Panel: Direct-To-Consumer In Games: Promise vs. Reality.

I'd like to welcome to the stage my colleague Craig Chapel who's going to host the next panel. So we have another insightful panel of experts for you. This one is on the topic of director to consumer again. Director to consumer in games promise versus reality. I'll let Craig introduce his three expert guests. Um and yeah, a round of applause for for

Craig and his panel please. Hello, testing. Am I Can you hear me?
Awesome. All right. Yeah, please uh welcome to the panel. So, yeah, I'm Craig Chapel, head of content at pocketamer.biz. Uh we're going to be discussing direct consumer in games, the promise versus reality. Uh I'll give you uh each a microphone. We have one each. This is this is this is groundbreaking. Um uh so yeah, we're going to be discussing uh the the promise versus the reality of D2C, which is a topic that's very uh a topic I'm very interested in. You've been writing about it quite a lot. Um but we've got the experts here to to do it. So um if you could please uh introduce yourselves. We'll start with you uh Jonas.
Sure. So my name is Jonas. I'm a commercial director for Warline. Um we basically focus on processing payments for develop for publishers platforms

etc.
Perfect.
Thank you.
My name is Zinas Ramalio. I manage the accounts at Exola in Southern Europe. So we you probably already know us. We are a video game commer uh commerce company uh helping studios and developers enhance their monetization.
Hi, my name is Peter. I'm Peter Gerson based here in the Netherlands. Uh great to be here in Barcelona. I'm representing Breeze. Um whilst Exola is the 800 pound gorilla in the room. Breeze does a very similar service focused quite focused mostly on creator paying payouts in all of the UGC community. It's our area of expertise. um doing a very very similar service to what other payment platforms do. Great to see you all.
So we have three experts here to talk about everything DTOC. So a lot of this is going to be focused on like the regulatory kind of landscape where we're at. So I guess we all know

hopefully the developments around the world regarding the regulation and kind of the lawsuits around it of the app stores in terms of platolder revenue share and anti- steering policies. So, years after Epic kicked all this off with its big campaign that was like a 1984esque uh movie, deliberately put payments in their game, they weren't allowed. Years later, where are we now? How do you feel about things right now? Anyone want to kick us off?
Yeah, I mean, of course, a lot have changed. Um, but that it didn't necessarily make it simpler, didn't necessarily make it cheaper for developers. I think um, you know, I think there's still a long way to go until we see kind of widespread democratization of uh, of direct to consumer particularly around platform fees.

In I'll jump in. Yeah. So I think um it's clearer on the Google Android side right now than it is on the Apple iOS side in that um some agreements have been reached and Google have countered the whole process with trying to set percentages. So as uh Jonas pointed out things don't suddenly seem as cheap as they were when you had where you heard claims of oh you can save 30% if you bypass the store. Not all 30% is just some of the pains. there's a whole lot of other hidden costs that you pick up if you do stuff yourself. So, just be aware of that. But, um there is some guidelines now around the 20% mark and and how you can work with Google. The Apple process still has to play out in court, but right now you can bypass um and so in the short term there's a window. Who knows where that's going. Apple I think is going to fight all the way in America and in Europe. So the lay of the land is still a little confusing certainly for publishers and studios and

it's not exactly clear know where the savings are especially with how they can work around quite quickly as these large organizations to change the structure to fees or other charges um against that 30% that they used to charge
and
we're still have a long way to go that is uh set but at the same time uh one of the um highest uh let's say I would say advantages but I would say learning uh that come from this is that studios mostly uh studios and publishers are more aware of the importance also uh of D2C in a way that uh they are owning more the relationship with their their players and this is definitely their biggest asset uh as a as a company is is definitely this this this relationship.

Uh Peter, you said there, you know, that it's not you're just going to get the 30%, there are like like other fees that you have to pay. Like what kind of fees are developers looking at? So they want to just kind of take try and take as much sales off the platform as possible. What kind of cuts are they looking at? So I I've heard it can be anywhere from like 5 to 15% working with a partner. So there are always fees around moving money. Um so if you're talking about a D2C setup where you're bypassing the Google and the Apple setup, you're going to um the one thing you shouldn't be doing is trying to take all that processing on yourself because you're going to have to go build a massive team with skill. Like my colleagues on the stage have ample skill. So when you're going through a processor, the fees can range anywhere depending on what you're doing around 3 to 7% in terms of costs. Then you also have all of your discoverability, your UA, all of the process costs that when you that are baked into the if you look at Google and you look at Apple, you look at the reach and you look at being on that platform

