Games publisher value add in an iPhone world

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At the GDC conference in Cologne this morning I attended a panel session which was addressing the question of how games publishers add value to games developers in the iPhone ecosystem.  This is a topical question because in traditional games publishing the ability to deliver retail shelf space was beyond most developers and so they had little choice but to work with a publisher.  In the iPhone world this critical gating function has simply gone away – when Apple launched the App Store they announced that they would take submissions direct from developers and release everything that complies with their fairly simple guidelines.

As you’d expect the panel participants, which included representatives from leading iPhone publishers Chillingo and ngmoco as well as leading iPhone developers Subatomic and Fishlabs, had lots of ideas on the topic, which more or less fell into the following five areas (please shout if I’ve missed something):

  • Money
  • Marketing services
  • Advice on how to price the app (what level to start at, when to reduce it)
  • Advice on how to make the game better
  • Software the developer can use to make her game better and drive distribution (e.g. stats and social features)

I think that the last item on this list could well become the most important over time but it is largely a thing for the future.  The company furthest ahead in this regard is ngmoco and they released version one of their plus+ software only very recently, and Chillingo who are probably in second place have announced their first version of their Crystal SDK will be released shortly.

So the panellists talked mostly about the first four items on the list and the debate reminded me of discussions about VC value add to startups.  There is the money element and then there are the other things which are slightly intangible and which a startup or developer could do for themselves, but where a VC or publisher benefits from exposure to a much greater number of projects and might have more experience and/or contacts to bring to bear.

The fourth item on the list, that publishers help make games better, is perhaps the most contentious with Sergei of Subatomic (whose Fieldrunners game I love btw) saying openly that his company has all the creative skills they need and that publishers trying to help might not actually be helpful.  This of course has parallels in the VC world where some entrepreneurs will argue that they don’t need any help from a VC.

In the end this all comes down to the individuals and funds/companies involved.  Some startups will have enough experience and connections that however much a VC brings to the table it won’t make that big a difference to the eventual outcome and I’m sure the same is true of developers.  Sometimes though, and I would argue most of the time, the reverse is true.  When there is a good chemistry and alignment of thinking between the key individuals at the project and the investor you get a real 1+1=3 effect which goes way beyond the money.

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  • gbroker

    Since publishers have recognized the critical issue that they might get squeezed out of the value chain. They're trying to act as co-devellopers, which means sharing the developpers risk on the one side and getting a 50% revenue share (instead of only 30%) on the other side. Whether this might be the right approach to lock up / generate (new) revenues, this can be argued because the possibility of having a blockbuster game/app is just as hard as for a VC to find the right game develloper/publisher company to invest in. by(e) gbroker

  • gbroker

    Since publishers have recognized the critical issue that they might get squeezed out of the value chain. They're trying to act as co-devellopers, which means sharing the developpers risk on the one side and getting a 50% revenue share (instead of only 30%) on the other side. Whether this might be the right approach to lock up / generate (new) revenues, this can be argued because the possibility of having a blockbuster game/app is just as hard as for a VC to find the right game develloper/publisher company to invest in. by(e) gbroker