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Stardock boss says mobile games 'not a viable business model yet'

Stardock boss says mobile games 'not a viable business model yet'

June 4, 2014 | By Christian Nutt

Stardock's Brad Wardell has released his latest annual report, and in it, the outspoken CEO reveals that as far as he's concerned, developing mobile games is "not a viable business model yet."

"That isnt to say money isnt being made on those platforms. But a viable business model requires that someone be able to reasonably project that an investment of $X will result in a return of $Y within a margin of error," Wardell writes.

"iOS and Android more closely resemble a lottery system. If you win that lottery, you can stand to make millions. If you do not, you will not likely even come close to recouping your investment."

It's clear from reading the report that Wardell is used to a PC game business that's based on dedicated fans, reliable genres -- his company concentrates on strategy games, such as Sins of a Solar Empire -- and consequently a predictable return on investment.

That's not the only challenge, however: "Once a game or piece of software leaves the very, very top of the sellers, the income fall-off is severe. Our poorest-selling DLC for PC games generates more income than nearly ever iOS or Android developer app we've gotten numbers for," Wardell writes -- notably, he's not speaking only of Stardock's mobile apps here, but those of other developers he's spoken to.

He notes that lower-position games on PC sell much more reliably than those on mobile, which he puts down to factors including "terrible" discoverability, consumer price sensitivity, and the fact that players don't "expect to spend a lot of time actively interacting" with mobile devices, which would necessarily impact the gameplay of time-intensive titles Stardock produces.

Notably, 70 percent of Stardock's existing audience owns a smartphone or tablet, according to statistics in Wardell's report, gathered by surveying his players.

Still, the problem will fix itself in the future, he reasons: "Lest someone take this quote out of context, let me also emphasize that I dont think this will be a long-term problem," he writes. "Stardock will be supporting iOS, Android and Windows Mobile in our future titles but we are doing so as an investment in the future when we think that those platforms will become viable."

Elsewhere in the report, Wardell declares PC game retail dead, writing that the shift to digital distribution is total, and that "Retail disappeared even faster than our tech-savvy customer base imagined it would." Only 6 percent of survey respondents still prefer to buy games at retail, with another 5 percent ordering boxed copies. Steam captures an unsurprising 43 percent of sales, with other digital delivery options making up another 43 percent (3 percent of respondents chose "none of the above.")

You can read Wardell's full report at this link [PDF download.]

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