that drives the engagement. So to Inis's point, you can be more direct and own your community better, but it does come at the price of being able to talk to that community through marketing costs, UA costs, advertising where on the platform that's kind of built in for you where you get discoverability and I think that's sometimes misunderstood.
That answers the question.
Yeah. Yeah. [snorts] And
yeah, I think I I I definitely agree. Right. It's it's a trade-off. uh the savings are definitely not substantial and the marketing cost of user acquisition is is substantial. Um so I think the the flip side really is about owning the player data right and having a like said a very much more direct connection to to the players and build community and etc. Because if we're just looking at the fees, they're extremely complex. They're variable depending on

region on and many factors. So that's what I said in the beginning. It's it's really really complex. So has to be done in a very strategic manner to in order to drive actual benefit to to the title. And actually, I guess just if you can elaborate on that or anyone on the panel that how how do publishers actually keep track of of everything that's going on around the world because each kind of region each per country market is kind of has different rules. I think the Google Play is probably a bit more settled in some regions, but how do you actually keep track?
Okay. uh there is not one size that fits all and um definitely that is why um on Exololis and we have been observing this all over the world. So um it's it's really need to be assessed case by case, market by market within its specifics.

We were talking about fees and this is um also very related with sometimes on the players hand to some method payments preferences. there are markets such as LATAM that they do prefer to pay with picss. So um while it's very hard to to stick on what are the fees that uh studios and uh publishers are looking for with a specific number, it's also very important to have a broad overview but at the same time thinking about uh scaling globally um at a local level by assessing how do the market behaves, what sort of emerging payment methods are uh taking part uh on the field and what is the adurance on the player's hand. Um and so therefore that will give um the needed information that publishers do need to

assess and traction uh this uh this data. Mhm.
If I can add to that, um, don't track this by hand anymore and you shouldn't even try. And so the best advice I think that we can give from stage without digging too deep because each case, as we've said, is unique. As a publisher or studio, you should stick to the cause of what you do really well, which is own the relationship with your players through community and communitydriven activity. But when it comes to a payment platform, things are highly complicated and always moving in the world with legislation. The issue for example of the Google Apple case is in it's in flux. Uh new compliance just today the UK started talking about age verification because of 16 and how that may affect a game that you didn't have a problem with before. All of these things around a payment pay in and payout process. You need to look for a partner enough of us around at the conference

sponsoring the conference. But that's the job of what someone like a merchant of record or a payment service provider does is the crossber the tax compliance the the the the laws and in each of the regions which are the best payment providers and where can you get the best deal. It is highly complex. It shouldn't be your problem. You want a partner to do that and you want to build that cap capability in your game to be as frictionless as possible for your community. So the key here is understanding how easy is it for your players to buy from you and interact with you and that's the route you find to best integrate a partner.
Yeah, I I I would definitely agree. Right. I think finding the right partner is is key
and hopefully a partner that has a global reach that can obtain local information not only about payments but kind of regulatory and etc. But I think it's also important kind of split direct consumer versus platform driven kind of

revenue and and try to kind of not split it in the game itself but as a revenue stream and try to specialize in both channels, right? because the complexities are definitely different and constantly evolving and I I think that's really the only way for studios or plat or or publishers to kind of really dig into direct to consumers. I think the companies that we work with that have done that are the ones that have a bigger share of uh direct to consumer revenue.
Could you just elaborate when you say split the the two? What do you exactly what do you mean? I I I mean in terms of strategy, the resources that you put into it, kind of have subject matter experts for both, right? And not try to kind of put it all into, okay, this is the the the revenue stream or the team that handles revenue.
How do they differ? So it's like you have different offers for certain ones

or you just have a different what be the word funnel or direct. Yeah, I I think particularly on the direct direct to consumer, it should be about kind of getting access to the players directly, but also giving something back, right? So maybe acquire them on on web first before build a payment profile before then inviting them to in to install kind of the game for instance. And then throughout the game the Give give back. Really? Your marks off.
Mic off.

