A Brief History of Game, Part Eight: Forging Partnerships
by Shannon Appelcline
Though I've occasionally strayed far, my initial conception for this column was a simple one: to talk about what I've learned about game design through the very real business of designing, developing, administering, and marketing games. Many of my individual columns have sprung from singular issues encountered in our business. However, four articles have, more than any other, risen directly from our Skotos experiences, my four-part history of the company:
This week I'm going to continue that history, by talking about the end of 2002 and all of 2003.
To be honest, 2003 was a very hard year. We were a full two years into accepting subscriptions, and we were expecting to start breaking even. But, through some combination of a continuing stagnant economy and the limited niche of our games, we hadn't achieved the breakout that we'd been planning for.
On November 1, 2002, we'd done two things that had helped a lot: introduced a premium program and increased our prices to $12.95, which was closer to the market rate than our old $9.95. Though these two things made a real difference (and continue to), we were still running over $30k a month deficit toward the start of 2003.
The obvious answer was cuts. Thus, thoughout 2003, we did a lot of things to decrease our costs. We went from a central-office business model to a virtual-office business model, with employees working out of well-connected home offices. Because we have an excellent, enthusiastic staff, this worked well. Unfortunately, we had to cut some of that staff as well. We also made cost cuts in any number of places, from redundant network lines, to extra phone lines, to overly expensive storage. Much of it was painful, but it was all necessary to push us to the point of breakeven.
I've seen a number of different companies make the same core mistake. They start off small, but then quickly ramp up to a large size. This is sometimes based upon pure optimism, and sometimes upon a one-time sales boost. The overly large size of the company can't be supported and they're ultimately forced to cut dramatically back. And, if they don't do it quickly enough, the extended overhead can be damaging for the company in the long run.
There's a lesson in all of this, which is:
Today, we're still not quite at breakeven. I'd really hoped we'd be there by the time I wrote this article. Though we're not, we do have our monthly deficit down to around $5k, and that's a really big deal. The downside is that money is tighter than ever because we've largely used up our initial venture funds. We're trying to close up that last gap as best we can, so that we don't have to make really drastic moves that could hurt the company.
Finding New Games
With 2 years of commercial experience behind us, by 2003 we were really starting to see that we couldn't go this totally alone; the market was bigger than we were and in order to find success we really needed to work together with other small companies in the huge gaming pond.
Fortunately we already had a template: our successful partnership with Worlds Apart who at the start of 2003 were supporting 2 of the 4 Skotos games, The Eternal City and Grendel's Revenge.
Through the end of 2002 and the start of 2003 we slowly developed a new model for a gaming partnership, which we called the Associate Game program. Rather than the tight partnership that we arrived at with Worlds Apart, we created a model for a loose partnership where an existing game company could take advantage of the infrastructure that we'd already built up at Skotos, to essentially give them an additional portal to attract players into their games.
We launched the program on March 3, 2003, with two MMORPGs--both fully graphical RPGs, unlike our own offerings. They were Underlight and Meridian 59: Sacred Haven. Since then we've added another four: Gang of Four (March 22), Space Federation (June 3), Queen's Necklace (June 6), and Droidarena (August 8). We've actually got an eleventh game too, Fist of Dragonstones, which we've been offering as a beta-test since December, and haven't completed the integrations solely due to time-constraints. I expect to have it fully available next week.
On the one hand, we're still strongly a text-based game center, even after all these additions. Castle Marrach, Grendel's Revenge, and The Eternal City continue to be our biggest draws and the true heart of our community. However, I think our eight associate games really add something to the community too. They increasingly highlight us a single-stop location to find a lot of high-quality, small games. I feel like it's taken the idea a while to catch on, but that it's getting there. Droidarena has been quite popular since we brought it on, and is already our #5 game, despite being one of our newest. Meridian 59: Sacred Haven has slowly started to push upward in recent months as the community has finally gelled; it's now our fourth most popular Skotos game. Even our smaller board and card games have been edging up, so that they're showing small but real community numbers as of the last month or two.
As we add more games, and these ones have more time solidify their communities, I hope that this will all snowball.
The lesson here:
Making New Games
At the same time, we haven't ignored the Skotos gaming engine. As I wrote last year, our system had gotten to the point of maturity where it could finally stand up to a team of developers creating a new game. If anything, that maturity has just matured more in 2003, with our engineers and volunteers alike making real, notable, and important additions to the engine.
Of the 3 Skotos 7 teams that I mentioned in my last article, Devils Cay and Lazarus Sleeping are still in process. Galactic Emperor: Sucession, meanwhile, went under mostly due to the team being overly small; however a remaining team member decided to pick up a previously abandoned Skotos 7 project, Ironclaw Online, and that project is still going strong today.
Meanwhile, Lovecraft Online, after initial work here at Skotos, was turned over to a full Skotos 7 team over the Summer, where it's been going gangbusters since.
Finally, we also added 3 more Skotos 7 teams in late 2002 and 2003, bringing our total to 7 for the first time ever. They are: Orphan Crown (December 12, 2002), Glory of the Nile (January 12, 2003), and Pendragon Online (March 4, 2003).
We'd have more official Skotos 7 games if we weren't limiting ourselves so that we don't overburden our engineers.
Counting it all up, there are an immense number of people working on games now, and it's really starting to look like some are nearing completing. In Spring or Summer of this year, I'm expecting to see some of the first releases, as Stages or initial games, and we'll get to see the core of the Skotos community really flower.
If there's a lesson here, it's simply:
New Century Advertising
Having a great community is great, but it only works if you can actually attract people to it. This has probably been our biggest problem in 2003, and our biggest problem throughout Skotos' lifetime.
How do we offset churn, which is to say, how do we find enough new players to offset people who leave after their average 12-18 months or playing? And, how do we do that in a cost effective way?
As I've written previously, we'd tried an expensive advertising blitz back in 2001, and it just wasn't cost-effective. By the time that 2003 had rolled around, I'd pushed the numbers around enough to be fairly certain that even at dramatically reduced banner ad prices, banner advertising just didnt work for us.
On March 30, 2003, we tried something new. We launched an affiliate partnership with gamer.tv, whereby they'd send us customers and we'd cut them a small percentage of the membership fee on an ongoing basis. I originally saw gamer.tv as a one-time thing, and concentrated more on other aspects of the business afterward, but on August 8, 2003, we added a second affiliate, Download Online Games. We've since added a handful more.
As of today, I'm really not sure of the efficacy of this whole program. Our conversion rate through these partnerships has been very low--even if we get good trial membership numbers, not a lot of people have stayed to become paying subscribers. I'm not entirely sure of the reason, though I think that it's partially that a lot of our early partners have been sites that appeal to a demographic of people who play free games on the net.
Still, it's something that I want to push in 2004, possibly changing who we're working with to include more comic sites and literary sites and others which aren't largely about free games on the net--because ours ain't.
Meanwhile, our biggest source of new players continues to be old players. I'd still like to figure out ways for our StoryPoint program to work better so that players will have even more incentive to recommend our game to their friends.
The lesson here:
The Year Ahead
On the one hand we're doing much better than we were a year ago. Our budget deficit is almost closed. We have 11 games available, rather than 4. We have deals with a handful of affiliate sites and a model for how to expand this. We have new prose games in the pipeline, which may be debuting in as little as a couple of months.
On the other hand, things are very tight. We need to figure out how to cross our final hurdles before our venture money is entirely gone and only then can we relax a little bit and look at reducing a bit of the individual load our remaining staff members have taken on.
We're so close that I have to believe we'll manage it.