David Vogelpohl (FastSpring) (00:04)

Hello everyone and welcome to Growth Stage by FastSpring where we discuss how digital product companies grow revenue, build meaningful products and increase the value of their businesses. I’m your host, David Vogelpohl. I support the digital product community as part of my role at FastSpring and I love to bring the best of the community to you here on the Growth Stage podcast. In today’s episode, I’m really excited to see you talking about, can mobile games really achieve over 50 % of their revenue coming from their website or direct to consumer. We’ve seen these claims out in the wild and I’m just curious, is it possible to really monetize that much outside of app stores? And joining us for that conversation is someone that knows a little bit about that as part of their work through Nexus, founded Nexus.gg. I’d like to welcome to Growth Stage, Justin Sacks, the CEO of Nexus. Justin, welcome to Growth Stage.

Justin Sacks (00:59)

Thank you. Thank you for having me, David. Excited to chat.

David Vogelpohl (FastSpring) (01:02)

Yeah, so excited to have you here and I know the audience isn’t aware of this, but Justin is one of those people who told me that yes, mobile game companies really can achieve over half of their revenue coming outside of app stores. So I’m really excited to get your perspective on that today, Justin. and so what Justin will be sharing in general though, are his views and thoughts about what winning strategies publishers use when they’re going direct to consumer and mobile, why these strategies can actually result in over 50 % of revenue coming from direct-to-consumer, how you can pursue these strategies, and of course, Nexus is a supported creator platform, so it’ll be giving us a view of how you can leverage creators in your direct-to-consumer strategy as well. So, meaty topics here today, Justin, but really excited to dig in. I’m going to ask you a question, Justin. Justin, I’ve asked many guests here on Growth Stage.

Tell me about the first game or in-game item you bought with your own money.

What was the first thing you bought?

Justin Sacks (02:08)

Taking me back, I think I got a summer job in high school so that I could pay for my own WoW subscription. Back in the day, games, well, at least large online multiplayer games, required a subscription rather than just a one-time fee. And so I needed consistent money coming in to make sure I could pay for that. I think that was the first one.

David Vogelpohl (FastSpring) (02:31)

How much was a Warcraft subscription back then?

Justin Sacks (02:34)

So was $15 a month if you bought it monthly, and then it went down to like effectively $12 a month if you bought annually. of course, I always just paid monthly and overspent because I was like, maybe I’ll not be playing next month. But fast forward 20 years later and I’m still playing the same game.

David Vogelpohl (FastSpring) (02:51)

It said, did you say a part time job or a summer job? Like I’m trying summer jobs. You just saved up a bunch of $15 to like pay for the year ahead basically.

Justin Sacks (02:54)

Summer jobs, summer job of the time.

Yeah, I worked at a snack bar on the beach in San Diego and it’s an amazing job in and of itself and it paid for food and video games for the school year.

David Vogelpohl (FastSpring) (03:10)

That’s super cool. I was going to say a snack bar in the beach in San Diego doesn’t sound like a terrible job to have. all right.

Justin Sacks (03:15)

No, it was pretty great. They didn’t have to pay me, but it was great that they did.

David Vogelpohl (FastSpring) (03:19)

Excellent. And of course it supported your your work craft, your journey there. How many years you recall did you pay for the subscription?

Justin Sacks (03:28)

I mean, it’s the game is just celebrated last month. It’s 20th anniversary. And I think I only skipped like maybe six or seven years. So, you know, 13 times 12, so 150 months of wow subscription or something like that.

David Vogelpohl (FastSpring) (03:42)

Wow, that’s super cool. it’s so interesting because when Warcraft and the subscription model were really taking off, a lot of people thought that that was the future of gaming and how games would make the most amount of revenue possible. And then, of course, we saw the evolution of live services as well that just kind of turned out a little bit on its head in that way. I think that’s an interesting transition point, kind of talking about the topic at hand.

But before we jump into that, could you tell me and the audience a little bit about Nexus and what you do there?

Justin Sacks (04:17)

Sure, yeah. So again, I’m Justin Sacks. I’m CEO here at Nexus. We call ourselves a creator program in a box. And so really what that means is if you’ve ever seen, know, Fortnite, for example, has a support of creator codes or super cell’s games like Clash Royale. And if you see your favorite YouTuber streamers say, hey, use code Ninja, if their name is Ninja, for example. What that means is inside of the game, you as the player can attach your account to your favorite content creator.

of in-game stuff or on the webshop, your purchase supports that content creator. And so what Nexus does is we make it really easy and turnkey for any live service game publisher to build and manage their own creator program.

