Portals going rate?

[Robert Cummings]

Hi lads,

What is the current going rate at portals? I read that John P intends to maybe take as little as 20% of the fee, which I feel is very generous (for unique and high quality games).

Whats the going rate at real arcade? I understand that it is a variable fee, and this gives me cause for concern.

Any other portals offering a good deal?

I ask now because I have full product in development, it is being managed really well and has every chance of being moulded into a success story, but to succeed I will need your help and counsel.

-Rob

[Matthew]

Expect to see 25-35% royalty from portals as a first-product developer.

[Robert Cummings]

I'm thinking 50% is near the lowest I can go to recoup costs. The product is worth far more.

If one portal is struggling to meet this, their incentive will be seeing the slice of the pie doing really well with competitors.

[Dan MacDonald]

Keep in mind Robert taht those numbers are typically non exclusive or have a limited exclusivity (a few weeks). The audiences of the various portals are typically quite distinct, what sells in one may not sell in the others. Shopping your game around to several portals at a lower % can actually minimize your risk and give you bigger returns then going with one publisher at 50%.

[Robert Cummings]

Thank you for your guidence.

I feel though, Garage Games are doing 50% royalties. This is very generous and non-exclusive...

And Zee Three might (not confirmed) be offering 80%.

Perhaps times are changing.

-Rob

[simonh]

Zee Three can hardly be compared to the likes of Real Arcade, Big Fish Games etc though. Real Arcade have an established customer base of several hundred thousand. Zee Three have an established customer base of 0. Even when the Pickfords finally get their website going, it is going to take a while before they have a decent no. of visitors.

Anyway, the general rate seems to be 25-35% as others have said.

[luggage]

I'm thinking 50% is near the lowest I can go to recoup costs. The product is worth far more.It all depends on how many sales you've made. Would you rather have 50% of 100 sales or 30% of 10,000 sales?

And remember it's not 50% OR 30% it can be 50% AND 30%.

[dima]

I would rather make 1,000,000% of 1 sale! /year

[Ciperl]

Thank you for your guidence.

I feel though, Garage Games are doing 50% royalties. This is very generous and non-exclusive...

And Zee Three might (not confirmed) be offering 80%.

Perhaps times are changing.

-Rob

While I won't discuss specifics, We, GarageGames, have always encouraged indie developers to not go the exclusive route, but to diversify as broad as they can go. Robert, take a hint from some of the guys on this forum. The wider you cast your net, the greater your chance to yield a greater number of fish.

[ggambett]

OK, I'll bite... what is Zee Three? www.zeethree.com and www.z3.com don't seem relevant.

[Bmc]

I think Dima said it best in a jokingly way. Even if a portal like Real only offers 25% you might be more likelly to profit by doing business with them, as opposed to another place that offers a higher royalty but may very well have a much smaller customer base.

[Anthony Flack]

Zee Three is the planned game publishing business from the Pickford Bros, long-standing game developers recently turned indie (after their console dev studio Z2 went under). Their basic philosphy seems to be analagous to Garage Games'. The only problem being that it doesn't actually exist yet, so nobody knows if it's going to work or not.

Which you may want to take into account before you build a business plan around it.

[Robert Cummings]

My business plan is still being planned. I have decided on maximum exposure for this title. I will probably seek to speak to portals and interested parties individually.

I don't see any portals as evil, it's strictly a mutually beneficial relationship as far as I can see... doesn't hurt to cast the net out and see though.

If you have any extra advice for me, I will really appreciate it, as you have all obviously been round the block.

Thanks again,

-Rob

[Jack Norton]

A big advice: check the thread about the price war on these forums ;)
Always put a clause "you can't sell my games lower than XX.XX$".

[Anthony Flack]

Well, I guess the best advice would be to make sure you're offering something the portals really want, because they're spoiled for choice these days. Deciding to go for maximum exposure is one thing (who wouldn't want that?), but just because you offer a game to a portal doesn't mean they'll take it.

And I don't think you can rely on "just" making a fantastically high-quality game, either. Because, as many people here can attest, they very definitely are looking for certain criteria. And of course it varies from distributer to distributer too - a game that does well at, say, Garage Games might even be turned down by a company like Realarcade if it doesn't work with their audience.

So, if you haven't done so already, I would make sure you're aware of what these criteria are, and that your game does everything it can to fit - as well as being fantastically high quality.

[svero]

Well, I guess the best advice would be to make sure you're offering something the portals really want,

So THAT's why my last cletus clay beta was swapping and matching aliens of the same color!

[Anthony Flack]

Yes, that was a concession I made, but I'm standing firm on the controls - force-feedback steering wheel ONLY.

