At the Casual Connect conference last week in Seattle, Ernie Ramirez, CFO of Reflexive Entertainment
(Big Kahuna Reef, Ricochet Lost Worlds
) shared his insights on how smaller developers survive in a hit-driven business.
"Our founders were tired of publishers so we wanted to make our own stuff," Ramirez says. He calls the studio's first attempt, the 1998 shoot-em-up Swarm
, a flop, which led Reflexive to take on contract work. "We hated it," he says simply. "It wasn't why we started the company."
In 2001, Reflexive used the extra money saved from contracting to build games. Ricochet Xtreme
, Ramirez says, was the company's first big casual success. "We had a fight to see if that game would make more for us than the big budget game we did," he recalls. "It did."
The Reflexive Arcade, created from the money the studio made from Ricochet
, struggled to be profitable at first. "We believed in it, and kept working at it," Ramirez says. Why? “To control our own destiny."
What Ramirez and Reflexive needed, then, was a hit. "A game that is in the top ten in most, if not all, of the portals," he describes.
Easier said than done. As Ramirez notes, there's no guaranteed formula, but he has a few ideas. First? "Passion," Ramirez says. "Development cycles are long; you need passion." Second, of course, is skills; "If your programmers don't have the skill, it will be a hard time," he cautioned.
Third, Ramirez encourages aspiring developers to look closely at whether their game can make money if released to the market, assisted by the fourth element-- a heaping dose of good, old-fashioned brutal honesty.
Ramirez highlights the importance of maximizing returns from the game. "Sell your game on your own site," he advises. In his opinion, using portals is "losing a chance to make an 100% profit."
Distribution is another essential, according to Ramirez. "The more it's out, the more eyes see your logo and come to your site [for] that game," he notes, which can lead to the sale of other games. "Sign up with an affiliate, own your own intellectual property, and never sign an exclusive deal-- or anything-- in perpetuity," he cautions.
Quitting while you're ahead can be another big win, according to Ramirez, who advises developers to know when to cancel a game. "Understand sunk cost, he stresses. "Once you spend it, don't think about it in future decisions. Forget about money loss; always think of the best opportunity you have today." When a game seems unlikely to continue making money-- and, perhaps equally important, when the team's passion begins to wane-- Ramirez thinks it's a good time to hang up that title and begin work on the next.
Touching on other income sources for developers, Ramirez noted that one's own site can become a mini-portal if several of one's own titles are hosted there. "Allow your games to be sold in subscription," he advised, and also touched on the benefits of pre-roll advertising.
Finally, wrapping up an informative and well thought-out talk, Ramirez advised developers to be open to going cross-platform, as increased availability can open up more opportunities.