Of course, since I last really worked on Protonaut, Greg Wohlwend has been off making fantastic trailers and new games, and I’ve been working on SteamBirds. We haven’t had a lot of time or desire to work on something that isn’t being successful.

Greg and I decided that Protonaut wasn’t really working; it’s missing a key nugget of user-retention-fun, and the effort required to fix it is exceeding our desire to continue work. We pretty much decided to write off the game and put it to rest, but I decided to give it one last push.

In the latest update, I added some character-building signposts and rewrote a bunch of the tutorial levels. Fixed replays and made the controls keyboard-and-mouse, which is a whole lot easier to master than the old keyboard-only layout. And then I did the crazy: I posted it up for bidding on FlashGameLicense.

Bidding is probably a week or three away from closing, but it’s looking good so far! The game is already exceeding average sponsorship rates, despite the fact that the game has been out for a while (albeit with no traffic) and has a few external links in it. Exclusive sponsorships probably won’t work without a fancy non-standard deal with a sponsor, and yet we still have a lot of interest!

If the sponsorship gives the game the boost of traffic it needs to jumpstart the engines, I’ll be able to continue developing it. But if it fizzles out over a month or two, I won’t put in much more effort than bugfixes. Crossing my fingers!

“[...] A few sponsors have recently been complaining that developers aren’t required to pick the best bid, considering all the terms and conditions. Sometimes developers just pick bids that are clearly worth a lot less, just because they like a certain sponsor more! To businessmen used to a more traditional bidding model, that is absolutely unacceptable and should be banned.” – From an FGL Thread, emphasis my own.

The core of the issue is discussed in a  private FGL thread, which is debating the nature of FGL itself. Is it an auction site? Is it a bidding house? Should it be purely by the numbers? The short answer is “no,” but I won’t be discussing that directly here. I’d like to address the issue of value.

Allright, perhaps that particular quote wasn’t pointed directly at me, and maybe my experience with SteamBirds had nothing to do with it. But maybe it’s a direct response to my last blog post, so I figure I’d better clarify the issue of value and why exactly I chose to go with Armor Games.

When I say “I like Dan (at ArmorGames) better” it’s a shortcut to saying “their offer was financially beneficial in the long run.” Yes, I do like him better on a personal level. But I would have gone with another offer if I actually thought I’d make more money that way. I am running a business here, after all. I find my personal lifetime revenue will probably be higher if I’m with a sponsor I “like” because we’ll have a better working relationship, and more possibilities will blossom. Having a good rapport with you sponsor means more opportunities, more flexibility, and in the end: more value.

As a quick aside, my personal, friendly, awesome relationship with Dan has earned me thousands of dollars in extra revenue (by giving a bit of extra flexibility in his already loose contract), and even earned me some new personal equipment and other joys in life. I would say the “external value” here is worth four times as much money as I’ve earned from advertising revenue.

I should address what is perhaps an unavoidable issue in this debate: the semantics behind the word “value.” When I think sponsorship value (in SteamBirds’ case), it looks like this:

Notice how small my blue circle is and how large my green circle is. I’m not particularly concerned with the size of the dollar-sign-bag; I think I can get much, much more money in the long run with good business partners and built relationships. I’m not looking for a quick fix, nor am I looking for recurring revenue [on this particular game]; I’m looking to get my foot in the door of the industry, and build a brand.

Also notice how small the ad-revenue slice of the pie is. I get the distinct feeling that the average sponsors view looks something a bit more like this:

In this (totally theoretical, based-on-my-experience-only, probably offensive to some) visualization, note that potential ad revenue is as big as the primary sponsorship. External value is nearly disconnected and incredibly tiny; some sponsors even seemed to imply that by taking any deals for “long-term business” reasons would exclude me from obtaining any secondary revenue. It’s like you have to make a choice: Big bucks, OR good business contacts… not both.

During the bidding process for SteamBirds, many sponsors told me I could “Easily double [my] money!” with ad revenue. Considering how low my ad revenue is (around 5% of my total), I’m thinking that’s nearly a complete fabrication, or it simply doesn’t apply to my game’s circumstance.

I’ll grant you that different people have different objectives. Some folks only care about recurring (ad) revenue; some folks only care about up front payments. What I’m trying to say here is that your personal Venn diagram is going to look different than mine, and allowing sponsors to dictate what an appropriate value is is completely retarded.

“To businessmen used to a more traditional bidding model, that is absolutely unacceptable and should be banned.”

