A Brief History of Game, Part Seven: The Business of Business

by Shannon Appelcline

November 21, 2002 - On occasion I have used this space to write a continuing history of Skotos, from its incarnation in January 1999, through its release of Castle Marrach, and into the year 2001 with its varied and changing priorities. If you haven't read the previous parts of this mini-series, you might be interested in taking a visit now:

• Trials, Triumphs & Trivialities #11, A Brief History of Game, Part Four: Skotos Tech
• Trials, Triumphs & Trivialities #12, A Brief History of Game, Part Five: Castle Marrach
• Trials, Triumphs & Trivialities #47, A Brief History of Game, Part Six: Gamist Evolution

I ended last year's history by writing, "Where will we be a year from now? I can't say for sure, but I hope I'll be here to chronicle it in a seventh part of this very same series." And, to be honest, I wasn't entirely sure that I would be. I knew that Skotos Tech had some growing pains ahead of it, that we'd struggle as we tried to truly fulfill our business model, and that there'd be problems along the way. Today, we're still in the middle of those growing pains — still trying to turn our dreams into a profitable business. There are still hard times and hard decisions ahead, but I can also see the shape of things to come in a way I couldn't quite last year.

So, let me write a little bit about how Skotos has changed from November 2001 to November 2002, and what lessons we've learned along the way.

The Business of Business

As I mentioned in my last article, Skotos started accepting subscriptions on April 2, 2001. Because we have a free trial period that meant that on May 2, 2001 we received our first actual credit card charge for Skotos services. In many ways that was the day that Skotos really got going. Beforehand, we'd enjoyed kicking around ideas about building games and creating worlds. We'd theorized about what our business would really look like when we became a pay-for-play service.

But we didn't really know.

In the 18 months since we started receiving credit card payments we've all really learned a lot about what running a business actually means. Or, to phrase it as a simple lesson learned:

• If you want to be more than a hobbyist, just creating games isn't enough.

Our biggest problem is, and has always been, the question of how to increase our user base enough to amortize all of the structural costs of running a game company like Skotos. In other words, we've needed — and need — to bring our income up to the minimal level of expenses that we feel are required to run a game company of the sort we envision. And the best way we know to increase income is to increase users.

By November of 2001 we were in the middle of a large and costly advertising push, the idea being that if we told more people about our games, we'd have more people coming to our site, more people trying out our games, and thus more people sticking around. The overall theory is good, but unfortunately a lot of advertising just didn't give us sufficient users to pay for itself. We've continued advertising to this day, but currently our advertising is much more selective. We've put together statistics on specifics types of advertising that work the best on specific types of sites, over specific time periods, and are limited ourselves to those known-good types of advertising. The result? For something like 5% of the cost of our November 2001 advertising we're getting between 50 and 100% of the benefit.

Unfortunately, advertising alone hasn't proven enough to really grow the Skotos community. Thus over the last year we've looked at lots of different ways to draw players to our site and into our games (and to otherwise raise revenues).

• When your business model isn't working, change it.

For more information on running professional games see Trials, Triumphs & Trivialities #45, And Now a Word from Our Sponsor... .

Other Forms of Business

Some of these other possibilities have worked; some haven't. Here's a quick overview of things we've tried in the last year as alternatives to advertising.

The Chat Theatre Experience. In summer of 2001 we hit upon the idea of "Chat Theaters" — free, interactive chat areas which would show people the power of our gaming medium. We launched one on October 31, 2001 at RPGnet and talked with a bunch of other webmasters about setting Theatres up at their sites. The theory (as ever) seemed like a good one: lots of people liked chats; some of those people would be interested in Skotos games; and so we wanted to make it easy for them to transition from the one to the other. Unfortunately we haven't been able to convince either webmasters or chatters that it's worth trying out a Chat Theatre rather than a traditional chat. So, we're not pushing hard on the idea right now, though it remains a possibility.

Story Points. We've long known that the plurality of our paying subscribers get to Skotos after being referred by friends. Thus as early as July 2001, we started thinking about a "Story Point" system which would reward people for bringing their friends to Skotos, and thus hopefully encourage more of it. In 2001 and early 2002 we talked the whole idea to death, delaying the implementation. It was March 2002 before we finally got a preliminary version of the Story Point program out. However, the initial implementation didn't yet have rewards in place. Those didn't really appear until our premium program went live on November 1, 2002. But, it's out there now, and as we increase its presence on our web site, hopefully it'll encourage people to help their friends get involved with our games.