(Are we killing the forum with off-topic noise yet?)

[Robert Cummings]

HAHAHAHAHA, like it :)

Whats that about can't sell lower than $19.99 clause?

Very interesting...

-Rob

[James C. Smith]

Always put a clause "you can't sell my games lower than XX.XX$".

Have you had much luck doing that? I have found that most big distributors/portals are not willing to put a floor on the purchase price paid by the end user. You are more likely to get a floor on the royalty paid to the developer.

[Robert Cummings]

So you would agree that it is better to try and arrange a contract where for example, I get a guaranteed $8 per copy sold?

-Rob

[Bmc]

That is pretty much what he means.

However, I think that unless you have a "killer app" and it's apparent to the distributor(portal), I don't think you will have quite as much leverage when you first begin working with them.

When you pump out enough successful games like Popcap, Mumbo Jumbo, Reflexive and the rest of the casual wrecking crew then you'd obviously hold more power.

[Ryan Clark]

One thing to note: If you plan to demand a "floor" on the amount you are paid per sale of your game, you may end up hurting yourself in other ways. Read this:

http://forums.indiegamer.com/showthread.php?p=32614#post32614

Dan Prigg says that RealArcade's top 10 ranking system is based on revenue! So, if you demand a special rate, your game will not create as much revenue for Real. As a result, you may drop off the top ten.

Something to consider! What's more important, exposure (on the top ten) or percentages?

[James C. Smith]

So you would agree that it is better to try and arrange a contract where for example, I get a guaranteed $8 per copy sold?

I am not saying I think that is 'better'. I am saying that it is more likely to happen. Most web sites that sell you game will demand the flexibility to set the selling price. They would be more likely to guarantee a minimum royalty of $x per sales rather than let you directly limit what price they can sell your game for. If you are talking about big portals like Zone, Yahoo, Shockwave, Real, AOL, and so on then $8 would be too much to ask for. I don’t think they would ever agree to that. But you may be able to get 25% of the sale price with a guarantee of at least $3 per unit sold which would protect you if they ever tried to sell the game for less than $12 or bundle it with other games. In this situation, you would get $5 each time your game is sold for $20 or $3.75 if they sell your game for $15 or $3 if they sell your game for $12. They could drop the price down to $8 if they wanted, but they would have to pay you $3 per unit.

[BitBoy]

One thing to note: If you plan to demand a "floor" on the amount you are paid per sale of your game, you may end up hurting yourself in other ways. Read this:

http://forums.indiegamer.com/showthread.php?p=32614#post32614

Dan Prigg says that RealArcade's top 10 ranking system is based on revenue! So, if you demand a special rate, your game will not create as much revenue for Real. As a result, you may drop off the top ten.

Something to consider! What's more important, exposure (on the top ten) or percentages?
<troll>Gee, if I decide to lower my royalty to only 1% Real will earn more from my game and therefore I will get higher on the top ten list!</troll>

Sorry for bitching, but that kind of logic seems kinda backwards to me. ;)

[Ryan Clark]

<troll>Gee, if I decide to lower my royalty to only 1% Real will earn more from my game and therefore I will get higher on the top ten list!</troll>

Sorry for bitching, but that kind of logic seems kinda backwards to me. ;)Yes, if you take it to that extreme, the logic is certainly absurd! I wasn't suggesting that people purposefully accept a lower percentage, but I still feel that the ramifications of negotiating a "special deal" are worth considering.

[Jack Norton]

They could drop the price down to $8 if they wanted, but they would have to pay you $3 per unit.
To me, 3$/sale seems really a low revenue for a game... :rolleyes:

[Stu]

Everyone wants exactly the same thing. All the $$$ they can get at the end of the day/week/month/year/decade. The proper working formula of dollars per copy, percentage per copy or how widespread the distribution is, is going to be tailored to the individual game or company releasing the game. It seems to me that we all have to devise our own formulas and tweak them until we think we are squeezing the most $$$ per game.

In my personal (humble) opinion, someone just starting out should be more concerned with the widest possible distribution than with the amount they recieve per copy. Sure you want to get the best deal you can but most importantly, get that sucker out there far and wide and see if it flies. (or just attracts flies)

[Dan Prigg]

"<troll>Gee, if I decide to lower my royalty to only 1% Real will earn more from my game and therefore I will get higher on the top ten list!</troll>

Sorry for bitching, but that kind of logic seems kinda backwards to me."

