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javaexp

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Hi Martin,

Here are 5 questions which are constantly hitting my mind. I wanted to know your opinion on these:

1) How about registering Cobaltplay or PandaTap as registered business entity (given the costs of registration, maintenance of annual audits and bookkeeping records for past years)

2) Since mobile gaming may not be that much profitable after 5-7 years and then VR may kick off, do you plan diversification to other sort of businesses like web apps, softwares e.g. video player, real estate, financial services.

3) Do you see yourself as opening a physical office ever?

4) Will you be interested in selling off your business (games, code, employees) to a bigger company and then work under that bigger company's leadership (like Occulus, Youtube etc)

5) I see that many of your games are enhancement on top of assets purchased from unity asset store which is excellent and I appreciate it. What is your stand on game re-skinning as that also virtually gives you a new game with repeated game mechanics at a lesser cost/time.

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Martin

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Hey Javaexp. How are you this week man. I hope work and the weather there is good.
I've added some replies below in blue:


1) How about registering Cobaltplay or PandaTap as registered business entity (given the costs of registration, maintenance of annual audits and bookkeeping records for past years)
Panda Tap is already officially registered in Hong Kong. For Cobalt Play I might do this eventually but at the moment the main focus is really getting a stable business model established and keeping costs low.

2) Since mobile gaming may not be that much profitable after 5-7 years and then VR may kick off, do you plan diversification to other sort of businesses like web apps, softwares e.g. video player, real estate, financial services. 
Yeah definitely. It's super important to diversify I think. We're working on some bigger VR games now which are much larger than our mobile games. I've also started a forum on stock market trading (www.howtogetrichinvesting.com) to see if that area of web forums can create some profits. I would also like to get in to the real estate industry as a more passive investor too.
My opinion is that its almost impossible to succeed in the mobile game industry now and so for Panda Tap and Cobalt Play we're moving more towards VR now but it will take time for this shift to happen and generate revenue from it. Its still a very new area for us.

3) Do you see yourself as opening a physical office ever?
I do yes, but not with the current business model of Panda Tap and Cobalt Play. We've been operating now for 5 years and 3 years respectively and we've never managed to break above the $200 per day mark as a stable revenue, even though we've released more and more games over the years. So opening an expensive physical office in this model would put too much pressure on us. However I'm now speaking with some investors about opening a new VR game studio in Shanghai and that would be funded by seed investors, angel investors etc. So opening a physical office in that situation would be a requirement.
I'm glad i didn't open a physical office 3 years ago with Cobalt Play because it would have been game over already lol.

4) Will you be interested in selling off your business (games, code, employees) to a bigger company and then work under that bigger company's leadership (like Occulus, Youtube etc)
Yes, that would be the long term plan for all of the businesses.  But for that to happen it would require a physical office and a strong game IP or franchise for them to buy. I don't think that any investor / company would be interested in buying us at the moment.

5) I see that many of your games are enhancement on top of assets purchased from unity asset store which is excellent and I appreciate it. What is your stand on game re-skinning as that also virtually gives you a new game with repeated game mechanics at a lesser cost/time.
 
Only a few of the games are actually re-skins of unity asset store packs. I think SniperXXX is the main one, but it was heavily modified from the original source. Re-skinning unfortunately became a neccessary thing for a lot of studios to do just to keep their revenue at a stable level. I don't particularly like doing re-skins because we're not creating anything new, just trying to make some cash flow on a quick game. But, to be honest, we can't spend a lot time development games because we just can't get the downloads, and players never pay for mobile games (at least for the most part). This is an area of big debate I think. I would love to spend 6 - 12 months building awesome, amazing games that players love. But the 2 major problems are 1) Visibility, and 2) Players almost never pay for mobile games. So we have to adapt our business model around the market.

Catch me if you have any other questions.

Chat soon man [smile]
Martin
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bestgamesstudios

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Reply with quote  #3 
Excellent questions javaexp!

