Game Publisher Stardock Apologizes To Its Customers For Releasing A Subpar Game… By Giving Them Its Latest Game Free

Surprises

from the well-played,-sir dept

One of the best things you can do for your business is have the guts to stand up and take full responsibility for your screwups. Too often, businesses tend to minimize their errors or sweep the screwup under the rug. This works right up until the public notices and when they do, there's all kinds of hell to pay. Word spreads fast on the internet, much faster than most companies seem to realize.

On the bright side, good news travels equally fast when companies do the right thing and take care of their customers. This is one of those all-too-rare occasions when a company goes above and beyond what anyone expects and turns customers into lifelong fans.

The Consumerist has an amazing story of customer service gone exactly right. The company is Stardock, the publisher behind “Elemental: War of Magic,” a strategy game that was released as a buggy mess a couple of years back. This (unfortunately) isn't unusual. Games get rushed to market for several reasons and end users are left to either deal with something nearly unplayable or install patch after patch to get their brand new purchase up and running. So, while screwed up releases may not be unusual, what followed absolutely is. Customers who purchased “Elemental” received a letter from the CEO of Stardock that not only apologized for releasing a lousy game, but actually offered something way more valuable than lip service:

Dear Stardock customer,

My name is Brad Wardell. I’m the President & CEO of Stardock. Two years ago, you bought a game from us called Elemental: War of Magic. We had great hopes and ambitions for that game but, in the end, it just wasn’t a very good game.

Elemental was an expensive game. You probably paid $50 or more for it. And you trusted us to deliver to you a good game. $50 is a lot of money and companies have a moral obligation to deliver what they say they’re going to deliver and frankly, Stardock failed to deliver the game we said we were going to deliver…

Its design just wasn’t adequate to make it into the kind of game it should be. So we decided to start over. From scratch. We made a new game called Fallen Enchantress.

So even though it’s been two years, we haven’t forgotten about you. This week, we released Fallen Enchantress. It is a vastly better game and, we believe, lives up to the expectations set for the original Elemental. This game is yours. Free. It’s already been added to your account…

Thank you for being our customers and your patience.

Sincerely,
Brad Wardell
President & CEO
Stardock
bwardell@stardock.com
@draginol http://www.twitter.com/draginol

Not only is it highly unusual for developers to apologize for crafting an underpar game, it's even more unusual for them to take the extra step and offer their latest game absolutely free. Wardell takes advantage of the technology at hand to keep the affected users from having to make any effort on their part to get their replacement game (“It's already been added to your account…“)

Stardock realizes that each game its customers purchase takes a bit of their time and money, and both commodities are in limited supply. This gesture doesn't ask for any more of those two commodities, and goes a long way towards securing something else only available in limited quantities: trust.

Wardell and Stardock are investing in their own future by taking care of their customers now. By doing the unexpected, fans who were burned by “Elemental” will be more likely to take a look at Stardock's upcoming offerings. And even if they felt “Elemental” wasn't that bad, hey… free game! How often does that happen? Either way, a ton of goodwill and positive word-of-mouth is being generated, something no company can purchase.

Filed Under: customer service, elemental, games, surprises, video games
Companies: stardock

Yet Another Musician Discovers That Free, Implemented Well, Can Increase Fans & Make You More Money

Free

from the haven't-see-seen-this-before dept

I almost didn’t post this story, because we’ve seen nearly the same thing so many times — but seeing the surprise that some have expressed about musician Andy Othling’s post about giving away his music for free for a day (with a pay what you want campaign via his Bandcamp page), it seemed worth mentioning. As in other cases, he found that he ended up with many new listeners and much more attention… but what surprised him was that he also made more money. He expected to make less, assuming that people would just take the content for free. And, of course, some did. But when you expand your audience tremendously, and give them the option and the tools to support you, amazing things happen:

I was anticipating a drop in revenue, because that’s usually what you expect when you start giving things away for free. But what happened was that in a single day I made more than 2x what I normally do on music sales in an ENTIRE MONTH. Yes, you read that right. More in a day than in two months of regular sales.

