You made almost $200k in 2008. That’s pretty impressive for indie developer. My sales are 10 times worse. What have you done to achieve such great sales?

Ahahaha. I didn’t make $200k in 2008. That’s the revenue from direct sales through my main payment provider. I earn other amounts from other deals. And then to find out how much I actually *make* you’d have to subtract all the expenses, and they can be surprisingly high when you actually pay for advertising, and a dedicated server. I guess the way I achieve it is to make games that are not easily copied and cloned, and I put quite a lot of work into promoting them. I also get very into the business side of selling games. if you sell games, and you don’t know which pages on your website have the lowest bounce rates, if you don’t know what the average CPC is for your ads and do A/B testing to increase the CTR…. and much more importantly, if you have no idea WTF I’m talking about, then you are quite simply losing sales to people like me, who study this stuff :D.

Imagine that I know what CTR, A/B testing and all that stuff is… but still my ads are not efficient. Maybe I am just not patient enough? How long do you test them before you pick a winner ad?

It’s a matter of impressions and clicks. not time. If I have 2 ads and one has got 100 clicks and the other got 60 clicks, with the same impressions, I’ll ditch the 60 click ad. That might be a day, or 6 hours, or two weeks.

You are probably one of the very few indie devs that constantly invest in marketing. What is your marketing budget and where do you advertise?

My marketing budget varies, but its basically about 90% of my day to day costs excluding paying contract artists. I probably get through about £450 a month on Google Adwords, and I advertise a fair few other places too. That really adds up. Over the year, you are talking maybe $10,000 on advertising, maybe more. I advertise in absolutely tons of places, but Google gets the lions share.

Does it pay back? A lot of indies complain that advertising is a waste of money?

A lot of indies don’t take the time to really study advertising. My favorite book right now is ‘the advertised mind’ which is like neuroscience for advertisers. You really need to know your stuff. You can’t just throw $100 at the wall and hope it sticks. Also, sometimes ads don’t sell any games, but they give you information. If your ads get 1000 visitors to your site and nobody clicks the demo link, maybe your site design needs work, or you are advertising to the wrong people. It takes literally years of fiddling and tweaking and learning to develop the ad campaign that works for you. I price different keywords for different countries for different days of the week for different ad placements all differently. If you just slap down $100 and say “I’ll pay 12 cents a click for this keyword”, then you are laughably un-optimised.

My biggest problem with Adwords is that even if I get hight CTR (around 3%) people just don’t download – only 1 of 10 or 1 of 5 at best downloads advertised game. If you get better results did you do anything to get them? Did you optimize your download page?

Yes. I use Googles Website Optimiser to do A/B testing. The results are eye opening. In some cases, pages are too simple and people bounce away from it quickly. In other cases, the amount of clutter gives people something to do rather than click download. I found a page where adding a youtube video decreased demo downloads. I had another where listing the awards the game won actually reduced downloads. It’s very game specific. You HAVE to test. Companies test varieties of chocolate bar on customers. Your download button is your chocolate bar.

Do you track your ads? What tools do you use?

Oh yes :D. I track everything with google analytics, and sometimes compare it against awstats data too. Analytics is the best free tool that I know about. Most people use maybe 1% of the features in that software, it can do amazing stuff.

What is the most important feature of Google Analytics then?

The bounce rate is the thing I check most often. After that, I check time spent on site, but I do this per-ad campaign, and per-referrer. A visit from gametunnel is valuable to me. A visit from stumbleupon is nearly worthless. I also do the two metrics stuff a lot, where I can compare the behavior of visitors who actually convert to downloads, versus those who do not.

Do you create your banners on your own? Who gives ideas for them?

I used to use a flash banner artist who did some great ads, a guy I used to work with, but generally I do my own ads. I find that changing the ads often gives a good response, and it’s suprising what works best. I always do LOTS of variants I can tell you, for example, that people are more likely to click on a democracy 2 ad themed around socialists or patriots, than they are around commuters, capitalists or the defence budget.

What are the other places besides Google Adwords that you advertise on?

Ah that would be telling :D

What is your typical day? How many hours do you put into marketing, development, and support?

I am always working, mainly because I love it. Maybe once I move house and get a safer garden I’ll take up more time with archery, but to be honest, my main hobby is writing games, which is also my job.  I start work around 8.30 AM, and will work through to around 7PM, but from then till midnight I’ll occasionally be checking emails and handling support if there isn’t much on TV. I spend a lot more time on business and marketing than most indies. When I *do* code, I can zone out and get lots done very quickly.

