Where is my money, dude: what is Steam
This is the first of six articles in which I want to review the entire process of publishing games on a PC from start to finish. Leave behind the braces development - in addition to it you are waiting for many other adventures. Choosing a publisher or an independent publication, localization and adaptation of the game, marketing and PR, choosing prices and planning discounts, working with publishers, distributors and intermediaries.
We will talk a lot about Steam, the largest open platform for games, then we'll look at 3rd-party distribution and alternative sales options. Before you find your own answers - let's take a sober look at how the game flywheel works now.
Forgive me, guys, but it will be a very mercantile article with figures and percentages - I believe that if the creation of games is your passion and craft, without them it is difficult to confidently go forward. Let's start with the prices, discounts and how the wish list works on Steam.
Review of the state of affairs on Steam - distribution of revenue for the cost of the game, sales growth, lower cost of games, the average number of game owners. Be sure to read if you have not already done so.
Now we are interested in countries for which historically formed prices are not directly converted, like the dollar to the national currency. So, the analog of the price of $ 2? which offers Steam in China - Ұ70 (~ $ 10), in Russia - 465₽ ($ 8).
If we take into account that 50% of the sold copies will be in the US ($ 20) and Europe (17.2 € or $ 20), 25% in Russia ($ 8) and 25% in China ($ 10), the average price will be $ 14.5 , then the number of copies that we need to sell in order to recoup the creation of the game - ?896.
The more copies you sell in regions with a higher price (North America and Europe), the stronger the average cost will be towards the originally announced figure.
Let's take into account that on all large areas of digital distribution there are returns, and buyers use them. You will never have a situation with zero returns on Steam - there will always be disgruntled or players with technical problems. You should lay 2.5% to 5%, I will be a pessimist - taking into account this factor, we will need to sell at least ?258 copies (with 5% returns).
Let's just leave the exact calculation of taxes (VAT and GST) slightly aside - this is a difficult question, which depends on the country your company is registered in, the user from which country you buy the game, the existence of an agreement on excluding double taxation between your country and the country of the store .
In my experience, I can say that with world sales for a company from Cyprus, the share of VAT losses from revenue lies in the region of 4.5% or ?600 copies.
Somewhere here you should have been screwed up, right? Exhale, it's time to share the profit. Platforms take ~ 30% and for a payback you need to sell at least 1?875 copies.
You should also remember about taxes on profits that you will pay in your country. For example, if your company from Germany profits from commercial activities are taxed at ???%, and the number of copies sold at full price should be at least 1?919.
Copies = Your budget /(Average price * Platform share * Returns * Taxes)
Yes, yes, I'm not at all satisfied with the price. We also do not have the opportunity to consider the average price to be the same throughout the year - discounts, sales and special promotions will still reduce it. And after your victorious procession in the first months with sales at full price, the average annual price will be 25% - 30% lower than at the start of sales.
The damned mines? Resale !!!
It should immediately accept and accept that all the modern distribution of PC games is built on sales and start with Steam.
You are waiting for two large and open annual sales, summer and winter, the opportunity to participate in the Weeklong Deals are sales that take place every week and begin on Monday. You can also start your own sales - choose time, discount, write what this sale is dedicated to.
Plan your release so that it does not interfere with the summer or winter sales. Think about when to launch the first sale - after its end, your sales at full price will fall, and it will be difficult for you to return them to their previous level. Remember that discounts on Steam are added together. Strongly think about the expediency of the release on Friday - you can run into Weekend Deal and a big sale of the back catalog of a major publisher such as Ubisoft, which will shift the focus of a wide audience from your release to AAA games at a 70% discount.
There are special promotions about which you can try to negotiate with your personal Steam manager: Daily Deal, Weekend Deal, Midweek Madness or special sales, which consistently take place during the year, for example, the best games of a specific genre or game from a particular country.
The possibility of participation in special promotions is in a sense a lottery. This is one of the reasons to think about the publisher. A publisher who has worked with Steam for a long time has a better chance of getting such an offer for you.
Find where there were Weeklong Deals and a summer sale? When the discounts on Steam (except for that which you bet on your own) start, you automatically get a good fencing for a short time and a lot of traffic. Each sale will bring you a big leap, connected with the arrival of money and the audience, each time the audience of your wish list list will grow abruptly.
There is an opinion that sales start to work well with 20%. If you have already reached the level of 50%, forget that your sales in organic will work just as well as before.
Remember, you can not run Weeklong Deal more than once every 60 days. Other things being equal, during the year you will not be able to participate in more than five or six (five) shares. In total, in addition to the release, you have 5 - 6 points of growth, and the cost of the game after the release window closes will correlate with the average discount that applies to the whole year. Soon we are waiting for the return of the format Flash Sales, which will give the opportunity to run discounts for ? ? 10 or 12 hours.
Any large sales increase the percentage of returns.