I don’t quite know how to explain this, but I think a lot of it is based on reciprocal generosity. People seemed to really appreciate that I did this and responded by paying more than they normally would. I was blown away by people who decided to give more for an album than it would have cost them the day before.

Of course, we’ve seen this exact thing over and over again, so it shouldn’t be at all surprising by this point. Andy points out that he greatly increased his fanbase too:

There you can see that in one day, I added almost 450 email addresses to my mailing list. That’s 450 more direct connections that I can make in the future, and 450 more people who can spread the news when I do something like this again. This is way more exciting to me than money.

Of course, he chose to only do this for 24 hours… and then took away the free option. We’ve seen some others do this as well, to mixed results. More than a few musicians I’ve talked to who have run similar experiments later switch to leaving the free option up permanently, but it’s not uncommon for people to try it as a limited-time experiment at first. There may be some value in the “it’s only free today!” aspect to get people to act, but I do wonder if it limits long term potential. For example, with this post, some people here might want to check out his music — but I’d bet a lot more people would be interested if the music were still free.

It’s also important to note that while people often get blinded by “free” and forget about everything else, Andy didn’t just do “free” and leave it at that. He (1) strategically promoted that it was free and urged others to pass that info around and (2) provided a clear way for people to support him monetarily as well, if they so chose. Free is a piece of the puzzle, but it’s not everything.

Filed Under: andy othling, free, music

Exploring The Earnings Of A Humble Bundle Author

Business Models

from the a-humble-attitude dept

Recently, we highlighted the success of the first Humble Ebook Bundle by noting that with over 84,000 bundles sold, all those authors should be on best seller lists. That is fine and dandy on its own, but what does that mean in terms of money for the authors? With the bundle bringing in over $1 million in sales, what do the authors get out of that?

In response to that very question, one Humble author, John Scalzi, wrote up his back-of-the-envelope calculation of how much his book, Old Man's War, could earn him.

Let’s say for the sake of easy math that when all is said an done my default amount of the bundle was something like 6.5%. That would mean that my default gross cut of the Bundle would be something on the order of $78,000.

Keep in mind that this is a gross earnings. He then factors in a number of other variables, including his publisher Tor's cut, and comes to a much smaller net amount.

When all is said and done, if I end up with $20,000 (before taxes) then I figure I will have done well.

He goes on to explain what he would likely make selling the number of copies he estimates he sold during the bundle, if those copies were sold at full price.

…let’s say OMW was in 42,110 of those bundles. For electronic books, I make 25% of the net to the publisher, and Old Man’s War currently sells as an eBook at $7.99. Unless I’m doing my math incorrectly, my cut is about $1.40 per eBook for OMW (no, $1.40 is not 25% of $7.99; remember, I’m working off of net). If those 42,110 copies were sold straight up, I would gross $58,000.

So, basically, if I gross what I expect to gross from the Humble Bundle, I’ll be taking a roughly two thirds cut in my income per unit than what I usually do.

That's quite the difference. However, he is very happy with what he will make from this bundle for four reasons.

1. The volume sold may compensate for the reduced price.
2. Old Man's War is the first book in a series and will likely bring in new readers who will buy the sequels at full price.
3. He went in to the bundle knowing full well that he could make as little as $0.
4. Whatever bundles were sold because of his book were benefiting some important non-profits.

He then closes out his comments with some advice for authors considering getting involved in a bundle. All of it is great advice and I will let you delve into it yourself.

Looking at this whole thing, John makes some very important points that we have highlighted many times in the past. For instance, we have argued many times, with Paulo Coelho as a recent example, that selling in volume at a lower price has the potential to make far more money in a shorter span of time. Additionally, selling at a discount, or even giving it away, is a great way to provide publicity in order to sell other products or scarcities tangential to the product.