You are famous for making a lot of guerrilla marketing, like the one with talking to pirates. What is your favorite trick? Beside getting more eyeballs did you get any sales?

yes it did boost sales, but although nobody ever believes me, it was a genuine question and not a PR stunt. PR stunts can work, but they have to be tied in to your games. A discount on inauguration day works for me, because it makes sense in the context of the game. I’ve made games that have some kind of ‘story’ and ‘angle’ to them in PR terms. If you make a match3 game, you really don’t have any way to leverage it as PR.

You sell Democracy 2 for $24.95, but Kudos 2 for just $14.95 and RockLegend for as low as $9.95? Why?

These prices maximise my revenue. Trust me, I tested it :D

I had to click “buy it” links to check out your games prices. Do you think that it helps you sell more games this way?

Possibly. There is some chance that you increase the emotional connection with going through with the purchase by making them click, so they are already closer to a sale once they see the price. I’m not sure about that, because it’s an extra step in the process. I do it because it makes managing price changes and discounts easier.

What will be your next game? When we can expect it?

It still doesn’t 100% have a name yet. It’s a bit of a departure for me in some ways. It’s a space battle management simulator thing. basically you configure a big space fleet and go kick alien ass. It’s not an RTS, at least not yet, and it’s not really turn based either. I’m still a bit nervous about whether my idea for how it works is genius or madness, so I might chicken out and make it a bit of an RTS too. It will be done ‘in 2009′.

Who will survive in the casual game business in 2010?

Big Fish Games, Popcap.
I think I’ve got the full list there.

Really? That’s a scary scenario. Not much developers on that list. Who will make all those games for “a new game everyday” idea at BFG?

BFG.
If I owned BFG, I’d buy all the developers that make my top ten games, and ignore the rest. Thats why I listed Popcap. They are possibly too big to be bought. Maybe there will be a few other devs working for 10% royalties, but they will be part timers or Eastern Europeans.

What is the most important thing for indie developer to do?

Sell your games. Don’t expect other people to sell them. Read a few books on business, marketing and advertising. This stuff is just as important as learning pointers and vertex buffers. In fact it’s much more important.

Can you name three must have books for those that lack business, marketing and advertising skills?

‘The Advertised Mind’
‘Predictably Irrational’
‘The Long Tail’

I recommend watching Dragons Den, if you are in a country that shows it on TV. I’ve read the biographies of most of the dragons, and they are an interesting read too :D

Has portal sales hurt your direct sales?

In some cases yes. In other cases no. It depends a lot on pricing. The danger is that portals undercut you. Not all portals will do that, and you can discuss this with some of them. Some portals just insist on having total freedom to sell your game at whatever price they want, and just give you a percentage. Nobody should do deals like that, and I don’t do them now I’m older and wiser. Thankfully I can tell portals where to stuff their contracts if I don’t like them, and I’ve done it more than once :D.

Do you think there is a win-win solution for portals wars issue?

A win-win for developers too? I don’t see one. Not in casual gaming. The portals have defined the market as being controlled by subscriptions to big publisher websites. The problem is the developers have no leverage, because they are all scared to turn down portal deals. Not only that, the devs help to fuel the situation by actively working as the affiliate arm of the big portals. At this point, the devs only have themselves to blame. My hat is off to Reflexive. They are like Valve, they saw the portalisation coming and made a quick transition to being a publisher. Maybe more devs should have done that. I probably should have.

It seems that you have pretty active forum on your website. How important that forum is for your website? Is it something you would recommend for developers to add to their site?

It’s great, once there are posters, but it’s a lot of maintenance. It’s worth doing, but you need to make a game that will encourage discussion. Modding really helps, and they are a must for strategy games. I think more relevantly, I recommend designing a game where forums are a natural side effect of the design.

Hello Everyone,

We are happy to announce an exciting new pricing strategy for the games and products in the Reflexive game catalog. The prices of games in the GameCenterSolution catalog now reflect a more competitive position which we expect to represent an attractive offer in today’s marketplace. This compelling pricing strategy is intended to empower you to sell more volume, have greater customer loyalty, and ultimately increase your monthly earnings. By offering games to customers for under $10, we are anticipating higher conversion and better customer satisfaction resulting in better overall sales volume for you.

If you have any questions or feedback please contact me: …..

Michael Mei

BFG sells your games for $6.99, iWin for $9.99 and now Reflexive joins the party. I believe this would not happen if not for Amazon deal, so lets hear more:

Reflexive Games are now available through the Amazon Game Downloads store

Developers and publishers, greetings. Today I’m excited to share news that Reflexive is now providing games for the beta launch of the Amazon Game Downloads store, www.amazon.com/gamedownloads. This is Amazon’s first step into the downloadable games space. This means that all of Reflexive’s developer and publisher partners now have the opportunity to make their games available on Amazon.com, in addition to Reflexive.com and our GameCenterSolution affiliate network.

