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Quick hits

The publishers that thrive during the rise of AI-generated search results will be the ones that form a direct connection with their audiences and focus on creating high-quality, original content. The ones that continue producing commoditized, low-effort content that's heavily search dependent will be hit hardest. [Ian Betteridge]

This is a great deep dive into the rise of a rightwing media outlet in the UK that's leveraged culture war content to build a sizable audience. [The Guardian]

Complex has long been an incredibly innovative media company, and the fact that BuzzFeed has to unload it in a fire sale is a testament to how poor of a financial situation it's in. The media industry used to treat Jonah Peretti as some sort of prophet; now he's a symbol of an era of profligate spending from media outlets that had no viable business model. [NYT]

Amazon-owned Wondery has built out an entire stable of narrative nonfiction podcasts that collectively generate 166 million downloads per month. [Variety]

This isn't specifically media related, but I think a lot of media entrepreneurs could see themselves in this piece. It's so easy to feel like you're spinning your wheels while everyone else around you is succeeding. [New York]

ESPN's deal with Pat McAfee is probably an early example of how the mainstream media will interact with the Creator Economy in the future. Creators will build out audiences on their own and then get scouted by traditional media companies that want to tap into their popularity. [WashPo]

News aggregators like SmartNews, Apple News, and Flipboard have always had a negligible impact on publishers' revenue, and now many media companies are questioning why they're giving away so much of their content to these third party platforms. [Digiday]

Keyword blocking "has the intended effect of preventing brands’ ads from running alongside polarizing content, but it also has the unintended effect of demonetizing news publishers’ coverage of these news cycles." [Medialyte]

How the GameDiscoverCo newsletter launched a data product for game developers

There’s absolutely no way to predict with 100% accuracy how a piece of commercial art will perform once it’s released to the public. If that were possible, then book publishers would only put out bestsellers and movie studios would exclusively release blockbusters. There are just too many variables at play — including critical reviews, marketing campaigns, word-of-mouth buzz, and even macroeconomic trends — to determine ahead of time whether a piece of content will be a smash hit or total flop.

That’s not to say that the companies that fund this content don’t try to gauge the potential sales numbers of a project before greenlighting it. That’s why every book proposal is required to have a “comp titles” section where the author lists other similar books in the marketplace along with their sales numbers, and it’s why there’s a whole cottage industry of data analysts who try to predict the box office openings for films. It’s also why Hollywood is obsessed with making movies and TV shows that fit within already-existing IP; it gives executives at least some peace of mind that there’s an audience that’s expressed an interest in the property.

But what happens if you’re a video game producer who wants to set realistic sales expectations for an upcoming title? While some games are based on already-existing IP, there are hundreds launched every year for smartphones, desktop computers, and consoles that are wholly original, and the companies that publish them collectively spend billions of dollars to market those titles to potential customers. In order to ensure a good return on their marketing spend, they need accurate data on how similar games were promoted and discovered.

To get this data, many within the industry turn to the GameDiscoverCo newsletter. Launched in 2019 by a longtime gaming journalist named Simon Carless, GameDiscoverCo analyzes both public and private data around game releases and then distills it into marketing and sales insights. Carless monetizes the newsletter through a mixture of paid subscriptions and consulting, and he’s used his profits to build a platform that visualizes this data for paying customers. Think of it as sort of a Bloomberg Terminal for game developers.

In a recent interview, Carless discussed why he decided to quit his job to run the newsletter, how he grew his audience, and what it took to build out and run his own data platform.

Let’s jump into my findings…

Learning the ins and outs of the gaming industry

While Carless spent the last 20 years in gaming media, he actually got his start on the operations side of the industry. Specifically, he was a game designer in the 90s, working on a number of titles that included Looney Tunes Racing and a first-person shooter for the PC. “I enjoyed it, but I didn't really feel like I had a full skillset,” he said. “Like I can't really program, and I felt like that was sort of holding me back.” 

Starting in the late 90s, Carless began writing about games for websites like Slashdot and Gamasutra, the latter of which was associated with a print publication called Game Developer Magazine. One of his earliest pieces for the site was a longform history of arcade fighting games. For the first few years, he freelanced for these publications while continuing to hold down his day job, but in 2004 he decided he wanted to make a full-time plunge into gaming journalism. “I basically went over and said, ‘Hey, I've been writing for you as a game designer. Can I come and write news and features about game development?’ And they were like, ‘sure.’”

For the next 16 years or so, Carless basically worked for the same company, moving up within its ranks as it got swallowed by larger and larger parent companies. Between 2004 and 2008, he served as the editor-in-chief of Gamasutra, which was eventually rebranded as GameDeveloper.com. Then he moved out of the digital content space entirely to run the company's various events, including the Game Developers Conference and Black Hat, which is an annual information security conference. Informa, one of the largest event companies in the world, bought Carless’s employer in 2018 for $5.2 billion. Carless was given the title of executive vice president and continued to run its events.

It was while working at Informa that Carless launched the GameDiscoverCo newsletter on Substack. In 2017, he had invested in a gaming studio called No More Robots that went on to produce multiple hit games, and his collaboration with them spurred an interest in game sales data. “I was very interested in this problem, which is that there's an increasing supply of video games and the demand for video games is going up, but there's also a lot of existing video games that continue taking up interest.” There was plenty of existing data for mobile game downloads — due to the fact that marketers acquired users through paid ads on platforms like Facebook and Twitter — but that wasn’t the case for PC and console games, both of which required a lot more guesswork in their marketing.