David Vogelpohl (FastSpring) (05:03)

And we’re talking about direct to consumer today, which of course is largely monetized off of websites and web shops and things like that. But Nexus is a support a creator program or create a program in a box. You’re these creator codes work on different platforms, right? Like creators are using these codes. Your players are using these codes on Xbox and PC games, all kinds of games, right? You’re not restrained to one platform or just the D to C side of the universe. Correct?

Justin Sacks (05:29)

Yeah, we are platform agnostic and so we have partners that are PC games or console games, like you said, mobile titles are a big chunk of what we do. We have VR games and web, so creative programs can work whichever is the distribution platform that the player is playing on.

David Vogelpohl (FastSpring) (05:45)

Excellent. I’m sure there’s those watching and listening who are thinking about their creator strategy as well. And I think the intersection of that with direct to consumer is going to be some interesting topics for us to cover here today. So you mentioned you’re the CEO next and you’re also the founder, right? Like you, you’ve you’ve found it and you’re still CEO basically. So help me understand some of the publishers that you’ve worked with over the years just to help people get a flavor of like some of the

Justin Sacks (06:05)

That’s right, yeah.

David Vogelpohl (FastSpring) (06:14)

brands that you’ve supported in their journey.

Justin Sacks (06:17)

Sure. So some of the bigger names would be ones like Capcom, has games like Street Fighter and Monster Hunter and Resident Evil. We work with awesome publishers like Hi-Rez, which makes, I think, biggest third perspective MOBA and certainly the biggest on console called Smite. We work with big, wonderful mobile developers like Ninja Kiwi that make games like Bloons Tower Defense, folks like BoomBit, Hutch, and a bunch of other great developers and publishers.

David Vogelpohl (FastSpring) (06:45)

Okay, so it sounds like you’ve had the opportunity to get exposure to different game types that are monetizing in different ways on different platforms. You have kind of a broad view of that. Is that fair to say?

Justin Sacks (06:58)

Totally. Yeah, we work with dozens of different genres amongst them. I think the thing that does tend to tie them together is the games end up being more on the core side rather than the casual side. So these are games that players can commit to for long periods of time that they stay highly engaged with that have deeper monetization. Those are more of the type, the characteristics of the games that we work with, but from a genre perspective, totally across the board.

David Vogelpohl (FastSpring) (07:28)

Is that a result of you focusing on creators or creators less likely to work with casual games and the content they create?

Justin Sacks (07:39)

That is right. Yeah. That’s the major reason. The other piece is that the core of what Nexus is, is revenue share. So how do you incentivize a creator to drive the sort of actions you’re looking for? And it’s hard to do revenue share with an advertising based model. it’s possible, but harder. And it makes more sense when there’s a really direct incentive and a direct call to action for a creator to tell their audience, go and purchase this thing, the new battle pass, the new content, whatever it is.

David Vogelpohl (FastSpring) (08:06)

And casual games are more likely to use advertising as the baseline of their revenue. OK, it makes sense. All right, so let’s kind of shift back to direct-to-consumer for a minute here. I mean, there’s all kinds of different reasons I think people think about going to direct-to-consumer. But what do you think about it? Like, why should publishers bother testing or trying or offering a direct-to-consumer offering on their site or their web shop or web store?

Justin Sacks (08:10)

That’s

So there’s two  reasons. the alternative of direct-to-consumer is just through the distribution platform. So through, for example, the App Store on mobile or through Xbox or whatever it might be. And really the two big reasons, one is margin. So for example, on Apple, if someone buys some in-game purchase for your game, 30 % of that revenue immediately goes to Apple.

And so, but on a web shop, that’s totally different. Basically the only fees that you’re going to be paying are payment processing, merchant record, and then maybe some sort of like website management. And so your fees are going to be closer to like single digits rather than 30%.

The second large reason is just to have a direct relationship with a player. So when your player is on a platform like steam or apple or the switch or whatever it might be, you don’t have a direct relationship, which means you can’t actually reach out to that player outside of the game itself. So if you wanted to send them an email about some cool thing, if you wanted to tell them about your social profiles, any sort of thing, there’s, there’s no real way for you to have that relationship.

