Digital Distribution Wars

July 24, 2010 | Filed under: business

Disclaimer: I sell my games on all these portals, and am happy with them as a business.

So NPD think they have a list of the top 5 online games sales portals, but GamersGate and Impulse cry foul. Ok, fair enough.

With gamersgate, I can see why they are in the position they are in. They were late to the party, didn’t have a killer-app that people wanted to buy, had an abortive attempt with a client they abandoned… so maybe they have had a tough ride. They seem to be doing well though, no doubt tons better than lil old me.

Impulse is another story. I am surprised they haven’t been much more aggressive. I tend to assume they are the #2 seller, after steam. The interesting thing with Impulse is that stardock make money from Object Desktop, and presumably lots more  from games like GalCiv and SOASE, demigod etc. They literally do not need the profits from Impulse at all. So, assuming that, here is what I don’t get:

Why doesn’t stardock run impulse at a loss? Maybe only a small loss, but a loss nonetheless. Give developers 95% share of the royalties (totally crushing any other offer), or maybe 80% but 95% if its impulse-exclusive for 6 months.  Do not take a penny in profit for the next 2-3 years.  Maybe instead of cutting the royalty split, just discount the games big-time like steam are doing. Or maybe buy out the rights to some games entirely to make them 100% impulse-exclusive forever.

The prize at the end of this battle is market share. The web has 1 auction site, 1 book store, 1 video site and 1 social networking site. You know which ones I mean. It is close to having 1 PC games site, which is a license to print money. If I ran stardock, I’d sacrifice everything to fight for that slot. I’d probably run the whole business at a loss for those 2 years, taking every penny in profit from Object Desktop and throwing it at impulse to grab market share.

But….

The guy who runs stardock is a very clever guy. And no doubt rich. And no doubt he knows more about this than me, so I defer 100% to his greater knowledge of the issues.  Regardless of what happens, tragically they all do better than me. I’ll be under the table hoping for crumbs from whoever wins in the end :D

In unrelated news, if you like tower defence/defense games, then you might love revenge of the titans. I just added it to my site (it’s by a fellow indie). There is of course a free demo, and it’s 50% off right now. Give it a go, it’s excellent.

10 Responses to “Digital Distribution Wars”

  1. CaesarsGhost says:

    If I were you, I’d write and tell Wardell this. He’s always interested in developer’s feedback it seems…

    He won’t change necessarily… but he does listen.

  2. cap'n lee says:

    i played revenge of the titans a month or so back, although it looks very slick and i like he way it requires you to madly click about like a loon during tense moments, i think it stll needs quite a lot of balance tweaking before it’s ready for release.

    it’s too possible to spend your upgrade money incorrectly or to start a round with too little cash and make the game incredibly difficult for yourself, and because you don’t know exactly what you’re unlocking before you do, you’re pretty much upgrading blind.

    still, i know they’re still working on it and when it’s ready for release i’ll be willing to try an updated demo but at present i won’t be buying it from what i’ve seen.

  3. Droniac says:

    I wouldn’t be surprised if NPDs list proves to be false and Impulse actually does place in the top 5. It’s very hard to believe that the numbers 3 to 5 actually outpace Impulse, with its 2+ million users, in terms of sales.

    GamersGate’s absence seems more easily explainable: NPD has assembled a list of the top 5 American digital download services. GamersGate only has a European (.com) and British (.co.uk) portal. So GamersGate is not included in NPDs digital download statistics despite, in all likelihood, easily outpacing numbers 3-5 on that list in terms of global revenue.

    And Stardock could probably significantly boost their sales simply by pushing publishers to do proper worldwide releases on Impulse and attracting a few more games to their catalogue. It’s nearly impossible to find a purchasable game on Impulse nowadays with all the ‘North America-only’ region restrictions.

    As for Revenge of the Titans: seems interesting, will have a look!

  4. Cliff says:

    I think part of the issue with Impulse is something Droniac pointed out…they are very regionally locked down when it comes to the big publishers. That’s likely cutting a sizable chunk of potential sales out of the equation (and also makes me question how potent Impulse::Reactor has a chance to be in the future).

  5. Morslok says:

    Well, Brad Wardell has stated that his intent with creating Impulse was specifically to AVOID having “1 PC games site” even if that site COULD be Impulse. He saw that Steam was on its way to being that “one game site” and decided to make Impulse as competition for Steam. He IS about making money, but he is also about encouraging competition to keep things fair for the consumer and for the developers who would use these services (like you). Otherwise, whoever was the “winner” would be able to make demands of any developer that wanted to sell their games on their service, and the developers would either have to suck it up and give in to those demands, or not sell their game on that platform and depend entirely on their own storefront on their own website.

  6. EZ3kiel says:

    I’ve heard several times from publishers directly that Impulse is close to irrelevant in terms of sales, so I dont see any reason for them to appear in the Top5. On a worldwide level, I really doubt they even manage to get to Gamersgate’s level, and I would not place them higher than 7th or 8th place on a global level.

    Also, this list doesnt take into account any of the major digital distributors that operate on a B2B level – i.e. EAstore is actually run by Digital River. No doubt they would in the Top3 of biggest digital games e-tailers if anyone would bother adding up their numbers.

    Many of the biggest distributors are unknown to the public and a lot of professionals just laugh at D2D’s or Impulse’s ridiculous claims at being #2 :)

  7. Yak says:

    Looks like someone’s been reading the NYTimes recently… if I had to guess, their article about Zynga would be a good place to start.

  8. Daveybaby says:

    The problem with impulse, IMO, is that they dont have that many great, or ‘must have’ games. There are quite a few games that i’ve bought on a whim during their regular weekend sales, but there isnt much on there that i’d consider paying full price for – I think the only stuff i’ve paid top whack for has been mount & blade (& warband), galciv and sins of a solar empire.

    Their other problem as i see it is that steam often seems to somehow match their sale prices at the exact same time. Currently theyve got all of the paradox catalog half price – and, funnily enough, steam seem to have the same thing going on as well. Dont know enough about how all this works to say whether this is down to paradox deciding to have a half price sale across all vendors, or steam trying to spoil paradox’s attempts to gain customers or what, but it certainly aint helping.

    I try to support impulse as i approve of their take on DRM, and i think its important that there’s someone out there to give steam some competition & keep them honest, but even so most of my purchases have been via steam, because they have pretty much every game there is to be had, it couldnt be any easier to use, and they have occasional sales where the prices are so stupid that i now have a large stack of games that i’ve never even gotten around to installing.

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