What is most impressive is John's understanding and attitude about this whole promotion. He knew full well that this promotion was not an end in and of itself, but a way to expand his audience and reach. By taking this risk, he will potentially see a lot more success in the future. This is an attitude that we praise on a seemingly daily basis–an attitude that too many people in the legacy industries deride and belittle. Hopefully, more creators will learn from this and embrace, as John did, the power of tools and promotions such as the Humble Bundle.

Filed Under: case studies, humble bundle, john scalzi
Companies: humble bundle

Veteran Parodist Turns To Kickstarter To Fund Downton Abbey Spoof After Publisher Gets Spooked

Business Models

from the chilling-effects dept

Kickstarter provides a way for creators to route around the strictures of traditional publishing industries for a variety of reasons. We’ve seen Double Fine break the bank on Kickstarter, after getting a lot of blank stares from publishers who didn’t think there was a market for point-and-click adventure games. We’ve seen top Hollywood talent fund a film on Kickstarter to ensure no studio execs would be meddling with their movie. Now, in what I think is a first, we’ve got a parody author turning to Kickstarter after his publisher dropped the project, citing fear of a legal backlash.

Michael Gerber already had some published parodies under his belt (most recently the Barry Trotter series, from Gollancz, which also publishes spoofs like Bored of the Rings) when he was approached by a major publisher for his take on TV drama Downton Abbey. The writing was complete and the contracts were almost signed—but as he puts it:

And then somebody in New York started… thinking.

“What if [Downton Abbey creator] Julian Fellowes gets mad?”
“What if they hire another company to publish the official Downton Abbey Calendar/Tea Cozy instead of us?”
“What if I make the wrong decision and get fired?”

So even though Downturn Abbey is the most fun I’ve ever had writing a spoof, Mr. Big Publisher changed his mind and offered me a couple bucks to shred the manuscript.

The hell with that! I like this book too much to kill it.

So, rather than accept the kill fee, Gerber is trying to self-publish the book with crowdsourced funds—and with over 50% funding only a few days into the campaign, it looks likely that he’ll hit his (relatively modest) goal of $3,500. It’s interesting to see a publisher’s legal panic serving as the prime motivation for a Kickstarter project. In the “Risks And Challenges” section that Kickstarter now requires on all projects, Gerber directly addresses the legal question, and takes an admirably principled stance:

Now, some of you might be thinking, “Won’t he get sued?” I’ve been doing this professionally since 1991, and so far, so good. Parody — particularly print parody — has a very robust precedent, and I’ve specifically written Downturn Abbey to fall within it.

…

A right only exists if you exercise it, and one of the biggest reasons I’m crowdfunding this project instead of taking the kill fee is to assert the right to critique our shared culture via parody. Media corporations will extend their rights relentlessly, so if you like parody — in any medium — it’s important to support it in print, because this is where it is most vulnerable. Nobody’s suing Jon Stewart, but if parody gets rolled back, that’s the logical next step. Downturn Abbey is a harmless bit of fun for fans of the show and the era, but if it can be suppressed out of corporate risk-aversion, sooner or later that attitude will have a chilling effect on the rest of comedy.

Unfortunately, due to the nature of copyright lawsuits and fair use defenses, it would cost a lot more than $3,500 to defend his stance in court. Hopefully, though, it won’t ever come to that—the creators of (and anyone else with a copyright stake in) the show would hopefully realize that there’s little point (and less honor) in trying to squash out parodies of this nature. However, Gerber’s move also highlights the associated problem: even when something is as well-protected as parody, copyright law can have a huge chilling effect by making publishers nervous. Kickstarter and other tools for creators are, at least, helping to combat this—for a publisher, standing behind a parody is just another risk factor in the spreadsheet; for Gerber, it’s a matter of standing up for his rights.

Filed Under: business models, copyright, crowdfunding, downton abbey, michael gerber, parody

And… Jonathan Coulton Crowdsourcing A Piece Of His Next Tour As Well

Business Models

from the a-growing-trend dept

It would appear that crowdsourcing concerts is suddenly becoming quite popular. Just as we wrote about Andrew Bird crowdsourcing his new South American tour via Songkick, someone points out that Jonathan Coulton (who has experimented with crowdsourcing shows in the past using Eventful), just announced a similar effort via a new ticketing site called BringTheGig. BringTheGig has a slightly different feature set, which is also interesting. The first group of people to pledge to bring a concert to the area (providing enough support to make the show happen) can actually then get their money back if the show itself turns out to be really big. So, this gives incentives for fans to sign up early and to tell all their friends about it.