But if you have a direct-to-consumer option, if you have that web shop, then you can build that direct relationship with your, often your most engaged players. And so you can keep communicating with them about content in the game or stuff for them to engage with and buy or whatever it might be.

David Vogelpohl (FastSpring) (10:00)

Okay. So these two make a lot of sense. Matter of fact, it was Tim Sweeney. I think he recently said that with a 30 % cut app, you know, the app stores or whatever would make more money on their games than Epic would. And that was a key reason why they felt that that was kind of in that sense unfair, that that was maybe one of their only options. And so like profit is a big draw. And you kind of mentioned that if I’m going direct to consumer, I’m maybe paying closer to single digits.

And that’s a big difference with 30%. So like money makes sense. the direct relationship with the player, think people often like skip over this. They’re like, yeah, but what about the money? Right. but it’s such an interesting point where, you know, game publishers specifically in the world of digital products and like the software you could create and things like that, like you, a lot of publishers don’t have that direct relationship, the entire relationship. It’s your marketplace or a distributor.

And that seems pretty unique in gaming, but it’s also like this challenge to build a business around an environment where you don’t actually have a relationship with your player. Do you think that that’s like an undersold value of direct to consumer? Do you think people over index on the money side of things?

Justin Sacks (11:14)

Yeah, absolutely. It’s it’s it is a little squishier. It’s hard to tie, you know, direct ROI to building that relationship, but it is very real ROI. Just simply like if you just think about often for games that are going to perform the best in a web shops are going to be more, whale heavy, meaning like there’s a smaller minority of players who are a larger majority of the revenue and building a direct relationship with those folks means that you can retain those players for longer periods of time. You can offer unique offers to them, which is not an easy thing to do inside of a game. So like you can tell a player, Hey, this thing that you most care about, I’m going to give you a special offer so that you can engage with it and get the experience that you want. And so by building that direct relationship.

It does have a very real tie back to profitability and ROI. It’s just not as obvious of a line as the difference between 30 % and like 8%. But it is very real and can be as or more impactful than the margin impact.

David Vogelpohl (FastSpring) (12:14)

Yeah, and it’s interesting to hear you talk about VIPs, and I’m sure that’s going to play a role later when we talk about strategies around D2C. On this question of why, though, like one thing I never hear game publishers talk about is player acquisition. And when you talk to mobile app developers about direct-to-consumer, they will often reference their web shops and kind of web purchase options as like actually a user acquisition strategy because of some of the enhanced analytics that they get pointing those ads to their website instead of to the download page within the app stores. Do you feel like game publishers also get a player acquisition advantage by offering a webshop option or a direct-to-consumer option? Or is this kind of like untested waters maybe, or you’re just not aware, just curious. Do you think that acquisition is also a benefit of offering direct-to-consumer for game publishers?

Justin Sacks (13:10)

It is certainly underexplored. mean, I think, especially in the mobile world, mobile in the mobile gaming world, player acquisition is like one of the most database and studied and science and like, there’s no art, all science to it that I think people kind of close their eyes to other opportunities around acquisition, which might be pointing them instead of directly into the game to install, it might be to your web shop, or it might be reaching those potential players in other ways. And so it’s certainly under explored. And I think it’s a place that we’re going to see further explored. I think it’s kind of natural when there’s so many benefits of having a web shop, both on the margin side and the direct relationship and in other places, that they’re going to be like, OK, not only do we want to bring our players from in-game to our web shop, we might want to start the top of our funnel with our actual web shop itself so that we can communicate directly to those players in ways that’s really hard to do inside of an App Store.

David Vogelpohl (FastSpring) (14:10)

Okay. Yeah, that makes a lot of sense. I haven’t heard a lot of talk around the acquisition. that whole idea of underexplored, makes a lot of sense, but it does seem like there’s a significant amount of opportunity perhaps there. so one of the things that when we talk about, you know, actually achieving 50 % or more of your revenue coming from a direct to consumer offering. So one thing that I think surprises people, even in the game industry, is that you actually can offer a direct to consumer offer where you make purchases on your website and enable those entitlements or in-game entitlements inside your mobile game. But what are the rules? And I know they’re kind of fluid and different based on geography, but like, what can I do today with a mobile game in terms of permitting direct to consumer where I’m not going to get in trouble with the mobile app stores and they’re not going to charge me really any fees. Like, what can I do without fees for permitting mobile DPC?