Portal Deals. It's long been our dream that we could bring Skotos to the attention of tens of thousands of potential subscribers by signing a deal with a Yahoo! or an MSN Gaming Zone. It's only in the last few months that these types of possibilities have really started to look likely. We're in some talks now that will hopefully reap rewards in 2003.

Guerilla Marketing. Most of the rest of our direct marketing work in 2002 could be labelled as guerilla marketing: making sure that our games are listed in gaming portal sites like MPOGD; that our press releases get good distribution; and that industry people who should know about us do. It's had some good results. We're now listed on many more web sites that we were in 2001 — which is nice because web searches are our second source for new subscribers, after friends. We've also had some great press coverage, including an article in Wired News (July 15, 2002) and a TV spot on TechTV (August 23, 2002). This press coverage is likely what led to some of the portal and game deals we're now looking into, so it's all connected.

Changing Subscriptions. By August 1, 2002, we'd also come to the clear understanding that we needed to change our underlying cost model in order to make Skotos profitable. Thus, with great reluctance we posted an open letter explaining that we'd decided to raise prices and also offer a premium subscription program. The price increase happened on October 1, 2002, and the premium subscriptions went online November 1, 2002. Overall, the community has been amazingly supportive and the changes have been very successful to date. We've had only a minimal drop in users thus far, and more players than I'd expected have decided to support Skotos with premium subscriptions. On the bad side, the new premium accounts have created some increased problems with credit card fraud.

More Games. Finally, we've settled on one last, obvious, new way to increase our number of players: new games. We had three games this time last year — Castle Marrach, The Eternal City, and Galactic Emperor: Succession. Since then we've shut GE:S down, but also introduced two new games: Galactic Emperor: Hegemony and Grendel's Revenge. Even better, we're in talks to offer a couple of associate games to the Skotos community — existing pay games that you can also play as part of your Skotos account fee. And, there are some new games using the Skotos engine which are... on the way.

Overall, lessons learned from all of this?

• Marketing is more than just marketing. Reach out to people who can help you, whether they be customers or businesses working in the same or similar fields.
• Every change you make in your underlying business model (like a premium account) will have multiple, unexpected repercussions (like credit card fraud)

And that's an overview of the varied things we've been doing in 2002 to change Skotos into a genuinely effective business. As of November 2002 we understand the problem of profitability a lot better, have instituted some changes that have helped out, and have some more in process. I'm hoping that by this time next year I can say we found a break-even point that we can grow from.

If you're planning to center a business around your game design, this is all critical stuff that you need to think about, to ensure that you can still be there, working on your games, a year or years from now.

But it's not necessarily as interesting as the game design itself, so let me now talk about how that's gone in 2002.

For more information on the underlying work that needs to be done to support any type of marketing see Trials, Triumphs & Trivialities #85, If You Build It, They Might Come, Part One: Attention.

Changing Empires

We've long had ideas about introducing a space-strategy game to Skotos. As I've written previously we were considering a game called Vortex as far back as March 2, 2000. We started thinking about Galactic Emperor: Succession on June 19, 2000, then released it on April 3, 2001, and rereleased it on July 10, 2001.

But, space-strategy proved a harder nut to crack than we had expected. We shut down the second release of GE:S on February 11, 2002. Since that day it's become a part of Skotos mythology, forming the heart of our meme that, "It's OK to fail." Though our overall company needs to succeed, sometimes an individual game will fail, and our games are cheap enough that we can live with that. (Though, on the GE:S front, we've had a Skotos member thinking hard about GE:S and working on a third release for most of 2002.)

It was the right thing for us to remove GE:S when it wasn't successful, and to give someone else the opportunity to make it work:

• If you refuse to accept failure, your failures will drag you down.

On the bright side, we've had success with a new space-strategy game, Galactic Emperor: Hegemony. We actually found it, then called Space Empires, way back in November 2000, and started talking with the developer about adding it to Skotos on January 15, 2001. However, a variety of factors greatly delayed things.

It wasn't until January 2002 that we were able to really get negotiations finished up. By late February 2002 our web designer was putting the finishing touches on a GE:H logo and web site. By early March 2002 I found myself doing the coding work required to get GE:H integrated into Skotos. We launched Hegemony on March 21, 2002.

