HeroCraft: "We are ready to give an external team up to $15 thousand to finish the project"

The head of the mobile publishing house HeroCraft tells how his department interacts with developers.

Sergey Manucharyan — Head of HeroCraft mobile publishing

A few years ago, HeroCraft was in a difficult position. Its revenue was in the red, there were no stable earning projects. There were rumors that the owners of the company were looking for a buyer for the asset.

In four years, the situation has changed radically. Today HeroCraft is a successful publisher actively looking for external projects. His team itself is ready, if not to buy studios, then actively invest in small developers.

We talked with Sergey Manucharyan, the head of mobile publishing, about the current mobile achievements of the company, whose head office is located in Kaliningrad, about how it is currently looking for projects and building work with third-party teams.

Money and leading projects

Estimated monthly earnings of HeroCraft from mobile — up to $ 350 thousand. This is the amount that the company can receive after deducting the share of the App Store and Google, according to the analytical service DataMagic.

However, Sergey does not agree with this assessment: “Now it is much more. Our advertising revenue is not taken into account here. We really made several million dollars last year.”

The main money for the mobile division today is brought by four projects: Space Arena, Warhammer: Space Wolf, Armor Age and Tempest. These are hardcore, harsh-looking and generally non-standard projects for mobile.

Space Arena is the flagship project of the company

The company’s portfolio is not limited to them. HeroCraft also has bright casual projects. They don’t earn money comparable to hardcore titles yet, but Manucharyan says that all the projects that have gone into global release are profitable.

So the company, which has more than 100 people today, has the opportunity to both build up teams, including UA specialists, and spend more and more money on buying traffic.

Traffic and controversial niches

For many teams looking for a publisher, the willingness and ability to buy traffic is a determining factor. “One of the most popular questions among developers is how much money we are willing to pour into the project,” Sergey smiles. – We always ask in response: what kind of ARPU and LTV do you have?”

He is sure that you can “pour” as much as you want, as long as the money spent is returned. Although he immediately clarifies that the initial verification iteration is usually about several thousand dollars. On average, HeroCraft can spend up to $50,000 on one project per month, and the company has a lot of projects.

The company does not bet on cross-traffic, although it is also one of the important tools for attracting users to its other games. As the head of the mobile publishing house notes: “This is not the main source for us.” The reason is politics. If HeroCraft’s internal studios make hardcore titles, then both casual and midcore titles are taken for publication from external studios.

The Kaliningrad company does not want to limit itself to one narrow specialization. But this does not mean that she is ready to take on a project in any genre or for any platform.

“We are unlikely to take a board game or a children’s game, a classic puzzle, something for VR or with AR support. We also don’t take sports games,” Manucharyan shares. — They came to us once with an excellent football simulator, good, well-executed, but we refused.”

“We want to be sure of success and willingly take on those genres where we have gained serious expertise. It is worth noting that we have a lot of projects and it is not always possible to find a free producer. That’s why we try to save developers’ time and can give up shooters or sports games. We don’t have that much experience in these genres,” he explains the decision.

Casual games and attitude to clones

As a mobile publisher, HeroCraft today is primarily open to casual projects from very small teams. If the developer brings a clone, but it looks high-quality, the company is ready to consider it.

“Doing something very original, based on nothing, is always a big risk. Of course, we don’t want the game to be a ruskin. It is better if there are new ideas, features, improvements in it. But if this happens, if a clone is brought, we launch the project in softlonch, look at the indicators, and then, if the game is viable, we add USP there,” says Sergey.

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In his opinion, the main directions have already been formed, it is becoming increasingly difficult to offer something completely original today. The tone is set by majors (as happened, for example, with Clash Royal) or very small teams. Sergey also says that the main development of genres will occur through their mutual combination.

“I believe that in the foreseeable future, new things will arise through a combination of mechanics. For example, consider Gardenscapes. The game has no new mechanics, but thanks to the combination of familiar components, its authors have created a whole subgenre.”

At the same time, HeroCraft does not abandon original projects. And I’m even ready to take such games for testing as part of a softlonch. But here it all comes down to the reaction of the audience: is such a product interesting to her?

