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OK. Hello, everyone.

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It's a pleasure being here.

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It was a really well-designed
presentation, so to say.

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I hope ours will not look badly,
compared to that.

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It will be hard to measure up
to a person that specializes in design.

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OK, so hopefully everything works, yes?

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We were just trying out
some remote-control software,

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that's why I'm holding this device.

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We would like to tell you a little bit
about the Black Sheep strategy.

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We'll try to keep it very simple,

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and we'll try to come up
with some practical cases,

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to make it all a bit interesting.

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And, of course, the black sheep
is really black here, actually.

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(Laughter)

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Yeah, it's so black
that you can hardly see it.

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I hope that Zynga --

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That's a black sheep
that I found on the Internet.

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It's from Farmville.
I hope they will not sue us.

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I didn't ask them for permission.

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There was not enough time for it.

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So actually, with Michał,
we started following this strategy

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unconsciously,
when we were in high school.

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So, it was the Black Sheep strategy.

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It didn't reflect well
on our grades, you know?

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We were the black sheep of the class.

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It was the two of us,
and we were apart from the herd.

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So, let's... (Laughter)

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Michał Kiciński:
What actually resulted was that I,

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for example, didn't finish high school.

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Marcin Iwiński: You did, in another way.
M.K.: In a sense, yes.

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(Laughter)

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M.I.: I did, but I had to
change the class.

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So, it's not easy,
what we're going to tell you about.

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So that's a flaw,
because you see it's very nice,

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it's warm, it's cuddly, you feel safe.

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Actually, we changed
the Farmville black sheep,

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as they have only black sheep, into white.

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So right now,
you'll see the black sheep...

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(Laughter)

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You just see the eyes of it.

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You just see the eyes
of this little sheep.

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But it means it's really not
a very cool place to be in,

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at least on the slide.

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So, how do we see that?

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we really see that there are two
main problems with the herd.

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Let's start with the first one.

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Following the herd is easy,
it's very easy for everyone.

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And what we really see,

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as we are in business,
we are entrepreneurs,

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it's all about delivering value.

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With the herd, people just follow.

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So whenever there is a certain solution,
they just follow, because...

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They feel safe,
and that's the second thing.

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M.K.: You can see that everywhere
on the market.

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For example, Marcin has an iPad here,

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and right now everyone is doing
pads on the market, right?

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And it was very difficult
for the first company,

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in this case Apple,

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quite often being the black sheep,
in our opinion,

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to invent this device.

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But now, every hardware manufacturer
is doing some kind of pad.

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So it's pretty easy to follow
the one who set the trend.

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M.I.: Yeah, that's really funny,
because, I mean,

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in our 15 years in business,
we talked to a lot of experts,

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a lot of analysts,

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a lot of, so to say, knowledgeable people.

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But they just follow the trend.

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So, in our opinion, they follow the herd.

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When something is set in stone,
there is a standard,

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industry standards,
a certain way of [doing] certain things,

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the most convenient way
is just to follow.

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Because it's easy, and you feel safe.

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If you work in a big company,
if you don't cross the line,

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you'll most probably not be fired,
you'll be safe.

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Until the company
runs into some big trouble,

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and then there's massive firing,
but that's another story.

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M.K.: It's visible in very big companies,
where people are afraid to take decisions.

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If they go the way
everyone else is going, they are safe.

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Nobody can accuse them

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that they're doing something
the wrong way,

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because they are doing it
the way everybody else is doing it.

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M.I.: So if you look at the herd,
it's a really nice place to be in.

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It's warm and safe.

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(Laughter)

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And, you know, we wanted
to ask you this question:

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"Do you dare to be different?"

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We think that first of all,
it's a way of life,

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and there is a big reward.

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I mean, whatever you do,
it can be business,

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it can be just, you know, things in life.

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M.K.: Being in high school. M.I.: Yeah.

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In high school, it's kind of cool,
people like you.

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(Laughter)

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Because you don't really care.

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But actually, you do,
because you have to change the school,

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but it gets all complicated, so...

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So, as we are entrepreneurs, in business,

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there is a big reward.

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Because if you don't take the risk,

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if you don't try to come up with something
that really delivers the value --

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And what is important to stress here is,

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you have to try to be different
for a reason.

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We are not talking
about rebels without a cause.

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The high school example
taught us a lesson, you know.

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"We're just rebels and, um..." Yeah.

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We were penalized for it.

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It didn't really make [so much] sense.

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But in business, it does.

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It does if you have a cool idea.

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You have to go against the herd, you guys.

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You have to go against certain trends
which are set in stone,

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and it's really hard
to break through them.

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M.K.: So, it's important.

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It's not "to be different
for the sake of being different,"

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just like that.

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M.I.: So let's move to the next slide.

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And that's actually a practical example.