If I just testing testing. There we go. Didn't want that to happen again. [snorts] So, thank you. Sorry. Sorry about that. Um, so, uh, one of the things we touched on earlier was the the Epic Games deal with Google. And so, I guess I think I've got this right. Uh uh well I guess what people wanted was no more anti- steering and a significant revenue share cut but with the Google Play and Epic deal which by the way seemed to change quite a few times if people remember the various offers that went around eventually they settled on something. Do you think is that deal good for the industry? Is it disappointing for what

we thought could happen? And yeah firstly we'll do that. Are you happy with that deal? So, I think if I remember right, it's like a 20% share plus there's other potential fees or less fees for doing certain things. It gets quite complicated.
I'll be very short. I think it's disappointing.
Yeah.
I I think everyone was expecting more. And beyond that, is it a deal that more studios or publishers can can make? Is it accessible to the wider industry? It is not. So yeah,
especially for um smalls size studios, there is still a long way to go and definitely uh although things have changed and they um were promising they looked like more a promise than a reality when it comes to to that percentage definitely. So the struggle will be more not for the AAA studios but

more for the mid small to midsize studios and affecting particularly um not so mature markets such as the southern European one.
Right. Right.
Yeah. No I agree with that whole process. I think it's not so much about the permissions. Permissions have been one. It's the execution and execution always comes down to resources and your ability to make them work and a medium to small studio struggles with those resources compared to a AAA studio. So your hidden costs of things like managing forward in tax and all of the compliance that goes with moving direct to your own D2C. So it's very possible and in theory everyone can do it. In practice, it may not suit a small to medium studio to do it straight away, but to sort of experiment with some maybe one game in the portfolio to really to really understand, have they

got the capacity to work with partners to do this themselves. And that's exactly why you want to go to the stands and talk to the experts to understand the the nuances because it's not just a straightforward, oh, if you move someone to your store directly, you don't pay 30% and you save money. It's clearly not that uh to Jonas's point, it's actually quite a disappointing result. It almost seems like behind the scenes a lot of negotiations went on with the folks at Epic, Apple, and Google, and that compromise doesn't help the market as a whole. It in the end, it's not direct to consumer, right? It's just another platform,
right?
Yeah.
It's almost like the revolution then didn't happen is always what you're saying. [snorts] Um, so I guess um I guess as a quick question, I'm not sure you have the answers. What what's going on in the EU with App Store regulation? I've been I was uh researching it this week and I was like there was a fine then Apple there was a 500 million record fine uh

for Apple for um I guess not adhering to the digital markets act. And then they made some changes which are incredibly confusing which is I guess part of the problem of this DCC era in a way. It used to be very simple and now it's very complex because of what the platform holders have done. Um I guess two questions there we could ask is one do you think things are just they're just unnecessarily complex now because the platform holders are trying to hold everything back and two if you have any insights on on the EU. [laughter] So the the I think the answer itself is it's EU. If you think about anything European Union and some of the complexities um it's the same. The fine was actually given and everyone goes, "Yay, the fine's given. That's going to change everything for us." And Apple then Julie makes the changes to comply with EU. then appeals the fine and doesn't pay the fine and ties the EU up in a whole litigation process which is now going to

take the time because it's got to go all the way around the EU and everyone's got to vote and say their bit. So effectively using the legal system against itself. It can look how long it took Epic to get to their point. It's exactly the same. So effectively from my perspective the more things change the more they stay the same. And for us on the ground here building games and taking it to the community, I honestly think sometimes you got to ignore the noise. Look at your own business case. Look at your community. Understand what does your community do? Payins, payouts. How can you drive new ways of making that community engage with you and not worry too much about the rules? A huge amount of effort going in to save a little bit of money probably isn't worth your while unless you're AAA putting millions through on a title. Yeah, I I would agree, right? I mean, it's constantly changing. It's very complex. There's a lot of litigation. I

think all the plat the platforms are leveraging on that on the EU complexity as well. And I definitely can relate to that advice to for for publishers and game studios to just focus on their games, on their community, and go the user acquisition route through the web, you know, and kind of steer clear of all that noise and build kind of the base for when hopefully there's more clarity and kind of stronger mandate to for platform. forms to really open up. They're they're ready for it. But I I I to be honest, I I don't think it's anywhere soon.
And I guess the last question on the regulatory stuff before we jump onto a different topic is I guess what what revenue share would you have liked to seen or changes to the platforms that you would have liked to seen? Cuz I

guess at the end of the day and is what's being judged in the US court at the moment is well Apple does deserve something for example. They can't have nothing. They need some sort of incentive. So what is the is there an ideal fee or you just hoping that will get worked out?
I'll go first cuz I keep it short. I think the two of them here have more more experience in this area than I do. I think it's again it comes back down to thinking about this in terms of what does a Google and Apple do for me as a studio and it allows me to go out and do user acquisition at a known environment with a massive base of people where I can find discovery. So I think for your UA and your new players and look at a D2C strategy for engagement with your higher paying players, your community and your existing processes. Of course D2C again people can just buy straight away if they know about it. So if you look at a complete process, um your DTC should be quite focused on how you can

