Iron Horse Games is the publisher of dozens of mobile games including Idle Apocalypse, Uncivil War and many more. Founded on the premise that not every game requires the services of a giant publisher, Iron Horse Games offers small and medium sized developers best practices in game development and monetization, as well as help getting the attention of mobile platforms. The company was founded by Mike Gordon, who has more than a decade of experience in social and mobile game development and previously served as VP of Publishing at Kongregate. In this Mobile Champions interview, we ask Mike about why he created Iron Horse, what advice he has for developers looking to land a publishing deal, and why he has described the User Acquisition funnel as “the funnel of endless sadness.”
Hi Mike, thanks for joining us. Let’s start by having you tell us a little about yourself and Iron Horse Games.
Sure. I started Iron Horse over 2 years ago. My wife was 6 months pregnant and I had been out of the house for 12 hours a day minimum at that time. I decided that if I wanted to recognize my son and be a part of raising him, I needed to do something different. My mother in law Leslie Garson had just passed away from ALS as well. Her courage gave me — and continues to give me — a lot of inspiration. It certainly helped me make the jump and start Iron Horse.
You have a long history in the gaming industry, going back to the earliest days of social gaming as a product manager at Playdom. How did you come to found Iron Horse, and what was the goal when you first set out?
Ha…BLAST from the past! That’s a very polite way to say I’m getting old. Outside of the life reasons I mentioned above for starting Iron Horse, I was a part of the team that built out the Publishing business at Kongregate (alongside some SUPER talented other folks and developers). I figured if I could help build a business of that caliber for someone else, I could do it for myself (or build something that was at least fractionally as successful). And if I couldn’t do it alone, I needed to know that about myself.
As a mobile games publisher, what do you look for when choosing which games to partner with?
That’s a good question; I’m looking for a unique gameplay hook within a specific genre and a unique art style within a given genre. It doesn’t have to be revolutionary but it does have to be something that helps to push the genre forward mechanically. Same with the art; I’m looking for a unique combination of art and genre to help a title stand out.
In a talk you gave at this year’s GDC, you argued that Games as a Service is dead. What do you mean by that?
Well..I was a bit wrong…right at the time I said it, super wrong now. It’s a long answer but the short version is that you used to launch, get installs from a feature, and then never hope to reach those install levels again without heavy user acquisition and super strong LTVs. Live servicing a game that receives no installs isn’t bright. Recent changes to the app stores and marketing (mostly recognizing the need to capitalize marketing and then doing it) means that games are “alive” and serviced for longer than launch…at least games that have strong ARPUs and decent marketability (i.e. games that have reasonable CPIs).
You have also described the User Acquisition funnel as “the funnel of endless sadness.” Why so pessimistic?
HAHA. Man you did research! I think I believe it because it’s TRUE. There is so much effort that goes into creating a game and the VAST majority of people won’t even bother to download something that’s FREE and that’s not even the first step of the funnel! An old mentor of mine told me that if you like winning, games are the wrong business for you. Losing, over and over again, in new and inventive ways, is the essence of game development. Adjusting your approach incrementally from failure to slightly less failure — and learning to love that process — is something that I think a lot of people miss about game development. Describing things in pessimistic tones I feel is the most accurate way to talk about gaming.
What are the most common mistakes you and other publishers make when trying to forecast a game’s profitability?
Good question. Unless you have heaps of cash on hand for marketing, you have no idea how many installs a game is going to get, and installs are a critical part of your forecast — so incorrect forecasting is one common mistake. I think retention is an area that people can get into a LOT of trouble since a game’s retention is a referendum on how well it’s designed (plus which genre the game is in) and you can’t know that until you have a nearly complete game (the design’s quality that is…you should know the genre early on). Fluffing retention numbers can play havoc with revenue forecasting. Those are the big mistakes.
If you haven’t vetted your developers thoroughly or you aren’t aligned with them on goals for the project, that can lead to all kinds of issues down the line. For example, when a developer disagrees with your ideas on monetization or advertising, you might all of a sudden be looking at a game performing much less effectively than what you had forecasted. It’s better to sort that stuff out before you sign a contract.
What’s your general approach to game monetization? How much of a factor is rewarded advertising versus in-app purchases?
20-30% of revenue comes from ads these days (it changes a bit from game to game, but that’s generally the range). I think the crux of the strategy is to give players an embarrassing amount of value for their purchase. I literally suggest offering them a $30 or $40 value for a super steep discount. That plus heavily surfacing the package AND why it’s such a great value is key. I think people underestimate how important surfacing is.
Got any tips for the best ways to integrate rewarded ads into a mobile game?
Sure. Come publish your game with me and I’ll tell you all about them. Joking aside, similar to monetization, you have to surface ads and surface why they are valuable. You can’t hide them and expect players to be grateful for it. I think a lot of developers assume that players are going to be SUPER grateful that they went light on monetization and ads…and then magically they’ll make money from that goodwill. That doesn’t work…players ONLY see what’s there, not the compromises you made on their behalf. They aren’t going to give you any benefit for taking a route that is generous since they didn’t know what the ungenerous route looked like!
What advice do you have for indie developers who are looking for their first publishing deal?
Get your publisher to clearly lay out what they are going to do and how often they are going to do it in the contract. If it’s not in the contract and they don’t do anything on your game then you have no recourse. Contracts are usually super detailed in what a developer has to do…and yet they have very few details at all as to the responsibilities of the publisher.
Duration and Rev Share matter a lot. How long the agreement runs for matters a ton because you’ll be working on the game much longer than the publisher (publishers typically have a lot of front loaded work on a game, usually around the launch of a game). Rev share should reflect the value that the publisher is bringing to the table. If the things they are offering don’t have value, they shouldn’t get ANY associated revenue share. Price things out! For instance, if a publisher is saying localization is a key part of their deal, go find out how much it would cost to translate 10k words into 5 or so languages. Then think about giving up a rev share for that cost.
What games are you playing right now?
I just put in 60 or so hours into Divinity 2. I’m playing Bravely Second on my 3DS and Slay the Spire again. The new World of Warcraft expansion is coming out soon so I’ll be healing in instances and raids in the next month or so!