GameStreamer Review: A Viable Distribution Channel For Developers (And Game Sites)

I got approached by the Timothy Roberts (GameStreamer’s CEO) and Nathan Lands (Co-Founder and Executive Vice President) about a possible cooperation with GameStreamer. We agreed that I’d do a detailed review for them, and Nathan also agreed to do an interview later. I will mostly focus on the developer side (which – bit confusingly – they call “publisher”) in this review, but will also highlight some points about the benefits for those who want to sell their games.

In short: if you are interested in getting more sales (whether you are developing games or selling them), you want to check out their system.

Overview:
GameStreamer (GS) has been working silently for couple of years and recently opened their doors. Basically, they mention having a massive network that contains both publishers and developers. GameStreamer works with clients that have good traffic coming to their sites – and GS to provide targeted traffic to certain demographics. In my mind, this means that for example Car sites could offer targeted Car games to their audiences (instead of “new random casual game every day”). In terms of conversion this sounds good.

They are also working with variety of clients to create new type of revenue streams and they have various payments models available – ranging from try & buy, only buying, subscription, micro-transactions to rental and advertising.

Benefits for developers
There’s some obvious benefits for developers who wish to use GameStreamer to distribute their games:

  • First of all, it’s free (so basically, you have one additional way to get publishers to sell your game)
  • The royalty rates are quite low – as we often see in today’s gaming industry (GS offers 25% of net revenue at the time of writing this review). It’s hard to say if that’s a bad or good rate, since they claim to have a great amount of publishers that can sell games (with great technology) – so who knows if the conversion rates are better (and if their net revenues are decent), then to me it sounds like worth pondering.
  • You might also earn revenue from trial downloads, since the 25% net revenue goes for that too. So basically, the more people download your games – the more you have chance to earn (that sounds like a solid deal to me)
  • Registration is pretty straightforward (register herebut be sure to read the terms before registration, don’t just do what I write here). No hassles to figure out “how to get published”.
  • Please notice that the terms say that you are required to have 36 months with them (although in my experience you usually can discuss on how things go) – I asked this from Nathan and will update this as soon as I get more information on this.

I briefly mentioned to Nathan about getting Dead Wake into the system, and when the time is nearer for release of Dead Wake we’ll continue discussion and see if it sounds like a good deal to try out. Right now I don’t know how good the system is, but to me the concept sounds promising: if they can sell my game to targeted audience (and generate me revenue) then it’s worth the deal. These type of portal options aren’t always available for niche games, so to me this sounds a good distribution possibility for my game. Their site sells games ranging from casual to multiplayer to much more.

Benefits for those who want to sell games in GS catalog
If you want to start selling games from their catalog, you can sign up to become a White Label Partner with them (see WLP overview). They can also help you create your portal with their system. I’ve registered to become a partner to see how the system works, but right now I have no further information about this – except that I’d guess you can customize your portal (at least according to their site) to provide targeted games to your audience.

Royalty rates
Like said, they give 25% of net revenue. The net revenue is a tricky term (which unfortunately most publisher/distributor will give you). If game costs $10, then net revenue isn’t $2.50. It can be $2.40 or $2.00 or $0.73. It all depends how cost-effectively they can provide games. If the costs of providing games are big, then 25% net revenue sounds bad. If they have little overhead in selling games, then of course net revenue sounds just fine.

Since I don’t have access to information that would say what this 25% means in practice, it’s hard to know how good deal it will be. Basically, if it’s a bad deal for developers – then the word will spread and eventually they won’t get many developers and their company will not be here for long… but if it’s too good for developers, then the publisher won’t like it, and soon they might end up having loads of developers but just few publishers.

If on the other hand they manage to balance this to create a win-win-win situation for every party (developers, publishers and of course for themselves) then we know things are good: this means that it might be a simple way to get your game distributed.

Like said, I don’t know how good deal they have, but they’ve got World of Goo in their system, so it can’t be all that bad I believe.

Update: Nathan from GS informed that “they are carefully reviewing some of the feedback and also are considering upping the revenue share from 25% to 35%”.

Revenue also from downloads
I really like that they also offer potential revenues for downloads. I presume this works so that if people click their ads (in case there is such) in your game (or game download page perhaps – my wild guess), you earn 25% of the net revenue. A really nice way to increase developer income (at least when the conversion doesn’t work).

How the GS distribution works
GS allows game developers to upload their games to the system, and then distribute to partner online games stores. So basically, you upload your game – then the GS partners will start selling it. And if all goes well, you start getting bucks.

Bottom line
While I’ve been exchanging emails with the GS folks, I’ve got a professional image from them. I got prompt replies. I felt friendly attitude.

My gut feeling is that GS can be a really big thing in the digital distribution for games. I think they have spent a good deal of resources to make the concept true, and we’ll see how things will go. That’s why I think the developers who get first in the system can benefit from this the most.