According to Manucharyan, it is still better when the project starts from something: “When a developer comes to us with a game, we always ask him questions: what is the reference of the project, what inspired the team when it was created. As a rule, two or three games are called. We look at the references, we look at their indicators and, based on this, we give an assessment and make an initial analysis: what kind of audience the project may have, whether there is a niche at all.”

A clear scheme and acceptance of applications for publication

HeroCraft has three publishing directions today. There is one that is responsible for working on Steam, there is a newly formed console, and there is a mobile one. The latter works with developers according to a clear scheme.

There is an expert team. These are four people who collectively decide whether the game will be taken to the mobile edition or not.

They either look for projects themselves, or process external applications that can either fall into the mail, or, for example, come through familiar developers. There is an ironclad requirement for applications — to send a video of the gameplay. The application is not considered without it.

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“It’s useless to send screenshots. They often do not reveal the essence of the game, and may even be drawn. As for the build, it may simply not start or require a system or devices that are not at hand at the moment. And in general, we don’t have time to install ten .apks a day. In the case of video, communication is much faster and more efficient,” Manucharyan explains.

The video should contain core gameplay, meta mechanics and, preferably, a game store. In addition, producers focus on the quality of graphics. All this allows them to understand what niche the developer is aiming for, what audience he is going to reach.

If something is not in the game, HeroCraft writes to the author of the game what needs to be done, for example, meta. Sometimes this is the end of communication. The developer can estimate and understand that it will take six months for the meta. He is not ready for this, so he leaves to look for another publisher for the project. “This is a normal scenario,” says Sergey.

Preparing to work together

If the initial assessment of the gameplay is approved by the expert team, the developer is asked to send a version of the game. But even this does not guarantee cooperation. The game can visually look great, but at the same time, in fact, it turns out to be a Frankenstein’s monster assembled from assets.

“There have been cases when they send a project with cool graphics. We look and understand that the game needs to be seriously finished, and the developer is not able to do it,” says Manucharyan.

Further, as part of the pre-selection, experts look at the genre, evaluate the potential audience, as well as the production value of the product. If the project is made on Unity, then this is an additional plus for HeroCraft, since the company has accumulated expertise on this technology. In addition, she uses the engine’s advertising service.

The company prefers mobile games, whose monetization is based primarily on micropayments. However, the publisher does not expect the developer to have an effective and well-thought-out scheme on his hands initially. This is an ideal and in most cases unrealistic scenario.

According to Sergey, 90% of developers who come with games do not understand how to properly build monetization. “When we became interested in the game, of course, we ask the developer how he sees monetization, why he decided to do this and that. Someone sends his plan for monetization, explains what he will specifically sell. However, in most cases, a lot needs to be changed.”

Final decision

Whether HeroCraft will take the project for publication is ultimately decided by the market test. In the softlonch, the publisher looks at the performance of the game, how long it is able to retain users, how viral and, of course, how it repels the nested traffic.

If the softlonch goes well, the publisher is ready to take the game for publication. Although there may be exceptions here. At the stage of preparation for a soft launch or after it, it may turn out that the developer is not ready to reshape the project to meet the requirements of producers or work in a certain rhythm.

“Not everyone is ready to change the game, spend their last strength and money on it. Here sometimes the question is not in the team, but in the general circumstances at a particular time. One of the frequent reasons why we refused to work on the project are delays with updates, i.e. if the developer is not ready to actively engage in the game himself, then we will not be able to publish it well without him,” explains Sergey.

Work after signing the contract

Working with those projects that HeroCraft still takes on publication resembles external production. A producer is allocated for the game from the publisher. It is he who prepares an analysis on all aspects of the game (the so-called slice), and then writes a document for the team with the required edits. He also, if the project lacks individuality, offers USP for implementation.

Such work is discussed together with the developers and affects all aspects of the game: from the interface and graphics to monetization and social functionality. Immediately, all potential competitors in the niche are evaluated with the team, their analysis is already being done (in the spirit of “what they have implemented well, and what should be taken on a pencil”).