I can see how businessmen would like to ban me from realizing and calculating the definition of value on my behalf. According to sponsors, business partners are worthless and ad revenue is king. That simply isn’t the reality for me. Businessmen that want to lock me in to their value systems does nothing but increase their revenues at my expense. I won’t even get into the fact that Dan @ ArmorGames had the best licensing terms (the least stringent contract), so it’s not even like someone equally matched him, dollar-for-d0llar.

That’s not to say that my green-circle value wasn’t limitlessly large or infinite; in fact, I took great care sizing those circles in the first Venn diagram. Two sponsors, very late in SB’s bidding process, approached me and said “What would it take to win this bid.” I responded honestly, if not slowly. It was a tough few days for me (just ask my girlfriend!), having to sit there and sum my emotions and my ethics, and provide sponsors with a pricetag for my morals and potential future. But I did it, and the price wasn’t incredibly steep or unattainably high. Both my offers were seriously considered, and thankfully (for my soul), declined.

I did meet up with one sponsor after the bidding, while attending the Game Developer’s Conference in San Francisco. He mentioned they didn’t submit a bid in the end, because the pricetags on the upper bids were simply too high and they thought they had no chance. When I asked him what he would have offered, he was right in my range, and would have been a real contender for winning.

I’ll double-facepalm that little tidbit. Not only did the other sponsor potentially miss out on my game, but I missed out on them because of my unusual business tactic of not taking the highest bid. My own methodology shot me in the foot here; but hopefully the last few articles here will help correct that for the future.

For everyone.

Let’s make this industry a double-win instead of a double-fail!

EDIT: Eric from FlashGameLicense made an excellent comment to clarify some of the quotes coming from their site. It seems my sponsor-rage is directed at sponsors that possibly don’t exist, which I suppose is a very good thing. ;) Thanks for the clarification, Eric!

As an aside, I can’t help but feel that this post is coming way too early. The game launched on March 3rd, which means we’re coming up on the 1 month birthday soon. There hasn’t been enough time to collect all the secondary licenses (some of which are scheduled for mid-April and beyond), and definitely isn’t enough time to get a clear picture of the user traffic and how big the tail is. I hope to rectify this by making some update posts as things progress in the future.

Note: Some sponsors have asked that I don’t reveal exact figures, or associate their names with their pricetags. I’ve fudged all of the numbers by a certain percentage and made some anonymizing edits so I don’t step on any toes (though I’m sure some basic sleuthing can get you any answers you need).

The Development Split

I had a really tough time deciding on a proper revenue split model. I wish the game had 150 percentage points so I could pay everyone a bit more, but I think the ratio I have is fair to everyone. I won’t lie; I do wish I had more money for myself. Who doesn’t? But even if I cut someone’s wages back I’d feel like giving it to someone else, not myself. At least I’m happy. :)

Of the upcoming iPhone port, courtesy of SemiSecret Software (makers of the excellent games Canabalt and Gravity Hook HD):

• 30% of all revenues go to Apple first;
• 50% of the remaining revenue goes to SemiSecret Software
• 50% then goes to the SteamBirds Team (see below)

Outside of the iPhone,

• 10% of all profit FlashGameLicense inspires goes back to them. They get paid first, because without them I’d only have made a fraction of the money. Their service is truly excellent for the flash-portal-distribution model and not using them is foolhardy. Not paying them is just mean.

Of the remaining profit, the sTEAMbirds team divvies:

• 50% goes to myself, for game design and programming. I dare say I put some kickass lines of code into the game and I wish I could showcase them as easily as a work of art. :)
• xx% goes to Daniel Cook, a true game design genius and excellent artist to boot. Before SteamBirds, I don’t think I ever would have worked with a “GameDesigner,” thinking it was mostly elementary. I primarily hired DanC on to be an artist. Now I don’t think I can make a game without his advice.
• xx% goes to DannyB for his musical genius (and who also pays Jordan Fehr for sound effects out of his cut). I get a lot of shocked looks at this one, and I agree; I’m used to paying only a meager sum for audio. But the services Danny offers (perpetual unlimited music!) and the quality of the end result is astounding. Absolutely astounding. I do believe in the gameplay as a standalone product, but the music takes it to a whole other level of awesome. I think it’s worth it.

(Percentage splits classified upon request)

And yes, I just casually dropped the “iPhone version” bomb like it was nothing. Bitches.

The Bidding Process

Bidding for SteamBirds opened on FlashGameLicense on January 30th, 2010. I purposefully chose an early-month entry so that any larger companies bidding would have fresh monthly budgets at their disposal. I also consulted with FlashGameLicense’s Sales Statistics to give me some insight; it looks like January is the worst month of the year, and February is a close second. I wanted to wait until later in summer, but I didn’t want to wait any longer!