drive or control more of where your revenue comes from from your players directly and use the platforms for what they're really good at for you, which is driving that new acquisition in trying to manage acquisition cost. Because to Jonas's and to Inis's point, if you don't do this right, your user acquisition will outweigh any savings you make. So I don't know if you want to.
Yeah, definitely. While we revolve around all of these uh complexity, I think the key here is um trying to understand where are audiences, where is what are the channels that you use from uh and get to know your players more and more. um and from uh a student's perspective, this is quite important in order also to um create and design their own EUA strategies because once and we are competing we are

competing nowadays not only with other stakeholders but also with other forms of entertainment outside of the gaming industry. Uh you name Roblox, you name Netflix. So uh it's while sometimes it's very uh hard for studios uh to understand why their game is not performing. The first uh impulse is to invest money on UA rather than trying to understand where our audience is, what channels are they using, what are their preferences and this also uh comes with having trusted voices in different markets that we want to reach or in which we are present as a studio. So building these partnerships, it's also very important and will definitely save you as a studio from having multiple headaches and um failed investments as well.

And Jonas, did you want to
a percentage? [laughter]
Yeah, I'm not going to answer that. I really can't. I think, you know, to circle back there def the platforms definitely provide a service, right? and or way more than kind of is perceived and that definitely has a cost. And if we stack up from just payment processing, user acquisition, payment processing and you know and all the customer service, I mean surely it's a high percentage. Um, but I think the key question is really about player ownership. And while the vast majority of the volume or the revenue is coming through through a platform,
studios don't have that direct

uh kind of player ownership in terms of data and there's smaller ability to have marketing campaigns or targeted campaigns. So I think it's more about that than rather what percentage should should should should uh studios be paying really.
Yeah. And sorry. Oh and um I guess kind of moving a bit on from that but obviously related is so you know I guess we've made things sound a little bit bad by saying oh the revenue share is not maybe not what we quite wanted it to be. However, you know, publishers are actually actually making a lot of money through their DTOC channel. So, I did a little bit of research uh for an island call. I've got a talk tomorrow. Uh please attend. So, Playa claims it annual run rate for D2C has reached or is about to reach $1.2 billion. A modern times group uh said DTOC made up 39% of group revenue in Q1 2026. and Steelfront group

reported that 44% of bookings are now going through his DTOC platform which is actually around the same as third party platforms and the rest was ads. Uh so I guess on that uh now now we know that we know we are people are making a lot of money and they're building their communities I guess what share should companies be aiming for I guess between the the platform and their DTOC platform are we going to see uh companies making like 50% plus or 40% is good if you're making 20% you're not doing enough.
Yeah I can I can com start commenting on that. I think it really depends on on on the title. Today there are companies that are pushing 50% up on a variety of titles, but I think smaller
studios should be aiming at 15 to 20% really today or in the next uh period and build from that. I think it's not

reasonable to expect you know a small studio with all the overhead cost that comes from user acquisition and etc to target 50% um immediately
definitely something I agree with John definitely something around 10 to 15% for small studios while uh for other types of studios with with a more solid structure Um definitely those margins can increase more and at Texolo we have uh been seeing this um with companies such as Microids or Marvel um using our solutions in order to enhance their monetization and effectively succeeding. So 20 15% sounds good but it can be better and really depends also on your efforts as a developer as a studio as a game

creator to um understand where do you want to go which direction uh do you want your title uh to take
take a bit of a controversial view or a slightly different view of it I think it can go towards more than 20% % but I agree that with current setups in the market 15 to 20% for most studios publishers should make sense. The thing is if you're going to build a D2C strategy you should think about what is beyond that. Why do what is already being done? So if you have a Google and you have an Apple and you have a D2C and they kind of do the same functionality of paying through a channel as as Inis and Jonas have clearly pulled out. I'm talking about how do you grow the channel you own? How about the creator payouts? How about driving creator stores? How about looking at how you can engage more communities? And that's where you can get the growth beyond the 20%. Because you're controlling a very

