The rise of web stores and direct-to-consumer (D2C) models in the gaming industry is becoming increasingly prevalent. In a panel discussion at GamesBeat Summit 2024, industry experts from Discord and Coda discussed the effectiveness of D2C strategies in generating revenue for publishers. The conversation highlighted the need for publishers to focus on creating a balanced and engaging game experience before implementing monetization strategies.
Discord, known for its popular chat and messaging platform, has found success in the D2C space by prioritizing the quality of its free product. Peter Sellis, SVP of product at Discord, emphasized the importance of making the free experience as great as possible. Discord then adds value to that experience through its paid Nitro subscriptions, which offer additional features and benefits. This approach allows Discord to cater to a broad user base while still offering premium options for those willing to pay.
One challenge Discord faced was deciding which new features should be included in the free version versus Nitro. To address this, the company introduced sponsored Quests and cosmetics in its Discord Shop earlier this year. Developers contribute content for these offerings, and Discord shares the profits with them. This expansion of monetization options provides additional revenue streams for both Discord and its partners.
Sellis believes that D2C is experiencing a renaissance in the gaming industry, with more publishers incorporating it into their portfolios. However, he emphasizes the importance of maintaining a diverse portfolio to avoid making sub-optimal decisions that could negatively impact consumers. By offering a range of options, publishers can cater to different player preferences and maximize revenue potential.
Rick Phillips, COO of Coda, stressed the need for publishers to focus on creating a balanced game before implementing monetization strategies. He acknowledged that monetization can sometimes be seen as a negative aspect of gaming but argued that it can actually enhance the player experience when approached correctly. Phillips believes that monetization should be part of a broader strategy to create a long-term relationship between the publisher and the player.
Phillips also cautioned against expecting immediate success with a web store launch. He emphasized the importance of testing and iteration to optimize the store over time. Consumer behavior and trends can change, so it’s crucial to continuously adapt and refine the store based on data-driven insights. By taking a scientific approach and constantly iterating, publishers can create the best possible experience for their customers.
In conclusion, the rise of D2C models in the gaming industry presents new opportunities for publishers to generate revenue. By focusing on creating a balanced game experience, offering diverse monetization options, and continuously iterating on web stores, publishers can effectively engage players and build long-term relationships. The key is to prioritize the player experience while still finding ways to monetize without compromising quality.