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"Black Sheep makes a computer game."

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So on the left
we have the flock, or the herd.

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On the right,
we have the very black sheep.

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And that's the example
of the first game we've developed,

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"The Witcher."

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So at the time
when we started the process,

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the main trend
was the gaming consoles, so...

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Everybody who was talking to us
was saying,

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"Hey, you have to make a console game,
or it will not make money.

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You will go bust with the company."

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Then, the second trend was:

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"If you don't want to make a console game
you have to make an MMO."

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A Massive Multiplayer Online game,
like World of Warcraft.

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At a certain point in time,

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almost everybody in the world
was doing World of Warcraft clones.

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That's a very "flockish" approach,
I would say.

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And there is no reward at the end.

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A lot of these guys really went bust,

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and that was happening during the crisis,

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and a little bit afterwards.

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M.K.: So when we started
the development of The Witcher,

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somebody [calculated]
that there were 200 projects,

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MMO projects, started in the world.

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So everyone was doing MMOs,

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because analysts, consultants,

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everyone was advising
that that's the future of gaming.

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M.I.: I remember the reports
we were getting from big publishers,

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and the reports were saying, like,

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"Make a console MMO,
that would be the best.

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It would really kick ass,
and you would rule."

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"And make sure
that it appeals to everyone,

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so then you have
all the market in the world,

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and you will make a lot of money."

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So what we did...

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We did a PC game.

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A dying platform.

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So PC computers versus consoles, I mean,

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the retail having its problems.

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We do not have time to elaborate,
but yeah, it was tough.

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It was almost like that sentence.

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And then, we did single-player,

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because we wanted to tell a story,

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the story of an iconic hero,

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Geralt, the monster slayer.

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And then, we designed it
for a specific audience,

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a mature audience.

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So, the whole story

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was written in a way
that a mature audience would enjoy,

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and would find it witty,
would find it intelligent.

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I don't want to say that other games
are not intelligent,

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but if you're making a game
designed for all,

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which is getting an R rating
or 12 rating in the US,

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I mean, it has to be pretty flat
in many places,

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or you'll not get this rating,
so it won't appeal to this group.

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M.K.: And one of the hardest parts
of making this game

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was not actually making the game itself,

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it was to sell this game to a publisher.

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Because we were approaching
different companies,

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and they were asking us questions.

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It was a standard set,
from all the publishers.

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"What about the multiplayer mode?"

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And we were like,
"We are telling the story, you know.

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It doesn't fit in this kind of game.

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So, we decided to make it single-player."

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And people looked at us like,
are we crazy or something?

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And the other question was,
"Do you plan it for consoles?"

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"No, we would like to focus on the PC."

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And then, it was end of story, basically.

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M.I.: We were coming with a story
based on Andrzej Sapkowski's books.

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It's defined.

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It makes sense, it's a believable world,

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millions of people
read the book, and so on.

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We didn't come up with it.

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And they were asking us:

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"Could the main protagonist be a female?

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Maybe a dwarf? How about that?" (Laughter)

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And we said, "Yeah, maybe we could
tweak it a little bit,

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so let's talk another time."

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But really, people come up
with these kinds of ideas,

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because it comes out
of a certain market service.

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M.K.: This female character
is kind of a company story,

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it's told from person to person,

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because that was what actually happened.

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One of the representatives
came from the second meeting,

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and told us
that they had done the research,

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and gamers would love
to play a female character.

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And could we change the witcher Geralt
from Sapkowski's books

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into an elvish woman?

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Because that was something that gamers
supposedly expected. (Laughter)

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M.I.: We are already running 10 minutes,

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and we are halfway there,
so let's end here.

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So what's the result?

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Just very briefly.

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So the flock was saying:

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"Working in a dying genre,
on a dying platform."

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That's pretty much the verdict.

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And we sold 1.5 million units worldwide,

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and received over 100 awards.

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Why? Because...

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(Applause)

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Simply because the game was different,
it was appealing to a certain audience,

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We delivered what we wanted to,

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and not some mass-market "blah-blah" pulp,

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which we really hate, by the way.

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Oh and by the way, the game was good, too.

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That's kind of important.

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M.K.: That's important too, yeah.

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So the next example is:
"Black Sheep does digital distribution."

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So, direct delivery of games.

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We are gamers,
we're running a gaming company.

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And again, you have the flock,

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and you have the very black sheep,
on the right.

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And what was the flock doing and saying?

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So, "only new games."

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Digital distribution is, basically,

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the concept of downloading the game
directly to your computer,

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and playing it, in one way or another,

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without the necessity of going to a store
and buying the game.

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So basically, Video on Demand,
but in the gaming world.

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So, only new games.

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High price points,
because new games are expensive,

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so that's the best market.