different way of people buying through the channel. It's a slightly different way of looking at how you build it out. That's what we're focusing on in how we we go to market with our customers is that there ways to very quickly scale to players in a more it wouldn't be indirect but different route rather than just a straight D2C process where you can actually keep your costs under control because you raised some interesting figures. My challenge back to you is have you seen the financials over all of those companies you've just mentioned? They are not as healthy as the D2C shows. Correct. And that's because there's some hidden costs. And one of the reasons they're moving to D2C because they can resource stillfront has central play TK has central capabilities around it is because they are under pressure in overall revenue and they have to switch their revenue model. It's not because D2C is the way to go. It's because the market's forcing a process in a bigger group. Yes. And that also is something we should all think about. what is your business case as a studio

or a publisher and where should you get your healthy revenues from and why and that's why you want to talk to partners.
Okay. Yeah, just to add to that you just confir Yeah, you raised a very good point. So, uh also note that in the presentation where it's interesting to see DTOC like this and revenue or like profit sometimes kind of looks surprising but like that for the reasons you kind of state. So it's you can't just rely on D2C and suddenly your business is fixed. Um I guess um we've talked a lot about community already, but I guess is there anything you could add that you know what channel what channel should you be meeting your consumers at and how do you kind of get them onto there?
So like Discord is is that where you
So everyone thinks about Discord. You have to understand your brand and your positioning and your values and your norms and what do you want to own as the brand and the game and where

should you allow the community to do what they want to do because some communities build their own version of the discord channel and share amongst themselves and so that's why I say you have to look at the market in almost a 360° way company owned or brandowned gameowned process you should engage with your as much as possible one to one and one to many in a number of campaigns uh driving events driving engagement driving uh you know discounts if you come through that channel and that's one of the ways you can build your D2C but one of the other ways is recognize that players can also on their own do a whole lot of stuff around content and creation and creating awareness and that's a more indirect way so I think that community becomes very important Discord is only one channel Reddit is really coming good you see Snapchat and ads Tik Tok, Telegram, you really need to explore what's working for your community. Inis has made the point a h 100 times already on this conversation. You need to understand where your players are, who

they are, and what they're doing. That's where you should be spending some of the money rather than just driving another UA campaign.
Especially because um players rarely are present in all the channels that you can imagine. For instance, in the seas region, uh Telegram is the way to go. in Latam WhatsApp there is a huge traction and enga engagement through WhatsApp. Uh communities are more prone to try new games and to engage with it. Um therefore it's really important to understand uh what is the language in your market? What are the channels that people actually use it and use it effectively and maximize your strategy around building the communication building the tone of your message around those those channels and those those audiences?
Did you want to add anything?
I don't have much to add. I think a lot was said already. I think it's about

following the community wherever that is and not only following but kind of triggering and kind of feeding the community in terms of language trends, localization and etc. But I don't I don't think there studios should be looking at one platform to drive the community also because the the most successful communities especially in video gaming are the ones that are kind of self built right that kind of trigger themselves and start growing by themselves with some small nudges from from the studios. Those are typically the most successful.
Interesting.
Yeah. I think just adding an a piece of unsol unsolicited advice for for students in this matter is try to build your own community as early as possible and that means um providing updates no matter how long uh your game uh development cycle is. If you we often

come across uh studios uh from all sizes uh trying to build their community within three months before launch. So they are already late because the competition in in the in the industry is huge. So as soon as you start the more successful you will be even if it is uh um even if you feel uncomfortable with it. Um even when when you when you're working or you're planning to work with content creators sometimes studios feel a little bit ashamed of reaching out to those creators but no one can uh understand uh uh your game as as well as you do as good as you do. So the more piece of of context you provide to those creators, they will they will be able to see it evolving and communicate better when the once the time is is when the time comes. Uh so the game also can be

uh so create awareness can be created for uh the game also. Just one last comment and it's an unashamed little plug and it's not a plug for anything we do. Um or if any of you coming to Gamescom on Tuesday on Gamescom built and baked into the Gamescom dev week, we run the community clubhouse and everything you've heard about community, the day is dedicated to how do you do exactly these things with your community very early on as you're building your game. So those of you who want to delve into that then uh post the holidays in August, we have a whole day dedicated to that at Gamescomde Dev on the Tuesday.
All right. Uh thank you very much. I um I think that's all my questions. Do we have time for any audience questions? Are we done or do we have any audience questions at all?
People are quiet today.
Answered everything already. Uh well, look, thank you very much to Craig and the panel. Really appreciate that. Thank

you. And as I always say, if uh if you do have questions, you want to follow up on that insightful conversation, then don't hesitate to seek our panelists out either through the meet to match platform or at their um exhibition booths later on.