The start, admittedly, could have been smoother.
In May 2012, after a roller coaster campaign on crowdfunding website Kickstarter, an independently developed mobile game called République finally achieved its $500,000 funding goal, barely crossing the finish line with just six hours to go.
Almost two years later, though, the principals behind République — Ryan Payton, founder of Bellevue-based Camouflaj, and partner and investor Jeffrey Matthews — are enjoying the game’s early success. Payton and Matthews, who met when Payton took Matthews’ economics classes as an undergrad at the University of Puget Sound in Tacoma, said that lessons from their shared South Sound roots helped their company weather the early crowdfunding storm.
Chief among those lessons, Payton said, was patience.
Before the turbulent Kickstarter campaign, République’s foundation looked solidly, well, solid. Payton brought with him an impressive pedigree, having produced Metal Gear Solid 4 at Konami and worked at Microsoft on Halo 4. He had designs of marrying complex, story-based gameplay with a big production feel, an immersive experience for iPod and iPod gamers. A trailer showcasing impressive game footage and a clever narrative was produced to accompany the Kickstarter’s launch — but while campaigns drew in funding by the millions, République stumbled out of the gate early.
If not for a focused social media campaign that lit the Twittersphere during the Kickstarter’s homestretch, République’s 32-day campaign may well have fallen short.
It was a stomach-churning ride for the Camouflaj team then, but fast forward almost two years and the rewards have been evident. République hit the App Store on Dec. 19 — the most competitive day on the app release calendar because of its proximity to the holidays — and, after Apple chose to spotlight the game on the App Store’s front page, the game has spent its debut month charting among the top of the list in paid games: top 10 on iPad and top 20 on iPhone domestically.
“And we actually have more international sales everyday than we do U.S. sales.” Matthews said. “We’re doing particularly well in China, even though we haven’t yet localized in the Chinese market. We’re still doing very good there in English.”
Not such an odd couple
It’s been more than a decade since Payton graduated from the University of Puget Sound, and even longer since he took one of Matthews’ classes. But the two stayed in touch, and, after Payton returned to the United States from a stint in Japan, the pair again connected, meeting more regularly to chat about business issues and the gaming industry.
“I guess I’m kind of a teacher’s pet or something, because the only guy I still talk to from college is one of my professors,” Payton chuckled.
So when Payton made the decision to leave Microsoft and branch out on his own, he wanted someone to help with the business side so he could focus on creative — and he knew exactly who that someone was.
“He literally just called me a couple of years ago and asked if I wanted on board,” Matthews said. “And I said yes.”
“There was a venture capitalist that said that people don’t really take you seriously unless there’s a businessperson involved,” laughed Payton. “I think that’s totally true. One of the things that Jeff brings to the studio is that we basically have 25 kids running around like crazy, and what Jeff brought was not only experience and mentorship, but also legitimacy. We really lean on him to make our company feel like a real company, and it’s helped us work through a lot of issues. It’s been a great partnership.”
The Camouflaj team knew pretty early in République’s life cycle that they didn’t want it to be a free download, with revenues coming from in-game ads and in-app purchases.
“One of our motivations really was to respect the customer,” Matthews said. “We thought by having a premium pricing model, we wouldn’t have to then ask customers subsequently to keep paying more money to pay the game — that if we offered a quality experience, there was enough people out there that would pay for that and not feel like they were being bombarded with requests for in-app purchases along the way.”
The question, then, became simply, “How does the game make money?”
“One of the things we really struggled with in our first year and a half on the project was how we were going to monetize this game,” Payton said. “Narrative games are really difficult to monetize, because there’s not an infinite loop of playability. It’s a narrative, so by definition, there’s a beginning, middle and end, so you have to figure out a way to best monetize to people that’s fair.”
The inspiration, finally, came from California-based Telltale Games, which pioneered a model based on digitally distributed, episodic graphic adventure titles based on popular media franchises such as Homestar Runner, Jurassic Park, The Walking Dead and Game of Thrones. The games are released in a series of episodes that complete a narrative arc, with each episode retailing at around $5 and a “season pack” that packages all of an entire arc’s episodes (including unreleased episodes to be downloaded at a future date) at a discounted total.
“Really, we were just floundering for a while until we saw what Telltale was doing,” Payton said. “We thought what they were doing was not only really fair, but also working really well for them as a business model. One of the things that I think is really cool about our game — and we’re seeing a lot of really positive response from the consumer on this — is that our season pass not only gives a 25 percent discount, but we’re also giving people early access to the next episode if they have the season pass. We’re also giving them some director’s commentary about the making of the game, and we’re also giving them some ‘making of’ videos, all these different bonuses to try to upsell them into the season pass. It’s gone way over expectations in terms of the attach rate.”
“Attach rate” refers to the number of people who have converted from the first episode to the season pass, and as Payton said, the returns are good.
“There have been days where 10 percent of the players are choosing to pay $4.99 for the game, then $14.99 for the season pass at the same time. That’s a remarkable conversion rate,” said Matthews, adding that, usually, between 1-3 percent conversion rate is considered a success within the paid app market. “That really tells us that we’re building a brand that’s resonating with people.”
The game’s episodic structure has made for some interesting discussion within Camouflaj’s walls about tweaking the game to encourage future sales. According to Matthews, the company has discussed various promotional strategies for the coming release of the second episode, including — since playing the Episode 2 requires beating Episode 1 — making the first episode free for download for a limited time.
“One of the things we’ve talked about, then, is whether or not we should go back and make Episode 1 easier to play through,” said Matthews. With so many more casual players in the mobile realm compared to console gaming, Matthews said that such a decision, weighing the rate of casuals who make the leap from the first episode to the second against the possible alienation of hardcore gamers who value the complexity presented by the episode’s original structure, presents a fascinating dilemma.
“It’s one we’re going to have fun talking about in my business class,” Matthews laughed.
Matthews has used Camouflaj’s journey as a frequent example in his classes, discussing everything from hiring decisions to monetization to pitch presentations. Now that République has gone live, Matthews added, the classroom discourse will inevitably expand to topics including marketing and business decisions like the one mentioned above. And Camouflaj has used UPS students in a variety of ways, as well, bringing in interns from both the university’s business and computer science schools on several research and development processes.
“We’re big into giving the students real world experience through what we’re doing,” Payton said. “I’m going through the mentoring program [at UPS], with two mentees who report to me, and I’m trying to guide them and help them as they’re getting interested in the tech industry. We actually bring them up to the studio and give them real projects to see how real work happens.”
Conversely, Payton is quick to point to the lessons he brought from Matthews’ classroom to his company.
“One of the things that stuck with me that we really try to instill within our business is less of a focus on these artificial ways of giving power and influence, like job titles and salary,” Payton said. “Instead, it’s about focusing more on the interpersonal — how you work with other people and how you influence them in positive ways.
“I actually found myself dipping back into those tools that he was teaching us as undergrads when I was working [on Metal Gear] and at Microsoft, in these highly competitive, corporate environments that did focus a lot on those other ways of giving power. So when it came time to develop my own way, I definitely went back to what Jeff taught me.”
“And perhaps the biggest lesson for anybody,” said Matthews with a knowing smile, “is for people — not just students, but, you know, businesspeople — to see that a successful enterprise in such a competitive industry can have its roots down in Tacoma. I think that’s a great part of the story.”