The Dreary Business of Video Game Websites

This entry isn't going to be about video games, but it is going to be about running video game web sites. Feel free to skip this if you don't give a toss!

A few weeks back, Kieron Gillen announced he was leaving games journalism over at Rocks Paper Shotgun. His blog is a bit more bitter, and echoes many of the posts you've probably seen Sketcz make about the state of monetary compenstation - which is to say, bleak. The only part which sends up little ! marks is him saying about how games journalists are not valued because it's a crowded field and anyone can take their place, and therefore they are not paid a whole lot. That's absolutely not wrong, but the generally crappy pay for journalism is not limited to games writing. I know someone who used to work for a (now defunct) niche media magazine who made something like 22k a year. A friend of mine works as a report for a newspaper - an actual journalist, basically! - and makes barely more than a retail cashier.

Just last week, UGO announced more layoffs, including some fantastic writers at 1Up, including Scott Sharkey, Ray Barnholt and Richard Li. All were stand-up influences on the site, and the place will undoubtedly be worse off for it. But businesses are businesses, and sometimes things like this are necessary to keep afloat.

The written word is not nearly valued as much as it was - it's a rough field. I would love to be able to pay contributors for the site - hell, I'd love to quit my day job and do it full time - but as an ad-supported site it doesn't bring in remotely enough cash. This brings up Harlan Ellison's infamous "pay the writer" rant, which you can see below:



It's a fantastic point, which should be obvious (although a bit overblown, because this is Harlan Ellison we are talking about), but it's missing one incredibly crucial point - you can argue about paying the writer all you want, but who's going to pay the person who pays the writer?

In the old days, people bought newspapers and magazines - now people just browse the internet and expect everything for free. With that source of revenue gone, the only cash influx comes from advertising. Which sucks even more now, thanks to the way ads are tracked. Many affiliate ads are based around commission - that is, if a user clicks on an ad for a retail site and buys something from them, we get a fraction of the cut. If they visit and don't buy anything, we don't get anything. Never mind that it's still a blinking thing on our site, taking up screen real estate, promoting their brand...that doesn't count. This is one of the big differences between the old days. Magazines could sell ad space based on their circulation and demographics. When it got into the hands of the reader, it didn't matter if the ad actually affected them, because there was no way to actually track it. Now, there is, and thus the payouts to the media is far less.

Over the past few months, I tried putting up Gamefly and GameTap ads. They have brought in precisely nothing. Play Asia I've had for longer, and they are kind enough to pay approximately 28 cents per month to host banners, with payments occasionally spiking for the very few people that place orders through them. Our most succussful affiliates is with Good Old Games, who, if someone signs up for the service through one of our affiliate links, we get a small cut of each purchase they made for a year. The payout is not substantial, but it is also much larger than $0.00.

Google Adsense works a bit differently, in that will actually pay you, to an extent, based on views, like they should. Their actual formula is shrouded in mystery, because (A) it's a trade secret, and (B) they don't want unscrupulous webmasters exploting the system. When I first started using Adsense, the payouts were pretty phenomonal the first few months, but they quickly dived, and then hit the bottom over the past two years when the economy collapsed. They've been picking up all around the boards, for both myself and others.

Interestingly enough, I found this Google Adsense Revenue. For an experiment, I plugged in my site traffic in, used the default category of "technology", and my jaw dropped. The yearly result was in the low five figures, which the site sure has hell doesn't even come close to. Then I ran it again in the "gaming" category, and it was actually pretty close to what the sites make. Without getting into specifics, it was a tiny fraction of the total amount as the "technology" number. (It also overestimated my click-through rate at 1.5%, when the reality is closer to 0.5%. It doesn't seem to work at the moment, as it keeps mistaking "gaming" for "sports".)

So why is this, exactly? Why do ads for "technology" pay so much more than "games"? Whatever the exact reason, the basic is that some advertisers just don't pay nearly as much as others. Hence, it's much tougher for a video game oriented site to make money. Obviously, professional sites can exist to some capacity because they have actual ad deals that pay significantly more than Google ads. They are also specifically targeted and bought. Places like 1Up and IGN can do that, where I cannot. How much that actually is, who knows.

At any rate, I would love to be able to grow the site a bit by getting some more income and recruiting some more talent to work on a wider variety of topics, but it's clear so far that it can't be accomplished by advertisements alone. I drafted a redesign that displayed more ads, which you can see in the new Nanashi no Game article, but I'm not entirely happy with it and I'm not convinced the visual eyesore it creates is going to actually going to increase revenue, because, again, they'll all commission-based affiliates that haven't worked out well so far. I'm working on making some of the ads more relevent, in linking to Amazon or eBay ads, which should hopefully work better, and at least have some context.

I don't entirely know what the point of all of this was, but if you're working on your own video game site and are trying to monetize it, hopefully this will be of some use to you. If that's you, then I wish you luck!