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The Night of the Rabbit

Hamburg, Germany-based Daedalic Entertainment is going international with its popular adventure games, but its move around the world also means good news for the genre and other developers. The publisher/developer of titles like Harvey’s New Eyes and The Whispered World wants to show the potential for adventure games to succeed in foreign digital markets and enable smaller studios to bring their titles to a global audience.

Carsten FichtelmannFirst, the company needs to stabilize sales in different countries. As it delivers the final chapter of its Deponia series with Goodbye Deponia, Daedalic is preparing for worldwide simultaneous releases of four other new games this year, including The Night of the Rabbit (due May 29), 1954 Alcatraz, a sequel to The Dark Eye: Chains of Satinav, and an unannounced turn-based strategy title.

“Now we are looking very deep into new platforms, which we’d like to do besides PC and Mac,” Carsten Fichtelmann (pictured left), the chief executive officer and founder of Daedalic, told GamesBeat in a phone call. Moving forward, the company will bring its full library to iOS, Android, and consoles like PlayStation and Xbox (either Sony’s and Microsoft’s current-gen and/or next-gen systems).


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Sergei Klimov“We expect to make all of Daedalic’s in-house series available on iOS and Android within the next six to nine months,” said Sergei Klimov (pictured right), the company’s director of international business development. Daedalic already released its first iPad game, Edna & Harvey: The Breakout, six months ago to test the App Store waters.

Klimov said Deponia may be the first release on Sony’s platform, and as for Microsoft, Daedalic wants to debut with its under-wraps strategy game, which it’s revealing next month at the Game Developers Conference in San Francisco.

Equalizing launch across territories

Daedalic has already found huge success in Germany, which previously contributed to 70 percent of its revenue and about 80 percent of sales. While that’s comfortable territory for the team, which is closely familiar with that market, Klimov said, “Production is quite big and expensive, and to recoup the budget, we need to be international. There’s no way that we’ll go back and say, ‘Let’s do smaller projects based on the size of the German market, and that’s it.’

“You have to cross the border, and you have to stop thinking, ‘We’re a German studio that’s going to be successful.’ We have to think, ‘We’re a studio — one of the many studios.’ And we have to be relevant to not a single culture but to every culture — to every language.”

Same-day release is a strategy that began with Deponia; however, the game had a gap between the German and English launches. Daedalic is working to ensure that localizations happen at the exact same time, and that includes markets beyond the common English, German, and French languages, such as Brazilian Portuguese.

The Night of the Rabbit will ship in German (with voices), English (with voices), Russian, Polish, Spanish, French, and Czech on day one.

Goodbye Deponia“As the digital market is international, we’ll have to learn to work with that market,” said Klimov.

The audience potential is huge, too. Daedalic’s Facebook community is roughly three times as large as one the adventure-game leaders, Double Fine Productions. The success of campaigns on Kickstarter — like the Sierra Entertainment-style adventure Mage’s Initiation, nearly to its goal, and the successful Asylum (which completed today) — is also a good indicator of the interest in these games.

“This shows that the genre is very vital and that people like to play [these] games,” said Fichtelmann.

Adventure games come a long way from the old industry model of box-only business. “This … makes us quite confident that we will be more successful in the future,” said Fichtelmann. “So it makes sense for us to do more localizations.”

Losing the PC-only mindset

One of the big challenges to breaking into different markets is simply making the move across borders. Every product is collecting small sources of revenue from different countries, which makes the need to go international even stronger, said Klimov. Then the next step is to get away from the genre’s most native platforms.

“We have to stop thinking that we’re doing a PC game, and we have to start thinking that we’re doing a game,” said Klimov. “We’re creating a world. We’re creating characters. We’re creating the story.” Daedalic wants to tell that narrative on any device, but that’s “a big mental shift,” he said.

“People move to different devices. People move to different lifestyles,” said Klimov. But expanding to a variety of platforms also means investigating alternate distribution methods.

“We may come up with a slightly different strategy for mobile because we’re still selling all our games [at] higher price [points],” said Fichhtelmann, who added, “At the moment, we’re not selling episodic content.”

Harvey's New EyesHowever, the episodic format may become more of a reality for Daedalic, which is also considering selling subscriptions and enabling cross-play between devices.

“We’re looking at the fact that the audience is no longer this one group of people who comes home, opens up the desktop computer, and plays,” said Klimov. “The audience has different cases that we have to find a strategy that delivers our properties — our stories — to these people in the way that they like to consume.”

Another issue concerning mobile platforms is figuring out how to approach microtransactions in these storytelling-focused games. This is just one area that the company will need to learn to respond to as it progresses.

Regardless of platform, Daedalic wants to focus on building a quality product and then investing in communication so that people know that it exists. That’s part of what makes its reach on sites like Facebook so important.

Attracting new players in more markets

Despite its history, Klimov doesn’t believe that the genre is niche.

“We would like to make the games as accessible and as easy [as possible without] requiring previous familiarity and knowledge of the genre [so] that our games actually create interest in the genre,” he said.

The Night of the RabbitHe added, “I think it’s important for us to remember that we’re making games for every level of experience and not necessarily for the hardcore fans who don’t mind certain issues,” such as intense puzzles.

Careful moderation on services like Steam Greenlight and community-based sites like Kickstarter can help drive adventure games toward better quality products as well.

“The involvement of the community is really good for showing to developers the potential of international sales,” said Klimov. Feedback is arguably more valuable there than with other genres, such as action games.

