PCR spoke to Green Man Gaming CEO Paul Sulyok about the future for PC gaming, the possibility of the etailer becoming a publisher and how other businesses can mimic the firm's rapid growth…
In three and a half short years [having launched in 2010], Green Man Gaming (GMG) has become one of the biggest players in the digital download market for games...
We tend to be – it varies on a-title by-title basis – number two to the first-party platform [for games]. So when a game's released on Steam, we're number two to Steam. On [EA platform] Origin, we tend to be number two to Origin. On Ubisoft['s Uplay platform], we tend to be number two to Uplay. We tend to be number two generally – sometimes we get knocked to the number three slot but when that happens I get very unhappy.
We're very fortunate, the guys next door have worked hard. We have a great team, they put the hours in. Quite a few of the guys that we tend to bring onboard are extremely passionate gamers, who understand how customers feel, who enjoy the products themselves. I'd be a bit of a poor businessman if I ran a pub and had a bunch of guys who were tee-totallers running it.
We've also got some great publishers who have backed us tremendously and we have a very good working relationship with them, and they've been very supportive.
Do you think there's a particular USP that makes you stand out to the hundreds of digital download services that have failed over the years?
We're not the same as the vast majority of guys who operate in this space – we started off different and made a big noise about our initial difference, and we've continued to be different in the space going forward.
When we launched, we had a core USP, which was the ability to buy a game, download it and then trade it back in – and we'd then resell it. Every time we resold it we would pay the publisher an additional royalty. That was our initial USP, we went to market with that and that made a big noise.
The second pivotal moment for us is when we decided to purchase Playfire in 2012, which is a social platform.
What Playfire gives us is two things – our proposition is to be a social commerce platform, and to be a social commerce platform you need data, you need to have information about your customers.
With Playfire, what we can see is every single game they have ever owned on a platform, how many times they've played it, which achievements they've scored, I can even see in some games how many bullets they've fired. I can see where they are, whether they like driving games, first-person shooters etc. I can see if they always buy real-time strategy games when they have a deep discount six to nine months after they've been launched, or whether they brought them on pre-order.
To our publishers, being able to partner with someone like GMG and Playfire is invaluable, because a publisher is always able to see how players are delivering performing within their microcosm of the game, but they are very aware of the fact that you don't just play one game, you play a whole plethora of games.
What they want to get an understanding of is how you enjoy other games as well, because if you play Game A and Game B, Game C might be the right game for you.
That's the level of data and the level of information that we have the ability to be able to work with publishers on, and publishers are very keen to work with the community on that level.
Do you know of anyone else who has that relationship with publishers, or anyone else who takes that amount of data and uses it in such a way?
Amazon and other generalist stores don't have that level of information, because they'll be able to sell you a toaster, admittedly, and some Lego bricks, and can see the games you've brought before, but they don't know what games you've played before and how long you've played the game for. We do.
I look at a High Street retailer, and they can see which games you've purchased through their loyalty programme with them, but they will have no idea what other games people have purchased elsewhere and how far through they've got.
And then the platform holders – people like EA and Steam, for instance... We've got a heck of a lot of respect for Steam, what they've done, and we consider ourselves to be good partners – we've got a contract with them, we work with them very closely. I'm just waiting for the announcement of Half-Life 3 to come out.
Have you got plans for your own Steam Machine?
No, we don't actually. But we have built our own, using the [freely available operating system] SteamOS. Steam Machines are a very interesting proposition.
There's some really cool things happening in the marketplace in 2014, and Steam Machines are one of them – the other is the Oculus Rift. It's going to turn computer games as an entertainment form on its head.
Have you discussed any deals with Oculus?
There are certain things I will talk about, and certain things I won't talk about...
Are there any difficulties that arise from having a potentially unlimited audience across the world?
There are challenges, let's be clear. You need to have a good, clear understanding of ecommerce, local cultural differences, of the ability to be able to talk in different manners and tones to people around the world.
Things like redressing currencies [GMG had to make adjustments to the payment currencies used by some countries in early February], unfortunately that was a housekeeping exercise that we needed to do.
The benefits are actually going to be quite a lot to quite a lot of people, because of the pricing and the currency that we're offering. There were elements that were very happy, and other elements were it wasn't just such a good deal for them, but unfortunately it was just one of those things that needed to be done.
A quick question about currency – have you considered accepting cryptocurrencies?
Just watch this space, that's all I'll say.
Have you seen your use of Playfire data affect sales, or do the GMG sales and Playfire community elements operate in parallel, rather than collaborative, manners?
A bit of both, is the honest answer. It's given us a very good and a very deep understanding of what our customers are doing at any one time. It produces some really surprising trends – we sit there going "I never would have thought that." From that perspective, it's very positive.
