F2P game publishing is a tricky thing

When Christian Nutt asked me to write an article for Gamasutra on the topic of publishers, I wasn’t sure what to do. Spry Fox is relatively committed to self-publishing our games and I haven’t kept up with developments in the publishing space. So after writing and discarding a few half-hearted introductions to this article, I decided that the most useful and honest thing that I could do is simply explain why, with one aging exception, Spry Fox has avoided working with publishers.

An important thing to bear in mind, if you’re not familiar with our company, is that we are primarily focused on developing F2P games that we hope to maintain and evolve for years to come. We haven’t been trying to secure a slot on XBLA and we haven’t been trying to sell boxed product. We view everything through the lens of “will this partnership enable us to make a better game, to learn important lessons and to eventually become more independent.”

So, that said: I’ve met a few really interesting publishers in the past couple years; folks who seems smart, motivated and knowledgeable about things that I wish I knew more about. We haven’t done any deals. Why? It always comes down to three issues:

Issue #1: Paid user acquisition

One of the major reasons why many F2P game developers want to work with publishers is because they are terrified by the skyrocketing costs of user acquisition on Web and mobile platforms. They figure, “I don’t know how to do this user acquisition thing and I couldn’t afford it even if I did, so I need a publisher.”

It makes sense, in theory. But one of the major problems with publishing arrangements for F2P games is that by their very nature, they can actually make user acquisition more challenging, not less, by raising the bar for what is a profitable user acquisition. Say for example that the developer of FunFunGame agrees to a 50/50 revenue share with ThatPublisher.  And let’s say that the estimated lifetime value of an average player of FunFunGame is $5 after distribution fees have already been accounted for, which means that the developer and publisher will each earn $2.50 per player on average.

What this implies is that, not including ongoing operational costs (which can be substantial for F2P games), ThatPublisher can afford to spend up to $2.50 to acquire a user for FunFunGame without losing money. But if the developer of FunFunGame had self-published and kept 100% of the revenue from the game, they could afford to spend up to $5 to acquire a user.

By making a 50/50 agreement with ThatPublisher, the developer of FunFunGame has literally doubled the performance bar it will need to reach in order to make its game very successful.

And again, this is predicated on the typical 50/50 revshare that many publishers prefer.  The more the ratio shifts in favor of the developer, the more unappealing paid user acquisition becomes for ThatPublisher. It is the ultimate catch-22… you can effectively negotiate yourself into a situation where your game becomes unmarketable.

Issue #2: Relationship with the customer

The second major issue is that, by signing a publishing deal, the developer of FunFunGame will most likely give up much, if not all, of its relationship with the customer. Building a strong, direct relationship with players is one of the very few things that developers can do in order to increase the odds of success for their future games and, relatedly, to decrease the cost of user acquisition in the future.

A smart publisher understands this. They are not simply interested in the revenue from FunFunGame; they want a long-term relationship with its players. ThatPublisher will typically claim exclusive ownership over the players’ contact info and all channels of communication associated with players. And many indie developers will simply let that slide because they’re much more worried about issues like IP ownership. But ultimately, something like this could be just as important to a developer’s future.

Issue #3: Platform migration

The third and final major issue is that the gaming landscape is fractured, and it is increasingly impractical to focus all of your efforts on a single platform. Which means that if you’re working with ThatPublisher, you either need to work with them (and cut them in) on every platform – even if you don’t need their help on certain platforms – or you need to figure out what you’re going to do when, for example, players of FunFunGame on Steam (where you self-publish) migrate to FunFunGame on mobile (where you work with ThatPublisher). The latter can be super messy; odds are you’ll simply choose to work with ThatPublisher on every platform, even if you didn’t initially want to.

Of course, you could solve for this problem by simply preventing cross-platform player migration. But that will just irritate players if there isn’t an obvious good technical or design reason for it. And remember, if they can’t play your game when and where they want to, they’ll just play someone else’s game.

Given these issues, should you ever work with a publisher?

This is a very difficult question to answer. In truth, I’m largely skeptical of publishers – not because I think they’re all inherently bad folks, but as I’ve explained, because I think they are a relatively expensive funding source. There are a variety of ways for a mature indie to secure development dollars, most of which do not suffer from the issues I previously noted.

Sometimes it’s worth paying the price for a good publisher. If you feel poorly equipped to tackle the business side of game development in general, or if you feel ignorant about the platforms or business models that your game will depend on, then a publisher can be not only a source of funding but also a teacher and helping hand.

There is a caveat to this. In my very limited experience, and in the experience of several indies I’ve spoken with, most publishers are not good at extrapolating broadly generalizable lessons from their specific experiences. In other words, publishers who have been successful with F2P real-time strategy games tend to be very good at publishing more very similar F2P real-time strategy games. They tend to be not-so-good at publishing other things.

F2P is not a simple list of best practices that, when applied to any game, instantly result in fame and fortune. Monetization and retention tactics that work well in one title will fail in another. A given game will thrive on one platform but flop on another. F2P game development (heck, game development in general) is hard. You better believe that if anyone had the magic formula for cranking out successful games, they wouldn’t be publishing your game. They’d be making their own and keeping 100% of the revenue.

So if you’re making something unusual, I think you need to be especially skeptical about working with most publishers. Their “playbook” (a term made infamous by Zynga) is not likely to be a perfect fit for your game, and there’s a good chance they’ll be stumped and disheartened when that turns out to be the case.

But if you’re making something that is clearly in the wheelhouse of a given publisher, and if you are not prepared to spend the next several years growing up and learning some (occasionally painful) lessons about the F2P space, a publishing deal might be the right thing for you. I’ve been impressed with some of the folks at Kongregate and Tilting Point; they represent a new breed of publishers that understand how the publishing model needs to fundamentally evolve. (Spry Fox is not in a publishing relationship with either Kongregate or Tilting Point and we have no plans to be. I share their names mainly because people at both of those companies have impressed me with their knowledge and attitudes and have freely given me some helpful advice in the past.)

And if you’re like us… well, it’s a bumpy ride, but I think it’s worth riding solo when you can.

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