Category Archives: Busniess

Apps “locking” in customers

Apps have become a common expression after the success of iPhone/iPod application system. Its become huge business on Apple devices and Google Android Marketplace. Recently Apple logged over 10 billion downloads through the App Store. Sure, lots of Apps are free, but the numbers are interesting.

What I find more interesting is how the apps really create its own echo system for both Apple and Google. Their own digital download channels, which they own and operate. And Apple owns both the Hardware, Sales/Distribution Channels, Software, and get 30% of all the revenue generated by sold Apps.

From a customer perspective its interesting to see how this affect which device (system) we choose. For example, I am a big Apple fan, owning an iPad, iPod, iPhone and an iMac. I purchase and download new apps all the time. Mostly games, and between 1 – 5 dollars. And now when I have invested so much money in apps through Apples system, I am very unlikely to change to the Google system, cause I would then have to purchase all the apps again. Even if the apps isn’t that expensive, I still have invested quite a lot of money in Apple Apps.

In some way customers is making a bigger decisions now when they have to purchase mobile devices. The Apps will be a heavier factor in the choice of which system to pick.  Its interesting because Apps really adds value to the system and devices, so its in the interest of both Google and Apple to get the latest and best apps to their platform.

Google’s Chrome Web Store is really happening!

In the US, the worlds biggest Search Engine have taken the step (outside the mobile platform) to start selling applications. And not just any applications, web browser applications (apps)! Throught the newly opened  Google Chrome Web Store you have the ability to purchase web browser apps. At the moment its only available for in the US territory. People with mobile phones or other devices running Google’s own operating system Android have had access to apps before. But this is a new direction, but in line with their plan for their upcoming PC operating system to compete with Windows.

And among the first publishers to release games on the Web Store we find Electronic Arts, Zynga, Digital Chocolate, Jagex, Spryfox, Bigpoint and Namco. They will inially start with just over 200 games. But most of those partners are probably already signed thanks to the help of the Android Marketplace for Andriod Mobile decides. Here Google have sort of taken the position were Mircosoft could have been, having the dominant Mobile OS for none-Apple mobile phones. Microsoft’s answer is the new Windows Moblie 7, but the question is if it will be dead on arrival.

It will be interesting to see the potential of the games and other applications they will release going forward. Will it be yet another platform for games, similar to GamersGate and our competitors? It seems Googles focusing more on building platforms and offer services than its core business, search. Well, its all business right to expand and develop its portfolio. And looking at the success of both Apple’s iTunes and digital distribution stores for PC/Mac games, this is a very lucrative market. Owning the distribution channel and the customer. And customers, or rather users is key for Google. Knowing as much as possible to display better directed Ads, which generate more revenue. So taking the step into distribution is something else from their core business. But hey, its Google! Would could they possible fail? Oh wait… Google Wave. But stop! They still rethinking that project.

Then we have Apple, which is its own success story! Not only do they own and control their own distribution platform (iTunes), they are also hardware manufactures. So the Apps build for Apple product will ONLY work on Apple product. One manufacture, one platform. But its still it makes millions both for Apple and its third-party developer. And they have their own web browser as well! Wouldn’t surprise if they start selling Web browser Apps as well, through iTunes of cause.

They are truly trying to take over the internet, and at the moment they are also battling Facebook for the time, attention and clicks from the worlds billions web users. Facebook have done what Google did to Microsoft, “steeling” good workers/programmers. And to lock-in users as much as possible. Which is really good from a business perspective but not away’s from a customers/user perspective. For exmple this is happening in the PC/Mac games industry at the moment with our biggest competitor, Steam. They are locking in customers in their service and make developers and publishers reliant of them. Will write another post on this later.

But the battle of the web giant is about to begin.

Chrome Web Store

Google Chrome Web Store

OffiSync = Good for customers

The other day I read about a new free program available (for free) online called OffiSync. A nice little program which enable you to connect your Google Docs account with Microsofts Office. So basically you can work on your computer in Word, you can save it up in the cloud to your Google Docs account. Which enable you to always access the document later, as long as you have internet access. Its such a basic feature, but yet so powerful! The ability to connect the most used offline and online office work package  is really useful, and really good for customers.

This program was created by a third-party company, with the same name as the software. Ideally, the two IT giants would collaboration them self. Of cause they want every single person on the planet to ONLY use their software/solution. To own the customers, but sometimes collaboration is better, for the end consumer!

Collaboration,something that I think believe companies often forget, can benefit the end customers more then they can imagine. With all the new devices, operating systems, social platforms and new software programs, the connection between those and the ability to transfer files, documents, information and other media fast and easy between them.

I would like to point to two great examples, DropBox and Facebook Connect.

