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GamesBeat Summit 2024: Exploring a new era of direct-to-consumer strategies

More and more publishers are turning to web stores and other direct-to-consumer (D2C) models in today’s games. And at GamesBeat Summit 2024, Discord SVP of product Peter Sellis and Coda chief operating officer Rick Phillips talked about how companies can effectively use D2C strategies in their own products.

GamesBeat lead writer Dean Takahashi brought up the current downturn in the industry and the need for new sources of revenue. He asked the panelists if this is leading to a new era of D2C monetization. Sellis said that Discord has been so successful in D2C because they focus on making the free product (creating servers to chat and message with friends) as great as possible, and then try to add value to that experience with its paid Nitro subscriptions.

The only problem was that Discord had to constantly decide whether or not any new features it developed should be added to the free version of the platform or to Nitro.

To address this, Discord expanded its monetization offerings earlier this year with sponsored Quests (rewarding players with in-game items for playing games) and cosmetics in the Discord Shop. Developers provide content for both Quest awards and Shop items, and in turn, Discord splits the profits with them.

“I do think D2C in particular is in a little bit of a renaissance and people are incorporating it in their portfolios,” said Sellis. “But you want exactly that — you want a pretty broad-based portfolio, otherwise you’re stuck making some very linear optimization decisions that can be sub-optimal for the consumer.”

Coda works with developers and publishers to create and manage new sources of monetization (like alternative payment methods and web stores). But prior to joining Coda, Phillips worked in development for 12 years and he emphasized how important it is to have a balanced game first before worrying about monetization. If not, the players won’t stick around for long.

“When we think about monetization — yes, in some cases, it can be a dirty word in isolation,” said Phillips. “But if you think about monetization as part of a broader strategy to create a long-term relationship between the publisher and the player and to enrich the player experience, then it’s really not.”

But he warned that even the biggest publishers will have trouble creating a successful web store right at launch. It takes a lot of time and iteration to get it right.

“You can’t launch a direct-to-consumer web store and expect to be incredibly successful out of the gate,” said Phillips. “Maybe you’ll get lucky, but the reality is you’ll develop the best experience for your customers if, after launching, you do a lot of testing and iteration. The longer the store is live, the more consumer behavior will change, the more trends will change. So we rely heavily on a scientific framework, a lot of testing, creating hypotheses and observations, and redoing all of that to drive changes in the web stores.”

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