Its based on gross sales. Rate has no impact whatsoever. Sales are sales. Its a tough delima for developers and distributors. I am not saying who's right or wrong, I am just trying to give another view. As the distributor would developers make more money if the distributors we not able to get the masses to his doorstep? How much money were the Indie developers making before the portals started showing up?....Everyone wants more money, heck, even I want a raise, but in the long run if the industry does not grow, no ones going to make money. I think the developers should get more, I do. But the truth is that the portals all have around the sames rates( at least the top ones) and that money goes back into the industry by creating growth and distribution. We use it to increase the amount of our consumers, so that all devs can make more. I think compared to 2 or 3 years ago devs can make a lot more money now than before in Casual games.

[BitBoy]

Actually, my last comment wasn't really intended as an attack on the portals at all, but more as an ironic comment about the current situation. In fact, I'm currently developing a casual game intended for the portals, since that will (hopefully) make me more money than I can earn on my own. 25% of something is better than 100% of nothing and all that... :)

It just struck me as funny that one could actually argue that you would gain an edge by dropping your royalty rate even further. The obvious problem with that would of course be if everybody else did the same thing. It sort of illustrates how short-sighted rational thinking can lead to a non-optimal situation, one which is very hard to get out of in hindsight.

Sorry for creating noise yet again. It's not constructive and it's been said a million times already. :rolleyes:

[Robert Cummings]

It's not constuctive, and nor is your reply. This is a board for people who want information.

But I forgive ya ;) Now go and make that game.

edit: your current game looks cool!

-Rob

[Jack Norton]

since that will (hopefully) make me more money than I can earn on my own. 25% of something is better than 100% of nothing and all that... :)
Hehe well, you consider yourself so bad at marketing to get zero sales?! :D

[Mike Boeh]

25% can fetch a lot of money if the game is a hit on the portals and makes their top 10 lists. They can move a large amount of units for sure. The trick is, the game has to be a hit- and making a hit isn't an easy thing to do.

[Evak]

Even if your not as successful as you would like, if your agems good there are other rewards. Aerial Antics despite being a bit shallow in the gameplay department has caught a lot of attention, and I've made a few $1000 through contract work initiated after someone tried the game and wanted the same artist on their own projects.

Also made it into several magasines and recently on TV. There's not an awful lot of sales, but a lot of interest in the game, and publishers enquiring about a sequel with certain changes that they feel would raise the bar and make all the difference.

Kind of like a foot in the door really. My next game currently in development came about in part due to the attention that Aerial Antics got.

[James Gwertzman]

to one of the moderators:
how about we move this thread to the casual game discussion forum? I feel like we need to remind people it's there since it's easy to overlook at the bottom of the list of forums.

[James C. Smith]

Good idea. done.

[Black Hydra]

I really don't see why you need a floor at all.

Think about it. The portals are in the same position as you. They are trying to get the maximum revenue possible for your game.

If it means you only get 2$ per game, but it sells far more, then so be it. They wouldn't make your game undersell because they would be screwing themselves as much as you.

Remember, they have a % just like you. Besides, considering they are usually much better businessmen then you are, why argue with them. If they feel temporarily dropping the price will benefit themselves, it will also benefit you.

The only bonus to a floor is that it won't undercut your OWN sales of the game. Seeing as most people don't compare prices for games at different portals I don't see this as a real worry anyways...

[James C. Smith]

That is not entirely true. They could use your game as a loss leader to drive traffic to their site or bundle it for free with another game to drive sales of that game. Imagine if Reflexive ran a promotion of “Buy a copy of Ricochet Lost Worlds and get Cosmic Bugs for only 50 cents more.” Would Reflexive be screwing themselves out of the opportunity to sell Cosmic Bugs for more money? Or would Reflexive be getting a lot of extra sales of Ricochet at the expense of Retro 64? Needless to say, Reflexive would never do this and our contract with developers doesn’t allow us to do this. But does your contract with other distributors prevent them from doing this?

[arcadetown]

Whats that about can't sell lower than $19.99 clause?
In the US you can legally require a minimum per unit royalty but you can't legally have a specified end consumer price as it's called price fixing which is a big no no.

[BantamCityGames]

Needless to say, Reflexive would never do this and our contract with developers doesn’t allow us to do this. But does your contract with other distributors prevent them from doing this?

James, what does Reflexive have in its contract that prevents this? The reason I ask is that it is something I will look for in future contracts with portals.

[James C. Smith]

Simple. All the games sold in Reflexive Arcade have their prices set by the developers of the games. Reflexive doesn’t set the price. The affiliate web sites don’t set the price. Developers control the price of their own game.

[Robert Cummings]

James,

That sounds quite fair and I'm looking forwards to talking with you in the future.