Since that time, Hegemony has nicely met our expectations. It's not as big of a game as TEC or Marrach, but it's formed a small, friendly community of gamers. In addition, it seems to act as a sort of "glue", giving Skotos players something else to spend time on when they're a bit burned out on other games.

Personally, I've found a new fondness for strategy games since I started doing engineering work on Hegemony. In the half-year since I've done lots of work cleaning up Hegemony's user interface and putting in some new features. I'm hoping to clear up that first set of changes by the end of the year, and to start thinking about a new strategy game set in the same universe, and with a similar interface, called Galactic Emperor: Merchant Princes... but I need to free up some time before I can really get involved in that project.

For more information on Galactic Emperor: Succession see Trials, Triumphs & Trivialities #62, Galactic Empires, Part One: Failing at Succession. For more information on Galactic Emperor: Hegemony see Trials, Triumphs & Trivialities #63, Galactic Empires, Part Two: Expanding into Space and Trials, Triumphs & Trivialities #64, Galactic Empires, Part Three: Building a Hegemony.

Ascending Monsters

Our bigger game news of 2002 was our decision to partner with Worlds Apart Productions (WAP) to create a totally new game — Monsters! Monsters!: Grendel's Revenge. The engineers of WAP are, of course, the same folks that brought us their existing game, The Eternal City, in 2001. Creating something totally new on their robust achievement-game engine was very exciting.

We wanted to do something totally different — a genre that hadn't really been touched upon by existing online games. Our first idea was an exciting pirates game where you ravaged ships travelling from here to there, set up your secret pirate cove, and generally did piratey-type things. However, because Worlds Apart had been doing some thinking about pirates on their own, we put that first concept aside and instead came up with the idea of monsters.

Grendel's Revenge shows clear intellectual descent from Monsters! Monsters!, a tabletop RPG put out by Flying Buffalo a few decades ago. To offer thanks to the game of monster roleplaying that got it all started, we paid Flying Buffalo for the rights to use their original name (though the games are very different in background, gameplay, and even the monsters that are available). Hence the lengthy nomenclature: Monsters! Monsters!: Grendel's Revenge. Hopefully we'll be able to produce additional monster games in the future, and we'll be able to combine them under the Monsters! Monsters! brand name.

We started talking with WAP about Grendel's Revenge in December of 2001. At the start of January both WAP and Skotos brainstormed on ideas for the design of the game, which was then codified by WAP into a full design doc a few weeks later. We officially announced the game on January 29, 2002, though we were still flailing about for a name at that point. Our top choices all centered around the word "Grendel" or the word "Monster". Ones that we didn't pick, but could have, included: Grendel's Folly, Grendel's Lair, Monster Mayhem, and Hic Sunt Monstres. Slightly less popular options that appeared in our brainstorming sessions included: Caliban, The Fallen, Lairs & Looters, Monsters Online, Out of the Abyss, and Mr. Monsterato Head.

• As has been said before, names are very important. Make them your first priority, not your last.

After our combined design work, Worlds Apart took the game and ran with it, doing all the development and engineering work. At the same time, Skotos has stayed pretty closely involved, and we've done everything we can to help QA and generally improve the game. The closed beta for Grendel's Revenge started on May 6, 2002, an impressively quick turnaround for a brand new game. We announced the full release exactly three months later, on August 6, 2002.

Overall the Grendel's Revenge experience has been a good one. We have a game with a unique premise (monsters) and some unique real-time-strategy-like gameplay elements (lair building). It's also a bit closer in look-and-feel to our existing Castle Marrach game, despite being built on a different engine, because we and Worlds Apart worked together to create common support systems (ala StoryGuides), increased commonality of command parser, and a standardized client (Alice).

We hit critical mass on the game right away, thanks to our existing Skotos community. Grendel is still our smallest online roleplaying game, but by next year I expect it to have surpassed Castle Marrach, for the simple reason that achievement roleplaying has slightly broader appeal than social roleplaying in the gaming population.

For more information on Grendel's Revenge see Trials, Triumphs & Trivialities #73, There's No Such Thing as a Free Launch.

The Future of the Skotos Engine

As may be obvious from our decisions to integrate Hegemony and work with Worlds Apart on Grendel's Revenge, in 2002 we took a slight step back from the Skotos game engine that's at the heart of Castle Marrach. We do think it's a terrific, third-generation text game engine, but as of the start of 2002, when we were starting work on both Hegemony and Grendel's Revenge, we didn't have enough systems in it to design games other than those in the Marrach class.

