Long tail with Digital Distribution
by Andy Schatz · 02/28/2007 (4:02 pm) · 9 comments
Thorbrian over on indiegamer.com just posted some extremely interesting aggregate sales data from Reflexive.
forums.indiegamer.com/showthread.php?t=9995
In particular, these two charts sum up his findings:
Average game sales over 4 years
Cumulative Sales data over 4 years, averaged across all titles
What this really shows is that building a successful and STABLE games studio is about volume of titles. If you can get a bunch of titles out, these long tails start to overlap. The release spike for any particular game is unpredictable, but once a games' sales have leveled out, you can pretty easily predict how that game will continue to perform for the following 4-5 years.
forums.indiegamer.com/showthread.php?t=9995
Quote:Hey all,
I've read various posts here and there about how well games sell over their lifetime ("casual games have a long tail", "portals only care about new games", etc) so I figured I'd throw some data into the ether on that topic.
The attached image is a normalized graph of the average sales per week of a single game over it's lifetime in the Reflexive Arcade system (we have about 4 years of usable data for this purpose). I got it by grouping all the sales by the age of the game in weeks, then dividing by the number of games that were that old. Then I normalized the values so that 1 represents the sales rate that the graph seemed to flatten out at. I didn't do anything to try and account for and remove growth of the affiliate network or hit games. So the graph incorporates a number of factors, and it gets noisy near the 4 year mark because we have many less games to average over.
So for us, games have sold about 10x when first released, but quickly dropped down to a stable rate, which it seems like they could sell at forever. My expectation is that other portals and direct sales systems would show similar behavior, but I am curious if anybody else has had a significantly different experience.
In particular, these two charts sum up his findings:
Average game sales over 4 years
Cumulative Sales data over 4 years, averaged across all titles
What this really shows is that building a successful and STABLE games studio is about volume of titles. If you can get a bunch of titles out, these long tails start to overlap. The release spike for any particular game is unpredictable, but once a games' sales have leveled out, you can pretty easily predict how that game will continue to perform for the following 4-5 years.
About the author
#2
This is nothing new, however it's VERY cool to see the quantitative data to back up the old adage. It's long been said that games in the GG store have a long shelf life and it's one of the great things about getting published - your game can stay up for YEARS and retain a stable sales rate, as opposed to WEEKS in the box channel. However the opposite is also true, if a game isn't selling well at first it's not a matter of "waiting it out," if nothing changes (demo strategy, game design) that sucker just ain't gonna move units.
Thanks for the post Andy, this is relevant to anyone wanting to get into online sales.
02/28/2007 (8:56 pm)
Quote:quickly dropped down to a stable rate, which it seems like they could sell at forever
This is nothing new, however it's VERY cool to see the quantitative data to back up the old adage. It's long been said that games in the GG store have a long shelf life and it's one of the great things about getting published - your game can stay up for YEARS and retain a stable sales rate, as opposed to WEEKS in the box channel. However the opposite is also true, if a game isn't selling well at first it's not a matter of "waiting it out," if nothing changes (demo strategy, game design) that sucker just ain't gonna move units.
Thanks for the post Andy, this is relevant to anyone wanting to get into online sales.
#3
02/28/2007 (9:05 pm)
Also for those not familiar with "Long Tail" here's a succinct summary from the thread: "The long tail effect means that having lots of smaller but essentially infinitely recurring revenue streams can quickly add up to more revenue than, say, even your newly released game."
#4
02/28/2007 (9:38 pm)
@Daniel- These numbers are not absolute sales. They are normalized numbers. Meaning it's not trying to say that it steadies out at 1 sale a week. It simply steadies out to SOME value for every week. The other values are a multiple of that. 
#5
The important concept of the long tail is that it requires a fairly large selection of niche products for buyers to choose from. That way, small numbers of individual sales of niche products adds up to an overall large number of sales. The key is that it benefits the distributor much more than the developer. In terms of indie games, it would be difficult for a developer to take advantage of the "long tail" concept because you'd need to develop a good number of games to do so. Indie game distributors, however, could definitely take advantage of this.
03/01/2007 (8:53 am)
I put up a blog about the "long tail" concept and its relevance to the indie game dev scene back in July of last year. It has a link to the piece presented on NPR at the time -- if it's still available, it's a good listen.The important concept of the long tail is that it requires a fairly large selection of niche products for buyers to choose from. That way, small numbers of individual sales of niche products adds up to an overall large number of sales. The key is that it benefits the distributor much more than the developer. In terms of indie games, it would be difficult for a developer to take advantage of the "long tail" concept because you'd need to develop a good number of games to do so. Indie game distributors, however, could definitely take advantage of this.
#6
03/01/2007 (9:38 am)
@Rubes - I don't think it's difficult for indie developers to take advantage of it at all. A typical casual title CAN be made in 8 months with a team of 2-3 people. If those sales last for 5 years, the overlap in sales of these titles becomes significant. In the indiegamer thread, some stats showed that the top 25% of titles settled down to 25% of their average sales after the first year, and pretty much stayed there. That means that after 5 years, you'll still be collecting at least 25% of average first year sales on 7 titles, which adds up to a number much larger than the average sales of the launch period for any one title.
#7
03/01/2007 (10:55 am)
This is a surprisingly encouraging graph for small time indie developers and even medium sized indie development houses - it shows that it's a sustainable business model if you can keep getting product out onto the market place.
#8
BTW, what's going on with qatfish.com? I see it's still up and aggregating, any additional plans?
03/02/2007 (2:30 am)
@Andy: I would like to complement you (and also Josh R.) for taking the time to fill in the community with your nuggets of knowlege. Keep up the great work. BTW, what's going on with qatfish.com? I see it's still up and aggregating, any additional plans?
#9
As for Qatfish -- Development has been on the back burner for a while, though we have had steady repeat traffic to it. At first, I really just built it because *I* wanted it as a tool (and it provided built in traffic for my blog, which I occassionally post to), but I think it has the potential for more. It's not a money-maker yet, though, so game development takes precedent. If anyone has any suggestions for how to make it better/more useful or if anyone wants to help develop, I'm all ears! ;)
03/02/2007 (9:54 am)
@Jason- Thanks! It's fun to share stuff like this because it's fun to talk about it (at least for marketing nerds like me).As for Qatfish -- Development has been on the back burner for a while, though we have had steady repeat traffic to it. At first, I really just built it because *I* wanted it as a tool (and it provided built in traffic for my blog, which I occassionally post to), but I think it has the potential for more. It's not a money-maker yet, though, so game development takes precedent. If anyone has any suggestions for how to make it better/more useful or if anyone wants to help develop, I'm all ears! ;)
Torque Owner Daniel Scott
I think what it really says is one MUST get in to the mainstream publisher cycle if they hope to have a STABLE studio. Maybe I am reading those numbers wrong but I don't see how any studio can survive on that sort of sales, even if a studio happened to have three or four selling at a time.