Here’s how it works. There are 40 funder slots available – basically 40 tickets that go on sale in advance of the rest of them. After two weeks (or sooner), these slots will theoretically be filled, and the rest of the tickets will go on sale. If you are one of these first 40 people, you get your money back if we get more than 160 people to come to the show.

It’s a pretty cool idea I think: get a core of fans to cover what you need to make the show happen, and then incentivize those to spread the word

There are other similar sites, like GigFunder, and Eventful’s “Demand It!” feature is still around as well. Songkick’s Detour platform also has similar incentives, but through a very different mechanism. Given all this activity, I’m hopeful that we’ll start seeing more innovative ways to make live shows more efficient and effective, while also creating new ways for artists to connect with fans and to help fans spread the word about their favorite artists. It seems like a real opportunity that is only just now being explored more deeply.

Filed Under: concerts, crowdsourcing, jonathan coulton, tours
Companies: bringthegig, eventful, gigfunders, songkick

Humble Ebook Bundle Breaks $1 Million; All The Authors Should Be Best Sellers

Business Models

from the if-they-counted-properly dept

We’ve been talking about the first Humble eBook Bundle, which launched recently, and has taken off really successfully. Over the weekend, it zoomed past $1 million in money raised. As author John Scalzi (whose book Old Man’s War is included in the bundle) noted, if Humble Bundle purchases were counted by the NY Times every one of the authors would be on the best seller list. Think about that for a second.

More than 70,000 people have bought these books in just two weeks, and the folks at Humble Bundle passed along the news that the current average price of $13.94 (which keeps on rising, as people pay over the average to unlock all the extras) far surpasses all of their previous bundles. And yet, people keep telling us that there are no business models that work and that people won’t pay for stuff when they can get it for free? When do we finally put those two bogus assumptions to rest?

Filed Under: best sellers, ebooks, humble bundle, sales
Companies: humble bundle

Rovio Recognizes That Massive, Massive Volume At Cheap Prices Beats Low Sales At Inflated Prices

Business Models

from the unrealistic-ebook-pricing-is-nothing-more-than-a-paywall dept

Maybe it takes a “digital native” like an app developer to instantly “get” digital publishing. Asking those who’ve spent most of the ebook era actively fighting the new medium is frustrating for both sides of the conversation.

Rovio, the Finnish developer behind the omnipresent “Angry Birds” game, is releasing its first ebook/app, based on the print version that debuted last year. Mike Cane has a brief but excellent rundown on what Rovio’s doing right, and where other publishers are continuing to fall short.

Cane starts by quoting from PaidContent’s article on the ebook release, which points out a couple of important aspects of Rovio’s offering:

[T]he app is “not just a book,” said Peter Vesterbacka, Angry Birds CMO. “We took the content from the book, 41 egg recipes, but didn’t want to just take the book, make a PDF and sell it to people. We actually made it a lot more interactive.”

“Bad Piggies’ Best Egg Recipes” is on sale for an introductory price of $0.99 or €0.79 in the iTunes Store and includes step-by-step photo instructions, an egg timer and photos of the finished dishes. Users can also upload their own pictures of the recipes they make.

First off, the app/ebook is not just a quick and cheap “port” being thrown into iTunes to grab some quick digital dimes. Secondly, the price is well under what most publishers would be willing to charge for a comparable ebook.

Why is this such a frikkin big deal?

[T]hey are selling an app-book for one-tenth of the print version’s discount price. ($9.99) One-tenth!

