MAY 17, 2016 • Since its founding only six years ago, Green Man Gaming has become one of the best known digital distributor of computer games. The exposure came from offering titles at very reasonable prices. At first this was accomplished through a unique digital trade-back service in which PC games could be resold at a discounted price, but in more recent years the online retailer has also gotten into the business of selling legitimate keys to digitally distributed PC games – sometimes obtained contractually with the original publisher, and sometimes with keys sourced from third-parties, as was the high-profile case last year with The Witcher III.
The company prides itself on taking different approaches to building its product lines. During 2012 Green Man Gaming acquired the Playfire social gaming network to both broaden its user base, as well as leverage the wealth of player data available. The firm has also got into independent game publishing in 2014. To better understand how Green Man Gaming got to where it is, and where the online retailer fits in amongst bigger digital distributors such as Steam and Origin, DFC spoke with founder and chief executive Paul Sulyok.
DFC: How does one spend six years as an officer in the British Army, move on to debt and equity markets, and then jump into the games industry? What led you on this intriguing career journey?
Paul: After having been through a wealth of experiences, the games industry looked like a great opportunity. It was also about being in the right place at the right time. A deep understanding of data has always been fundamental in every business that I’ve founded and this has continued at Green Man Gaming. Today, data plays a vital role in informing the business and our partners on trends that can further improve the overall gaming experience and our business as a whole.
DFC: When Green Man Gaming was launched in 2010, the business model was to sell PC titles digitally and give consumers the option of trading the title back at a later date for credit. The title could later be resold as pre-owned. How did you and the other co-founders come up with the idea and what were the challenges in implementing it?
Paul: In 2009, the idea for Green Man Gaming came about when we were considering where the games market was going to go and what was going to happen next. There was a strong business model in trading in games in the industry and there was the start of the move to a fully digital marketplace. The coupling of these two market mechanisms were supported by research from London Business School showing that a customer’s propensity to purchase is heightened when offered the option to trade-in a product or recoup some of its value. So the “big idea” was to combine digital and trade-in into the same platform, effectively being a retailer and a marketplace on one global digital platform.
DFC: How would you describe Green Man Gaming’s business model today?
Paul: Our business model is growth focused and we cover three key areas in the gaming industry. Firstly, we’re a global e-Commerce store selling over 7,500 games from 450 publishers in over 190 countries to millions of gamers. Secondly, Green Man Gaming has a thriving community who discuss and track their game achievements on our community platform. This data combined with the commercial data of the store gives Green Man Gaming a significant depth of knowledge of our customers. Finally, we have a publishing arm that helps developers publish their own games and bring them to market, supporting them every step of the way. The fusion of Green Man Gaming’s e-Commerce store, a strong community generating billions of data points and publisher support sets us apart from our competition.
DFC: The company today seems very data driven, especially since the acquisition of PlayFire in 2012. But has this data focus always been there, and how did you apply data in adding new product options to consumers?
Paul: Green Man Gaming, like many data driven technology marketplaces, was born in a spreadsheet and continues to this day to be heavily data dependant. The business uses historical analysis of correlated data to generate forecasts of customer behaviour, as well as real-time data streams to augment those forecasts in real time.
Our robust technical platform enables us to monitor any changes in customer behaviour and react on the results quickly. This means that we can reinforce successful campaigns quickly on the e-Commerce platform or in the community.
DFC: How did the opportunity to acquire PlayFire come about? What benefits led you to the deal, and what other tangible opportunities presented themselves after the acquisition?
Paul: As two start-ups based in London, the Green Man Gaming team had known Playfire for many years. When the opportunity came about to merge the two companies we thought there would be great value in bringing the Playfire community and platform into Green Man Gaming. Technically, we were also a very good fit.
In terms of benefits, access to billions of data points from the Playfire community has provided Green Man Gaming with detailed insight into gamer behaviour, which enables us to improve the overall gaming experience.
DFC: How do Green Man Gaming and Playfire complement each other today? We know that earning certain game achievements can reward PlayFire users with GMG credit, but how else do you cross-pollinate between the two?
Paul: Green Man Gaming customers are Playfire community members by default through their passion for games. Today we’re able to offer commercial incentives, game giveaways and discounts from the Green Man Gaming store exclusively to Playfire community customers. On the other hand, Green Man Gaming customers have the ability to connect with other gamers, track their games and get rewarded for in-game activity. The Playfire community platform also provides gamers with access to the latest insights, reviews and updates from the industry.
DFC: How do Green Man Gaming customers help you develop PlayFire?
Both platforms help us to listen and interact with our customers whether they are new or existing because the data points available on Playfire gives us access to gamer behaviour and the blog allows us to listen to gamer views. Whilst analysis of buyer behaviour on the Green Man Gaming store also gives us insights into what consumers want and like in terms of games. By analyzing all this data points together we’re able to offer our customers a better shopping and community experience appealing to passionate gamers all around the world.