Justin Sacks (15:09)

Yeah. So it is rapidly changing all the time. and even right now it’s a little bit different in Europe than it is in, in the, in the U S for example, but broadly you are totally allowed, to monetize a player outside of the web shop. So meaning a player or sorry, outside of the app store. So if a player goes to your web shop and makes a purchase and they get an in-game item, you’re allowed to give them that in-game item and then not

have any of the fees of what the App Store might charge you. But there are restrictions around

how that player can visit the web shop, specifically its steering rules, which basically just means that you as the app developer cannot directly tell a player, hey, go here and make a purchase. You get a better deal. If you do that, then the app store will be able to claim some sort of fees. Now, how they go through that process of calling that back, don’t even, it seems esoteric and wild, but,

David Vogelpohl (FastSpring) (16:06)

Thank you.

Justin Sacks (16:08)

Basically, as long

as you don’t directly tell the player in-game, go here and make a purchase, but instead you tell them in some other way, you’re able to sell that in-game item outside of the game itself.

And so a lot of the, the challenge is, okay, well, how do you actually get the player to start visiting the web shop? Because you’re right. Like it is very possible, at least in the gaming world to have more than 50 % of your revenue come from the web shop. I was just talking to, one of our partners a week and a half ago about their web shop and they were, they were really sad. They, they feel it’s like, it’s really, you know, not performed to their expectations and they haven’t gotten all the resources internally that they want. And I was like, well, how is it performing? And they’re like, it’s only like 23% of our revenue. And I was like, okay, well, that’s still somewhat significant for something that has almost no resources given to it and little attention and there’s a lot of opportunity for growth. so the amount of what is possible on the webshop is very real. As long as you observe the one challenge of how do you actually get the players to start visiting there?

David Vogelpohl (FastSpring) (17:11)

Yeah, because you can’t steer from inside the game. You can’t embed payments, which would even be better, right? Then linking off to a website. and so you’re restricted. And so it seems like the publishers that have direct relationships with their players and bigger brands are the most successful at this. Is that a fair statement? Like, am I in a better spot if I have like this vibrant community around my games that I can talk to directly?

It seems like an audience.

Justin Sacks (17:40)

Certainly.

I don’t know, it isn’t necessarily always the largest games that have that, but it is somewhat the older games. Because older games tend to have already built an audience outside of the game itself. The most common places for this are social channels. So your Twitter or Facebook or whatever it might be.

David Vogelpohl (FastSpring) (17:59)

chord.

Justin Sacks (18:00)

Other places that have done really well is when you build communities and you have a blog or you have leaderboards that people check or there’s some sort of outside of the game resource that the players go to. What Nexus, what we focus on is we think one of the most obvious places to be able to drive a player from in-game to a webshop is through a content creator. So if you as the developer, you’re not allowed to tell the player directly, hey, inside the game, you cannot say, go visit this webshop and make a purchase here and get a better deal.

But a YouTuber certainly can, they can literally say, Hey, if you’re going to go buy the new battle pass, make sure you do it on the web shop. You get 10 % more gems and go ahead and use my creator code when you do so. And it supports me as the creator. So there’s sort of the aligned incentives between the publisher and the content creator. So we’ve found a lot of success of incentivizing the publishers to get excited about creative programs because they can incentivize the creator to tell their audience to tell the most engaged players. Go purchase through the web shop and then begin that direct relationship.

And so using some of those methods like social channels or leaderboards or blogs or, or, you know, creator programs are some of what we’ve seen game developers and publishers do in order to get around to the steering roles and still get their players to be able to visit the web shop and participate in the better opportunity for the player. But then also start building that direct relationship with them so that they can keep that player for longer and offer them better deals and cooler stuff.

David Vogelpohl (FastSpring) (19:28)

So it sounds like publishers need to be able to communicate directly with players, of course, outside the game itself. Having your website be a destination for your players, whether it be leaderboards or online communities or even beyond your website in terms of like your social media presence, is a way to establish that direct communication with them so then you can let them know about special offers on your web shop or any other message you might want to put forth.

