Pearl Harbor: Zero Hour Flies Again on P2P

Electronic Gaming Business, May 7, 2003

Can game companies realize a new aftermarket channel from the same nefarious file swapping networks that pass thousands of pirated Linkin Park MP3s? Yes, say developer ASAP Games and digital download technology provider Trymedia systems after just a couple of months of distributing Pearl Harbor: Zero Hour via the Kazaa network.

"We didn't know about Kazaa until Trymedia brought it to us," says Josh Gordon, vp of business development, ASAP Games. And after selling through 1,000 copies in the first month, Gordon is looking forward to trying this channel again.

PH:ZH is a light flight sim shooter that sold quite well as a low budget title for publisher Simon and Schuster Interactive in 2001 when the epic film "Pearl Harbor" hit theaters. Long after sales dwindled and the game showed up in $10 bargain bins, ASAP negotiated the digital download rights back from SSI at a low rate so long as ASAP didn't impinge on boxed CD sales.

Neither company had ever done this sort of deal before, but ASAP wanted to squeeze more revenue from a popular title that did especially well in a mass market venue like Wal-Mart. "The interesting thing is that [SSI] didn't perceive there would be any value there," says Gordon. As digital downloading is starting to show its potential, however, "I think going back to do a subsequent deal is going to be tougher."

Shrinking the game files to a broadband-friendly 35MB and retooling it to a try-before-you buy format, ASAP first distributed PH:ZH on RealNetworks channel in Q1 2002. The game consistently gets 15,000 to 20,000 downloads a week, which is good, and its conversions to sales on those downloads exceeded 1.5%, which Gordon calls, "the baseline for survival in that environment."

Steal This File!

Moving the title into the P2P channel supercharged that performance, however. The massive P2P audience generally is broadband-enabled, here to download stuff and looking for more than MP3s. After music, "games, porno and video are all similar in terms of [P2P] user interest," says Gabe Zickerman, VP of marketing at Trymedia, which has distribution relationships with Kazaa and others. The company also offered ASAP its all-in-one ActiveMark game wrapper. This technology puts a time limit on unregistered game play, but also contains a fulfillment engine so gamers can buy full access directly from TryMedia and within the program.

Best of all for Gordon, Trymedia offered a better revenue sharing model than the big distribution portals, which often keep a 60% to 70% share. "PH:ZH came into our distribution channel with pretty strong sales in its class, so it was easier to put together a deal that was financially attractive to both parties," says Zickerman. Trymedia relies heavily on its detailed database on past download performance, which shows that simple shooters, "blowing a lot of things up very fast," according to Zickerman, sells well in P2P.

The plan was to go big with ads on the Kazaa service's welcome and gaming pages as well as direct email to previous Trymedia customers who had liked similar products. The programs launched in February.

Try, Not Buy

Unlike retail, the marketing message in digital downloads is telling the user to try not buy. "You want the trial period to end when the average user is engaged but not bored," Zickerman says. Capped at an hour of play, and priced at $14.95 (actually higher than bargain bin retail), PH:ZH becomes a compelling impulse buy for this audience. "Mass market titles perform significantly better in our channel than hardcore titles," he says.

Not only did PH:ZH sell through about 1,000 units in its first month on Kazaa, "but we actually saw it hold up the second month," says Gordon. Better yet, it enjoys a sales conversion rate of 14%, which is phenomenally good, he says. Larger file sizes usually get fewer overall downloads but a higher conversion rate, he finds.

"At this point it becomes a marketing game," which is also the channel's greatest shortcoming, says Gordon. "The minute we lost the ad on the [Kazaa homepage] sales dropped way down," he says. Zickerman agrees that sales in the download channel are hypersensitive to promotion because "this is an impulse buy, like the stuff that is at the checkout counter."

Promotion and sales of PH:ZH did bounce back after this brief burp, but the experience reminded Gordon that persistent, consistent marketing is essential with digital distribution, and it requires vigilance. Rather than be at the whim of distribution and publishing channels, he would like to negotiate into these contracts minimal guaranteed exposure at networks like Kazaa.

But even as presence dwindles Gordon expects sales to settle down shortly to more like 500 units a month, "but if it does that for any period of time then it was a very good investment," Gordon says.

Zickerman argues that PH:ZH's success demonstrates how game publishers should consider the Hollywood model of "content windowing," of releasing older or failed retail titles into the download channel as a way to retrieve after market revenues with no risk or additional investment.