Cliffski's Blog

Want to see a GRATUITOUS graph of some sales stats for one of my games? I bet you do. People love info-graphics, especially those really long vertical things with lots of numbers. I’m not going to do one of those, but I will present to you for your delight the following sales graph showing two weeks of income on an un-named website…

If you sell games online, you may well have seen similar looking graphs when looking at your own data. The thing is, just staring at a graph doesn’t help you much unless you can tie it in to the events that have influenced that data. After all, people like me are always talking about return on investment, marketing, publicity, and how to get attention, and how to convert visitors into buyers and all that kind of stuff. In other words, sales data is USELESS. What you need is sales data with context. So lets add that in the version below…

Now this is actually something useful, because we can use the sales data, in combination with our recent marketing efforts to deduce what is working, what is not, and how best to approach marketing and business stuff as we continue to promote and sell this indie game. You can tell immediately that the blog post where we mentioned the game resulted in a notable spike in sales, that the ad campaign had a big, but very short-lived boost, and that a new lets play that someone did had actually only a pretty small impact on our sales, ditto a new steam curator that listed the game.

From this we conclude that we should put more effort into blogging, probably keep up the ad spending, but not be too bothered about encouraging lets plays and steam curators, as they have less of an impact on our bottom line.

Except no, hold on.

That’s all bullshit.

Lets look at the real graph, through the lens of realizing that the top point on those spikes was about $1k a day, and that the game has been out a while now. We could zoom out and look not at two weeks data, but at a years data, and then with that context taken into account we can re-formulate the data for those two weeks as follows:

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scroll down…

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… keep going

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Basically fuck-all happened in those two weeks. Did I blog about the game? Probably. Did we get a new lets play. Maybe. Did we get some new steam curators. I think we might of, I’m really not sure. But regardless what happened, it made absolutely sod all difference to our sales.

Do not fall into the trap of over-extrapolating information from noise. It is VERY VERY tempting to do so, especially when you are a new developer because you desperately want to know how sales for your game will be, and you desperately want them to be good. The problem is, as a new developer your ability to analyze this data is very very low, simply because (unless you made banished) your sales are likely, with your first game, to be low enough that any change in them is statistically irrelevant.

If you sell 5 games a week, and then suddenly one week you sell 7, thats a huge percentage boost in sales. Sales have SKYROCKETED. Sales are ‘up in a big way’. There has been a ‘boost’ in sales! But really there has not. Really, one of the people who bought last week told 2 of his friends how good the game was. This is a trivial thing you cannot analyze and cannot benefit from analyzing.

If you sell 5,000 games a week, and then suddenly sell 7,000 that IS actually significant, despite being exactly the same variation. You absolutely should draw conclusions from it.

That seems counter-intuitive, so keep re-reading it. The margin of error is basically lower with a big sample size. This is why pollsters try to have a decent sample size, so one or two outliers don’t skew the result. In our 5 sales example, we lucked out and one of the 5 had lots of similarly minded gamer friends. The thing is, we could have gone entirely the other way, we might havebeen unlucky, and sold to 5 people with even less friends than normal, and this might actual dent the next days sales as our ‘virality’ collapses. A single customers sociability can skew our popularity up or down hugely.

With 5,000 customers, we are going to get lots of sociable customers, AND lost of unsociable ones. They cancel each other out, and we get a steady stream of recommendations, and non-recommendations. Unless one of the buyers is notch or stephen fry, them tweeting about our cool game will make zero difference, in the grand scheme of things.

The vast majority of indie game post-mortems over analyze events in their sales curve. It’s absolutely worth reading them for the ‘we made a game about chickens and it was a hit’ or ‘we made a mobile game and then we ended up living off noodles’. That’s ‘big picture’ stuff. But buying an advert or releasing a  trailer and seeing your sales go from 5 to 7, or 7 to 5, is a total irrelevance. Ignore it.

Tell me if I’m wrong :D

That’s kinda an inside joke. but anyway. What would be a better way than to avoid doing real work this morning than to daydream about what I’d do if I owned valve :D My assumptions are as follows:

1) Valve probably have a large stockpile of cash, or at least access to such cash at good terms

2) Valve want to grow.