Eventually 7 sponsors would bid on the game, and a dozen more EMailed me offers and discussed options on the side (they were typically complex enough offers that posting them to FGL wasn’t appropriate).

Those 7 actively-bidding sponsors made 27 bids in a nice (for me) 10-day battle for control of the game. Bidding opened at $500, and quickly made it above $6000. Here’s a quick rundown of the stand-out bids I received through all mediums (including EMail):

• 1/30: $500: Opening LOL bid.
• 1/31: $1,500
• 2/01: $2,000
• 2/01: $6,000: A big jump right away. There were no bids between $2K and $6K.
• 2/04: $8,000: A bidding war follows.
• 2/04: $10,000
• 2/05: $16,000
• 2/06: $20,000
• 2/07: $21,000
• 2/10: $22,000
• 2/10: $25,000: The deal I went with.
• 2/12: $30,000
• 2/12: $35,000
• 2/15: $45,000

I closed bidding around February 16th and notified Dan at ArmorGames that his bid had won.

“But… but why“, I hear you incredulously shouting. “Why would you take such a low offer?!“

“I’ll tell you,” I respond with an eerily-calm demeanor.

The extreme value deals ($35K+) had some very restrictive licensing terms. Phrases like these were most common:

• Rights to first refusal for a sequel.
  While I understand that ‘rights to first refusal’ aren’t all that binding, it still makes me feel uncomfortable. What if I have a bad experience with the sponsor? I don’t want to feel locked into anything. If the sponsor behaves and is a nice partner in the venture, I’d be more than willing to go with them again for a sequel. Why put a friendship in writing?
• No sequels, spinoffs, or use of any existing assets or similar assets for 1 year.
  Bah. I have some pretty big plans for the future, and SteamBirds as an IP is ripe for the picking. Especially now that the game is a resounding success, I cannot ignore it. Yes, I understand it is important to space out sequels and launches – I don’t want to over-saturate the market with my products. But I don’t want to be forced out of my own work for a year.
• This deal is considered pre-payment for a spin-off version containing bunch-of-features XYZ, in addition to primary sponsorship.
  To be fair, these offers were tempting. But in the end the extra amount offered wouldn’t make up for the time and effort that goes into the new features.
• Perpetual exclusive license; no secondary sales or ad revenue.
  Fair enough. As long as you can pay enough to outweigh that lost revenue stream…

How I Chose My Sponsor

What I ended up doing to help me sort through the bids was devise a “value” scale. I projected how much I thought the game would make on secondary license sales, advertising revenue (which I estimated to be near-zero, for what it’s worth), and other such income. I included figures like bonuses for performance (if any), prize money (if allowable), and any other special-case funds. I then added these values to the base price of the offer.

In my mind, the ArmorGames’ offer was worth around $30-40K. By accepting their deal I’m fully expecting to reach $35K (right in the middle of my predictions) in total revenue over the lifetime of the product.

Unfortunately for the larger offers ($35K+ up front), their restrictive licensing terms didn’t result in a whole lot of added-value. In fact, some had negative added-value when they started talking about the longer timeframes and exclusionary periods.

What I was left with, in the end, were two very similar deals I was seriously considering. They both had similar terms and ArmorGames was a little behind on my value scale. But I went with them anyway, for one very important reason:

Personality.

Dan McNeely of ArmorGames is amazing to work with. From early on in the bidding we struck up a rapport and we discussed many things (even not game-related). Several times he suggested that other deals might be better for me. He often tried to work out new agreements, suggested other sponsors I might want to approach, and is on good terms with many other sponsors. Best of all: he always kept his licensing terms wide open with amazingly few restrictions.

In short, most sponsors say the words “This deal is the best deal for you, the developer.” It always sounds like something a used-car salesman might say. Dan earned my trust, and I legitimately think he’s looking out for me and my well-being; he didn’t have to say those words. The words were implied.

Sponsors are more than just money-machines. They’re partners with the future of your game-making career. Accepting Dan’s bid is likely to have a long and prosperous relationship between us, where I can trust him to help me find the best deals (hopefully with him again!). Though not tangible, that’s worth a few extra grand in my pocket any day of the week.

You simply won’t believe the number of Sponsors that approached me with aggressive stances, insulting me, or even calling me names for not taking their offers. Some Sponsors won’t even give me the time of day (and haven’t responded to eMails in the last 2 months). Some sponsors seem to think they are superior to the developers and put on this air of “you will bend to our will.” Seriously, you guys? Not very professional.