I don’t know how much hype GS offers, but the impression I got from them (and seeing all the studios they partner with) is at this point positive, and I think this can help add another way for developers to monetize their games. In their website they say:

… not only can the multi-national developers get involved, but so can the 2 guys working out of a coffee shop in San Francisco.

Sounds good for one-man studios.

Where to go next:
There’s several resources to check out:

  • They have a brochure about GS: download (9 megs).
  • If you are a developer, and wish to get more information about them, I recommend that you visit their game distributor pages.
  • If you want to see their catalog in action, check out their store.
  • If you want to sell their games, see WLP overview.

For everything else, check out their website: GameStreamer.net.

An interview with Nathan coming in the nearly future (say: within couple of weeks or so) – dedicated to game promotion and marketing for developers (questions will be outside GS too). Please comment in this blog entry and ask anything. I’ll be asking Nathan any clarifications there might be about this system, but also will be making questions regarding game promotion in general – and trying to get some tips for developers.

17 thoughts on “GameStreamer Review: A Viable Distribution Channel For Developers (And Game Sites)

  1. Juuso Post author

    Nathan: thanks for the clarification. And Baloo, it’s good that people do read the agreements before signing :)

    Reply
  2. Nathan Lands

    Baloo,

    Thank you for pointing out this confusing language! We’ve had a team of lawyers review the contracts as well as I’ve read it myself but somehow this got missed. We are not asking for source code. We’ll be updating this agreement and want to make clear we are never asking or demanding source code.

    -Nathan Lands

    Reply
  3. Baloo

    “Publisher shall deliver to GameStreamer all code, documentation, reports, and other materials developed by Publisher in the course of its performance under this Agreement and any other items reasonably necessary for the operation of the GameStreamer Network [..] and all changes and enhancements thereto.”

    I’m kindda new to indie game development. Is it common for a distributor to ask for source code?

    Reply
  4. Jim Perry

    “Like said, they give 25% of net revenue. The net revenue is a tricky term (which unfortunately most publisher/distributor will give you). If game costs $10, then net revenue isn’t $2.50. It can be $2.40 or $2.00 or $0.73. It all depends how cost-effectively they can provide games. If the costs of providing games are big, then 25% net revenue sounds bad. If they have little overhead in selling games, then of course net revenue sounds just fine.”

    This is worrying. The low % as well as no guarantee of the exact %.

    “Like said, I don’t know how good deal they have, but they’ve got World of Goo in their system, so it can’t be all that bad I believe.”

    But since WoG isn’t being distributed just through this service, they may not be worried about the % they’ll be getting.

    Reply
  5. Jake Birkett

    my experience has been that portals normally deduct up to 10% max of gross as expenses leaving you with 90% of gross or higher. That’s OK because it’s the same if you sell direct because payment processors normally take around 10% when it’s all worked out e.g. BMT Micro.

    Reply
  6. Chris

    Heh. Would have been nice to be able to read Nathan’s comment before I wrote all of that. :-)

    Thanks for commenting, Nathan. 35% of net is certainly better than 25%, and I appreciate that you’re listening. Could I ask precisely what expenses are deducted from gross revenue to arrive at the “net” figure upon which the developer’s 25%/35% revenue share is calculated?

    @Juuso: I don’t know if I’d call 75% “very, very high”. It is higher than any deal I’ve seen, but you can easily get close to it with several of the non-casual distributors. e.g. Stardock, who to their credit are unusually open about their terms, offer 70% of gross on Impulse. And they raise it to 85% if your website is the referrer!

    Ref: http://www.impulsedriven.com/developers.aspx#Publishing

    As I mentioned above, I wouldn’t expect 70% in an affiliate-style system like GameStreamer, simply because of the extra middleman (affiliate -> GameStreamer -> developer instead of, say, Steam -> developer). But for digital distribution deals in general? Totally doable.

    Reply
  7. Juuso Post author

    Notice: there was 3 auto-moderated comments which got published now, so check out the them (they appeared between some of the comments)

    Reply
  8. Chris

    Completely agree with Koen, I thought the same thing as soon as I saw it. My immediate reaction was “hang on, surely that’s 25% to *GameStreamer*?” But no – 25% to the publisher/developer. Of *net*!!!

    There are plenty of other digital distributors with ample traffic who offer well above 50% on *gross* proceeds (units * sales price – sales tax; sales tax is a perfectly acceptable deduction). No bandwidth or advertising expenses deducted. See Steam, Impulse, D2D, etc. Against this kind of competition, GameStreamer’s value proposition to indie devs is highly questionable.