DFC: Have you already mined the available data from PlayFire, or is there more user information still to find useful application?
Paul: The data available on Playfire is useful and dynamic. As we work more closely with our publisher partners, the data points are changing all the time.
DFC: How would you describe the role of Steam in the market? Often you are the No. 2 behind them despite Steam being the dominant player. Where do other companies fit? How does Green Man Gaming work with Steam?
Paul: Green Man Gaming will always support Steam as a retail partner. We sell Valve products on the Green Man Gaming store and our publishing arm sells games on Steam’s platform so there is definitely a working relationship between both companies. Steam’s market share has been earned and well deserved, however, Green Man Gaming has a different role to play in the digital games market. We offer a wider selection of games and platforms than Steam – only 65% of the Top 50 games sold on Green Man Gaming is available on the Steam store.
DFC: Can you give us an overview of the current state of digital distribution for PC? Are there new players beyond the majors such as Steam, Origin and Uplay? What does the competitive landscape look like?
Paul: When viewing the digital distribution market as a whole, the growth of digital PC games has been remarkable and PC is far outstripping other platforms in embracing the benefits of digital distribution. Both publishers and developers are increasingly seeing the benefits of launching their games on PC and digitally due to its economical advantages. Steam, Origin and Uplay as well as Bethesda’s first party, Rockstar’s first party and other publisher platforms are critical to support this digital ecosystem. Green Man Gaming focuses on encompassing and supporting all of the distribution platforms that are currently available and many others that are still to come. Our support amplifies the economic benefit for these platforms.
DFC: Green Man Gaming started out strictly as a British proposition. When did you know that demand was coming from far beyond the U.K., and what leaps had to be made to meet that international demand?
Paul: Our initial business plan was to start in the UK market and then move on to Europe in 18 months and to the rest of the world in 36 months. However things didn’t go quite to plan because within first 6 hours of going live we sold 400 games in Japan. This meant that from the start we were always going to be a global company. Green Man Gaming has been chosen as the 53rd largest exporter in the UK out of 354,000 SME’s in the Sunday Times SME Export Track 100 list.
DFC: Last year we learned around 90% of your revenue comes from outside the U.K. What is the percentage breakdown of the markets where your revenue is coming from today?
Paul: The breakdown of Green Man Gaming’s revenue share is 40% North America, 40% Europe (including UK) and 20% rest of world.
DFC: What is your policy on localization? How much do you adapt to different markets in language, product presentation and payments?
Paul: To date, Green Man Gaming has not localised the site in any other language except English. Despite this, the company has continued to grow rapidly due to strong demand for its wide catalogue of games. However there are plans in place to localise with different languages in the near future. In terms of payment methods, we offer our global customers popular local options to pay online such as Alipay for the Chinese market and Sofort for the German market.
DFC: You launched the digital game sell-back and resale business two years before the European Union’s Court of Justice said doing so was legitimate in the UsedSoft GmbH v Oracle International Corp. case. What were the challenges early on of reselling games digitally and how did you meet them?
Paul: The digital trade in and resale business was agreed contractually with each of our publishers and was not based on UsedSoft and Oracle case.
DFC: What percentage of your business today is taking trade-ins and reselling them? As we understand it, games that use Steam, Origin or Uplay cannot be traded in by default so many of the biggest titles on the PC cannot be traded in and that would hurt the trade-in business.
Paul: Trade-ins are only a small percentage of our business today but we strongly feel that there is potential for it grow significantly in the near future.
DFC: When did the idea to launch your own publishing arm come about, and how did it develop into Green Man Gaming Publishing in 2014.
Paul: The idea of launching a publishing arm was floated by one of our board members in 2014. As a high-growth business, we were constantly approached by developers seeking marketing and distribution support given our expertise in these areas. The Green Man Gaming team decided that we should launch a publishing arm that would help developers market their games in a cluttered marketplace supporting them every step of the way. Developers are able to leverage Green Man Gaming’s experts in digital marketing, PR, pricing, distribution and e-commerce to gain maximum exposure and revenue for their games. Today, Green Man Loaded has changed its name to Green Man Gaming Publishing and has launched well-received games such as The Black Death and Glitchrunners with lots more exciting titles to come.
DFC: How many titles have you published so far and how well do they sell?
Paul: The Green Man Gaming publishing team have launched 11 titles since 2015. Games published by Green Man Gaming are sold on the Green Man Gaming store, Steam, Humble, Steam, Indiegala and CE Asia.
DFC: What are your plans for Green Man Gaming Publishing’s growth?
Paul: We have a tremendous line-up of games this year. We launched The Black Death on 19 April and in June we will be launching Lifeless. We’ve got lots more titles coming in the summer of this year including The Bunker Game and Of Kings and Men.
DFC: What different currencies does Green Man Gaming accept today beyond the Pound, Euro, Dollar and Bitcoin?
Paul: The Russian Rouble and Indian Rupees.