In addition to discounts on Steam, there is another cool tool - coupons. This coupon with a 14-day discount can be given to all users of one of your games for another of your games. The average discount for such coupons is 15 - 25%, and it works very well if your game has a large audience. These coupons can not be turned on independently, they can only be asked to create a Steam manager.
This is not the most popular tool for the Steam manager, since the creation of such coupons is the manual work of their technical specialists. If your game has more than 20?000 installations, you will most likely go to a meeting. This, incidentally, is the second important bonus for working with a publisher - it can already have products with a large audience and experience with coupons.
It's also worth thinking about an instrument like Steam bundles, which can include not only DLC sets, but other games, including games from other studios and publishers. Think with whom of the colleagues in the shop you would like to be sold together and try to discuss this possibility in advance.
We already considered that for the payback of our game we need to sell at least ~ 1?000 copies at the full price and it's best to do this in the first month of sales until the discounts have gone to the course. Let's understand how the Wishlist (wish list) can help us. In other words - we will calculate how many people you should have on the wish list in order to plan sales.
Every company I know has their own ideas about how the wish list works on and converted to Steam. What I'm going to tell you now is my personal experience plus the experience of those colleagues with whom I constantly communicate on this account, and the statistics that Steam shows in its tools for developers.
Find the release date yourself and the sale? Among the Steam metrics associated with the list of desired we are interested in one - the percentage of conversion of users from the list of desired to buyers.
This indicator is constantly changing and at the time of writing this Steam partner tools say that the conversion of 5.0% - 7.5% is normal in the first 3 months from the start of the game, to 12.5% in the first 6 months and in the region 15.2% in the first year.
There are examples of games and companies in which the conversion ranges from 19% to 30%. Please be pessimistic - if you are lucky, there will be cause for joy. If not, you will not become upset.
In Steam, nothing is given for nothing. And the situation in which the top 100 games will make 90% of the ticket office will not change, because they sell well and everyone can count their money. After you received your promotional impressions to run the game, you do not have many options inside the Steam ecosystem - discounts that will attract new users and mailings for people from the desired list.
You also have several impression cycles - five cycles of 50?000 hits each, timed to important news and updates. They are shown only to users who have already bought the game or added it to the list. On average, these are conversions from 1.9% to 4.2% so do not count on the high importance of this tool. You can earn new cycles of impressions if your game sells well, and the news has a high rating.
Estimated, in 2018 you needed to make at least ?000 sales per day to stay in the Steam sales top and at least 700 to ?000 to continue to receive a sufficient number of organic displays.
The notification that your game has been released will be sent to all users of your wishlist, so that the more it is, the better it will give your game a surge in sales in the early days and raise the game to the top of sales where it will receive organic traffic that will lead to new sales. This is the cycle.
After the release, Steam will provide you with an order of one million impressions, based on which it will be concluded about your conversions and the appropriateness of new traffic. If you have good indicators - you will receive traffic until they deteriorate, and you are waiting for good sales. Some examples show that companies that invest heavily in engaging the audience and advertising their brand and increase their loyal audience are kept in tops for months and years. This is not because they agreed with the conditional Steam manager and gave him money, but simply because their sales are high for quite some time.
Think about early access - there are many articles that tell you what it might be useful to you. This is 100% early money - rather a unique opportunity to solve their technical and conceptual problems and to test the quality of marketing materials.
Steam never reveals the internal structure of its rotation mechanisms, and developers and publishers try to understand analytically and empirically how they work. On Reddit periodically break out the debate on the topic of how this can work, how it can be hacked.
It's time to uncover the calculators - taking a 5% conversion from the wish list into the purchase during the first month, we need at least 4?000 people on the wish list to sell ?000 copies per month. This simple and crude mathematics gives us confidence that, independently of other factors, we can predict a fixed number of sales.
There are different views on how the wish list is converted into purchases over an interval of time from year to year. I know at least two diametrically opposed methods. According to the first, using sales on Steam (both seasonal ones and those that you can run on your own), you can convert up to 70% of the audience within 2-3 years. Those. if today you have 4?000 people on the wish list, you will eventually sell them about 2?000 copies. The second technique says that for the entire life cycle of the game you will not sell copies more than you have users in the wish list at the time the sales began. This is a more pessimistic forecast model, which one is to believe - decide for yourself.
On the graph above, the number of additions to the desired list and the balance - the number of additions minus the purchases and deletions. Bear in mind that for a large number of games, the wish list never decreases. With each of your activities a large number of people will add the game to the desired list and will wait for the price offer that will suit them and you will only have to guess what it is worth to make these subscribers converted into sales.
Table of contents:
- Pricing, discounts and the desired list on Steam (we are here now).
- Regional restrictions, third-party distribution and alternative open platforms.
- Bundles, funds and vendors support, crow-fanding
- How much does the translation of games and LQA work.
- Marketing, PR and search for a publisher.
- And what about consoles?
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