That’s a much steeper discount than most publishers would be willing to take, especially on a potential cash cow like this. Sure, one could argue that it’s just an app spinoff, or that Rovio made plenty of money with its games, or that there’s no “real writing” involved, or any number of tangents in an effort to minimize Rovio’s deep discounting. One could even argue that Rovio is leaving money on the table or, as an outsider, just doesn’t “get” publishing and price points.

Here’s what Rovio has to say about the price point:

“We’re not looking thousands or tens of thousands of downloads,” he [Peter Vesterbacka, Angry Birds CMO] continued, “we’re looking for millions of downloads of this book…We’re going for massive, massive volume.”

Oh, those crazy Finns and their madcap ideas! Volume! It’s as if Rovio believes that it can distribute an infinite good at an extremely low price and still make some very good money. Insanity! Mike Cane points out the sheer incongruity of the situation:

He gets it. None of the Big Six of publishing — or the Little Sixes of it — do.

What if the Big Six started massively discounting their frontlist titles, going for that volume instead of trying to bleed each reader for the most they could squeeze out of them? They’d be able to transition their businesses to e faster and make lots more money in the process — and also help to thwart piracy!

Yeah. What if? Unfortunately, that’s still largely open to speculation as none of the publishers seem willing to try it out. Even in the wake of a DOJ investigation into price fixing, prices have tended to move up rather than down (or remain unchanged) as publishers burn through remaining discounts. Even after various self-published authors have demonstrated the ability to make a living selling thousands of cheap ebooks rather than dozens of expensive ones, the tendency is to price ebooks in the same neighborhood as their physical counterparts.

Mike suggests deeply discounting the frontline titles and making more money through volume. But even if publishers aren’t ready to take their current bestsellers down that road, what’s stopping them from knocking the price of their back catalogs down to an impulse purchase level? Making the back catalog a bargain bin could turn casual fans into completists and give readers a reason to dip their digital toes into unfamiliar waters.

But, if nothing else, Rovio’s pricing strategy has to, at the very least, highlight how many publishers are overvaluing their digital offerings, as if charging unrealistic prices will somehow prevent “devaluation.” In reality, these higher prices simply show the huge gap between what the publishers desire and what the customers actually want.

Filed Under: angry birds, apps, ebooks, peter vesterbacka, prices, volume
Companies: rovio

When Your Pay What You Want Experiment Is Too Successful In Ways You Didn't Expect

Business Models

from the challenges... dept

One of the interesting things to come out of the recent brainstorming session we had with artists and entrepreneurs had to do with the lack of really open discussions about experiments that fail. On the entrepreneur side, every so often you see someone write up a “post mortem” of a failed startup. But it’s rare to see artists post a “what went wrong” discussion. This is completely understandable. Most people don’t want to focus on what went wrong, and greatly prefer to focus on what went right. Admitting failure in any sense often has a stigma attached to it — and while entrepreneurs can “walk away” from a failed startup, giving them some distance, for artists, a failed experiment in their artistic career (which is often “their life”) isn’t so easy to walk away from. And many of the artists in the discussion agreed that they could probably learn a lot from the failures of others, such as how to approach things differently and what not to do themselves. This is a topic I’m hoping to explore more in the future, as any reports of “what went wrong” really do seem worth looking into.

This one isn’t completely a “what went wrong” story — it’s more of a “what went too right and we weren’t prepared for it” story. The folks at Good Old Games, who we’ve written about a few times before, recently put up a pay what you want bundle for Larian Studios’ Divinity anthology of games. The setup is very clearly influenced by Humble Bundle. You can pay what you want, and if you beat certain levels you can get more things. There’s also a leaderboard, and hitting certain checkpoints opens up new content for everyone.

Sven Vincke, of Larian Studios, recently wrote a really interesting post about how the “pay what you want” results were quite different than they expected. Despite having the examples of Humble Bundle and others for what happens when you do this kind of thing, Vincke still expected that people would pay very little for the game — but that they’d get wider distribution. And they planned accordingly — with the various “unlockings” based on the number of supporters, rather than the amount raised. But things didn’t work out that way.