Quote:
Originally Posted by Martin


1) How about registering Cobaltplay or PandaTap as registered business entity (given the costs of registration, maintenance of annual audits and bookkeeping records for past years)
Panda Tap is already officially registered in Hong Kong. For Cobalt Play I might do this eventually but at the moment the main focus is really getting a stable business model established and keeping costs low.


Can you go into more details of the benefits of having a registered legal entity as opposed to sole enterpreneur?  Is is optimal if you want to have employees? (I know, it varies from country to country but I think the main concept should be similar for most places)

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javaexp

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Reply with quote  #4 

Thanks a ton Martin.  I am doing great and hope the best for you and your family including little dog (can't recall his name)

So my personal take on these 5 is:

1) Yes gonna register soon

2) As I am sure to stay in software field so a generic name with multiple sub brands is the way to go. for e.g. Alphabet is parent company and Google is child company. They are doing it now, why not start the company keeping in mind this thing already. Since expansion to new areas in future would require restructuring anyway so a generic name which can fit multiple businesses is good. Another example is Tata. They have Tata Consultancy, Tata Steel, Tata Motors, Tata tea and so on. I had Java Experience name in past which is completely wrong and shows how novice I was at that time.
The future has a lot in store for us. I think VR + Home Automation is gonna change the world but who knows how much time these tech. need to go mainstream and earn millions.

3) Completely agree with $200 mark comment by Martin. We gotta earn huge money daily before making a move to physical office as it involves a lot of extra office expenses. My threshold for this is minimum $1K per day for 8 months before opening office on rent.

4) The other day I read that the guy who built Admob sold it for $750Million to Google and then quit Google to explore new things. Personally I would definitely sell to Facebook, LinkedIn, Apple and Google and then start new company lol. Usually after selling business, I see many people quit because they are now a small fish in big ocean and their voice is not heard anymore.


5) Sorry for using the word many. I has to be very few are build on top of unity assets [smile] one guy spent 1.5years building the next word search game and spent 1Million dollors and 50K downloads in 2 years
https://play.google.com/store/apps/details?id=com.rhs.wordsearchhero

Too risky, I would have rather invested that money in some shares/lottery/casino/forex trading.

Thanks once again Martin for taking some time for the reply.


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XdebugX

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Reply with quote  #5 
Quote:
Originally Posted by javaexp
one guy spent 1.5years building the next word search game and spent 1Million dollors and 50K downloads in 2 years
https://play.google.com/store/apps/details?id=com.rhs.wordsearchhero

Too risky, I would have rather invested that money in some shares/lottery/casino/forex trading.

Thanks once again Martin for taking some time for the reply.


http://forums.makingmoneywithandroid.com/showthread.php?p=88371

Expense Report: WordSearch Hero

It was more like $80k, but goes to show it's not neccessarily the quality of the game that gets the downloads as much as it is the visibility in the app stores.
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Reply with quote  #6 
It looks like that game was totally over-specced. It's not about quality, it's about where the time was spent. To me casually browsing the app store page, it looks like any other word game - I'm sure there's a plugin on the Unity store that could get you 80% of the way. A custom avatar creator - that must have taken a long time. (Again there's probably a plugin on the Unity App Store that does a lot of that too). From quickly browsing that thread it sounds like the way its been coded means it can't be launched on iOS (so that's half of his potential revenue gone straight away).

Spending time on a game is good, if spent wisely, but if at the end of it you've got something which (whilst it might be superior) looks basically the same as everything else, then you've got a real problem. There's no point reinventing the wheel. Hopefully he's reusing all this stuff (custom avatar creator etc) in his new games to recover some of the cost.