After that, the development team undertakes to make the necessary changes. This can take from one to three to four months. It all depends on the complexity of the product. In parallel, third-party analytics and advertising frameworks are being integrated. As soon as all edits are taken into account and all solutions are embedded in the code, preparations for the release begin. A full-fledged soft launch is already being done here, not a test run.

If a document with USP has been prepared for the project, then all the proposed features from it are tested separately within the softlonch. In other words, they implemented something, conducted an A/B test, collected metrics and made appropriate conclusions. However, HeroCraft also tries to follow this strategy within the framework of its large projects that have been on the market for a long time.

Working conditions

The most important thing for a developer is the conditions. Speaking about them, as a rule, they mean two things. The first one is right: everyone cares whether the game or the invented brand will remain in their ownership.

Sergey explains that everything is simple with this. And he repeatedly emphasizes during the interview that HeroCraft, even in the case of the publication of the game, reserves the rights to the game and the franchise for its creators.

However, if HeroCraft participates in the development from the moment of the prototype or even from the discussion of the idea to the release, then this is a separate conversation. But everything is negotiable.

“For example, we take the IP in the case when we buy the whole project,” says the head and gives the example of Space Arena. Initially, the game was called Spaceship Battles, it was created by a Finnish team. Then the developers lost interest in the project, and HeroCraft bought the game, connected its own team to support it.

The second question is more urgent. It’s about money. It is complex and consists of several. For example, is the publisher ready to support the development of the ruble at a stage when there is no project. Or what percentage of sales he is willing to share.

“We are now ready to give up to $15,000 to the signed project for completion,” Manucharyan shares. — If we like the project, we can afford to take a risk at the start. If everything happens before the test run, then we are ready to give up to $ 3 thousand. If it is successful, then we give more.”

It’s not a lot of money, but HeroCraft is an indie publisher, and it works, as a rule, with small studios. It often happens that they consist of only one or two developers. For them, such sums are often just enough to finish the project.

“As a rule, complex projects are created inside the company, and casual ones are created outside. We are able to take small games and make them into earning products, helping with monetization, production and, of course, with traffic. Although there are also large-scale games among external projects, for example, Superfarmers and Mafioso.”

Mafioso is a PvP battler released earlier this year

How does the publisher share the profits? The company operates on the revenue share model. Of the amount given by the App Store and Google Play, she keeps 50% for herself, and gives another 50% to the developer.

But since HeroCraft “can give the team money for revision, and is also spent on advertising within the framework of cooperation, helps with monetization, localization, provides its own internal QA, community support, preparation and constant updating of all promo and marketing materials,” that is a nuance.

The company needs to repel investments, and it offers several additional scenarios. For example, she can take 100% from the sales of the game for herself until she recoups the initial investment. Although, according to Sergey, as a rule, developers choose a different scenario: when the publisher takes 70% from the sales of the game until it repels the investment. The remaining 30% from the first dollar goes to the developer.

“If a developer who is already publishing a game with us, for some reason, is not ready to support it further, and we still see the potential – in this case, we take it to our Legacy department. I.e., the game sources go to HeroCraft, where we continue to develop the project and deduct royalties. However, the percentage of deductions is already being revised downwards for the developer.”

But it is not limited to these models. It all depends on what the author of the game requests at the start. Sometimes the contract prescribes that after the game reaches some financial metric, the developer’s share increases.

Successful projects and a successful publisher

For HeroCraft, a successful project does not necessarily have to bring in millions immediately.

“Our experience shows that any game that brings more than $2 thousand a month at the start can be successful. This is not enough, but with such a profit, we understand that we have not finished somewhere. Most likely, the developer paid little attention to her, and we ourselves could also have missed something. We decide to pounce on her and see what we can do. We had a project that earned $50 a day. We started working with him and brought him up to $10 thousand a month. In general, for the entire life cycle, a small project may well bring from $ 100 thousand net revenue or more.”

Against the background of indicators of such domestic box office hits as War Robots, Shadow Fight and, of course, the Scapes series from Playrix, these metrics may not seem so impressive. However, at the moment HeroCraft is among the top 25 most earning mobile companies in Russia.