Chaos on Deponia

“Kickstarter, and Steam, and GOG — they’re all making very useful feedback for the developers in order [to make] the titles better for the audience,” said Klimov, referring to comment voting on GOG.com, which can show how many people agree with a summary of a game. On Kickstarter, backers tell developers directly why they’re supporting their product or demand different platforms, like Linux. On Steam Greenlight, fans might comment to request different language versions.

“We have to listen to them because this is our audience,” said Klimov.

Fichtelmann said that digital platforms and better localizations work to spread awareness more than ever before.

“Our goal is to bring our games to all relevant regions, and we see with the very good feedback that we receive on games like Deponia or The Whispered World that our games are liked very much in all relevant territories,” said Fichtelmann. “Now we have to work to bring [them] in a more professional way [to] the big market, which was quite impossible three or four years ago, where indie developers or indie publishers had no chance.” They couldn’t keep up with the demands of physical retail, which Fichtelmann says was 60 to 70 percent of the business.

Widespread distribution is what Daedalic manages now and will have more control over in the future, he says.

Realizing the potential of international audiences

“What we’re seeing in terms of numbers on international sales is that we’re moving Daedalic from the situation where the German market was contributing maybe 40 or 50 percent of the sales to a situation where the German market is doing only 15 to 19 percent of the sales,” said Klimov. “And this is great because that means that just the overall figure is bigger.”

The Whispered WorldIndependent developers might take existing titles and bring them to countries where they underperform rather than focusing on major markets that have already shown success. With a few months of work, Daedalic has improved its sales in the Russian market to 12 to 15 percent.

“I know a lot of games that are making maybe 3 to 4 percent in Russia,” said Klimov, citing the prevalence of piracy there as a reason that developers stay away.

He said studios should localize to improve sales. “You don’t wait for the sales to happen in order to go back and say, ‘OK, now I’ve got fantastic sales. Now I can afford the budget to localize this title.'”

The Czech market is small — only selling hundreds of units. “But potentially, I know a few titles that were doing 20 [or] 30 thousand units a few years ago,” he said. “And these people are still there, and they need their games in the Czech language. And if you’re going to provide them, then you’re going to grow the market.”

Pulling in money from more markets — even a little at a time — has a big effect on production budgets.

“And all of that will enable us to come and say, ‘We can do a million-dollar project easily because we’re accessing all of those markets,'” said Klimov, who added, “You don’t focus on just one market, but you focus on building a sustainable model.”

Growing the genre, not just markets, for everyone’s benefit

The company’s new label, Daedalic Co-Op, will help talented studios use Daedalic’s publishing power to bring their titles internationally. It plans to announce a few partnerships soon.

A New Beginning“These studios hire us to do the job for us, but they collect the money,” said Klimov. “We don’t want to touch the revenue streams.”

Daedalic will also initiate co-production projects, where a new team or one that has experience in areas outside of games — such as film, television, or animation — can approach the company with an idea for its first game.

Klimov hopes that this label will enable younger studios to avoid mistakes and “to be more successful financially and creatively and basically have an easier way if they’re doing good stuff.”

Advice worth following

Daedalic shared a few points for developers based on its experience:

Try to reach international markets

Markets like Germany or Russia can be huge. In fact, these two are the biggest markets in Europe by revenue. And both of these markets have a language barrier: Players will need localized communication and localized versions to be available on day one. The same applies to France, Brazil, and Poland. It’s not a lot of work even if your game has a lot of text (you just plan subtitles, and the budget is not going to shock you) — it’s all about planning and taking this into account very early on in the development cycle. Taking good care of the international markets can add to your sales between 30 percent and 50 percent of extra revenue — revenue that you can use to increase the budget of your next project!

Paying for public relations is not the same as paying for love

It’s very rare that an independent team from outside of the international markets that have language barriers would be able to communicate with that market directly. For example, at Daedalic, we can take the best care possible in Germany and in Russia, our home markets, but we will be delusional to say that we work in Spain or France on the same level. All of the markets that you are not familiar with require local expertise, and we believe that more and more indie developers will be engaging the services of local independent PR professionals to reach local media and local players.

TDE: Chains of SatinavSometimes a team would say, “People love me, and I never spend money on PR — people love my games.” But we find this untrue because you’re not setting aside a PR budget to get higher scores; you’re setting aside this budget to reach local communities and to make yourself available for further contact.

‘Keep your bag with you at all times’

Times for indie studios nowadays are much better than ever before but also more risky. There are three factors that contribute to this:

1. Most of the studios now have many direct contracts with different platforms, localization agencies, magazines, co-production partners, engine owners, intellectual property (IP) owners, crowdfunding platforms — you name it. Whereas before, there was perhaps only one big contract with the worldwide publisher. This exposes every studio to much bigger legal risks, and it’s no longer a luxury to know a good U.S. or U.K. or German games lawyer — it’s a necessity.

1954 Alcatraz2. The industry changes as the digital age approaches, and, as everywhere, with new people and new companies come a few players who don’t know what is fair play. This means that you have to communicate with your peers at other indie studios much closer than ever before in order to exchange recommendations on the spot and to verify that whoever goes first somewhere lets his or her friends know if this was a safe bridge to cross.

And finally:

3. In addition to dealing with multiple contracts, often with new people, the structure of development is now different: Often, a studio would be owned by several principals, or the game would be a co-production between two to three teams from different countries, or a mod became a commercial product. This joint ownership of production means that creative people need to address the legal issues of who would own the creative results and how this ownership can change in the future. It is a bit like negotiating a marriage contract: Sure, you love each other now, but what if in five years, as the French would say, “love calls your heart somewhere else”?

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