I still think quality is key, but time should be spent wisely - new features, more levels, new modes, depth, humour and gameplay - no one is expecting an indie game to be as polished as a big studio's - we need to polish up to a point, but no more. We need to embrace the 80/20 rule - for 20% of the effort we reach 80% of the effect, to get that extra 20% we'd need to put in the 80% effort that just isn't feasible for indies.
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Quote:
Hopefully he's reusing all this stuff (custom avatar creator etc) in his new games to recover some of the cost.


I wonder what part of the 80K he will recover [smile]
(then again, I'm speaking as someone whose average budget per game is 0-40usd (not thousands, just dollars) for assets plus a few days of my time)

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javaexp

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Reply with quote  #8 
Quote:
Originally Posted by bestgamesstudios


I wonder what part of the 80K he will recover [smile]
(then again, I'm speaking as someone whose average budget per game is 0-40usd (not thousands, just dollars) for assets plus a few days of my time)


he has got a full time job now.
he was too much into it that he was about to die because of low blood circulation in his body by sitting all day on work chair.
so he lost health as well wealth. wrong wrong wrong.

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bestgamesstudios

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Quote:
Originally Posted by javaexp


he has got a full time job now.
he was too much into it that he was about to die because of low blood circulation in his body by sitting all day on work chair.
so he lost health as well wealth. wrong wrong wrong.


wow.. all of that for one game? Kind of puts everything in perspective for those of us who can churn out games like pancakes

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Grumpy

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Reply with quote  #10 
@bestgamesstudios - I'm starting to spend a bit on advertising now, but yeah I keep my costs low too. Like $100-500 for a game. The game I'm working on now is probably <$100.

@javaexp - Wow that really sucks.
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Martin

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@Javaexp - you're welcome man. Good to read your responses too. My dogs name is Louis [smile] we're all doing well here. I hope you and the family are good there too.

Wow, thats a huge amount of money to spend. Quality is only half of the challenge in mobile games, I find that marketing is really the toughest nut to crack. The biggest spend i heard of through a friend was 25,000 Euro to build a skiing game, and it got 450 downloads in the first 2 months :s

@Grumpy - yeah I agree. The development time needs to be spent in the right place. Don't build a game from scratch if there's a asset that can be purchased from the asset store. It can save so much time.

Maybe if the guy had released his game way back when the iPhone app store first launched he might have done well. But now there are a million word games which look like that, at least it feels that way.

Martin
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skyezeno

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Reply with quote  #12 
Quote:
Originally Posted by Martin
My opinion is that its almost impossible to succeed in the mobile game industry now

As the statement you made above normally hurt me whenever i hear it, my heartbeat increases whenever i hear such statement but to face reality it just a normal phase of life. i think i should just wrap up the little project am doing and maybe sell the source (and maybe use the money to relax for the weekend) or what do you think cause am really scared (like seriously scared). Pls i need your advice, you can pm me if you want to.
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Martin

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Hey Skyezeno. Yeah its a tough sentence to hear. I often hear the same thing when talking to other developers.
I think it depends on your current situation whether you should do some other business or not. It's a very tough decision for sure because as developers we put so much time and effort in to our games. It also depends on why you are doing games, are you in it because you really enjoy making games, or for the business side of things.

Sorry I can't give any specific help on this at the moment. But perhaps you can try out some other area of games instead of completely stopping.

Martin
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Grumpy

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Reply with quote  #14 
Quote:
Originally Posted by skyezeno

As the statement you made above normally hurt me whenever i hear it, my heartbeat increases whenever i hear such statement but to face reality it just a normal phase of life. i think i should just wrap up the little project am doing and maybe sell the source (and maybe use the money to relax for the weekend) or what do you think cause am really scared (like seriously scared). Pls i need your advice, you can pm me if you want to.