The Terms of the Deal

Dan at ArmorGames was kind enough to allow me to post the details of the primary sponsorship (with aforementioned number-fudging, of course). Not that there’s much to say. As I mentioned, Dan was very lenient with his terms.

• Up-front payment of $25,000 for the game.
• Bonus of $2,000 for providing a set of Bonus Missions exclusive to ArmorGames
• Requirement to implement ArmorGames AGI (High score interface)
  • 1-week exclusivity period on armorgames.com (ad-free)
  • following that, 1-week of viral-version distribution (ads allowed)
  • following that, secondary sales/sitelocks/etc. can be sold (ads allowed)

Note that Dan didn’t send me a big contract to sign (he was happy exchanging a few eMails confirming the details) and that he’s very flexible and will take every suggestion on a case-by-case basis. I’ve gotten a ton of exceptions out of him, and in return for his generosity — I even gave him a longer exclusivity period than he asked for. These relationships are two-way streets, and nothing is set in stone!

Revenues to Date

About time for a money summary. And our first image!

“Other” is the combined forces of CPMStar (around $300) and Mochi ($10) advertising, as well as some award/performance money. As you can see, my near-zero ad estimates were fairly spot-on. :)

Grand total? The game has earned approximately $34K so far. Also fairly spot-on to my initial estimate. Minus FGL and the sTEAMbirds, that puts $15K in my pocket for 1 month of full-time work. Even if you go on my full schedule (around 5 months to-date), that’s still $3K/month and a decent salary!

Keep in mind that the ad revenue will continue growing as time passes and might end up making a dent. There are a few more secondary licensing deals to be made as well.

Critical Response

The game has done surprisingly well. I won’t go into the details on the reviews and good comments I’ve gotten, as I’ve posted on them previously, but here’s some of the average scores around the internet (flash devs seem obsessed with these numbers, but I don’t see the allure):

• 87% @ ArmorGames.com (8.7/10)
• 86% @ Kongregate.com (4.29/5), before Badges were introduced
• 84% @ Kongregate.com (4.19/5), after Badges were introduced (lolwut)
• 88% @ Newgrounds.com (4.4/5), ratings
• 94% @ Newgrounds.com (9.4/10), reviews
• 91% @ FlashGameLicense.com (9.1/10), developer rating
• 80% @ FlashGameLicense.com (8/10), editor rating
• 75% @ FlashGameLicense.com  (7.5/10), first impressions (these guy are idiots though ;))

The game has also won a few distinctions so far:

• Daily 4th Place: NewGrounds.Com
• Weekly 6th Place: NewGrounds.com
• Front-Page Feature on Kongregate.com
• Weekly Prize Winner on Kongregate.com
• Monthly Prize winner on Kongregate.com (not actually awarded yet, but I’m #1! wooo)

Game Performance Tracking

Huge shouts-out to Ben at SWFStats. His very-easy-to-implement API is quite awesome and I’m very impressed with it. His data aligns perfectly with my data on other collection services, so I can vouch for it’s stability and authenticity. Right now it’s tracking everything for me. Sign up for his beta now, and it’s free to use!

First, an overview of the game’s traffic:

As of this writing, here are some stats for the game at a glance:

• 3,500,000 game loads (people that make it to the main menu of the game; doesn’t count bounces)
• 24,000,000 level plays
• 26:10 average total play time
• 1,000 sites hosting the game
• A statistically insignificant number of players play the game less than 2 minutes(!!!). Official stats say 100% player retention rate! If you see my title screen, by gum you are playing 2 levels on average!
• 53% of users play more than 5 levels.
• Only 1.3% of players hit the mute button (without un-muting it later)
• Only 3% of players look at the credits screen
• Some per-site traffic stats:
  • ArmorGames.com has the majority of my traffic.
  • Kongregate.com is a distant second place, with less than 1/3 the views
  • A Chinese site pirated the game on day four (breaking my sitelock), and is third place so far (again, by a longshot)
  • All others of my 1000 sites have less than 50,000 views each, with most having very low figures.

Hopefully that answers the majority of your questions. :) Any other details you want to see? Let me know!

Last Wednesday SteamBirds went live on ArmorGames.com! Click here to play it.

I’ll make a retrospective post with sale details and game performance in a week or two, but right now the game is doing very well. 93% of players play for over 2 minutes, which is an incredibly low bounce rate. The average person reloads the game 6 times, 15% of people hit the mute button, and 1.5% of people check out the credits page. Game has been out for around 4 days and I’ve already hit 500k game loads, and close to 5 million level plays.

Whee, stats!