Frictional Games Business Model
6:00 AM | Cord Kruse | 1 comment
A recent Frictional Games developer blog post revealed a brief overview of the company's business model. Frictional Games is known for its Penumbra series of first person horror titles and is currently working on Unknown, a new first person survival horror game set in the 18th century.
In the past we have gotten most of our income as pre-payments from publishers. The reason why one wants to get advances is because it can take a long time before publisher money arrives from the actual sales of a game (at least 6 months) and it is also a proof that the publisher is serious.Visit the page below to read more.
In The Games Of Madness: Briefly Being Frictional
For Overture, we got the money a few weeks before release of the game and a bit afterward. A great deal of the money never reached us (the bit that did was thanks to the "give us the promised cash or you will not get the promised game" method) because of the not-so-honest Lexicon Entertainment (now out of business I think, go figure). But that is another story.
For Black Plague and Requiem we got a good deal of the payments several months before release and the money acted as a kind of funding. It is important to point out that an advance is more like a loan though, and must be paid back using royalties before we get anything more. So far we have not reached this limit even though it has been over 1.5 years since release (we are very close though). By not having pre-payments you can usually get a higher royalty rate, but in the case of Black Plague and Requiem, it would not have been possible to create the games without being paid in advance.
Another source of income are the online sales. The major part of this are the titles that we own digital rights to (all mac/linux versions and windows version of Overture). In the past this have not been a huge amount of income but have still made it possible for us to keep alive during some harsher months and we would probably not have survived without it.
Recently with the weekend sale on steam, and later in our own shop, this have changed. These sales have shown us just how lucrative online sales can be and is also the reason why we are now able to finance the upcoming game ourselves.
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