With a focus on quality and depth I still think it's very possible to make money in this industry. While the number of winners might be shrinking, the industry is growing. As the big studios have started focusing on mobile, quality has risen making it harder for smaller studios/indies to compete. However if you can match that quality bar there's more money to be made than ever.
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skyezeno

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Reply with quote  #15 
Quote:
Originally Posted by Grumpy


With a focus on quality and depth I still think it's very possible to make money in this industry. While the number of winners might be shrinking, the industry is growing. As the big studios have started focusing on mobile, quality has risen making it harder for smaller studios/indies to compete. However if you can match that quality bar there's more money to be made than ever.

but what about marketing?
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skyezeno

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Quote:
Originally Posted by Martin
Hey Skyezeno. Yeah its a tough sentence to hear. I often hear the same thing when talking to other developers.
I think it depends on your current situation whether you should do some other business or not. It's a very tough decision for sure because as developers we put so much time and effort in to our games. It also depends on why you are doing games, are you in it because you really enjoy making games, or for the business side of things.

Sorry I can't give any specific help on this at the moment. But perhaps you can try out some other area of games instead of completely stopping.

Martin

thanks, i will keep that in mind and give your last sentence a trial
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skyezeno

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Reply with quote  #17 
Quote:
Originally Posted by Grumpy


With a focus on quality and depth I still think it's very possible to make money in this industry. While the number of winners might be shrinking, the industry is growing. As the big studios have started focusing on mobile, quality has risen making it harder for smaller studios/indies to compete. However if you can match that quality bar there's more money to be made than ever.

speaking of income, have you guys watch this video?

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Martin

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Reply with quote  #18 
Cool video post Skyezeno. Just watches it now. The few points that stuck out for me where:

1) $200,000 USD marketing cost to reach the top 25 rank in the app store, wow.
2) They seem to really depend on featuring from apple / google.
3) Video advertisting seems to be their main focus.
4) You can't just make a good game anymore, it has to be marketed with a marketing budget in mind.

The big problem I think is with number 2. As the guy in the right said "The app stores are the market makers", and therefore they really dictate the revenue of your game studio. I know I keep saying this, but if a business depends on another business for revenue / promotion then its a huge risk. Depending on promotion from the app stores is so hit or miss it feels like.

Martin
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bestgamesstudios

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Reply with quote  #19 
Quote:
Originally Posted by Martin

My opinion is that its almost impossible to succeed in the mobile game industry now and so for Panda Tap and Cobalt Play we're moving more towards VR now but it will take time for this shift to happen and generate revenue from it. Its still a very new area for us.


I've been ruminating this for a few days now, and I'll post an audio/video response soon, but as I was thinking about the content of my response, I think it can be summed up in a few simple words "Flying Car Free: Police Chase"

https://play.google.com/store/apps/details?id=com.gtracegames.flyingcarfree.police.chase


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Grumpy

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Reply with quote  #20 
Quote:
Originally Posted by skyezeno

but what about marketing?


If your game is of high enough quality and can produce a decent ARPU then marketing it becomes much more feasible. The reason why Clash of Clans gets advertised everywhere is because it makes so much money per user and because it's so socially sticky. They can afford to invest a lot in to the marketing because a new user produces so much revenue. If your game only makes $0.1 per user, you can't really afford to advertise so you become reliant on organic downloads, ASO and getting featured. If you make $1+ per user suddenly paid advertising becomes a possibility.

But ignore advertising for a second. Let's say you don't do paid marketing but your game still has an ARPU of $1 and you get 50 downloads on Apple and 50 downloads on GP a day - well then your game is still making $100 a day - 36k a year on what are quite modest downloads.

That's the advantage of an indie, if a big company makes 100k from a game, the project was a total failure, if we do it, it's a massive success. As our costs are low.

Martin makes good points, I certainly think the market is changing and I also worry about the reliance on others, the risks on building a business on what are shaky foundations, but I still think there's money to be made here.
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skyezeno

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Reply with quote  #21 
Quote:
Originally Posted by Martin
Cool video post Skyezeno. Just watches it now. The few points that stuck out for me where:

1) $200,000 USD marketing cost to reach the top 25 rank in the app store, wow.
2) They seem to really depend on featuring from apple / google.
3) Video advertisting seems to be their main focus.
4) You can't just make a good game anymore, it has to be marketed with a marketing budget in mind.

