Indie Business Rules: Relationships and Service

Jay Barnson wrote Business Rules for Indies, in which he tries to apply Jack Welch’s “cardinal rule of business” to indie game developers.

Never let anyone come between you and your customers or your suppliers. Those relationships take too long to develop and are too valuable to lose.

While game portals are a good short term solution for developers who are trying to reach a large number of players and paying customers, they aren’t so good for the long term.

In business, finding a new customer willing to pay for your products is much harder and much more expensive than selling your products to existing customers, who have already shown a willingness to buy from you. But if you sell through a portal, you don’t have a customer. You get paid, but by the portal, as a cut of the sales. If you were to sell directly to your customers, however, you not only get the sale, but also a relationship with your customer.

If you sell a game through a portal for $20, you get paid a small percentage. The portal gets the lion’s share, but of course the portal is the one with all of the traffic and customers, and so you are essentially paying for the chance to sell greater quantities than you could on your own.

If you sell a game directly for $20, you get to keep the income. You might not get as many sales on your own, but what you do get in this situation is customer information. YOU know who is willing to buy the kind of games you make, and so YOU can sell them expansions, sequels, and affiliate products. You can address them in newsletters and tell them about new sales you’re offering. That $20 is just the start of how much that customer might buy from you over the lifetime of your business. You trade short-term financial gain for future profits.

The theory sounds all well and good, but with so much competition out there, how can you hope to get ANY attention unless you’re on a portal? And if you’re on a portal, you aren’t allowed access to customer information, and in some cases you aren’t even allowed to let your customers know who made your game! The portals have become the new form of publishers, which is what being indie was supposed to get you away from.

Dan Cook’s The Casual Games Manifesto addresses all of this and more, but the essence of the article is that you need to develop a relationship with your customers, whether they found you directly or through a portal. Can you integrate your games into a service that YOU and YOU alone provide? Then the portal becomes your access point to customers and not just a distribution channel.

The Casual Games Manifesto got me thinking about specific changes I can make to my business model. If I make one game, and it takes me three months or three years, I have to compete with all of the hundreds of games released in that time. But if I create a game tied to a service I provide, am I competing with the same games anymore? I think what might make such a change hard for indies is that providing a game service requires outsourcing or hiring others to build and manage it. Then again, are you doing this as a hobby that pays a little bit for your pizza and beer, or are you running a serious business?

Either way, don’t feel that you need to let the portals come between you and your customers. If you don’t want them to, you have options.

[tags] indie, business, portal, game development [/tags]