Here at Reflexive, we’ve been looking forward to this day for a long time. We believe Amazon will really help to expand the audience for your casual games, by introducing all the great games you create to millions of potential new customers. Your games can now benefit from customer reviews, recommendations and all the other features shoppers are familiar with on Amazon.com.

For more details about the beta launch of the Amazon Game Downloads store, check out the Amazon.com Video Games blog post.

If you have any questions about the games currently offered through Reflexive or about submitting new games to the Reflexive network and the Amazon game download distribution channel, please contact us at developersupport@gamecentersolution.com.

Thanks for your continued partnership and support as we enter this exciting new chapter in Reflexive’s history.

Sincerely,

Lars Brubaker
CEO
Reflexive Entertainment, Inc.

That’s actually a good news and I was really looking forward to Amazon stepping into downloadable market. The new pricing strategy makes sense at Amazon – those downloadable games have to compete with all retail games prices at $9.99 (cd or dvd case).

Now if you are Reflexive’s affiliate then go change your game prices… and forget about ~$7 per game sold earnings.blockquote

Now you can choose between fixed 8.9% pricing with limited features and 11.9% pricing (than can go down to 8.9%) with full features.

I’ll stay at full featured version, but if you’re just starting it may be worth checking the cheaper version (or both).

http://www.esellerate.net

Last but not least – for most indies the new pricing model will be fixed model at 11.9%. I don’t know any indie developer that earns more than $1.000.000 :D

My sales stats for 2008: $21,650.09 and 1152 units.

I have released 6 games so far on PC, Mac and Linux (not all of them have Linux versions). Two of them have been released in 2008.

Note that those sales stats are only from eSellerate – my primary e-commerce service before any fees, affiliates commissions and discounts. I did make some money selling other games as affiliate and earned even more on portals and through retail distribution.

Be sure to check my blog later for more comprehensive sales analysis.

I hate advertising because I always feel like the only one that earns money is the Ad Server.  Even if clicks or impressions are not soo expensive it is hard to turn them into profits. Why? Games are either too cheap or too expensive.

But I read a book about AdWords and it gave me some inspiration. I also noticed that Pony World has quite good visitor to download ratio – over 40% of visitors download the game. With that ratio maybe it will not to that hard to turn AdWords into profits?

I created two ad variations for selected keywords and set up a daily budget of a little over $10. And today I got the results (that’s what I love about AdWords – almost instant results).

My ads received 90 clicks total: 51 for ad variation #1and 39 for ad variation #2. CTR for those ads: 1.55% for #1 and 1.22% for #2. Not so bad,  especially one you show it by keywords: the best CTR is 10.38% and the lowest one is 0.77%. The lowest one represents most of impressions and clicks.

Because that’s just 90 clicks I don’t know if it’s profitable yet or not, but we can do some estimations. Let’s go to Google Analytics and check if those clickers download the game. This is where we face first disappointment. Only 19.48% of clickers downloads the game. It’s still much better than what I had for Runes of Avalon campaign where only 11% of visitors downloaded the game.

If Pony World Deluxe has 1% CR (download to sale) then I need 100 downloads to sell one game. And I need 513 clicks to get 100 downloads. 513 clicks will cost me over $68. And I get only $17 out of each sale, so each sale makes me a loss of $51.

Judging just by those numbers you can for sure say that advertising is a waste of money. And it is if you do it wrong. It is if you aim short term. It is if you don’t tweak your ads, your game and your game description web page. It is if you don’t increase your visitor value.

It takes time to turn advertising into profits. Most people are not patient enough.

I made some tweaks to my ads and will do for at least few more days. If I can see improvements then I’ll keep advertising until I make a profit or run out of money :D

Do you need an e-commerce provider? Well, if you sell on your own for sure you need one. I use eSellerate, some use Plimus, a lot of developers uses BMT Micro and many others. But this may change… because if you set up affiliate account and sell your own game through it you can earn 90% of sales price, which usually is $19.95. That’s one of the lowest rates in the industry.

But that’s not all. Since they wrap your games (without putting Reflexive splash screen) you don’t have to worry about DRM. Forget about home made solutions, forget about Software Password.

And last but not least, you can use it as hosting service. No more worries about bandwidth.

The best thing about using Reflexive?

Your affiliate sales affect your game ranking. That’s right. Not only you get the same amount of money that you would get selling through other e-commerce providers, but also you can push your game up on the Reflexive charts. And because a lot of people uses Reflexive affiliate system, you can rank your game higher on their rankings too.

