SCG Daily – The Business of Designing Your Own Games

This week I’ll be talking about life as a game designer/publisher. Today and tomorrow I’m going to talk about game design. Instead of talking about design philosophy or some other subject best left to people like Mark Rosewater, I’m going to talk about the business side of game design. What do you want, I’m a Harvard MBA! Even if I wasn’t, design is a business issue. Any company that builds products in isolation from its business plan is being criminally foolish. I hate doing that. Moreover, incorporating your business strategy into product design may be even more important for a games company than for some others because the games business isn’t exactly an easy one.

One of the best rules of business is that when a good manager takes on a bad business the business will usually win.

Some businesses are good. You can differentiate yourself, there are barriers to new entrants, customers become repeat customers at a premium price – whatever the reasons, and you are able turn good decisions and hard work into money. Some businesses, not so much.

Game publishing is a bad business.

It’s not just the lack of barriers to new entrants, or the relatively small size of the market, or the fragmented customer base. I think the worst bit about the game business is the customers themselves. That’s right, faithful reader, you suck.

Your problem isn’t that you’re cheap – gamers spend a lot of money on their games. It isn’t even that you’re a bunch of geeks, since I like geeks (Okay, I am a geek!) and it’s not like I’m even going to meet most of you in person. It’s the way you buy games as a pack or herd or gaggle or whatever the name is for a group of gamers. (I was going to say that it should be called a geek of gamers, but then we have the singular and plural being the same thing.)

To see the problem, let’s compare the results of one member of a group of five friends buying a copy of Succession: Intrigue in the Royal Court and that same member seeing a movie. Let’s assume in both cases that the first person and the rest of the group all love the product. Let’s also assume that there’s a sequel…at least for the movie. (Only extremely successful games get sequels.)

See the problem? Not only does one person in a group not cause the rest of the group to buy a game she’s already bought, she probably makes them less likely to buy. Why, other than to avoid making angels cry, should I buy a copy of Succession when someone else in my group already has one? I’ll buy some other game instead. There’s also no re-buy and no sequel. The result is that word of mouth – probably the most powerful form of marketing ever – is severely handicapped when it comes to games.

The other aspect to the problem is that most games create no repurchases whatsoever. Megahit games get around this, with sequels, variants, special editions, etc., but for most games you buy one copy and it lasts pretty much forever. Besides, megahit games are already insanely profitable. Everyone hopes their game will be a massive hit, but building your business around the assumption that your games will be hits isn’t exactly sound.

Since anyone reading this is either a Magic player, a relative of mine or a stalker, you probably already know the answer to this problem – design a game that turns all this on its head.

Collectable card games reverse all of the dynamics listed above. Since each player needs to buy their own cards, one “convert” can turn his entire group into customers. And since you need more and more cards (especially as new sets are released), each customer makes a lot of repurchases.

Sounds great, right? So all we have to do is design a CCG and suddenly we’re in a good business! The problem is that CCGs have their own challenges – which is why there are so many “dead” CCGs out there and so few that have made much money for their publishers.

The most obvious problem for a CCG is that they take a lot of money to play – and players know it. You could have started out playing Magic and thinking you were only going to spend twenty bucks on a starter and some boosters, but no one made that mistake when they bought their first Vs. pack.

Another problem for CCGs is time. Most people who want to play a CCG already play one – which means they may not have time to play another one. I’d love to be good at Vs., and maybe I would be if I was still single – but even then I’d have to make some time tradeoffs between Vs. and Magic. Lack of time is why I’ve never even tried any of the other CCGs out there.

So time and money are two big barriers to entry. They combine nicely to turn one of a CCG’s biggest strengths into a likely disaster – CCGs are network games. They depend on having a critical mass of players in an area and without that critical mass, they die. A lot of CCGs that came out after Magic had no real launch strategy to create that kind of critical mass and were doomed because of it. A few people picked up the game and some may even have really like them, but unless there are enough people playing a CCG in your area that game becomes like the 8-4 queue in Magic Online – even the people who would rather be in it will switch because it’s better to play than not to play.

Vs. is a great example of a launch strategy designed to create the necessary critical mass, but said strategy requires many millions of dollars. There are other strategies that can work – I’ve even got a few tucked away in my notebook – but making a CCG is a massive undertaking with a very large chance of failure.

Our goal was a bit different. We wanted to make a game that had repurchases but that also didn’t require people playing it to spend crazy amounts of money. We wanted people to spend more money because they wanted to try out a new aspect of the game, rather than because they had to in order to play seriously or to compete with someone else. We wanted the play value to money ratio to be insane. We wanted expansions but didn’t want our customers to feel like their original purchases became worthless.

Here’s what we ended up with:

$15 is enough for you to play – really play. In fact, two people can play out of that same $15 purchase. (A typical game in this category would cost several hundred dollars for the same play value.)

$30 per set gives you as much as you’d need for a wide range of designs – all but the most extreme.

Because of the structure of the game you can play competitively with your $15-$30 purchase… and you will always be able to, no matter how many expansions we produce.

If you get hooked on the game and want to try out every expansion we make at the $30 level, you’ll spend $120 a year. (IMO, that’s a number that makes our game inexpensive as a hobby but still makes you a valuable customer.)

We showed our new game to a bunch of retailers at the GAMA Trade Show in Las Vegas. It was in early (i.e. ugly) mockup form and several retailers told us it was the most exciting new product at the show. We demoed it in good mockup form at Origins and sold over $1200 of product… without having any product to sell! Through the genius of Robert Dougherty we’ve managed to build a game with the potential to break a large category wide open with superior play and much better value for money.

Tomorrow I’ll tell you all about it.

Hugs ’til next time,

Chad