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April 14th, 2009, 19:29
Originally Posted by GothicGothicness View Post
I think what you guys do not know, is how much of a difference getting a game on a portal could make. We are not talking double or tripple,,,, we are talking much much more. I know from my friend, she could not make a living by her games until she got them on portals at that time her profit grew a lot.
I am aware how much of an effect the portals have. And I can't help the impression they are shamelessly abusing their power, to the disadvantage of indie devs.
Please ask your friend how his/her numbers have changed since Amazon entered the business in February. The numbers from ca. a dozen indies I've seen - Jeff linked to a couple of articles, the rest can easily be found - mostly indicate that they earn less since then. Meaning the price cut does not lead to a big enough sales increase to compensate for the loss.
This in combination with the ongoing downward spiral for indie game prices leads me to the conclusion that it's no longer clear selling through portals is still a promising business modell.
Imagine your friend releases a new game. On day one a big portal decides to sell it for 0.99$, as a loss leader for something else. But oops, it's not even a loss leader because your friend gets the usual 35% royalty deal. Then most other portals will follow suit and either match the price or refuse the game. Result: Your friend is out of business because he/she cannot recoup the budget from 35 cents per unit.

Let me repeat: It's bad business to give away control over the pricing structure. Whoever takes the financial risk has to maintain control over the pricing. Negotiate rebates based on volume targets, use the whole spectrum of price negotiation mechanisms developed since Athens was the capitol of the world. But maintain control over the price. If you give it away your business is a hostage in the retailers' hands.

Unfortunately I don't see enough leverage for most indies to push this through. The opposite will happen: The portals will tighten the screw until somebody stops them. Which will not happen anytime soon.

The only way out I see would be a competing portal run by, say, the 50 most successful indies. The portal gets all their games exclusively (apart from direct sales!). All other portals can license from the new portal. Of course the portal would refuse to make deals without a minimum wholesale price.

The reason for this is that the portal has signed up members, and when they play one type of game they love they are recommended other simular games on that portal……… which is a kind of marketing……
Word of mouth. The best marketing available - but it's not based on effort by the portal here.
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