2002 has, I think, changed that.

Castle Marrach continued maturing nicely during the year. The team of coders and plotters in the game is larger than ever before, and they're all doing amazing work.

And part of the reason that the coders in particular are able to do amazing work is that the Skotos games finally include a robust, mature internal programming language called MERRY (technically it's called MERIADOC, which is short for Mediated Execution Registry Involving A Dialect Of C). Over the last year a lot of work has been done getting MERRY into shape, and it's now at the point where Marrach StoryCoders are able to work with it quite extensively; among other things, Marrach coders have created a totally new CNPC system, a weather system, a signet-sealing system, and a lockpicking-key system.

MERRY has also allowed us to clean up a lot of existing systems. Verbs, for example, which used to be stuck in the bowels of the Skotos system code, and thus only available to system engineers, are increasingly being converted to MERRY so that they can be very simply modified as the needs of a game demand. We've even rewritten our classic Marrach dueling system in MERRY and put together a simple shooting system as a sample of other types of combat that we can offer.

In combination with MERRY we've also greatly expanded our "signal" system. This means that coders can now detect whenever an action is taken, based on a specific verb ("guzzle"), a general category of sensory information ("taste"), or a general category of verb action type ("eat"). We can intercept that signal before the action occurs or after, can refuse the action, let the action through uninhibited, or even slightly modify or expand the action.

The application of signals might be slightly unclear to a non-coder, but the core idea is that a non-systems coder can make any action, or class of actions, have any response, either in a specific or general case. So, I could add a specific response whenever someone smells a rose ("A bee buzzes out and threatens to sting you") or, alternatively, I could block an action in specific cases (e.g., if you were in the stockades, movement signals could be blocked).

This renaissance of coder technology has also led to our Skotos Seven program finally working, for the first time ever. Alas, all of our original Skotos Seven games, initiated back in late 2000, are now gone. However we've accepted several new games in the last twelve months which seem to be alive and vibrant. Devils Cay, a game of Caribbean horror, officially began work on December 14, 2001. Five months later, on May 17, 2002, external developers began work on Lazarus Sleeping, a dark science-fiction game. The newest iteration of Galactic Emperor: Succession is being done by an external developer as well, and has been going since March 3, 2002.

In house, we've reinitiated work on Lovecraft Country — a licensed game based on Chaosium's interpretation of the Cthulhu Mythos. Things got delayed last year when our previous LC developer turned into a pumpkin. We started signing up volunteers for this new iteration of Lovecraft Country this Gencon, and made our official announcement to the net on August 27, 2002. Since then we've built out the core of the town around Miskatonic University, and have a wide variety of people working on clothing, dreams, insanity, backstory, organizations, and more.

For some hints at our recent work on Lovecraft Country see Trials, Triumphs & Trivialities #86, This Blessed Plot: Events, Expeditions & Other Alternatives

For some recent views and news from the Castle see Trials, Triumphs & Trivialities #91, Advice from the Castle. For some more info on Devils Cay see the entire series In the Trenches.

The End of the Year as we Know It

Which only leaves the question: where do we go from here?

At this point we're thinking of Skotos as a game aggregator which is also producing its own core of high-quality roleplaying games. Bringing on other external games allows us to do that cost-amortization thing, and at the same time we get to keep working on our own stuff.

Although it doesn't perform as well as our roleplaying games, GE: Hegemony has met our expectations for how well an online strategy game should do; we also think that increasing the number of strategy games we offer will make them all more successful. Thus we're now more willing to look at strategy games as part of the Skotos package. We're considering developing some new ones on the same GE engine, and we've also put out feelers to existing strategy games out there. Hegemony still stands alone right now, but I suspect that won't be the case this time next year.

Finally, the number of games now in our community has grown to the point where we can seriously pursue deals with ISPs, and offer real value in the form of not just one or two games but a whole community of games.

The next year still promises to be a rocky one. We haven't gotten the business to a break-even point, and that's pretty much a requirement within the next twelve months. But, between new games, new types of games, our own game system reaching a decent level of maturity, and new deals of all sorts, I hope we'll finally have enough momentum to break through some of the initial barriers we faced.

• Ultimately, the only way to achieve success is to keep trying.

I'll let you know how it all came out 11 or 12 months from now.

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