Since 1999, I've had the luck to work in the game middleware industry. It's been extremely interesting, but something of a crusade. Why? Probably because game middleware is one of the hardest things to market and sell.
The electronic entertainment industry is a fast maturing sector, especially since the rapid democratization of online games and more recently mobile games on smart phones and tablets. If you're old enough to have been young in the 80s, we're back -- definitely for the good, to an amazing opportunity for talented creative individuals and small teams to create a blockbuster with limited investment.
Quite a few tools and middleware have popped up over the past 10 years to try and build a healthy business out of this booming industry. For example, there was a great opportunity to innovate gameplay by adding real-time physics in the mid-2000s, with the rise of Havok and PhysX (both companies have been acquired, respectively by Intel and NVidia).
There are many more opportunities to come with the ever-growing processing power of the gaming devices, and one of these successful tools could be coming from you. In order to maximize your chances to be successful, here are some easy-to-remember rules that I try to work with when helping other middleware vendors to go to market.
Some of these recommendations may seem obvious to you, but I can tell you many companies aiming to go after this market often forget some of these essential parts.
Mistake Number 1: No Marketing, No Social Network Presence
Whatever you promote and sell online and offline, putting the right marketing strategy in place is absolutely essential -- even if your product is a killer, and you expect it to sell without any type of effort.
There are some easy ways to market your product at low cost; some others are rather more expensive, and require a much higher investment:
A good website. Obvious but essential. The look must be modern, alive, the information easily accessible, the pricing exposed, and in most cases I would recommend online sales.
Social network presence. Your company must have a LinkedIn profile and I recommend Twitter and YouTube accounts, too. Facebook fans are a nice to obtain very casual support, but it's not the main revenue driver at this stage.
PR and communication. You must share your story and successes as much as possible. Blogging and tweeting is a real commitment, but it will improve your reputation and credibility over time, as well as your search engine optimization (SEO). If you can afford it, a PR agency is highly recommended, though you must be very clear with your goals in order to maximize the return on investment.
Be present at tradeshows. The game community is rather small and while people tend to travel less than a few years ago, a few major game events tend to gather most of the people you want to target first, starting with the San Francisco-based Game Developers Conference. Whether or not you are present on the show floor as an exhibitor, make sure you carefully plan your participation in advance, in order to optimize the costs and maximize the impact. Set meetings weeks in advance and prepare your demo material carefully.
One of the things you can do is to be hosted by larger technology providers/exhibitors. They usually offer a package with some marketing exposure and a kiosk against a limited fee of $2,000 to $5,000 if your product is compatible with theirs, and it will save you a great deal of organization to rely on them.
Advertising. This isn't my preferred track, but it can't be ignored. It starts with Google AdWords and goes all the way up to printing advertising in professional magazines. In any case, if you advertise, make absolutely certain you can measure the return on investment (by creating custom URLs, landing pages, promo codes, etc.)
Mistake Number 2: No Easy Access To Evaluation Copies
You have just completed the packaging of your product, following a long discussion with your peers to try and monetize your internal tools and tech. Congratulations! Well, wait -- how are other developers going to take a look at it?
In today's world, not providing an easy access to an evaluation version of your technology, whatever it is, is simply unacceptable. You will have to decide what licensing mechanism to implement, in order to track the usage. Warning: implementing some licensing tools can be very complex and costly. Internal tech is often used at first, but there are a number of products available. For more information about licensing, check this Wikipedia page.
It will require quite some work for another developer to evaluate your middleware, so the evaluation must also contain documentation, samples, and other elements listed on the next page.
Mistake Number 3: No Clear Pricelist
You believe that your solution is priceless and may add tremendous value for your clients. You are worried that some competitors might take advantage of your pricelist. If so, here are two options: Don't sell middleware, or refine your pricelist based on your core target. In any case, the most difficult exercise is, indeed, to nail down clear and simple pricing.
Remember, also: Whatever the price of your middleware, some smart engineers will tell their producer: "Naaah. I can do much better than that in less than a week!"
As a general outline, there are a few options:
Freemium. This pricing model popped up quite a few years ago and is currently the most popular. It is combined with one of the others below. Free-to-play games are also the fastest growing segment these days. Chris Anderson, in his bestselling 2009 book Free, has spent valuable time explaining why free is a very good pricing model. There are quite a few companies and organizations that provide free technology, including to the game development world.
Inexpensive middleware (sub $1,000). Your strategy is to go "commodity." Good luck: it will be tough and will require 100 percent dedication and quite some money from investors if you want to be serious about this and make a living out of your tools, especially if they are addressing a very niche market.
However, it's a fun area to be in if you just want to serve a developer community like the Unity Asset Store, without too much time investment. Remember the average salary in Western countries for qualified game development engineers (likely you!) How much do you need to sell of your product to reach break-even?
Middle class pricing ($1,000 to $25,000). This pricing applies to professional middleware developers. Some of them are spin-offs from game studios. Some successful examples in that price range, just to name a very few: Unity, Rad Game Tools (makers of the Bink video codec and tools among others), Scaleform (acquired by Autodesk), Havok (acquired by Intel), Kynogon (AI Engine and tools acquired by Autodesk), Virtools (acquired by Dassault Systemes).
High-end ($25,000+). This category is complex to enter and currently mainly consists of a happy few game engines, like Epic Games' Unreal Engine and Crytek's CryEngine. Large development houses used to trust these high-end engines, yet they now tend to consider that the price is way too high (deals negotiated around are $1 or 2 million / game, sometimes more for multiplatform).
Additionally to a software license, a pricing based on royalties is tempting for the software publisher (you). However, developers, like anyone really, don't like to share their potential revenues. Rationally, it would make a lot of sense, but a flat fee / project or a simple developer license regardless of what is built with it is much more acceptable, and might end up being much more profitable for you.