Because I enjoy theoretical empire building (not real empire building, because I enjoy working from home, and that kinda limits one’s galaxy-conquering potential), I’m going to imagine how best to achieve global domination if I owned the company. Here are my thoughts.

Thought #1: Let someone else worry about hardware.

Make no mistake, valves VR experiments are jaw-droppingly amazing. And the idea of a steam machine in the living room is cool, and making a gamepad that PC gamers actually like is a worthy goal. These are all worthy goals, but the thing is, they are hardware, and outside the realm of the ‘low-hanging fruit’  that I think would make a more sensible business move. As I understand it, valve are (very sensibly) avoiding building anything, just providing design and encouragement to actual hardware builders. This makes a lot of sense, but I think as a result it will not achieve as much as they think. The design and R&D but not the implementation seems like a job half done. Either try to take on the console manufacturers (and set aside a minimum of a billion dollars to do that), or don’t. I get the impression that they are doing this stuff purely because it’s cool, which is kinda awesome, and the sort of thing only a privately owned company can justify.

Thought #2: Casual Games.

Steam only has a limited cross section of games. They are mostly ‘core’ hardcore gamer games. Not the sort of stuff that BigFishGames and the other casual portals stock. Why not? It seems to me that a re-skinned ‘steam-casual’ client that wasn’t quite so serious looking, that focused on casual games could probably crush BFG and it’s ilk and takeover that section of the market too. I suspect Valve have a bigger marketing war-chest than BFG’s new owners. This is nothing but a marketing change, Valve already have the back-end for selling games to people, supporting community etc, it’s a no-brainer.

Thought #3: Video

Twitch and youtube are great, but why can’t I just watch the lets-plays of a game inside the steam client or website? Surely there is a big market opportunity there? If I’m browsing steam and find a great game, then want to see gameplay video, and leave the site/client to go to youtube, who knows if I’ll ever return? That seems like a leak in the sales funnel to me that could be easily fixed. Maybe the downside is bandwidth costs, but if youtube can justify it purely on ads, then surely valve can based on sales? Maybe their PC dominance is so great that everyone who leaves for youtube comes back to buy anyway? (or do they just watch cat videos instead?)

Thought 4: TV

I bought and enjoyed Indie game the movie through steam, and enjoyed their e-sports documentary. Frankly steam is better than the iplayer or itunes. Why can’t I buy breaking-bad through steam? They are experts at content delivery and sales. A video game isn’t *that* different from a TV show download. I was very surprised that more movies didn’t show up on steam. I bet they’d sell a lot of copies of Battlestar Galactica, Firefly etc to people who already own them, just to have them on steam.

Thought 5: Content

Content is king? or is it? it depends which pundit is popular this week. One thing is true though, 100% of something is more than [UNDISCLOSED_PERCENTAGE]% of something. Valve produce games in-house, but not many. There are plenty of devs that need funding. Currently they go to kickstarter. You can see where I’m going here right? You want funding for your game, maybe valve will fund the game and buy out your company? Valve is a huge distribution portal and a (relatively) small game developer. Nudging towards being a publisher seems a logical step.

Thought 6: Pay what you want.

Why isn’t this an option? Lets be honest, Valve could crush every single indie bundle this time tomorrow, simply by including PWYW + Charity bundles. It’s amazing they haven’t done so.

So why do I think they don’t do most of this stuff? Maybe the enlightened long term self interest of ensuring a vibrant market. That sounds like hippy bullshit, but it was widely speculated that Microsoft deliberately let apple stay in business back-in-the-day, so that they weren’t totally crushed by the government for being a monopoly. Sometimes it’s in your interest to keep other companies in business. That’s one reason. Another is just being nice guys. Public companies can’t do this, but they may well take the attitude that crushing The Humble Bundle and BFG would be a dick move. I suspect more likely is that the people at valve just want to do what is cool. VR is incredibly cool. Steam machines are cool. Negotiating with TV company lawyers and marketing match-3 games is not cool. Maybe nobody in the company is volunteering to do that. They don’t *have* to make any more money, or grow at all, so where is the incentive to do anything that they aren’t passionate about? I can kind of relate to that.