DropBox is a cloud file saving service, were I can upload and store my files. Then I can access them any time either through any web browser or the DropBox client.  Got introduced to this service through a business contact at work. She showed me how she used it to access all her work files on her iPad, without storing all files on the actual device. A true killer-app that made it possible for her to actually work with her iPad instead of caring around a heavy laptop. And the connection/integrations with the iPad apps is crucial for this to work.  Now I use it all the time to send files from my work computer to the home computer, fast and easy.

Facebook Connect is a feature Facebook offer everyone to freely implement on their web sites / software and games. Take a web site for example: It enables users to “connect” their Facebook identity, friends and privacy to any site. Another example is StarCraft 2, or rather Battle.Net (its online network). It uses Facebook Connect for players to through their Facebook profil add friends to their Battle.net friends-list. I never had to know my friends Battle.net names or anything. Just connecting through Facebook and right away I had 20 friends on my Battle.net account! And their is so many more ways to utilize this feature.

With all the competition out there in the market today, I think its better to focus on, what gives value and improve any service for the CUSTOMER! I mean, I have a lots of account to different services and it would be great if I could connect them better. To collaborate instead of forcing your customers to limit them to your service. Sure it might be a good service, but by thinking more openly and see the potential in collaborating, it can become great!

Competitor GOG shuting down?

Big news this Sunday that Good Old Games. com , a competitor to us (GamersGate) have shut down. Everyone on Twitter and game websites are talking about it. This just came out of the blue. While the website (GOG.com) is claiming that the service is down now, it hints that it might not be permanent. Its been hinted that the service will come back in some form, but this is only speculations.

If we analyse GOG, their business model is the same as ours, but they only focus on older games, as the name suggest. Older games, selling for just a couple of bucks, while the margin is quite low is probably something you can’t ONLY build your business on. For us back catalog titles are a good piece of our sales, but new release titles are the biggest by far.

Also some of their unique selling points always promoted is that all games are DRM free and compatible with newer operation systems.  They had a lot older titles we have had problems getting and they have surely spent quite a lot of time making them work for new systems. This process take time and a lot of works, we know!

Somehow its sad if they were to shut the service down, specially for all the customers who have purchased games there. But for us (GG) its an opportunity.

GOG Down

Twitter business model-s

Twitter is really one of the fastest growing phenomenon on the web in recent year, along with Facebook. Becoming a communication standard within basically a year, its on almost every webpage. It have expanded with x millions accounts today. Couldn’t find any numbers but I can only guess. And making expressions like “I just Tweeted this and that” a common expression.

But like most IT start ups, they still haven’t found the right business model to make substitutional revenue from. Google had the same problem in the beginning, but finally developed one which is now one of the standards when it comes to web advertising and marketing (CPC). For Google it came natural, complementing with their basic service. For Twitter its a different ball game.

Discussion online have been when and if Twitter will file for a IPO. Rumors about this have been shot down time and time again by the company. Still, before going public you need a steady revenue stream. As my interest in private stock investment have been increasing lately I am interested to see how they develop and if a IPO opportunity will show it self within a couple of years.

And it looks like Twitter is investigating different business models and which could work for them. Nothing revolutionary. One model is a classic ad-driven model, selling sponsored/promoted Tweets. Also opening for third-party applications to be connected to their service. Another model copies the Free vs Preimum model, such as Spotify. Were everyone get to access and use the service for Free, but if you want to follow special twitter accounts/people, you have to pay a premium fee. Quite a risky model, but could work good for the more confidential business 2 business users.

Its great that they are actively looking at different business model, cause revenue needs to come from somewhere. I can imagine that hosting and running one of the biggest services online isn’t by any means cheap. But at the same time its a tricky question. Ideally you want to follow the Google concept, were the revenue source won’t interfere or distract to much for the regular users. And like Facebook its a social platform, were people come to communicate with friends, follow conversations and news. I mainly use it for getting all news feeds collected in one place. On Google, Adwords/Sponsored Ads works and complements the vital Search function. And people would be furious if a payment requirement were implemented. I think selling premiums have its limited potential, and ads will struggle the same way as one Facebook. Looking forward to see what more business models they will come up with.

And they have also launched a new service for everyone without a Twitter accounts, Fast Follow. Its like the Facebook public setting were everyone can see and follow tweets, by using your cell phone. I think this is one part in their strategy to attract more people and bind them up for a real Twitter account. Get them interested, and when they want to join the conversation, then a registration is needed and you are there. From a business prespection (using Twitter to communicate to potential customers) this is a great idea! If, by some chance, we get the option to talk not only with the ones following our Twitter feed, but others as well through the same medium, its a win-win. Will be interesting to see if this service will be a success or not. Not totally convinced myself.