The idea behind GameDiscoverCo was that Carless would take publicly-available data from platforms like Steam and then combine it with private data furnished from his contacts within the industry, and from there he could shed light on why certain PC and console games found an audience. He began publishing the newsletter in 2019 and then basically ran it as a side hustle for the next several months.

That all changed in 2020 with the introduction of the Covid pandemic. Carless suddenly found himself running a live events business in a world where there were no events. By that point, his newsletter had about 1,500 free subscribers, and he felt it was as good a time as any to try something new. “I wasn't presuming that I could suddenly make the same amount of money or anything, but I wanted to try it because I felt like it would be sustainable and exciting,” he said. “I'm in my late forties now, and I figured that if I can build something for the next 15 years that's entertaining and where I own the whole thing, then that would be awesome.” 

Growing a subscription and consulting business

From the very beginning, Carless set out to turn GameDiscoverCo into a subscription business. He established a regular cadence of publishing two free newsletters per week and one for paying subscribers. The free newsletters — published Monday and Wednesday — will go deep on specific categories within the gaming industry. The newsletter published last Monday, for instance, gave an overview on the most popular free-to-play games on Steam, with a detailed breakdown of their similarities and characteristics.

The paid Friday newsletter tends to be more chart heavy and analyzes the most popular games on that particular week. While much of his data comes from public sources, he’s also built out contacts within the industry who will open up their books and show him their private data. “This is pretty rare in games,” he said. “So I’ll have someone tell me they made $2 million on this game, and here's exactly how many copies they sold in which territories and how many refunds they had, and all that kind of stuff. And this kind of information is very practical and interesting to people.”

Carless charges $15 a month or $150 a year, and his subscriber base spans every aspect of the industry, from the venture capitalists who invest in the sector to the major gaming companies to individual indie developers. “From a business model point of view, if you want our general insights, just subscribe for free. If you want to know what games were or weren't hot when they launched on Steam this week, and why, then you'll want to subscribe to the paid version. That was my original business plan.” 

What surprised Carless early on was that the newsletter ended up being a lead generator for a much more lucrative business: consulting. “People just started approaching me and were saying, like, ‘you obviously know what you're talking about. We'd like to talk to you about this problem we're having.’” Those conversations led to both short and long term consulting agreements where he would apply his data analysis skills to answering their questions. Sometimes these arrangements simply require Carless to jump on the phone from time to time, while others involve actual research projects. “These companies are used to paying retainers for PR and marketing companies, so this is really a retainer for game discovery, which is kind of a form of marketing, but more on the strategic side.” 

Building a data product

The upside to the consulting business is it provided a much larger cashflow than subscriptions, and Carless decided early on to invest this revenue in building a data visualization product that would enhance his services for both his consulting clients and paid subscribers. To accomplish this, he hired three employees. One of them is focused mostly on basic data entry and manipulation. “The others are literally frontend and backend coders. They're in charge of grabbing the information from these various platforms and then arranging them in attractive ways for our user base.”

The end result is a platform called GameDiscoverCo Plus. Carless gave me subscriber access to the product, and I clicked around and played with several of its widgets. Here’s a non-exhaustive list of its capabilities:

• Revenue Predictor: This is a tool that “allows subscribers to enter a price and release date for the game, as well as possible unit share percentages for non-Steam platforms, and see estimated net revenue for the next 5 years based on 'Hype' at median conversion rates.”

• Publish/Developer: This is a database of every major game developer and its associated stats that include gross revenue, copies sold, average review score, and several others.

• Steam Hype Chart: This tracks all the upcoming releases on Steam and attempts to quantify the amount of consumer hype there is for each title based on the number of followers, wishlists, and “chatter” associated with it.

Again, this was a non-exhaustive list of capabilities, but it gives you a basic idea of the type of data it offers up to paying clients.

Perusing through the platform, I couldn’t help but think of other companies that sell access to real-time data visualizations, the most famous example being Bloomberg LP, which charges upward of $23,000 per subscriber to access its Bloomberg Terminals. I asked Carless if he harbored dreams of building a “Bloomberg for gaming” product that he could charge a premium subscription for. He said that the thought had certainly crossed his mind. “I even hired a biz dev guy and started pitching it to companies, but what I ended up discovering was that the barrier to entry for some of these data products is quite high. There are a lot of stakeholders, and the lead time to close is very high.” It could take up to a year and lots of handholding just to close a single deal. 

What’s more, there were already-existing incumbents in the space, and Carless didn’t want to find himself in a bidding war to license data;  thus far, he had relied on scraping publicly-available information from APIs, but a high-priced product would have required him to pay for access to privately-held data. Ultimately, he wasn’t prepared to run such a capital-intensive business.

To date, GameDiscoverCo has grown to about 19,000 free subscribers, and Carless feels he’d built a healthy revenue mix in which both sides of the business compliment each other. “Consulting at this point is essentially about three quarters of our total revenue,” he said. “The way I see it is the Substack subscription is essentially paying for my three other employees, and then the consulting is our profit basically.”

I asked Carless where he wants to expand from here. He said he’s considered embracing new verticals and business models like podcasts, events, and sponsorships, but decided that they wouldn’t be very profitable unless he achieved much greater scale. For now, he wants to continue building out the data product and is in conversations with potential partners about licensing their data. He will probably raise his prices at some point, but not by an exorbitant amount. “I don't want to be exclusionary because I know there are a lot of indie devs out there who can't afford to spend thousands of dollars a month on data.”

Ultimately, Carless is just happy with slow, steady growth. “This is actually intended to be a lifestyle business. I’m not intending to double in size.” He spent most of his career working for a large media conglomerate; now he’s content with running a niche, sustainable business that makes an opaque, highly-competitive industry just a little bit easier to navigate.

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