your take?