Unlearn your MBA

Think there really is some truth to this statement given by David Heinemeier Hansson, the creator of the Ruby on Rails Web development framework at the Entrepreneur Thought Leader Lecture at Stanford (complete lecture below).  Schools and degrees are privilege many of us have to give us a boost for the success later in life, both professional and personal. Many people spend a lot of time and money to give this chance to poor people all around the world. Something many of us take for granted, to go to school. Here in Sweden its free to go to university or collage, while in the US you have to pay ahead for each term. They are discussing adapting this model here as well.

But an education can be many things, not simply an MBA. Its not always easy to get an MBA, but the more people getting them, more pressure to stand out. And often society / business evolves faster than the school text books. So basically, some educations are outdated when the students finish.Personally I felt that my real education started when I ended University.  MBA might be the start, but its not everything. The best teacher is life and learning by your self, by trying.

As David is speaking at the Entrepreneur Thought Leader Lecture he is directed to Entrepreneurs, and being that is not something you can read your way to. Not in my mind at least. I think its just part of you as a person. You might not have it from birth but it can come to you when ever. Many of the biggest Entrepreneurs of today (specially in the IT-era) were drop out. Even if they sort of finished their degrees afterwards. Like Steve Jobs and Bill Clinton. Some times the creating spirit is more important and powerful than your reading mind. Its always good to create a good foundation and basic understanding. But simply a degree won’t take you all the way. Its what you do besides that. I even got a couple of  jobs, not for my degree but because of all the things I did around by education. So I try to recommend everyone I meet to do as much as possible outside of just going to a program / class. Though its hard for many to early find their interested and what they want do and focus on it. And not all areas of work really require this type of thinking and devotion. But if you want to, push yourself to the limits and reach the skies!

Flattr: Web Micropayment

From one of the founder of the world famous Pirate Bay comes a new venture, Flattr. What it does is literally making web clicks into a currency, were you click on the content you want to give money to. I have attached a video explaining the concept better.

I really think this can be something. Clicks are already a way to get paid today with system such as Google Adwords and other advertising tools. We like to “Like” things on Facebook and just pressing a button to join a group.  The big question mark is the man behind it, Peter Sunde famous from operating and defending Pirate Bay. Debating heavily in Sweden that things on the web should be free, its a bit strange that he develops a system for paying content creators on the net. Just a bit contradicting.

YouTube Preview Image

Importans of Pricing

We have had some really interesting releases the recent weeks on the site. Especially two games have stood out, Torchlight and Machinarium. Both games are developed by smaller studios and only released online. Both review and sales wise they have done really good! Just looking at the numbers on our site I see it. What makes me even more proud is that I signed both titles.

We have been discussing the success of those titles, and one thing that we see in both, is pricing. They have fairly low prices. Machinarium is a bit shorter than Torchlight, but then the price is lower on that one. Torchlight you can get for around $19.95 and you get many hours of playing out of it. This is a great example for good pricing. At the end of the day its about value for money, and Torchlight is definitely that. Unfortunately I haven’t had time to play it (played through Machinarium), but once things cool down after Modern Warfare 2, Borderlands and Assassins Creed 2 I will get to it.

Once example of a game that goes the other way is the recently mentioned Modern Warfare 2, that instead of lower the price have raised it. Just in UK the game will go for £54.99!!

This more than anything made me realise the important of right pricing, regardless of the kind of product. After looking through many seasons of Dragons Den it hit me even harder, were many of them complain about bad pricing. At the same time its really hard sometimes when you will introduce a product on the market. There is many variables taking into consideration when deciding price. Development cost, margins, profit and ultimately what customers is ready to pay. I starting to learn more and more about it and see the importance. And damn, what a difference it can make!

price

Modern Warfare 2 controversy

This week one of this years biggest game is released, Call of Duty Modern Warfare 2, and the controversies have been quite many, as expected for a big title like this. But the issues have mostly been around the PC version, and its Multiplayer functionalities. The first was the lack of dedicated servers, which allow players to host their own servers. The game is basically locked to Infinity Wards (IW) own system. This also prevent Moding of the game,  limiting the customers/players to modify the game and creating new “version” of it, basically improving and evolving the life of the game.  For hard-core PC players, dedicated servers is a must! Some have even started a petition against IWs decision to skip it, and its growing fast.

