|August 1st, 2009|
The wild frontier of the Web for game and app distribution is rapidly looking a lot like the old landscape. The biggest challenge is distribution: the power to get your game in front of users. A lot of folks look to the centralized distribution available on things like the iPhone’s App Store or using Facebook’s apps infrastructure. But as noise rises, you need clout to get seen in the midst of an endless sea of apps.
And the answer to that? A powerful distribution network in the hands of an aggregator. In short, a company that has the funds to commission games and spend heavily to advertise them, to cross-promote them with their other titles (and get economies of scale on that marketing dollar), and to make their titles rise above the noise. In other words, a publisher. Take Zynga, for example:
“We do spend a lot of money on advertising when we want to, like when we launched Farmville,” Pincus said. “We spent a couple million dollars advertising it and we’re not shy about that.”
That’s more in marketing alone than most apps have in development budget. Possibly more than their makers have in total funding.
What does this mean? Well, there’s still room for scrappy viral hits. But distribution clout is a huge huge factor. In effect, we’re just seeing the birth of new kinds of publishers, just as we saw the raw power of Miniclip and other portals to create hit titles in the browser space. Being viral and marketed is a powerful combo; get onto the first page of apps and it’s likely that network effects sustain you for a long time.
What’s more, the titles in the newly burgeoning “social game” space look an awful lot like the Tycoon genre of games, and are starting to get similarly complex. I would expect to see more genres of games jump over to these new distribution platforms, and bring bigger budgets with them.
Despite the long tail, the question remains open, I think, how much the new industry landscape ends up looking like the old. We’re a long way from the budgets for the titles being as high and causing the sort of pressures we see in the boxed game industry — but marketing budgets being this high can trigger some of the same effects. It won’t look exactly the same, but I bet over time we see more similarities than differences, including a much more hit-driven environment (the casual games market on the web is already well along on this path).
In that kind of world, the deepest pockets win, and the likeliest candidates there are the companies that have already established themselves in the new space, plus some from the old space who make the jump successfully (some via acquisition, some via learning).
The good news is that there’s no stranglehold on the “shelf space” by those with the distribution power. It’s not like the physical goods industry where you simply cannot get your box on the shelf. But the shelf space of top search results or listings on the apps page is finite, and the battle for those slots is now a multi-million dollar one.