Mistake Number 4: No App Demo
Your technology is outstanding! Everybody will agree... if they see it in action. Code doesn't sell well. Be ready to create an application that demonstrates how great your program is.
This piece is absolutely critical, yet I've witnessed the problem many times with middleware providers. The demo is your best sales tool, and can go viral if done properly. If you don't have the internal resources to get the best graphic designer or game designer to work on that project, there are options:
- Provide the tech free-of-charge together with support to a talented local game studio interested in your project. There are several benefits: You get some real-life feedback on the product, often requiring adaptation; you get a first reference. Obviously, if you are able to convince some big guys, you may be able to get some cash out of this project. However, keep in mind you're looking for marketing material, and larger houses often restrict external communication channels about their projects.
- Hire a team to build the demo. There are now several ways to hire a team at low price; one of them is to use a sourcing platform like www.elance.com; another one is to go to your nearest game development school and put a bunch of students on the project. The latter option will cost you more time investment, but will also let you network with teachers and a pool of talent that could work with you down the road.
Obviously, a third option is to build a complete commercial game powered by your technology, which requires quite some resources. Epic Games, the makers of the ultra-famous Unreal Engine, have understood this very well. Their app demo is a superstar triple-A video game series: Gears of War.
Mistake Number 5: No Technical Support
This may sound like a simplistic recommendation, but I have witnessed this case many times. Licensing middleware means outsourcing code -- sometimes critical code -- to you. If your client can't reach a business guy during the evaluation, it's a very bad sign for potential buyers.
More importantly, developers must be able to access a forum or something equivalent to get rapid answers in case they hit a roadblock. If your community is very small, which is natural at first, make sure you provide a good FAQ section, and make yourself available by email -- and ideally over Skype or equivalent as well -- to answer all your clients. Respond quickly -- otherwise your potential customers will not feel at ease, regardless the quality of your product.
Mistake Number 6: No Source Code
This one is controversial. If you're building intellectual property and are working with both lawyers and investors to back your company, it will be a painful decision. However, a little empathy will help you make it happen. Game developers hate to debug (in general) and tend to have a really bad time when they hit a problem and are not capable of solving it themselves.
There is a solution that some smart developers have been able to capitalize on: price source code access at a premium price. This is the case with Unity, for example.
All in all, remember you're providing a component of a shippable product that will be the entire responsibility of its developers (or publishing partner). Being able to ease QA and post-sales support is valuable.
Mistake Number 7: No Multiplatform Support
There is a growing trend for players to expect to seamlessly play the very same game on multiple platforms, from their smartphone to their PC and television (whether consoles or smart TVs) without paying for their game on each platform. Even more traditionally, though, developers are looking for true cross-platform technologies, easily portable, in order to maximize their revenue potential.
Therefore, if you build a new amazing rendering pipeline or the next artificial intelligence tools, you must keep this in mind. Your technology will only be attractive if truly multiplatform, or at least easily portable.
Mistake Number 8: No Customization or Service Offering
“I don't want us to be a service business!” said the lead developer of the middleware package to his boss. Your idea is to build this middleware and make money automatically by licensing the software. It's a great idea, really. But you will fail if you stick to this.
Apart from a very few exceptions, all middleware providers end up servicing their largest clients well beyond what they planned. The main reason: you need revenues to survive and grow. These high-added-value services include training, consultancy, premium support (like 24/7 access to a developer), custom feature development and complete project development.
While at Virtools, it took us a few years to accept this idea and allocate some dedicated resources (sales and a custom development team) to offer additional services to a few key, targeted clients. It was not always easy; the service team was sometimes considered lower tier, while the core R&D was obviously Premier League.
However, if we hadn't done it, we would have had to call it a loss, and move on to the next project. In addition, our middleware wouldn't have ever reached the level of quality it did: Having an internal team building a product with a middleware is the best way to ensure it's actually really usable.
Mistake Number 9: No Clear Legal Agreement
You know this little box you tick to confirm you accept the legal terms of your product during the installation process? Actually, this matters, and guess what: it's often related to the bad business guy who will sign the check or hand over his duly completed credit card form to buy your stuff.
There are a few critical rules in the End User License Agreement (EULA):
- Make sure somebody in your team owns the EULA: she or he is the go-to person if you plan any changes in your business model, pricing, or features.
- List open source components integrated into your product, if any.
Overall, make sure you allocate some budget for an attorney to assist you with this critical step. There are tons of templates you can find on the web (this one, for example, looks good), which is useful as a start but cannot be an end.
Mistake Number 10: Not Being Ready to Sell Your Technology Outside of Game Development
By targeting the electronic entertainment industry with your technology, you are ready for the worst possible environment. However, once you crack that nut and perform in this market, your technology will go well beyond -- in industries that are sometimes less demanding, easier to work with, etc.
Unless you only target gaming console platforms (if so, read a few articles about the decline of these little boxes and reconsider), your middleware should be able to sell to a few very interesting industries, like the military business (e-learning and serious games), the architecture business (to create amazing sales tools). As an anecdote, I remember exhibiting at GDC in 2004 or 2005 and summing up the leads we got at the end of the show. Over 30 percent of the qualified contacts were in a business related to the military. These guys know where to get the best tools -- trust me.
If you are discouraged by the above checklist, sorry! I hope you will at least realize that there are some barriers to entry when it comes to providing professional middleware and tools for the game development market. If your ambition is purely to share your knowledge without generating revenues, you can post your code or tool on a marketplace and increase your reputation.
If you are ready to get started, that's great! Working with the most creative and powerful game studios is really exciting. You get to see what's coming next in terms of hardware and software innovation, meet brilliant developers who love your product and motivate you every day to work harder with your team, and get the most added value that's possible. Have fun!