And it sounds like creators of course have their own platform and so even if your players aren’t like, you know going to your website every day, which a lot of players might never do they’re probably going to YouTube every day or Twitch or other kind of content distribution mediums. And so it presents this really unique opportunity for communicating with them. It sounds like you’re kind of naturally doing this if you have creators but through

By promoting direct to consumer, can leverage those relationships basically for higher profit relationships. Does that sound about right?

Justin Sacks (20:29)

That’s totally right. Yeah. It’s basically if your game has content creators, so people on YouTube or Twitch or even, you know, you have in-game clients or communities with like one-off discord servers that are ran by a community leader. Now there’s a way, like if you have a creator program, you can incentivize those, those folks with audiences, not just to talk about the new content in the game, but specifically to tell their audience, Hey, you can go buy the new content over on the web shop.

David Vogelpohl (FastSpring) (20:55)

Yeah, and creators, of course, are creating content where people have fun watching it, some sort of challenge, but also like tips and tricks, right? And so if I’m able to get more gems and get more items and enjoy the game in a different way with more value, that seems like a unique value proposition that fits really well in with the creator universe.

Justin Sacks (21:16)

Yeah, that’s why, again, we, tend to focus more on core games rather than casual and in a similar fashion games that do have, you know, the really, really valuable VIPs, the VVIPs, they tend to do even better with creator programs. Cause all of those people are going to be watching some creator to learn what’s all the new information, new content in the game. What’s the best way to go in and get all of the new stuff. Usually they’re going to find that information by following their favorite creator.

on whatever platform they watch them on.

David Vogelpohl (FastSpring) (21:49)

read an interesting stat not long ago with something like VIPs are like 2 % of your players and represent somewhere like 70 % of your revenue, guess, depending on the study and the company and things like that. you know, those types of stats are generally true. Should publishers really be focusing on targeting VIPs when they think about D2C conversion? You mentioned how craters are a great avenue to communicate with VIPs.

that you might not already have that direct relationship to, but like is focusing on VIPs a critical part of this strategy?

Justin Sacks (22:23)

I mean, absolutely. think the more that your product has a meaningful subset of VIPs where there’s some minority of

Participants are players that are the majority of the revenue. The more you should be thinking about your webshop strategy. One, it’s actually easier. There’s less people you have to move over to the webshop and be familiar with it. And two, there’s more opportunity for you because that more like white glove experience that you can offer to those VIPs is more likely that those individual people are going to retain longer and frankly monetize higher. Because one of the blockers of why they’re not monetizing higher is they don’t have unique offers that are shared with them.

They don’t have things that they particularly care about that they can go ahead and buy. And sometimes there’s just limitations within the app store itself. In the app store, I don’t think you can sell something for more than $1,000 SKU. But there’s no limitations like that on a web shop, for example. Or if you want to make really custom bundles, that’s really hard thing to do inside of the app itself. But it’s totally possible to do on a web shop. And so if you’re the sort of app that has

VIPs as a cohort that you really care about. A webshop and a D2C strategy should be even more important than others, even though it should be important kind of regardless of your makeup of your player base.

David Vogelpohl (FastSpring) (23:48)

This also kind of lines up with a live service game because if it’s a premium game or a game that monetizes through subscriptions like your WoW subscription, kind of every player is almost worth the same amount of money, right? Versus where I’ve releasing lots of items all the time actually can even have a VIP where in a premium game, every player is worth the 20 bucks or whatever you charge for your game.

Justin Sacks (24:02)

That’s right.

That’s 100 % right. Yeah, the games started as well actually like the shareware, but, really they started as premium where

Everyone would pay $60 and you get one game and you’d go through that experience. then maybe three years later, there would be a sequel. And then they moved to this subscription base. and then finally now they’re free. And so the majority of players actually paid nothing, but some minority of them pay something and some minority of that minority pay the most. so for those really engaged players that care deeply about the game, that want to buy all the new stuff that comes into it every month or two months. Those are the players to focus the most on. And those are the players to make sure.

that you build that direct relationship with, and the best way to do that is by having a web shop.

David Vogelpohl (FastSpring) (24:57)

Yeah. And so if I’m shooting, you know, kind of the title of this episode, I can, really do over 50%. But if I can convert that 2 % of VIPs, then I have a really good shot, maybe even guaranteed to hit over 50 % of my revenue. If I can get effectively all of my VIPs in this hypothetical scenario. Okay.

