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[Gbutton]

Making a profitable ARG.

[thebruce]

The proble now is the real world - if you start selling products and making a profit (even if it is towards the game), at some point you'd legally be required to register a business, no? Perhaps laws vary for different regions/countries, but once you start selling things in an ARG, I'm sure there would be some real-world legal issues to deal with as well.
In-game, BU would already be registered as a business and be able to sell products, but as an ARG, the PM wouldn't necessarily have the same luxury. It might be a small hurdle, but it's something to keep in mind if you run a game where you are receiving money for a product or service from players.

[Gbutton]

That's very true, I guess I'm trying to think of how to make a self sustaining ARG company that has a sales model that would support multiple games over an extended period of time.

[Agent Lex]

You could always charge people for a ruinously addictive chunk of the game content

[imbri]

The problem is the number of people willing to buy something and the profit margin.

Let's say you have a successful game and reach 100,000 players. If 10% of players purchase an item that has a profit margin of $1.00, you will have only made $10,000 which is not enough to do something of "great scale over an extended period of time". That's making some assumptions (that you will reach 100,000 players, that 10% will buy something, and that you will be able to make $1 off of each item) which I'm not certain are realistic.

[Jas0n]

I agree with imbri, there's just so much that you can try to do to make money. You run into the problem she mentioned, plus the possibility of alienating players.

I've been going through a various number of possible revenue generation ideas for the Aporia Agathon Project and some seem promising due to the theme of the game, but others could alienate the player base. The goal for me with AAP is to not strike it rich, but use any revenue to put back into the game.

ARGs are not at a stage right now where a subscription based model would achieve a good deal of profitability (at least in my opinion). There are a number of means of using advertising in a non-corporate sense through product placement, but you would need to be able to sell that idea to a number of people.

Currently the best/most efficient means of ARG profitability is through a corporate sponsorship of a game to drive potential consumers to their brand.

I know some grassroots guys are thinking, yeah but it only costs me $100 to run such and such game for 2 months - I could sell t-shirts and if I make $5 a shirt and sell 60 shirts, I've trippled what I put into it. Yeah you did, but no you didn't. You have to consider that the time you put into development and the people's time who are helping you is worth money too. Yes you may have only put out $100 from your own wallet, but if you spend 200 solid hours (on the low end) making the game and you get $300 from shirt sales - then you made $1/hr developing the game. I'd suggest if that were the case: outsource the workload to India and you might get a little bit of profit (LOL).

[notgordian]

Along with that, one of the options towards turning a profit is the Angel Investors / Venture Capital route -- you put out a project as a proof-of-concept in order to attract investment so you have the capital to expend to generate business or create saleable IP/products.

Admittedly you still need a profitable model after that -- however, generating that safety net of capital allows you to present yourself as a more professional entity in pitch meetings and through sales, whether it's pitching your central retail product (books, podcasts, CDs, tv, movies, graphic novels, and clothing have all been used for this purpose) or pitching to advertising firms and corporations.

[Gbutton]

imbri: Good point, I don't really think that in game merchandise will be enough to create a self sustaining ARG company. The question I'm asking is, what will?

Jas0n: Yeah, every time I've tried to come up with a more viable revenue stream it seems like it would alienate the player base. I do agree that subs wouldn't work at this point, but maybe a premium content plan, where you get more puzzles if you pay.

And like I said before, I'm curious about this because I would like to see ARGs break away from corporate sponsorships and grassroots campaigns and into a more mainstream art form.

[BubbleBoy]

Lord knows I'm no expert on this subject, but if you are looking to make a profit, try going small scale. Create a business that uses the "ARG" model on a much more individualized basis. Something that would allow you to create a "template" that you could use with every game that you make.

One idea could be if someone wants to propose in a unique way, you could create a game for them that tells the story of their relationship, with photos and interactions.

Or maybe even a template for someone who wants to ask someone out in a creative way. Start with the flowers with a code attached and go from there.

