Hardcore Gaming's Salvation?

Quarter to Three talks to three developers about the profits and perils of bypassing the traditional retail market

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Qt3: Brad, Stardock sold Entrepreuner through retail and found it frustating enough that The Corporate Machine is going direct. Can you can tell us about that.

Wardell: Sure. Basically, we quickly discovered that the PC game retail market had changed in the mid 90s to such an extent that many large retailers had made MDF (Market Development Funds) into a profit center. Rather than trying to make money through selling PC games, they recognized that most games bomb at retail and thus made it so that paying to get shelf space would be where profits were to be made and selling games would be largely a break even business.

So when Entrepreneur got onto the shelves, it became apparent that even though we were selling out of our month's order of product, we weren't going to get enough re-orders to stay on the shelves for long. The only way to stay on the shelves was to provide additional MDF. Over the past coupld of years, as some of you already know, Stardock has become pretty successful on its business/consumer software known as desktop extensions with Object Desktop (which includes WindowBlinds, DesktopX, etc.). We've sold this software primarily through a software subscription network called ObjectDesktop.net (i.e. you pay $50 and you get everything we've already made plus everything we make for an entire year afterwards). Because all of this has been done without any retail exposure, we've learned that retail isn't necessary to product success.

Qt3: David, can you talk about the problems you faced with King of Dragon Pass and what you would do differently if you could do it again.

Dunham: Yes, we did try retail, though we really didn't have the budget for it. It was a learning experience, though luckily it didn't cost us money (I finally realized that one buyer was only returning my calls when he had a new idea for how we could pay his company).

But we also went retail through the adventure/hobby distribution system (which normally carries paper & dice roleplaying games like Dungeons & Dragons, and our license, Hero Wars). This is an option that we had as a licensed product, that most games would not have (I think Iron Dragon is another recent exception). We've actually sold over 75% of the copies through dealers (though direct sales represent almost exactly 50% of the gross revenue).

Our big retail success was in Finland. Finland is a tiny country (about 6 million), but they're very high tech, and they speak English. They also have some excellent print magazines that cover games, which gave us very positive reviews. On top of that, the Finnish distributor is really good, and managed to get the game into a lot of retail outlets -- even supermarkets! I'm told that King of Dragon Pass was a top ten game in Finland.

Qt3: Charles, you don't sell yours direct but Battlefront does, correct? Maybe you can tell us about that and how it's done for you so far.

Moylan: I'm involved with both Big Time Software (which made Combat Mission: Beyond Overlord) and Battlefront.com, which publishes and markets the game online. We're not in traditional retail at all. I agree with virtually everything David and Brad have already said, so I'll try not to restate too much of it.

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