GAMEGAME SALES SALES GAME SALES BEST PRACTICES: HOW TO CREATE AN ONLINE GAME STORE Learn the basics of setting up the right store for your brand It's no secret. Today, video game developers and publishers have a wide variety of platforms on which to sell their games. The possibilities can almost feel endless, but among all the platforms, one option often tends to get overlooked as a viable choice. And that option is selling directly to your audience from your own game store. We've put together a two part series of Game Sales Best Practices to help you understand how an online store dedicated exclusively to your titles can lead to a boost in your revenue. In the second edition of this ebook, you’ll learn the essentials of promoting your store. Let's first explore the benefits, challenges, and best practices to set up a custom, branded online store that facilitates direct game sales. SELL YOUR GAME ONLINE [email protected] xsolla.com 1 GAME SALES BENEFITS | WHY DO YOU NEED A WEB STORE? There are a few reasons why game companies should consider setting up their own online store through which to offer their games. Direct relationship with your audience As a developer or publisher, one of your most valuable resources is the relationship you have with your audience. If you are reaching shoppers directly through your own platform, then they are not simply just people looking at your wares on someone else’s services; they are your customers. If someone signs up for an account to your storefront – even if they don’t buy something – you will have their email address and maybe even other contact information. Right now, that kind of information is perhaps the most important thing you can own and leverage to a positive effect. You will be able to directly reach out to your audience, which is especially important for your marketing efforts. Once you have something to promote - a DLC, in-game items, a seasonal event, your other games, or even pre-orders for a brand new release - you can send an email directly to your community by connecting to reach an existing group of people who already like what you do and want more of what you offer. SELL YOUR GAME ONLINE [email protected] xsolla.com 2 GAME SALES Your own storefront will also provide you with access to a wealth of useful data to help you assess the efficiency of your marketing campaigns. You'll be able to see the costs to acquire individual users, how many people who view products actually buy something, and even redirect traffic to another platform. SELL YOUR GAME ONLINE [email protected] xsolla.com 3 GAME SALES INDEPENDENCE With your own game store, you aren’t reliant on another platform for your business. You're free to run your store however you want. You don’t have to worry about what other game companies on the platform – or even what the platform itself – have planned. You're able to run sales and promotions or seasonal events on your own timetable. For example, if your games are popular in a part of the world with a very region-specific holiday, you can launch a massive sale or in-game event during the time period making the holiday even more special for your players. You can also support whatever payment methods you want, enabling people all over the world to purchase your game with their preferred system. While a service like PayPal is very popular and widely used in many countries, it isn’t fully supported in others, including places like Macedonia, Cambodia, and Belarus. Depending on where your typical player base resides, you may need to accept payment methods that other platforms aren’t willing to support. If that's the case, then it’s worth setting up a web store for your games. People everywhere appreciate it when a company makes an effort to be available in their country, and it's very likely they might show that appreciation by purchasing your games. It’s also good to have multiple revenue streams so that your team can weather inevitable changes – either industry-wide or platform-specific. In recent years, we’ve seen plenty of examples of third-party storefronts pulling game titles due to conflicts with their platform policies. Having your own game store ensures that you're still able to sell your game regardless of changing policies, storefront politics, or if a platform suddenly shuts down. SELL YOUR GAME ONLINE [email protected] xsolla.com 4 GAME SALES Increased revenue Fact: anyone selling a game has to pay a platform fee to whoever is running that storefront. The industry standard is a 70/30 revenue share – meaning 30% of revenue from the sale goes back to the storefront, while you keep 70%. New platforms have emerged in recent years that boast more favorable agreements, such as an 88/12 revenue share. Let's do some math. Say, for example, your game generates $1 million in revenue. On a platform with a 70/30 revenue split, you’ll be giving away $300,000 and keeping just $700,000. With an 88/12 split, you'd keep $880,000 while the platform takes a $120,000 slice of the proceeds. All these numbers, of course, being before any other applicable taxes and fees. With your own game store, you’d be keeping 100% of the $1 million revenue, before any applicable taxes and fees. At a time when competition in video games is more intense than ever, the extra income could make all the difference in a company's long-term success. Also, having your own ecommerce site means that you can monetize your older titles. After all, your back catalog can be easily lost among thousands of other games on a bigger platform - but they won't be in your exclusive game store. SELL YOUR GAME ONLINE [email protected] xsolla.com 5 GAME SALES CHALLENGES | WHAT COMPLICATIONS CAN ARISE? Setting up an online game store is not an easy ride. There are a number of potential challenges that developers and publishers need to be aware of before taking the leap. You are ‘on your own’ By utilizing your own ecommerce platform, you are independent and there’s the potential for your team to make more money. But by going at it solo, in a sense, you will have to deal with a lot of extra stuff that you didn’t have to before. And if anything goes wrong, you have to be able to deal with it. If payments aren’t working, that’s something you have to handle. If your website goes down, you have to be able to fix that. If someone hasn’t received the games they paid for, that becomes your problem to resolve. SELL YOUR GAME ONLINE [email protected] xsolla.com 6 GAME SALES You will need to plan for additional resources It usually costs time and money to make an online storefront. Not only will you need to hire individuals to build it but also support it once it's live. It's wise to have a team that can perform updates, regular maintenance, and put out any fires. Let's look at some more math. On average, each team member has a monthly burn rate of $8,300 – that’s $99,600 per year. If it takes five employees two years to build your store, you’re looking at spending $996,000 out-of-pocket before even launching your platform. Even with the extra money that the store will potentially bring, that’s still a pretty steep output. Of course, there are more affordable ways to make websites. You can use the services of a general ecommerce business like Shopify or SquareSpace to build your store or a more game industry-specific option like Xsolla's Site Builder. SELL YOUR GAME ONLINE [email protected] xsolla.com 7 GAME SALES You’ll need to spend more on marketing Naturally, if you are on someone else’s platform, you can benefit from their audience and their marketing efforts. A bigger, third-party game store can certainly attract a large audience, which means more prospective buyers can see your game. By going with your own platform, you won’t have that particular digital footfall. You’ll need to spend more on marketing and PR – as well as community and social media management – to attract an audience to your platform. However, a bigger store that isn't dedicated to only your games has to cater to all their game developers and publishers. Getting featured and even getting seen may become quite difficult when your games are only a handful in that platform's extensive library. You will still have to spend time and money coordinating your own promotional efforts, otherwise it might be difficult to organically grow your audience on that platform. You have to think globally The other main thing to consider when building your store is the payment methods that you need to support. If your game is already out, it’s wise to study where in the world it is popular, so you can determine what payment systems you want to support. As we mentioned earlier, services like PayPal aren’t universally embraced around the globe, so that will help you figure out what payment methods your players prefer. If your game isn’t out yet, it’s worth looking at pre-order data for your title to gauge where there’s interest.