You wouldn't really have to put a lot of work into creating the games because you will be using a "template" for each one, so you'll already know what will need to be created.

You could charge a small fee and, over time, generate some income for yourself. Create different packages that sell for different prices.

You'll probably only get a small portion of the world interested in such a thing, and these are only two examples that I could think of, but the concept is the same. Use the "ARG" model to start an interesting business.

EDIT: Some companies already use the "ARG" model to help build teamwork within the company, maybe you can do the same kind of thing?

Just an idea.

[Nighthawk]

I don't think that one should charge to play an ARG, or at least be that up front about charging. Unless there is some sort of reward in the end, but then you are stepping in to the touchy atmosphere that differentiates an ARG from an actual contest (which requires insurance, bonding, etc...).

If there are expenses involved it's up to the players, and said expenses should never be required for progression of the ARG.

Now, if you need to make a profit, there is always the possibility of donations, something I myself have considered. Either before or after the game, but not during, give them an option to contribute whatever; if they feel it was worth the experience, mayhaps they will contribute so that you can do it again.

One thing I learned from the LGL Rubik's Cube fiasco is that people will pay a few bucks for something if it's worthwhile and "cool". I had five people shell out three or four bucks in order to get the cubes, even though I expressly told them that it wasn't necessary for them to do so. I considered that a compliment.

If my game sucked and I was sending a nondescript brick through the mail, I seriously doubt anyone would have paid $3 for it.

For my next project I am going to launch my company and a support site that's not directly related to my upcoming game. I will, most probably, give players the option to donate if they are so inclined; until Paramount hires me to do the Cloverfield II ARG, I gotta offset these costs with something...

[thebruce]

there is the other option of having that backing as mentioned earlier, by doing an ARG for someone. While sponsorship is generally referring to a company trying to build brand awareness, those args are still aimed at a general audience. If you do an ARG for someone, or a company, then you can charge them the fee, and the target audience would be their call - such as an ARG for a company's employees, or a special event, etc. That way the players don't pay, but the entity you're doing the ARG for does.

Other people have formed companies that already accomplish this kind of business model. You could ask Star Spider (a user here) about her company - I believe she has her own, and she creates these kind of events for groups and companies and whatnot.

The difference though is that the target crowd is determined by the person paying to make the ARG, as opposed to a sponsor trying to sell their product to whoever they can. The former would be a revenue model based on packages a client may choose from (they could be static amounts or dependent on variables), while the latter may be a more dynamic revenue model based on market penetration, popularity, acceptance, etc...

Perhaps you could say they could be called Sponsor-model ARGs, or Client-model ARGs?

[morelaak]

[Gbutton]

OK, this is what I have so far:

The personal client-model would sell pre-made ARGs to individuals for private use. For every person that registers for your service, the template you have created would be personalized, complete with websites and real world challenges.

The group client-model sells small ARGs, probably focused on building teamwork, to businesses as a form of entertainment. I kind of see both of these options as a way to gather money for the ARG you actually want to do. Like a movie company that publishes summer blockbusters so they have the revenue to publish indie films.

The donation-model is a quality fall-back for anyone who wants to go straight into making what they want, though there is a risk that you might not make back what you put in.

The merchandise-model would require story integration or a breaking of the curtain, but if done properly could create a steady revenue stream. This model becomes more feasible with larger audiences; the more you sell, the more you have to make, the more you have to make the cheaper it is to make, and cheaper products mean higher revenue.

And finally, the sponsor-model will have the limitless backing of a national advertising budget but you will be more restricted in what you can and can't do by the company that's footing the bill.

Sound right?

[chelec]

Your forgetting the 'agency' model, which means selling your services to companies that want to use ARGs for marketing or education. It is different to a sponsor model, as your customer can be more than advertisers. You design and run a game based on customer requirements. There's a few of them round here

[Gbutton]

I see what you are saying with the agency model, but I'm not sure this wouldn't fall under sponsor, in terms of where the agency receives funding from.