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Making of "Prince of Persia", the power of owning distribution

It's good to occasionally remind ourselves that today we have it good as programmers.

I've started reading a fantastic journal by Jordan Mechner, who documented the development process of a classic game Prince Of Persia (http://jordanmechner.com/old-journals/).

He was already a best-selling game author at the time (his previous game, Karateka, was a hit) and the royalty he was able to negotiate for Prince Of Persia was merely 15% (http://jordanmechner.com/old-journals/1985/10/october-17-1985/).

This is nothing compared to 70% (if you publish in Apple's App Store) or 95%+ that one can have when using e.g. PayPal or Google Checkout.

This is an important lesson in economics of owning a distribution channel. Mechner could only get 15% because his publisher and the physical stores controlled distribution channel. At that time it would be too expensive for Mechner to publish a game.

Internet disrupted the way we distribute software first and it was the exact same mechanic that later disrupted music publishing and now is disrupting book publishing. Giants in those industry didn't prepare themselves for the day when they no longer had monopoly on distribution channel. They were caught by surprise but only because they weren't looking in the right place. What happened to them has already happened to software industry. The future was there, it was just not evenly distributed.

Coming back to Prince Of Persia: there's also video talk from GDC that recounts the development story http://www.gdcvault.com/play/1014634/Classic-Game-Postmortem-PRINCE-OF
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I have a friend who wrote a book, and tried to use "viral" or "internet" distribution. He said that despite the internet, and despite his small target audience, he didn't have the expertise distributors have with marketing, advertising, and selling this book. When he eventually used "traditional" marketing channels for books - sales went up by large percentage. Marketing is a difficult job, and the fact you know how to produce something, doesn't mean you'll be able to sell it.

It might make sense that distributing the Prince of Persia took 85%, it might be that making this game is easier and cheaper than marketing this game.
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