The good, the bad and the unexpected

Oh boy oh boy oh boy.

How can a good thing be a bad thing? And how can a bad thing be a good thing ?

This game should be releasing any moment now on www.gog.com/divinity, and yes it is LMK!

Those are two questions that have been stressing me for the last few days, and if you read my last entry, you already know that I wasn’t exactly in a state of zen to begin with. So what happened this time?

Well, let me start with the easy part, and to be fair, also the part that occupied me the least because it turned out to be a good thing.

The Divinity Anthology boxes are finally shipping from the manufacturer to our distribution partners, and for some reason, one of these distributors went numb over the last couple of days, so numb in fact that he’s not picking up his boxes.

That’s annoying because we put money in that stock and we expected it to be sold. Having it lie around the warehouse doesn’t really help us and actually even costs us money. Money is important to us, because it’s how we fund our development. So, that’s not a good thing.

However, it did solve another problem, and that made it become a good thing.

The Anthology was selling out much faster than we expected on the Larian Vault, and chances were that we’d have had to close sales this weekend already because we’d run out of boxes. So –we took the stock from the numb distributor, and shipped it to our office so we could sell them via the Larian Vault, and voila, bad thing became good thing. (Actually, I’m not sure if the team is going to consider this to be such a good thing, because now they can expect to have to sign even more boxes, adding to the expected cramp in the arms, but then again, since it is those boxes that are allowing them to continue developing, they shouldn’t really complain in the first place)

That’s the easy part. Now the harder part – how did a good thing become a bad thing ?

Well, as it turns out, our Pay What You Want (PWYW) campaign on Good Old Games isn’t exactly working out the way we planned it. As a matter of fact, it’s doing exactly the opposite of what we expected, making us look like fools because the clever models we used to predict what players were going to do  turned out to be complete rubbish (Go figure ;) )

So how did that happen?

When the PWYW was conceived, we thought that we’d have a lot of sales at the absolute minimum, which basically is 1 cent, and this assumption was actually never challenged. The idea of the PWYW campaign was to on the one hand celebrate 10 years of Divinity and offer Divinity virtually for free (1 cent really is low), thus increasing the installed base of Divinity fans, but on the other hand also to put the Developer’s Cut in the spotlight.

The Developer’s  Cut (and Beyond Divinity) were made part of the campaign as a kind of bonus and to not completely ruin ourselves, we introduced the rule that to access the Developer’s Cut, you needed to be in the top 10% of customers. Whether or not that was a sound strategy is a different matter and open for debate, but that was the idea.

What happened however is that for some reason, people started looking at this like some sort of Kickstarter (this was the very first time something like this was done on GOG), and in the very first hours of the campaign, we saw the average pricing go to heights we never expected. Somebody even paid a 1000US$ for one of the games!!!  (Thanks again Alquist for ruining our plans btw ;) )

A consequence of that was that by the time the press took note, the average price for the three games offered had risen above the actual price of the games on other channels, which definitely wasn’t the intention. And so when the articles talking about the campaign appeared (e.g. this one on Joystiq), the pricing quoted for Developer’s Cut had risen to 21US$, much higher than we expected.

Hurah from a financial point, you’d think, but no – because that didn’t fit the model we’d been working with, it caused quite a few tricky issues, and tbh, we’ve really been struggling with finding ways to solve it.

Because the price increased so much, we didn’t attract the crowd looking for a bargain. That in itself wouldn’t have been so much of an issue except that we ‘d announced more or less what our expectations were by proposing a number of goodies that would unlock whenever certain targets were met, e.g. at 15K  of supporters, a video of a dragon going to work would unlock, at 30K we’d unlock a tech demo of LMK, my very first (well actually second) RPG etc… And at a very high number (150K) of supporters we’d unlock the announcement of a game we’d only recently decided on. (So fresh is that decision that we don’t even have a name for it yet ;) )

But, because the pricing was higher than expected, the number of players actually buying the games also decreased (these things are quite price sensitive), and as result all the models went to hell, resulting in the expected amount of videos unlocking being much lower than we thought. And believe me – we didn’t make those videos so they wouldn’t be seen ;)  They were meant as a reward for buying our stuff, as a big thank you to our players and also a bit as promotion for our new stuff.

So what to do?

Obviously we started looking real hard for ways to lower the targets at which the videos and tech demos would unlock, without creating the perception that that our PWYW campaign wasn’t working out very well or even worse, that nobody visits GOG ;)

Because in reality, it is doing well – it’s just doing the opposite thing of what we expected. From a revenue point of view, we’re seeing the best results we’ve ever seen on GOG in such a short time span for our games. But that wasn’t the initial idea ;)

So in the end we realized that there wasn’t a way of fixing this without admitting that we just predicted everything wrongly. And if we’d want to still offer those videos (and tech demo of LMK) as a reward for people keeping on participating in the PWYW campaign, then we’d have to lower the different tiers.

Which more or less is what we’re doing this evening. We’re going to lower the tiers to numbers that we think fit the current trend more or less, except for the last one, which we’re putting high on purpose. Well actually, I’m putting it high, because all the others in the team wanted to put it lower. But I decided to be stubborn ;)

What does this mean ? Well, it means that LMK, the game that started my RPG career (for real) is finally going to get an audience, after 15 years in the freezer. How cool is that ? Ok, it’s perhaps just a tech demo, but it was pretty advanced for its time. Remember, this is what this game looked like in 1998, at a time Diablo 2 wasn’t even out! It should unlock somewhere by tonight if my calculations are correct, once the tier lowering has been executed, and I’m really curious what the reactions are going to be.

Tbh, I’m also very curious to hear your opinions on our handling of this – do you think we made the right decision ? Or do you we think we should’ve stuck to the original numbers and pretend our nose was bleeding ? Or do you think we should’ve cheated and artificially boosted the numbers (+1 for evilness) ? Or was there an incredibly clever idea that could’ve fixed our problem more elegantly, but that we didn’t think of?

Let me know.

  • Kein Zantezuken

    What happened however is that for some reason, people started looking at this like some sort of Kickstarter

    Ouch. This definitely went in a wrong way. Hmm… honestly, I can’t think of a better solution in this case, things really got messed up. But plan sounded so perfect oh well.

  • FuzzKnuckle

    I really like the transparency. I have no problem with the way your team is handling it. Thanks for staying engaged with your audience, and I wish Larian continued success.

  • FuzzKnuckle

    I really like the transparency. I have no problem with the way your team is handling it. Thanks for staying engaged with your audience, and I wish Larian continued success. Sorry for double-post… thought it got lost.

  • ZeroCool

    I think that you made the right decision. Sticking to the original numbers wouldn’t have given the fans a chance to see any of the higher tier videos or the special announcement and that’s what you wanted. With the interest in classic RPGs on Kickstarter at a high right now I don’t believe that it was a good idea to have tiers. I was on GOG roughly 2 hours after the PWYW campaign went live and my eyes just about bugged out. Alquist just wanted to show his/her support by pledging such a high amount and really it was nobodies fault that this happened since such a high amount could not have been expected so soon. Luckily(?) I’ve seen the campaign posted on several deal sites and the average has dropped.

    Just thought I’d post this and say thanks for bringing Divinity II to GOG and I can’t wait for the sales reach 50,000 and see your announcement.

  • Jason

    Given things, I wonder if there’s a way to reset the deal, then extend the days? Just like Humble Bundles, they usually put the offer up for weeks. It also helps that GoG doesn’t put that pay $40 to be our top supporter.

    I myself haven’t purchased a copy, since Steam is offering it for $9.99. I haven’t bought it off Steam yet though, as I am hoping that the price drops in the GoG further than today’s average ($12ish).

  • flixerflax

    So Pay What You Want is a system where higher payments drive up the price. It sounds like the system is broken. If you could allow people to still pay 1 cent for the game while allowing people to spend $1,000, I think this would have worked out fine for you.

    What you should realize for the future: there are cheap, broke people who would only pay 1 cent for a game but there are also many people who would jump at the opportunity to actually donate sums of money to Larian.

    • Raze

      The system could have simply excluded purchases higher than the regular price of the games when calculating the average (and maybe the top 10% – large numbers don’t really effect where the cut off is), and tracked them in a separate category.

  • Elnareen

    Rather than “like some sort of Kickstarter”, I would say people looked at this like some kind of HumbleBundle, the original formula for the “pay what you want” system. The current Humble Bundle leaderboard first entry is at 1000$ too… for 8 ebooks :)

    Thanks for your honesty (I now have the anthology from GOG and LarianVault… as they say in Alien, “it’s the only mean to be sure”)

  • Adam Butler

    Will those of us that got the anthology through GOG get the item codes for Dragon Commander and Original Sin?

    • Raze

      The DLC item codes for D:DC and D:OS are only in the retail version of the anthology.

      • Adam Butler

        Ah, I see. So there won’t be any way to get these items in the US? Or is it too early to say that there won’t be an alternative for those of us across the Atlantic?

        • Raze

          Unfortunately there is no retail distribution in North America. You can order the boxed version directly from the Larian Vault ( https://www.larianvault.com ), though, or an online store. FWIW ordering other games online I’ve been generally pleased with the shipping times and rates of getting things from the UK to Canada.

          There is a retail release in Australia, Austria,
          Belgium, Denmark, Finland, France, Germany, the Netherlands, Norway,
          Poland, Russia, Sweden, South Africa and the UK. I don’t know if the distributor mentioned above that didn’t pick up the anthology boxes had a significant effect on any of those regions.

          There was a Chinese New Year promo offer for Dragon Commander DLC early this year. The webpage is still up, so you can try submitting your email address to get in on the deal (as long as you don’t mind silver instead of gold). I have not gotten any announcements from signing up (despite leaving the option checked to get updates), so you don’t have to worry about getting on any mailing lists, etc.

          announcement http://www.larian.com/forums/ubbthreads.php?ubb=showflat&Number=452988&an=
          site http://www.dragon-commander.com/silverfire/

          • Adam Butler

            Silver’s actually my favorite color, I went ahead and signed up. Thank you very much, both for being active here and on GOG.

        • Raze

          Amazon.com imported some stock from the UK, and has the anthology listed at $45.
          http://www.amazon.com/Divinity-Anthology-Collectors-Pc/dp/B009LD9224/

  • kalniel

    Do a tie-in with the local students union to offer a copy to every university student for 1c. You’ll get publicity from the tie-in and the distribution of prices will go down, bringing the upper decile into a more reasonable range again.

  • http://www.facebook.com/ahgaut Anders Håkon Gaut

    Without knowing the spread of data two solutions come to mind:
    1. Use the median instead of the average. That would eliminate single extreme results (but might get the threshold very low if half or more are buying for minimum price).
    2. As suggested elsewhere, ignore all payments above current listed price for calculations.

    Both should have been announced before the start, though. I think the solution you chose is nice.

  • http://twitter.com/Archon360 Archon360

    Wait… what ?! Boxes from Larian Vault are signed by the team ?!
    Damn, I focused on “English only” and “+9€90 for international shipping” and totally missed that point ( even if I’m not absolutely sure I wouldn’t have ordered it via Amazon anyway… ).

    For the Pay What You Want part, you should have worked with GOG.com on the announcement because your Masterplan was shot down in flame by this single line : “offers you an opportunity to support the games’ hard working and talented developers: Larian Games”.
    Players willing to support you ( or Larian Games instead :D ) may certainly not pay as little as 1 cent. That’s why I’m not surprised someone paid as much as $1,000.
    “celebrate 10 years of Divinity and offer Divinity virtually for free” would have worked better IMO.

  • derf

    easy easy fix, just drop the outliers from your average or top contributers formula. just throw out the 1k number or example

  • qq

    fyi it isn’t a min of $.01 its a min of $1

    • Raze

      The sliders in the GOG PWYW promotion go from $1 to $40, but if you click on the number you can type in whatever amount you wish, including $0.01.

  • yo

    2 better ways:
    1.
    Use the median instead of the average. That would eliminate single
    extreme results (but might get the threshold very low if half or more
    are buying for minimum price).
    2. As suggested elsewhere, ignore all payments above current listed price for calculations.

  • Ovocean

    To answer your questions, I think you made the *right* decision and by that I mean that people who noticed (like I did) that you lowered the goals for the bonuses have appreciated that you were aware of your bad prediction on sales numbers and that you acted accordingly.

    Now I think that, aside from having to fight with your good conscience, taking the evil path of artificially boosting the number of sales would have been more profitable for everyone, including us the community (since it would have reduced the price of the bundle). The tricky part for your conscience is that it would have faked some buzz by making people think that the campaign is very popular. But in any way, it would have slipped unnoticed. No one would have been in the position to accuse you, or would have had any reason to do so (since it would have been profitable for the crowd too) until you perhaps decided to reveal you evil strategy. And then your honesty for telling it would have been praised and your reasons understood and accepted.
    (Btw, you still have time to deploy this evil plan to unlock the making of video, I wouldn’t complain ;)

    But to be honest, your plan was broken from the start. You have somehow taken the Humble Indie Bundle (HIB) formula in reverse order: putting the smallest part of the bundle (Divine Divinity) as pwyw and “offering” the biggest part to the top payers. In the HIB, bonus games for those who pay over the average are meant as that: bonuses, small incentives / rewards to pay a little more.
    So, one of the consequence of your reversed HIB model is that the bundle, the core of the bundle, is actually *not* pwyw and its price is highly affected by the average amount of previous buyers. In effect, you called “pay what you want” what is not, and I’ve seen complaints about this. Personnally I wasn’t affected since the game I was most interested in was DD, but for others I understand that it felt a little like false advertising.

    The big problem is that the donation/support aspect is a basic of the pwyw model (that you, or gog, encouraged, btw) and it’s conflicting with the fact that the base price of the bundle is so affected by the average amount. From there, happened what had to happen: supporters making big “donations” raised the price for everyone else.

    All in all, I don’t understand why you didn’t go full pwyw. Well, I understand some of your reasons, but I mean it’s a wrong decision. The base idea of pwyw is that you’re letting people set the price they are willing to afford / they think is fair for them. And you trust people to be fair. If you don’t, then you shouldn’t think of using the pwyw model at all. If you do trust people, then let them really pay what they want. As we’ve seen with the HIB, it works. In certain conditions at least, it works.

    If I were you, I’d have launched the pwyw campaign a couple months or so before the release of Original Sin (for advertising purposes and to avoid hurting the physical bundle’s sales), I would have gone full pwyw, with some of the bonuses offered to those who pay above average, as an incentive to pay higher. And the other bonuses kept as “unlocked for everyone after X sales”. It’s indeed a major ingredient to make the campaign “viral” (or in more human terms: to motivate people to help spread the news).

    By the way, if you happen to seriously think of starting a crowdfunding campaign one of these days, I’ll be happy to give you my advice. I’ve spent (lost) an aweful lot of time analysing kickstarters and people’s behavior, I think I have a good understanding of what makes a campaign successful in the big and small lines. I’d be happy to put this knowledge to use.
    I’m pretty sure I would have been able to foresee the issues in your faux-pwyw campaign before it was launched. And probably others in the community too; you could have submitted the idea here or on the forums to get feedback before making the mistakes. :)

    Ovocean

    PS: Why the 1$ = 1€ conversion on the Vault? I and a lot of people feel cheated by that.

    • http://www.lar.net/ Swen Vincke

      You say a lot of clever things, but obviously, it’s always easy to steer when you’re not on the boat ;) I’m more than happy to discuss – if you don’t want to do it publicly, drop me a mail.

      As to the PS – this has a lot to do with remaining in synch with Steam & retail.

      • Ovocean

        Right, I’m sure lacking some hindsight from the situation on the boat ;) , I can only give good advice on how these things should be done ideally to be well received from the outside.

        I’m all for public discussion. Whenever you start designing a kickstarter, I say you should ask for feedback to the fans as soon as possible before launching the campaign. The start of the campaign is critical, it’s very important to be in line with the community’s expectations from the start and it helps build up buzz.
        I know there is this habit of keeping everything top secret before it’s ready in the games industry, maybe you’ll have to overcome this habit. In the case of a crowdfunded game you will have to work with the community and to reveal a lot very early anyway, so you’d better start working with us even before the start of the campaign. ;)

        • http://www.lar.net/ Swen Vincke

          That last part is a very good point – I wrote somewhere when we started this entire selfpublishing business that I wanted to be very open about what we were doing with Original Sin & Dragon Commander, but somehow we drifted and didn’t really get to doing that. It’s not as if we’ve been doing a lot of top secret things, but there indeed is still this habbit of not sharing our fuckups too much. Guess that’s a very human reaction ;)

          • Ovocean

            Well, it’s still important not to show crappy prototypes of the game, because it’s hard for the public to get beyond the dull state and imagine how it will be when done, even if reminded that it’s only a prototype. For the rest (design, concept art, etc.) I think it has mostly positive outcome to share and discuss early with the community. It’s one of the great advantages of being independant it seems (it’s the major positive point reported by Brian Fargo and Obsidian when asked about what crowdfunding changed for them), you’d be fool not to use it. ;)

          • Ovocean

            I’m just thinking about it so I’m adding that, as an independent, you should definitely do a kickstarter, and the sooner the better. Why? Because it will get a massive boost to building your community and provide you with tools to keep us updated with news. Seen inXile? They where almost unknown to the RPG crowd, now they have 54k posts on their Wasteland forums, Brian Fargo has 10k followers on twitter (he created his account for the kickstarter and used it as the main channel for the latest news on Wasteland 2). And better than this, they have 60k persons who will receive every update on the game in their mailbox, and they can legitimately promote their other/next indie projects through this channel.

  • Ovocean

    Also… it seems you’re emotionally attached to LMK but what is interesting for us to see in this tech demo? I’ve watched the trailer on gog, it ends with lots of boring RPG clichés, it’s not very inviting. Is there some hidden gems to find behind this ugly curtain?

    • http://www.lar.net/ Swen Vincke

      You are right, it’s only a tech demo and the only interest is historical for the fans of Divinity. Still, if this had been released in 1998 or 1999, I think the history of Larian would’ve been very different.

      • Bil

        “Still, if this had been released in 1998 or 1999, I think the history of Larian would’ve been very different.”

        How so ?

        • arne

          see “of kickstarter & one thing I think game journalists should do”

          “DOS is closer/more to LMK than Div was, as LMK had everything Div had +
          multiplayer + a party. But that was back in 1998, so imagine the
          impact on the RPG landscape if it’d been released in 1999, or even 2000.
          It’s hindsight of course, so it’s easy to say now, but I think a RPG
          with all that in there to be released back then would’ve been pretty
          sweet.” (SV)

          If this game had been released, Larian would have had the funds to grow, improve engines, being independent of publishers much earlier. I remember an article stating SV : “we could have been the size of BioWare by now” .

  • Lorpius Prime

    So, I wasn’t going to buy the Divinity package on GOG. Truthfully, it doesn’t seem like the sort of game that I’d get very into, money’s quite tight for me right now, and I feel like a jerk just paying pennies to a developer for any game. But then I read this (followed a link from Techdirt), and discovered that pennies were actually what you’d expected. Just bought two copies for myself and a friend for a quarter each. I know it means nothing to you or your company financially, but I appreciate your candor in a discussion like this, as well as the contribution it’s (I hope) making to the progress of the games market. Thank you for the sale, and I wish you every success!

    • Raze

      Thank you, and I hope you are pleasantly surprised by the game. Trying the demo for DD before the original release, just wandering around the first town with the NPC and world interaction / atmosphere / music / humour / etc made me want the game. An encounter in the starting catacombs made it a day one buy for me when it was released.

  • Bil

    As far as I’m concerned, you did the right thing. Before this sale on GOG I had no intereste in the Divinity franchise, only fact I knew about it was that in 2 you play some sort of dragon killer who becomes a dragon himself… Now I own all 3 games and I will most likely buy future Larian games on release date.
    I’m a little bit disappointed about the 50K goal that will not be reached, but from what I just read it was done on purpose. And I have a feeling you’re gonna make the announcement pretty soon anyway.