When the PWYW was conceived, we thought that we’d have a lot of sales at the absolute minimum, which basically is 1 cent, and this assumption was actually never challenged. The idea of the PWYW campaign was to on the one hand celebrate 10 years of Divinity and offer Divinity virtually for free (1 cent really is low), thus increasing the installed base of Divinity fans, but on the other hand also to put the Developer’s Cut in the spotlight.

The Developer’s  Cut (and Beyond Divinity) were made part of the campaign as a kind of bonus and to not completely ruin ourselves, we introduced the rule that to access the Developer’s Cut, you needed to be in the top 10% of customers. Whether or not that was a sound strategy is a different matter and open for debate, but that was the idea.

What happened however is that for some reason, people started looking at this like some sort of Kickstarter (this was the very first time something like this was done on GOG), and in the very first hours of the campaign, we saw the average pricing go to heights we never expected. Somebody even paid a 1000US$ for one of the games!!!

Yes, that seems like a reason to celebrate, but it also meant that the key plan — to get the games more widely known and distributed — wasn’t working as intended, and the plan to unlock certain content at key supporter levels was looking unattainable. However, adjusting midstream might make people think that the whole thing was a flop — when that wasn’t the case at all. Clearly they were getting more support dollarwise than they expected, but the number of supporters was much lower. So they finally decided that the best way to handle this was just to be incredibly transparent about it, and explain why they were changing the levels to unlock stuff:

Because in reality, it is doing well – it’s just doing the opposite thing of what we expected. From a revenue point of view, we’re seeing the best results we’ve ever seen on GOG in such a short time span for our games. But that wasn’t the initial idea

So in the end we realized that there wasn’t a way of fixing this without admitting that we just predicted everything wrongly. And if we’d want to still offer those videos (and tech demo of LMK) as a reward for people keeping on participating in the PWYW campaign, then we’d have to lower the different tiers.

Which more or less is what we’re doing this evening. We’re going to lower the tiers to numbers that we think fit the current trend more or less, except for the last one, which we’re putting high on purpose. Well actually, I’m putting it high, because all the others in the team wanted to put it lower. But I decided to be stubborn

One of the things that I think is important to remember about all of these different business model experiments is that they are experiments. We still don’t know what fully works, and lots of stuff goes wrong. Sometimes it’s a complete failure, and sometimes (as in this case) it’s just different than expected, so pieces of it don’t work the way they planned. But, the main reason many of these programs work in any way is that there are fans who really like to support the content creator, and when the content creator opens up and explains the situation honestly, that only increases the loyalty and the connection. That’s what likely happened here as well. While this one really is a success story, it’s still great to see an examination of “what went wrong” in the midst of success — and it would be awesome to see more of this kind of analysis.

Filed Under: case studies, expectations, experiments, pay what you want
Companies: good old games, larian studios

Could Co-operatives Save Newspapers — And Investigative Journalism?

Journalism

from the how-about-it-Rupert? dept

A couple of weeks ago, we reported that Rupert Murdoch’s paywall at the London Times isn’t looking like a huge success. That won’t come as a surprise to Techdirt readers, but does raise the question: if newspapers can’t use paywalls alongside ads to fund journalists, what can they turn to? Here’s a revolutionary idea: why not let the people who know and care most about the title — the readers — get more closely involved? That’s precisely what the Berlin-based newspaper Die Tageszeitung, affectionately known as “Taz”, has done. Here’s the Guardian’s description of how it came about:

That bold move seems to have worked: today, the co-operative has a healthy 11 million euros (about $14 million) in the bank. It’s owned by 12,000 readers, each of whom pays a minimum of 500 euros (about $650) to have an equal say in setting overall policy, discussed at the annual general meeting. Interestingly, that egalitarianism is also to be found in the newsroom:

It’s a fascinating approach, one that also seems to address the concern that in the age of the Internet, hard-hitting investigative journalism is a luxury that can no longer be afforded. Sadly, it seems unlikely that Rupert Murdoch would be willing to take a pay cut to around junior reporter levels to try it out for the Times.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: business models, cooperative, journalism
Companies: taz