We started our rewards programme in December, and in the first four weeks we gave away over 100,000 rewards as part of that scheme. So that's now cutting in and having a very positive effect.
Have you got any plans to offer bigger rewards?
Yes we have, and we're talking to our publishing partners about offering short-term one-off big achievements, possible in conjunction with a big promotional drive.
Where do you see the PC market going in the next couple of years?
When I launched GMG in 2010, I had a whole bunch of analysts show me a whole bunch of charts which showed PC gaming sales going down, and I said "Yes, but that's just boxed" – there was no data for digital sales.
It's difficult to absolutely put your finger on it, as to where the market's going, but what I will say is that, globally, Steam has 65 million customer accounts and there's 75 million Xbox 360 customer accounts – so you are now approaching a stage where the PC gaming population is as big as one of the key platforms that is out there.
I strongly suspect that as we move on to the back end of the year and the Steam Machines cut in, you'll start to see another group of people coming across who potentially were console gamers but have migrated across onto a Steam platform.
You think the Steam Machines will be enough to tempt them across?
It's the economics of gaming, and the economics of the living room.
If you want to sell a game on one of the traditional consoles, you pay somewhere between $15,000-$25,000 per developer seat to get licenses to be able to develop on that console. You then have to pay a license fee per disc sold, and you pay the fee in advance. In order to recoup that, you've then got to go out with a super high price and then as soon as they've sold that product that's your one bite of the cherry, then you're in the bucket in the front of the supermarket along with everyone else.
What you'll find is that the publishers themselves, the guys that own the IP, are going to start moving strongly towards heavily supporting the Steam Machines, because they will make more money out of it. Significantly – we're talking two or three times more. I think the publishers will lead with their pockets, and they will support Steam Machines and give them a nice diverse portfolio of products.
There's always going to be a place for the two primary consoles, but I do see there being a shift across and a realignment of what's going on. I would never underestimate Gabe Newell and the ingenious guys he's got over there at Valve.
You mention the importance of the PC digital marketplace – PSN and Xbox Live prices are often much higher than similar PC services. Is there a reason why those console services can't match the value of the PC?
It's to do with the market mechanisms – you're not paying an advance fee in order to develop a game, you're not paying a license fee per unit. If you're doing those two things, you've got to recoup your cash quite hard. If you're developing on Linux or on PC, you don't have that overhead, so you can afford to treat a product in a different way.
The objective of the retailer is to work with the publisher and maximise return on that individual SKU. Would you want to sell one game for £10,000, or 20,000 games for £1?
You need to sit back as an IP owner, as a developer or a publisher, and think "How do I want to make money?" GMG, with the commercial outlet and channels that we've got, with the data that we're holding, we are there to facilitate that, we're there to turn around and tell a publisher "If you do this, this will happen."
Have you considered becoming a publisher in addition to your existing services?
It's certainly something we'd consider in 2014.
I don't like to think of it as publishing in the traditional publisher route, I think of it more as supporting small developers who have got a great game.Three guys who have got together, put together a great game and we just come along and help them go to market.
We're not necessarily going to negotiate multi-million pound deals with Game and HMV to get their products out there – it's more about us being good at what we do, being very good at working with publishers, having a great community who have been very supportive, manned by a bunch of guys who like games, and we would like to help developers be able to get their product to market. Not just on GMG – we'll help them across the board.
Paul, you were nominated at the Great British Entrepreneur of the Year Awards for the 'Ecommerce Entrepreneur of the Year – Bizcrowd Special Merit' award. If you could give one piece of advice to startups or retailers looking to recreate your success, what would it be?
In my opinion, anyone who has got the inclination to want to run their own business should give it a go – otherwise you'll always be looking over your shoulder going 'I could've done that'. You never want to do that in life. It's far better to do it, see what happens and – win or lose – you've then done it and got it out of your system. Just have the guts to go and do it.
The most important thing that you will do in the first six months of having a business is to raise money. You need to have money. My advice to the businesses I was talking to was go and raise some cash, raise some cash from angels. Understand the benefits of raising money from an individual and understand the risks that that individual incurs.
The whole act of going out and raising money is a beneficial act to the entrepreneur, because as an entrepreneur you are a lunatic basically. You have the ability to be able to be fixed on an idea and drive forwards at the expense of everything else to deliver that one idea.
What's next for GMG?
We've got a really good year ahead of us at GMG. We've had a great run so far – 2013 was a cracking year for us.
We want to do more of what we're doing, we want to do it while continuing to be focused and targeted on where we are, but we wanted to bring more people into the party as well.
You're going to see that GMG is going to be getting much more involved with smaller publishers and smaller developers. There's a real flavour and desire, personally and with the team as well, to be more engaged with indie publishers early on, to support them, nurture them, help them and support them both from the data perspective as we can do, but also from the ability to be able to go out to market and make their hard work financially worthwhile for them.