Justin Sacks (25:14)

It’s right.

And not only are you saving, you know, 30 % of your margin, but you’re actually increasing the monetization because you build that direct relationship there, the player will stay longer within your game and they’re going to be able to buy more stuff because you can offer them unique experiences.

David Vogelpohl (FastSpring) (25:29)

Yeah, because they’re a good player is probably bouncing between platforms depending on the game, I guess. But that’s a really interesting perspective. with creator programs, what do you think the mistakes publishers are often making? And it can be like in the direct to consumer universe or otherwise, but like there are publishers out there that haven’t really fully taken advantage of their creators, may not even have a program at all.

What makes you cringe when you get a new client at Nexus? Like, what should people be avoiding that they’re doing now that’s bad?

Justin Sacks (26:07)

So I — two thoughts. One is the goals. As simple, mean, especially, like we talked about how acquisition is everything for mobile game developers. They think creator programs are simply an acquisition tool. But instead, creator programs are a growth tool. In fact, creators might not be the best system that you have for getting new players into the game, but they will be the best system for keeping players in the game, for reactivating lapsed players, or converting free players into monetized players.

So much of the initial thought is that it’s only focused on acquisition. The second, and this is just a very specific tactic thing is when people do really large influencer marketing spend that you can never tie back to performance. There’s no way to see direct attribution from, you know, a broad influencer marketing spend. Think of it like a billboard.

The goal a lot of the times and what agencies will convince the publisher that they should care about is like reaching some top spot. For example, on Twitch of like, we’re the seventh most, most watched game for this one minute period. like that doesn’t actually matter. If you think of how players discover games through Twitch, for example, it’s not like they’re on the browse front page of what are the most popular games. They’re like, that game reached number seven for a one minute period. Now I’m going to check it out.

No, in fact, what happened is you paid $20,000 an hour for one streamer to play your game. And so for one specific period of time, all of their viewers were watching your game. so it reached the top of the category, but like, basically this is just, I have a pet peeve of like, everyone is so proud of. were the seventh most watched game for this period. It’s like,

You, you really need to care about, did those players that were watching that one giant streamer who played your game for a single hour and never played it again. Did they ever actually start playing your game? And it’s really hard to do that with traditional influence marketing. and so like when agencies try to convince publishers, we’re going to get you on the top 10 watched games, you know, for this day, like that is a sure sign that they are trying to convince you to spend money in the wrong places.

David Vogelpohl (FastSpring) (28:16)

The word, we use the word “creator” and we’ve used the word “influencer” here and you kind of talked about like influencer marketing, like I’m going to spend money just to get exposure to an audience. do you think of those words differently in that way, or was that just convenience from how the conversation flowed or what’s the difference?

Justin Sacks (28:34)

So it’s two things.

It’s two things. One, creators do not like being called influencers. And so I try not to keep that in my own personal lexicon. But also the concept of influencer marketing, think is very, is like,

David Vogelpohl (FastSpring) (28:42)

Yeah.

Justin Sacks (28:49)

fundamentally different from a creator program. Influencer marketing is a one-off thing. It’s a marketing budget. You really can’t tie it back to any sort of performance or attribution versus a creator program is an evergreen experience that is fundamentally performance-based. For example, all of Nexus’s programs, we don’t make any money as a platform and the creator doesn’t make a single dollar until they’ve actually driven value. It’s a hundred percent performance-based. The creator only gets paid after they’ve driven a sale through their creator code. And I think that’s very different from almost the disincentive of saying to someone, here’s $10,000, play my game for 30 minutes. And then that influencer might be like, well, I’m not going to play again until you offer me another $10,000 versus the sort of lagging payment of the creator only getting paid if they’ve already driven value for you in a way that is 100 % attribution based.

David Vogelpohl (FastSpring) (29:46)

Makes sense. Yeah. So kind of the mistake would be like only paying attention to like this awareness strategy with creators or influencers, if you will. I’m a direct response marketer by heart. You’re preaching to the choir on that one. But yeah, so that makes a lot of sense now.

Justin Sacks (29:46)

But I’m very biased, clearly, those are my feelings on it.

That’s right.

Yeah. Perfect.