And with the news about the dedicated server come the biggest problem, according to me, it has complete Steam Works incorporation! What this means is that it have the full Steam technology in the game, and it requires a Steam account to be played. This is bad for us at GamersGate, since we will never be able to sell the game, as our internal policy is to not accept games that require Steam to be run. It doesn’t make sense from a business perspective, giving our customers away to Steam automatically which would happen. It would be like stating that we Support Steam, a competitor, which is madness. And now even Direct2Drive have gone out, stating that  they won’t sell the game at all due to the Steam incorporation, along side us and Impulse. This have really spawned a storm on the net around this. Cause D2D have before sold games that have the Steam in them. But its great that we are many putting pressure on developers and publishers not to support the Steam software, that lock the customers to Steam and strengthening their potential monopol. Its unfortunate that some new really good games have the Steam implementation, such as Empire: Total War, Serious Sam HD and of cause Valves own games Left 4 Dead 2.What Steam does is locking in its user in their network, something that some find okey, but I think most really doesn’t like.

And after the news about dedicated servers and no modding capability, then its revealed that the number of players in multiplayer have been reduced, from 32 vs 32 in Modern Warfare 1, to only 9 vs 9! Its seems like they didn’t want to do the PC version at all… Just focusing on the console ones. I heard on the Kotaku podcast were a guy called in and said that he had checked his nearest Gamestop regarding pre-orders, and I believe he said around 400 Xbox 360, and merely 10 PC pre-orders. And Call of Duty grew up on PC!

But the thing that interest me most about this controversy with dedicated servers and lack of modifications of the game, is how its a step backwards. IW claims that they have made it “eaiser” for people to just start playing online, that players don’t want to config or setup their own servers. Its like smacking all hard-core players in the face. I don’t think they realise what a mistake this is. The big problem is how they lock the game for people and removing features that is essential for it to be longed lived. Just look at Counter Strike, one of the worlds most played games, that started as a mod. If it weren’t for the openess of Half Life, it probably would have been borned on the Quake or Unreal engine. Then Valve and Steam would probably not be as big as they are today. Many great games, not to mention development studios have been spawned from this open culture. And instead of supporting this, IW and Activision decides to look their most important release this year completely tight! Its like taking a step backwards!

Last weekend I was in Karlstad, and I spoke with some students about this, and they said that now Modern Warfare 2 is something for them to play until Battlefield Bad Company 2 comes out, which will have dedicated servers. Also very interesting is how the founder of id Software (Doom and Quake series) John Carmack have gone out, defending IW decision to scrap dedicated servers.

Its gonna be very intersting to see the sales numbers for the PC version vs 360 and PS3 after all those controversies. Personally I will pick up my 360 copy on the day of release. Though it seems that several GameStop stores in North America started selling it many days before… Oh well!

*UPDATE

And now that the game is released a new Steam controversy have surfaced. Those who bought or pre-purchased the game on Steam have to wait 2 days extra to play the game. I bet many of their customers are really pist about this!

Modern Warfare 2

Modern Warfare 2

Never forget the basics

In recent weeks I have spent quite a lot of time watching my new favorites tv-shows The Apprentice (US) and Dragons Den (UK). “Its all about business”. Not only do I watch those cause they are entertaining, but I find them worthwhile. For the Apprentice a group of individuals is competing against each other for a job for Donald Trump. Here they have to show how great they are in a number of tasks and showing their skills.

And in Dragons Den aspiring entrepreneurs pitch their ideas to the “Dragons”, successful business men and women who really are inverters. They have to prove that their business ideas and products are worth investing in. And often that they as individuals are investible.

Both these shows had made me think quite a lot of the basics in everything. How we must never forget or underestimate the basics of every business and theories. I have read many books in recent years about the development of business models, the web, new media and marketing. Everyone claim to show how things have changed and how to utilize the new tools to reach the new, hard do reach, audience. Many seems to think that we have to rethink how we work completely. But I think its more important as ever to remember the basics. Just because we shop on the web, doesn’t mean the basic retail theories doesn’t apply. They have just taken other forms. Its still about working with  the shop, products, prices, getting people in the shop and get the to purchase, and then get back. We have better tools to work with, but the basic principle still apply.

In the Apprentice it often seems like the candidates complicate thinks in their task, ignoring the basics. And therefore fail in some of their task, sometimes there i just lucky and it works out for them either way.

The same can be said about the entrepreneurs in Dragons Den. They have really good time to prepare for their, not to mention working on their core business. And yet, when they come to the Den they often fall flat under the interrogation from the Dragons. They don’t know their number, their markets or the basic fundamentals of how to run a business. Not to mention, lacking some common sense. And this have made me even more interested in the basic of business.  To start with, then I can always expand my knowledge. As my new vision is to eventually be a Dragon.

Even as new business theories and areas is introduced, the basic is still true in everything. Its just that they have evolved. Even though I work with E-retail on GamersGate, I still bought a book in regular retail basic theories and practices. To not forget the basics.