I tried that with Runes of Avalon 2 and after sending one newsletter to Mac subscribers our game got position #12 (Mac games, browse by top sellers). It shifted 24 spots on the chart.

Now if you decide to promote your own game this way make sure to send a download link for Reflexive version. I just sent buy now link and then received a lot of emails from customers that didn’t know how to activate the game (because version hosted on my website didn’t have “Already Paid” button).

Any cons?

Well, there are three:
– If you sell games for Linux, you can’t use Reflexive to sell games for this platform
– Reflexive’s DRM is not very secure. You will probably quickly find your game on crack sites
– You will probably get your money later than you would using regular e-commerce provider (for example eSellerate usually pays within 20 days of the following month)

Ah, one more – you can’t cross-sell, which is a pity.

But if you are just starting game selling business it is worth considering this option, since you not only are able to sell your game, but also get access to a lot of other games.

And Russell just told me – you can create your own support center through the affiliate program.

I created 7 cross-selling groups. I’ve selected suplementary games that are similar to primary item (the first one that visitor puts into the shopping cart). Here is the list of groups and their effectiveness:

Maggie X – 13.6% effectiveness.
Runes X – 0% effectiveness!
Maggie X – 14.3% effectiveness.
Runes and Path of Magic – Windows – 50% effectiveness.
Path of Magic and Runes of Avalon – Windows – 13.8% effectiveness.
Runes and Path of Magic – Linux – 90% effectiveness.
Path of Magic and Runes of Avalon – Mac – 14.81% effectiveness.

Thanks to this technique I made $577.92 more than I would without using it (before I started cross-selling I had only 1 or 2 orders with multiple products). The best thing about it is that I didn’t have to pay a penny for it to get this extra revunue.

Effectivenes depends on suplementary game. It is a great way to sell sequels or level packs. It doesn’t work if you sell game for kids with puzzle game (that’s why Rune X had 0% efficiency). It works better if primary game is more expensive than supplementary game (50% of Runes of Avalon ($19.99) customers ordered Path of Magic, but only 14% of Path of Magic ($9.99) customers ordered Runes of Avalon).

Now, while I was writing this article I found out that Runes of Avalon for Mac was set up with wrong cross-sell group (Runes X). That mistake probably cost me around $200. Remember, always test your sales machine. If it is not set the way you want it to be set you will most probably lose money.

First of all, all your buy now links have to call a script that will save Google Analytics cookies to database. To match visitors with cookies we will use visitor IP. The script that will set the cookies on e-commerce domain will delete database entry right after retrieving it. It is not a perfect solution, but it will work in 99.999% (how many orders do you expect placed within few seconds from the same IP?). So instaed of calling:

store.esellerate.net/s.asp?s=STR4587075495&Cmd=BUY&SKURefnum=SKU41198308198

you call

www.yourdamain.com/buy/mygame.php

Mygame.php has to include save_GA_cookies.php script and then redirect to real e-commerce address. save_GA_cookies.php script looks like this:

<?
// this script should be called before you redirect to e-commerce shopping cart
// it saves Google Analytics cookies to database along with User IP

// include your database engine
include(“db.php”)

$dbga = new clsDBAnawiki();$IP = $_ENV[‘REMOTE_ADDR’];

$utma = mysql_escape_string($_COOKIE[‘__utma’]);
$utmb = mysql_escape_string($_COOKIE[‘__utmb’]);
$utmc = mysql_escape_string($_COOKIE[‘__utmc’]);
$utmx = mysql_escape_string($_COOKIE[‘__utmx’]);
$utmz = mysql_escape_string($_COOKIE[‘__utmz’]);
$utmv = mysql_escape_string($_COOKIE[‘__utmv’]);
$utmk = mysql_escape_string($_COOKIE[‘__utmk’]);

$dbga->query(“INSERT INTO an_ga_cookies(ga_ip, ga_utma, ga_utmb, ga_utmc, ga_utmx, ga_utmz, ga_utmv, ga_utmk) VALUES(‘$IP’, ‘$utma’, ‘$utmb’, ‘$utmc’, ‘$utmx’, ‘$utmz’, ‘$utmv’, ‘$utmk’)”);
$dbga->close();

?>

Then you need to insert into your e-commerce html template following line:

<script TYPE=”text/javascript” src=”https://www.yourSSLdomain.com/buy/set_GA_cookies.php” mce_src=”https://www.yourSSLdomain.com/buy/set_GA_cookies.php”>
</script>

set_GA_cookies.php reads GA cookies from database and sets them on e-commerce domain via JavaScript. The problem is that you need a SSL domain address otherwise your shopping cart will show unsecure site message. The good news is that this domain doesn’t have to be on your server or your own domain, though you will need to tweak my code to make it work on 3rd party server.