David Vogelpohl (FastSpring) (30:10)

You know, it was also interesting to hear you talk about like how a lot of publishers will think of a creator program was like, I’m going to acquire players. It’s an acquisition strategy. And you kind of mentioned on the influencer side, like I might pay someone 10,000 bucks to pay my game for an hour and get exposure to, whoever it is, his audience by playing this new game. and I think it was very appropriate to say, well, wait a minute now, cause influencers can influence your VIPs, your free players who haven’t converted into paid yet and so on and so forth.

And so help me understand though, cause like people still think of it as an acquisition player, right? Everybody wants, you know, mr. Beast to play his, your game on his channel or something. like, how do you mid and small publishers, do they even have a chance with creator marketing? how does that play into like acquisition versus like growth? And how do you think about all that? Do you mid and small publishers? Do they even have a place at the table with creator marketing?

Justin Sacks (31:06)

Yeah, so I actually think it’s pretty similar to thinking about building your DTC focus and building your web shop. That shouldn’t be the thing that you do before you launch the game. Similarly, you shouldn’t be building a creator program and creator strategy before you launch the game. You might want to work with creators around launch and beta and things like that. And those can be, you know, tests and experiments and like slowly building up the community.

But these sort of evergreen activities are things you’re gonna want when you have an audience, when you have players who have tried and played the game and are interested in the game.

And as to small and mid-sized publishers, it’s not really about the size of the publisher. It’s more about, you already have an organic community that is making content or that has an audience focused on your game? And if so, you’re going to find a lot of value in a creator program. You know, we have, we have creators who have less than a thousand subscribers whose videos get a few hundred views a video, but we can see that they’re driving tens of thousands of dollars in sales each month, just through their creator code.

And so the size of the creator is the fit for the size of the game, but they kill, they still can be incredibly valuable. And that game has a really important VIP segment and their VIPs are, you know, the vast majority of their revenue and all of those VIPs consume content from what creators and communities there are out there. And so being able to tap into though, into those and retain them and, and, and excited and engage them is really important. And it is very possible for small and midsize publishers.

I think the challenge for those is building it yourself is if you’re a small or you’re a midsize developer, you’re probably not going to be able to build a first party web shop. You’re not going to be able to be your own merchant record. You’re not going to be able to establish a creator program where you pay out dozens or hundreds of individual creators, different amounts of money every month and do taxes at the end of the year. And so you’re going to have to like work with one of the third parties out there. frankly, it’s something I’d recommend even if you are, you know, a large AAA publisher because

Often these activities are, have nothing to do with making a better game. And so like, it’s going to be totally different development and engineering and road mapping in order to do so. But the opportunity is there. it’s just the resources for doing so you’re going to have to find a third party, you know, that isn’t going to charge you upfront fees to do it, but rather be a partner of growing with you as your DTC focus grows and as your creative program grows.

David Vogelpohl (FastSpring) (33:36)

So offloading and outsourcing, of course, it sounds like is a good path to be able to go to market and take advantage of that opportunity. And then I thought it was interesting, the example you gave of the creator who was focused on that particular game and that particular community of players and how they had very little views, but because of the value they were driving and the fact you have a direct attribution based model, that creator can make a bunch of money off of it, even without a lot of views. It sounds like.

You know, that’s a great model to think about for small and mid-sized publishers who are like, yeah, don’t have, you know, Fortnite isn’t my game. I don’t have that audience. but having some baseline of an audience of players who you can basically grow with them. thought that was another great point as well, but obviously you don’t have to have, you know, 10 million views on a video to make a lot of money from it. so that was really helpful.

Awesome. Well, Justin, this was super interesting. Really appreciate you walking me through it. So it sounds like it is possible. And of course, I guess we see it out in the market. We’re, we’re publishers are absolutely achieving over 50 % of their revenue direct to consumer. I think you’ve helped answer that question for folks. And I think, some of the strategies you walked through gave some good insights, especially around the creator of marketing side of the fence, but this was awesome. Justin, thank you so much for sharing all this today.

Justin Sacks (34:59)

Thank you. I appreciate being here.

David Vogelpohl (FastSpring) (35:01)

Excellent. Well, if you’d like to check out what Justin is up to, you can look him up on LinkedIn or visit nexus.gg. Thanks everyone for listening and watching and joining us here on the Growth Stage podcast. Again, I’m your host, David Vogelpohl. I support the digital product community through my role at FastSpring, and I love to bring the best of the community to you here on Growth Stage. Thanks everyone.