In 2024, at this year's Game Developer Conference (GDC), the hot topic for the gaming industry? Going directly to your players with direct-to-consumer strategies. While skipping the middle man to sell your goods isn't new—Google is a prominent example of this—its use is growing for developers to save on platform fees, gain more control over their sales process, and dedicate more time to developing new games. In this blog, we'll review what you need to know about D2C strategy, including the benefits and challenges, and how Xsolla's comprehensive Launcher solution, which can be set up in less than 24 hours, can help your business deliver quality content and increase revenue.

The rise of D2C in gaming

The gaming industry is increasingly shifting towards direct-to-consumer (D2C) models, driven by factors like the Digital Markets Act and the concern over growing user acquisition and development costs. Game developers are building platforms and digital storefronts to sell and deliver games directly to players instead of using traditional platforms. Whether partnering with third-party companies or creating the backends in-house, developers are utilizing various tools, like launchers, payments systems, webshops, in-game services, and more, to facilitate taking a D2C approach. In his interview with PocketGamer.biz, Xsolla's Chris Meredith, Senior Vice President of Business Development - EMEA, explained how embracing D2C models increases profit margins and strengthens the connection between companies and players. For game developers, this means saving up to 30% on in-app purchase commissions and retaining full ownership over the sales process. With those savings, studios can reinvest in various growth plans, providing a net positive for developers. D2C models provide developers with more than just an increase in revenue - they allow developers to gather valuable user data previously unavailable via traditional platforms. Using this data, developers provide players with enhanced experiences and gameplay tailored to their interests. While D2C can boost sales and margins, its value lies in its insights about users. Many brands prioritize D2C for this reason, even if direct revenue isn't their primary goal. A recent Harvard Business School survey highlights how a 5% increase in D2C retention leads to a 25% increase in profits. This isn't just about immediate sales; it's about building long-term relationships with players. The trend towards D2C aligns perfectly with consumer preferences. Over 80% of consumers are expected to make at least one purchase directly from a brand within the next five years. Moreover, 64% of consumers feel a stronger bond with brands that share their values. For that reason, influencer marketing accounts for about 82%. Developers can tap into a powerful marketing tool by partnering with trusted voices who resonate with their audience while fostering a sense of community.

Building a D2C strategy in 2024

Using D2C channels has proven a successful strategy for game developers of all sizes. One of the main components of a D2C strategy is delivering game content seamlessly and meeting players where they play. To best target your players, launching a game across multiple platforms or being cross-platform helps expand your game's reach and increases revenue. The key tool that facilitates it all? It's a quality game launcher. In 2020, publisher MiHoYo released Genshin Impact for both PC and mobile and did just that. The results speak for themselves: Genshin Impact has over 4,530,864 daily players, totaling 65,000,000. Another popular game, Final Fantasy XIV, has seen similar results with its cross-platform capabilities. Launching in 2010, the game is one of the largest multiplayer online games, with over 30 million registered users worldwide. Let’s dive into some key building blocks when it comes to building out a D2C strategy. To create a successful D2C platform, focus on offering a premium experience that sets you apart from traditional platforms. This means providing exclusive content and unique features that go beyond basic incentives and will help drive traffic to your site. Customize your online store to match your game's style to boost sales and keep players engaged. Keep a close eye on your most valuable players with tailored experiences and digital offerings. No matter what, ensure a reliable content delivery system that guides your players seamlessly. The best way to do this is by using a reliable launcher supporting relevant and dynamic content across regions. It is clear that utilizing a D2C model not only provides significant benefits to both developer and player but it's also been used successfully by studios. So, what's preventing companies from adopting their own D2C strategy? A recent study conducted by 80 lvl shows that developers face financial limitations, a lack of technical expertise, and a lack of market knowledge regarding implementing D2C approaches. Furthermore, companies that can move past these initial issues then face the challenge of building their own platform. The resources and workforce required to create and maintain a quality product can be cost-prohibitive and take a substantial amount of time. Breaking it down, on average, a game developer will face the following:

• Time-consuming development: Building an in-house D2C platform requires approximately 18-24 months to bring the product to market.
• High initial investment: The total development cost of an in-house launcher is approximately $1.5 million.
• Ongoing maintenance costs: Maintaining an in-house platform requires around $20,000 per month or $240,000 per year.
• Delayed time-to-market: A two-year delay in bringing the platform to market can significantly impact revenue and market position.

Launcher as a D2C tool

Launchers offer game developers a way to plan and build an effective D2C strategy, allowing them to gain more control over their sales channels and foster a loyal gaming community. Directly interact with players and gain valuable insights without platform restrictions while enjoying the flexibility for pre-launch sales and monetization opportunities. Remember that building and maintaining an in-house launcher can be costly and time-consuming. Creating a platform that can not only deliver your games across platforms, directly communicate with your player base, sell in-game items, and provide testing features is a tall order but necessary for success. Luckily, Xsolla Launcher solves this problem by offering a cost-effective and time-saving solution compared to building an in-house launcher. PC and mobile gaming are growing markets with increasing revenue and player numbers. However, third-party digital distribution services have become fragmented, making it challenging for developers to connect with players. Xsolla Launcher offers numerous benefits, including easy-to-use customizations, seamless integration with third-party platforms, and faster content delivery. These features can increase customer lifetime value, improve ROI, and enhance brand recognition. Unlike traditional platforms, developers and publishers don’t need to worry about getting lost amongst a sea of games or being limited in what player data is accessible to them when partnering with Xsolla.

Introducing Xsolla Launcher

Xsolla Launcher is the best tool for bringing your games to where your players are while providing quality engagement and exclusive digital content. Our client app allows developers to create a custom home for their games as they implement a D2C approach and boost game sales. As a fully comprehensive solution, Xsolla Launcher has all the building blocks you need, including the following products,

• Login: One-click authentication for players
• Site Builder: A code-free gaming website builder
• In-game service: A backend monetization tool to implement and boost microtransactions
• Payments: Access to 700+ payment methods across 200+ geographies
• Xsolla Partner Network: An affiliate marketing engine to partner and promote games with influencers

Launcher comes equipped with ready-to-use designs and assets that seamlessly integrate with your players on Steam, EGS, or your PC or web platform. With our instant setup, getting started takes less than 24 hours, offers players the ability to start playing their games when downloads are at 1%, and features auto-download, meaning there are no gameplay interruptions. When used alongside Xsolla Web Shop, you can gain,

• Greater control over your customer experience
• An increase in revenue and better profit margins
• Access to valuable player data and insights to create tailored gaming experiences
• Enhanced marketing opportunities with features that allow you to include articles, videos, and social media posts to inform and engage your players
• And the ability to foster player loyalty and build stronger player communities

Xsolla Launcher features everything you already love about Xsolla, like top-tier anti-fraud protection, merchant of record services, enhanced analytics, and localization so that you can take your game worldwide. Are you ready to take the next step? Reach out to one of Xsolla's experts and learn how to implement your D2C strategy today.