I publish games by other indies (redshirt and big pharma so far, with an investment in duskers), and am always open to looking at proposals. I turn down more than I fund. Some pitches are awesome, some are dreadful. Here are some tips, whether you are pitching to me, or someone else.

Reality check:

Before you write a single word of a pitch, step back and remember what you are asking. Your whole pitch is basically ‘Will you take a $50-200,000 bet on me making a profitable indie game?’ This is a tough ask, a VERY tough ask. Unless you have, in your direct personal experience taken a bet of that magnitude where there is a chance you will lose every single penny of it, then you don’t really appreciate what you are asking. No investor *has* to invest their money. They can leave it in a bank earning nothing, but staying safe. They can stick it on the stock market and hope to make a relatively safe return. They can spread it across business crowd sourcing and probably make a safe 5%. Or they can gamble the whole lot on your game design… The reason they will choose the game is that sometimes (rarely), it’s a big big win.

What To Do:

• Include a brief bio, so we know who you are and what you did. Even if you are just 18 years old and always been in school, still say it, tell us what you studied in this case, and how you did.
• Get straight to the point with a very short elevator pitch description of your game. Don’t expect us to get to page eight to find out its a mobile platformer.
• Include figures. They will be wrong, but we need to know you have thought about them. Be able to back them up to the best of your ability.
• Include timescales, broken down into milestones. We want to know this is not an open ended thing.
• Explain why you need the VC. Is it the money? or the expertise? If it’s just money, why haven’t you borrowed it from family, or a bank? or re-mortgaged your house? There are justifications for all of these, but we want to know yours.
• Include flavor text. Games that are simply a list of bullet point features with no soul generally tank. We want to know the passion, the feelings and emotions you will put into this game. Concept art also helps. Even art from other games, movies, inspirations etc is fine, if it helps to conveys your vision.
• Include an allowance for marketing the game in the budget.
• Include any evidence that you can finish a project this big. Even if its not a game, if you wrote some software that manages a tractor factory, thats really worth knowing. Seriously.
• Include allowances for stuff like software licenses and subscription stuff.

What Not To Do:

• Don’t include a lot of crap about the size of the games industry, with huge numbers in, as some sort of ‘intro’. If I’m an investor in the games industry, I know this stuff anyway so you are boring me, and telling me what activisions profits were last year has fuck-all relevance to your indie game.
• Make financial errors in any calculation, anywhere in your pitch
• Compare yourself in any way to minecraft. It’s an outlier.
• Pitch a three year project based on you sleeping in a tent eating noodles. This is not sustainable, and we can smell the desperation.
• Pitch a three year game where you earn $80,000 a year salary because that’s ‘the going rate’. Thats the going rate for a job, not a partnership where you own a huge royalty stream at the end of it.
• Wrap up the whole pitch in a single page. If you are serious about your project, then editing your enthusiasm down to a few pages will be hard.

What the investor/publisher will do:

We will tell you if your game is doomed from the start (our best guess, we can be wrong) due to business / financial choices. We will tell you how we think you can fix that. Don’t think that all of your pitch has to be the absolute right choices, there just has to be some spark there, combined with reliability and technical ability. If you pitch a mobile game aimed at kids, and we think the game design and art is fantastic but it would work better as a pc game aimed at the 30+ market, thats still something that can be funded. Investors are generally looking for people, more than ideas. We assume you are flexible.

So how to pitch?

You do *not* need friends in the industry (although tbh it does help). What you need is just email. You don’t need a glossy printed brochure about your game, unless your plan is to physically hand it to someone like me at a conference. (Thats totally acceptable btw). Nobody cares if your pitch is a slide ‘deck’ or a word document, or a PDF or whatever. Contrary to what some people think, it is totally fine to just email investors out of the blue to pitch your project. If I’m honest, you probably do slightly better to introduce yourself in person, because then an immediate two-way discussion takes place, but if you email me a decent pitch I will definitely read it. My email address is cliff AT positech dot co dot uk. I only invest in PC games. Strategy preferred, but not essential. I don’t do Free to play games. I’ll be at rezzed in London in March 2015 and on a panel at GDC 2015 too if you want to elevator pitch to me.