Here is the code for set_GA_cookies.php:

<?
// script generates JavaScript code that sets Google Analytic cookies on eSellerate.net

// include your own database library
include(“db.php”);

$IP = $_ENV[‘REMOTE_ADDR’];
$db = new DB();

$db->query(“SELECT * FROM an_ga_cookies WHERE ga_ip=’$IP’ LIMIT 0, 1″);

$jscode = ”;
while ($db->next_record()) {
$utma = $db->f(‘ga_utma’);
$utmb = $db->f(‘ga_utmb’);
$utmc = $db->f(‘ga_utmc’);
$utmx = $db->f(‘ga_utmx’);
$utmz = $db->f(‘ga_utmz’);
$utmv = $db->f(‘ga_utmv’);
$utmk = $db->f(‘ga_utmk’);
$id = $db->f(‘ga_id’);

$jscode = “setCookie(‘__utma’, ‘”.htmlspecialchars($utma).”‘, 30, ‘/’, ‘.esellerate.net’, false) \n”;
$jscode .= “setCookie(‘__utmb’, ‘”.htmlspecialchars($utmb).”‘, 30, ‘/’, ‘.esellerate.net’, false) \n”;
$jscode .= “setCookie(‘__utmc’, ‘”.htmlspecialchars($utmc).”‘, 30, ‘/’, ‘.esellerate.net’, false) \n”;
$jscode .= “setCookie(‘__utmx’, ‘”.htmlspecialchars($utmx).”‘, 30, ‘/’, ‘.esellerate.net’, false) \n”;
$jscode .= “setCookie(‘__utmz’, ‘”.htmlspecialchars($utmz).”‘, 30, ‘/’, ‘.esellerate.net’, false) \n”;
$jscode .= “setCookie(‘__utmv’, ‘”.htmlspecialchars($utmv).”‘, 30, ‘/’, ‘.esellerate.net’, false) \n”;
$jscode .= “setCookie(‘__utmk’, ‘”.htmlspecialchars($utmk).”‘, 30, ‘/’, ‘.esellerate.net’, false) \n”;

}

if (!empty($id)) $db->query(“DELETE FROM an_ga_cookies WHERE ga_id=$id”);

?>

function setCookie(name, value, expires, path, domain, secure){
document.cookie=name+’=’+unescape(value||”)+
(expires?';expires=’+new Date(+new Date()+expires*864e5).toGMTString():”)+
(path?';path=’+path:”)+
(domain?';domain=’+domain:”)+
(secure?';secure':”);
}
<? echo $jscode; ?>

That’s it. I used PHP, but you can use any other web language to do that. Commands are self-explanatory, so I am sure you’ll be fine. Just in case you don’t want to copy the code from this page you can download zipped scripts.

Days to purchase statistic:

Visits to purchase statistic:

As you can see most of purchases occur on day 0 (same day visitor entered my website) and within one visit on my website. It’s reasonable that people buy on day 0. They download, play, trial ends and if they like it they make impulse buy.

The problem is that they should need mostly 2 visits, not 1. First visit to download the game, second visit to purchase it. So what happend? There are 5 possible explanations:

• people downloaded your game elsewhere and visited your site only to purchase the game (game downloaded from portal, download sites, etc.)
• people downloaded the game from your site using different browser than the one they used to purchase the game (buy now button opens default browser, which may be different than the one your customer uses mostly)
• Google Analytics counts it as one visit because it happend within short time frame – by default GA is sets sessions to 30 minutes, if your trial is short or player buys before trial expires, then it might be true. Some of my games (Maggie, Path of Magic) have trials shorter than 30 minutes.
• your sales copy (game description) is so great, that people buy your game without downloading it :)
• cookies are off or deleted regularly

The strategy of pushing new products to current customers based on their past purchases. Cross-selling is designed to widen the customer’s reliance on the company and decrease the likelihood of the customer switching to a competitor.

Or easier to understand:

Cross-selling is the term used to describe the sale of additional products or services to a customer.

The trick is that you need at least two products to cross-sell. If someone decides to buy your game it is much easier to convince him or her to purchase an extra item. It’s good to offer a discount when cross-selling.

If you want to maximize your revenues try to cross-sell similar products. Offer a sequel or another game from the same genre.

Once I analyze my sales data I’ll post some stats regarding my results on cross-selling.