The big problem I think is with number 2. As the guy in the right said "The app stores are the market makers", and therefore they really dictate the revenue of your game studio. I know I keep saying this, but if a business depends on another business for revenue / promotion then its a huge risk. Depending on promotion from the app stores is so hit or miss it feels like.

Martin


for me no. 1 really hit me hard, making that statement in the first few minutes of the video really made me loss concentration and thinking why on earth do you need to pump out $200,000 for marketing a game, the big guys can do that but any indie who does that is taking a very big risk, cause marketing is something that once you stop, you feel the changes.

no. 2 i have been hearing stuff like that for a very long time, while the appstore / google is a business line for respective companies, at least there should be room for fairness. relying on Google / Apple for success in the appstore is really another thing that is giving me concern. Am thinking on moving to other stores like chinese appstore, but i noticed that their mode of operation is kinda strict (they require some kind of documents, which i can't provide), and i also noticed that most chinese gamers love mmo/strategy games. @Martins, do you have any suggestions on moving to Chinese store.
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skyezeno

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Reply with quote  #22 
Quote:
Originally Posted by Grumpy


If your game is of high enough quality and can produce a decent ARPU then marketing it becomes much more feasible. The reason why Clash of Clans gets advertised everywhere is because it makes so much money per user and because it's so socially sticky. They can afford to invest a lot in to the marketing because a new user produces so much revenue. If your game only makes $0.1 per user, you can't really afford to advertise so you become reliant on organic downloads, ASO and getting featured. If you make $1+ per user suddenly paid advertising becomes a possibility.

But ignore advertising for a second. Let's say you don't do paid marketing but your game still has an ARPU of $1 and you get 50 downloads on Apple and 50 downloads on GP a day - well then your game is still making $100 a day - 36k a year on what are quite modest downloads.

That's the advantage of an indie, if a big company makes 100k from a game, the project was a total failure, if we do it, it's a massive success. As our costs are low.

Martin makes good points, I certainly think the market is changing and I also worry about the reliance on others, the risks on building a business on what are shaky foundations, but I still think there's money to be made here.


you are right about your statement, i really think success depends on what you call success, like for instance $100k where i live is already enough for me to start thinking of another little business.
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skyezeno

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Reply with quote  #23 
Quote:
Originally Posted by bestgamesstudios


I've been ruminating this for a few days now, and I'll post an audio/video response soon, but as I was thinking about the content of my response, I think it can be summed up in a few simple words "Flying Car Free: Police Chase"

https://play.google.com/store/apps/details?id=com.gtracegames.flyingcarfree.police.chase



@bestgamestudio i really miss your videos, but i av not figured how to download videos from the new site you are uploading your videos, cause i mostly view this forum on mobile and streaming with my device connection is really bad.
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bestgamesstudios

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Reply with quote  #24 
Quote:
Originally Posted by skyezeno
@bestgamestudio i really miss your videos, but i av not figured how to download videos from the new site you are uploading your videos, cause i mostly view this forum on mobile and streaming with my device connection is really bad.


Wow had no idea people were having this issue - can't you get to a pc? okey, I will search for some other platform

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skyezeno

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Reply with quote  #25 
Quote:
Originally Posted by bestgamesstudios


Wow had no idea people were having this issue - can't you get to a pc? okey, I will search for some other platform

ofcus i have a pc, but ever since my computer av crashed trice with no explanation (i blame torrents for this) i decided to be using my tab or smartphone (or my very old generic phone) for surfing the net while i use my pc for programming/ design, except i want to update some software or upload some files which cant be done on mobile.
It's nothing to worry about (dont bother yourself because of me), i think i know a way to go about it. Just keep doing more video pls.
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