    I realise their white-label model is a bit different from that of most distributors, but in essence it’s merely a very fancy affiliate system. Most game affiliate splits, as implemented by e-commerce companies such as BMT Micro, are much more equitable. Splits of 40%/50%/10% affiliate/dev/ecommerce are reasonably common in this area. The developer can also choose other splits, e.g. 30%/60%/10%, which are also fine. Importantly, the developer is in control and can choose the split which they think is fair, or even negotiate one-on-one with potential affiliates.

    The obvious counter-argument is that GameStreamer’s more advanced tech and the advantages it brings (rentals and so on) make up for the lost revenue share. I don’t agree with this argument, however, because percentages inherently scale. If GS’s tech really does offer such a commercial advantage, then the resulting increase in sales will be more than enough to pay for the additional cost of developing that tech. If it doesn’t, then the entire counter-argument falls apart anyway, since it’s predicated on the assumption that there *are* worthwhile advantages. GameStreamer needs to demonstrate confidence in their own platform.

    What revenue splits would I consider fair? Well, I’d start by looking at the affiliate model. At first I was thinking 30% to GS based on my digital distribution experiences, but then I remembered they’re not doing any marketing or directly driving any traffic. So maybe 20% as a compromise. If the retailers take 40% (note this is at the upper end of the scale in the affiliate world) then the developer is left with 40% of gross – better. If the developer can set their own percentage, or even negotiate per-retailer, even better.

    40% of gross is still bad when you’re competing with Steam/Impulse/D2D/et al, mind you. It’s a back-catalogue, low-return-on-high-exposure kind of range. I wouldn’t put my new games on there until I’d exhausted their ability to sell on the more profitable channels, for fear of cannibalising the better revenue shares. (Please note, this is what I’d do at 40% of gross. At 25% of net, I’m not touching them with a 10 foot pole.)

    Importantly, these are percentages of GROSS revenue. None of this making the developer pay for the distributor’s expenses! I don’t see them paying for my expenses!

    Wake me when they implement a decent revenue share and base it on gross revenue.

    [/essay]

    Reply
  9. Sebastien Larocque

    I saw the word “rental”. Might be more interesting than just trying to sell games. I know the subscription model is a lot less affected by piracy. I will check this in a near future if this could be a solution to rent my games online.

    Reply
  10. Koen Witters

    I think 25% is a rip-off. Signing into these kind of deals is exactly what put game developers into a weak position. Scale is not an issue, if you sell 5 copies or 5000, you’re still getting ripped off, no matter how much money you make. They will always get 3 more times more net profit than you, which puts them in an even better position.

    Reply
  11. Nathan Lands

    Juuso, thank you for writing a thorough review of GameStreamer from a developer’s perspective. How we see it is every game developer deserves a chance, just how iTunes and the AppStore have done, we are allowing everyone to make games and distribute them through our network.

    We plan on having the largest network for digital distribution of games and with our various partners will work to provide games based on the demographics of the partner’s users. So if one website has more young males, the games will be more focused on that audience.. if their audience is primarily middle aged woman it would be different games.

    We are working on building out a highly advanced recommendation engine that incorporates the latest in collaborative filtering and social discovery techniques. Basically, based on who you are as a person you will have a different experience than the next user who has a different personality.. you will see different games. Now throw into the mix eventually being able to make recommendations based on what your friends are playing and it gets really exciting what happens to conversion rates and the virality of the system.

    We are carefully reviewing some of the feedback and also are considering upping the revenue share from 25% to 35%. At this time we are actively working with major game publishers and most of the deals have happened outside of the automated system so we are definitely still perfecting how thousands of developers will use our system. The feedback is greatly appreciated. Please keep it coming and let me know any ways we can help to make a better system for you the developers and for the consumers who buy your games.

    -Nathan Lands
    Co-Founder & EVP Marketing
    Follow me on Twitter: http://www.twitter.com/NathanLands
    Follow GameStreamer on Twitter: http://www.twitter.com/GameStreamer
    You can e-mail me at nlands AT gamestreamer.com

    Reply
  12. Juuso Post author

    I suppose the key factor is the scale. If they can get enough distributors, then I think 25% of Big Number is better than 50% of Low Number (or 75% which sounds very, very high).

    (and of course it depends also how the non-buying trial ad based revenue works…)

    Reply
  13. Paul Eres

    I found them through Twitter if I recall correctly. The 25% net to the developer is really what turned me off from the idea. Half would be reasonable, but when someone wants to provide a content delivery service and take 3/4ths of what you deliver over it, that just feels bad. Especially when they’re just starting up and don’t know if the service will succeed or not I feel it’d be better to reverse that and offer 75%.

    Reply
  14. Juuso Post author

    Please feel free to shoot any comments: I’ll ask Nathan about any stuff related to marketing/promoting (and of course any GS related stuff too).

    Reply

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Pro-Human Quiz: