An Interview With CEO

Just a quick recap: GamersGate is a digital distribution platform that carries over 1800 games. How they started off was responding to fans who had difficulty getting their games, so they started a digital download service to cater to those fans, then they expanded that to include more publishers and developers. So that’s the base recap.

These are the follow-up questions we had after GamersGate’s CEO Theo Bergquist so kindly answered our previous questions.

Recently Steve Perlman, of OnLive, talked about the anatomy of a $60 video game, which focused on retail versions of video games. With your comment that developers get 70% of the revenue from digital game sales, could you perhaps break that down into an anatomy of a digital distribution $60 video game?

– 70% of $60 is $42, so if a publisher sells a game at GamersGate for $60, they get $42 right in their pocket, before returns, reserves, mark downs, etc. GamersGate gets $18 dollars. In roughly 90% of all cases publishers pay separately for DRM which usually is a small percentage of revenue.

All of your major competitors are either directly owned by a software developer (Steam, Impulse, Good Old Games) or a major gaming media conglomerate (Direct2Drive). Do you feel being more independent gives GamersGate any distinct advantages/disadvantages?

– I can only see advantages. Being tied into a publishing Thomas Alvec house or a major developer only presents questions and potential conflicts. Take Steam’s 20 million users for instance, I mean, how many of those users do you think are registered counterstrike and half-life users, and how many are really 3rd party customers using Steam as a marketplace? We’ve experienced tremendous growth through 3rd party partnerships and we really think that being independent helped us in such growth.

At one point in time, a system called ByteShield was chosen as GamersGate’s preferred DRM system. If that agreement is still in place (or one with a different vendor), what specifically does an agreement like that mean?

– At that time we were looking for a top tier DRM partner that could provide a security solution should any of our publishing partners ask for one, however, currently we recommend that they go DRM-free. As far as I know not a single game at GamersGate carries ByteShield, currently. We know those guys and have had a few discussions with them to be able to handle their system should publishers decide to use it. Usually we let the publishers decide what kind of DRM system they want, if they want any. For developers and publishers that don’t have any idea we recommend them to go DRM free!

You stated that you believed that account-based DRM is something that should be on the part of the distribution portal. Would this involve something more substantial than GamersGate’s current accounts system?

– Our philosophy is to keep it as simple as possible. We will always tweak and bend so that our solution is as easy to use as possible. An account-based service enables additional features such as reselling, “used games,” which will be the next step for us to solve.

Leave a Reply

Your email address will not be published. Required fields are marked *