Yesterday, I wrote that Microsoft should be doing more to tap the aftermarket for goods and services related to Flight Simulator. Kim, my friend and coworker here, took notice and essentially argued that I was wrong because: A) the 3rd party after-market is good for sales of Flight Simulator, and B) Microsoft could never think of and/or develop most of the aftermarket things that have arisen.
Permit me a bit of grumpiness. I hardly need reminding that 3rd party extensions, especially of the user-generated type, can be very good for business, nor that 3rd parties will think of & do things that Microsoft could not. My point was this: platform monetization strategies (be it for games, websites, or anything else) don’t need to begin and end with “releasing an SDK” or “building a community.” Yes, you can greatly increase the penetration of your platform (in this case, sales of a game) by encouraging 3rd party / hobbyist support of it. And sometimes, you can earn even more by remaining active in the aftermarket. You just need to be smart about it.
Tapping the aftermarket
Co-opting innovation. When professional 3rd party developers build aftermarket products for a platform, copying (and therefore supplanting) them is generally problematic. As Kim noted to me privately, it sends a strong signal to the world that developing for your platform is not a safe business endeavor. I agree wholeheartedly with this. However, when enthusiasts build free aftermarket products and services for your platform, co-opting those innovations can (in certain situations) be an entirely positive move if done correctly.
In many cases, enthusiasts are simply seeking ways to have fun and/or satisfy their own personal needs (which are being unfulfilled by your business.) They are implicitly pointing out an opportunity and suggesting how to seize it. Sometimes, the best way to take advantage of this is to build a professional version of their work into v2 of your platform, or into a separately-sold expansion. Recognizing the contribution of the creator is very important — you can accomplish this via some sort of relatively small but still meaningful monetary award, placement in the credits, and/or by actually hiring the creator(s) themselves.
Of course, this isn’t always practical. For example, many enthusiast innovations will ultimately have limited commercial potential. But some will be diamonds in the rough, just waiting for polish. There’s a broad theory of “user innovation” that covers all this. If you’re not familiar with it, I recommend checking out this material. (Also this material.)
Help them advertise. Profit-seeking aftermarket suppliers need to advertise, just like everyone else. You can leave them to 3rd party channels (magazines, search engines, etc) or you can create venues for them within your platform (and/or related properties). And of course, charge a fee for doing so. These venues would piggyback or exist in addition to any systems you create to freely promote 3rd party / enthusiast content (i.e. ads that appear above a user-ranked list of content.)
Help them pay the bills. You’ve created a platform, and they’re creating content for it. I’ve asked how you will profit from that content (aside from the after-effects of additional game sales) but I haven’t asked how they will profit from it. You can leave this up to the commercially-oriented third parties (in which case, the smaller guys will probably default to solutions like Paypal; the bigger guys to their usual mechanisms.) Or you can offer third parties a means to sell their content through your platform (again, for a fee.) On the face of it, this sounds like something more appropriate for Amazon.com than a video game, but is that really the case? Much like a game engine that gets reused from project to project, what’s stopping big publishers from creating a 3rd party transaction system that sits alongside their (applicable) games and helps enterprising third parties monetize aftermarket content without turning to Paypal? (Or co-opts Paypal, for that matter?)
Rude and crude
I’m intentionally being somewhat vague because I honestly don’t see much difference, in some ways, between a game as a platform and Ebay as a platform. The only difference is that Ebay is “just” a market, while a game is both a product and a market for other products.
The difference between my position and Kim’s is actually quite subtle. Kim is (in my opinion) simply too conservative — he’s afraid to fully capitalize on aftermarkets because, done clumsily, it could cause a 3rd party rebellion. Yes, that risk is definitely there, but I’m not content to ignore an opportunity just because, if handled incorrectly, it could backfire. That’s a recipe for obsolescence.
Kim, you called my post ignorant. I call yours overly-conservative, and perhaps intellectually lazy. The ball’s in your court. ;-)