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If it's a high price point,

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and you have a certain share
of the revenue,

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you'll obviously get higher revenue.

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The region restriction.

244
00:11:21,137 --> 00:11:25,051
The platforms were usually originated
in western Europe and the US,

245
00:11:25,076 --> 00:11:28,268
and quite often you were not able,
being a Polish customer,

246
00:11:28,385 --> 00:11:30,276
Thai customer, Russian customer,

247
00:11:30,526 --> 00:11:33,644
whatever that was, really,
outside the US and Western Europe,

248
00:11:33,669 --> 00:11:37,408
you weren't able to buy the games because
there wasn't a license for the region.

249
00:11:37,433 --> 00:11:41,125
M.K.: It works pretty similar
to what we know from iTunes.

250
00:11:41,150 --> 00:11:42,719
You cannot buy many things.

251
00:11:42,744 --> 00:11:44,047
M.I.: Or it doesn't work.

252
00:11:44,072 --> 00:11:47,166
M.K.: Yeah, you cannot buy many things
which US customers can buy.

253
00:11:47,191 --> 00:11:49,060
M.I.: And different region pricing.

254
00:11:49,085 --> 00:11:51,715
So, in the US, the game was 50 dollars,

255
00:11:51,740 --> 00:11:54,189
in Europe it was 50 euros. Kind of unfair.

256
00:11:54,214 --> 00:11:56,241
Of course,
depending on the period of time.

257
00:11:56,372 --> 00:11:59,244
And the last thing,
which is very important, DRM protection.

258
00:11:59,346 --> 00:12:01,248
So you'd download a game,

259
00:12:01,273 --> 00:12:03,985
and it's protected,
you have to be online to play it,

260
00:12:04,010 --> 00:12:05,455
even though it's single-player.

261
00:12:05,480 --> 00:12:08,134
It just makes your life
really difficult and cumbersome.

262
00:12:08,159 --> 00:12:10,884
If you're traveling with a laptop,
you cannot play the game.

263
00:12:10,985 --> 00:12:13,085
And what did we come up with?

264
00:12:13,976 --> 00:12:15,188
PC classics.

265
00:12:15,213 --> 00:12:16,404
Why? A few reasons.

266
00:12:16,429 --> 00:12:18,277
Because we found it a perfect niche,

267
00:12:18,302 --> 00:12:20,894
we had experience in it
in our Eastern-European markets,

268
00:12:20,919 --> 00:12:23,338
in our retail, brick-and-mortar activity.

269
00:12:23,810 --> 00:12:27,212
And also, the big battle of the big guys
was happening in the new games.

270
00:12:27,237 --> 00:12:31,213
So why enter there and you know,
fight with the big guys.

271
00:12:31,238 --> 00:12:33,034
Then, we introduced lower price points.

272
00:12:33,059 --> 00:12:35,940
So 5 to 10 dollars, pretty much.

273
00:12:36,384 --> 00:12:40,147
No restrictions, and one price for all.

274
00:12:40,172 --> 00:12:41,554
"All different customers,"

275
00:12:41,579 --> 00:12:43,467
I lost that in this presentation.

276
00:12:45,302 --> 00:12:47,288
So, no regional restrictions.

277
00:12:47,313 --> 00:12:51,036
Actually, I was very proud
that we had some customers from Cambodia.

278
00:12:51,523 --> 00:12:54,737
We are still looking
for some customers from Somalia.

279
00:12:54,762 --> 00:12:57,377
I think, you know, in a few years
we'll get one or two.

280
00:12:59,186 --> 00:13:00,993
And 100% DRM-free.

281
00:13:01,018 --> 00:13:03,391
So you download it,
and have a feeling of ownership.

282
00:13:03,416 --> 00:13:06,099
Although it's a license,
it's a real feeling of ownership.

283
00:13:06,124 --> 00:13:07,844
You own the game, you can back it up,

284
00:13:07,869 --> 00:13:10,235
you can install in on your notebook.

285
00:13:10,260 --> 00:13:11,751
M.K.: This is quite important,

286
00:13:11,776 --> 00:13:16,118
because most companies are afraid
to give the file to the end customer,

287
00:13:16,143 --> 00:13:19,534
because they imagine that the customer
will start copying it endlessly,

288
00:13:19,559 --> 00:13:22,292
and broadcasting it on the Internet.

289
00:13:22,317 --> 00:13:26,140
M.I.: "The customer will steal it."
(Laughter)

290
00:13:26,165 --> 00:13:29,821
And they can go at any time
to the torrent sites,

291
00:13:30,010 --> 00:13:33,369
and download any of the new games
totally for free.

292
00:13:33,478 --> 00:13:36,830
And quite often,
because these pirated games are cracked,

293
00:13:36,855 --> 00:13:40,099
so they have no protection,
the functionality for the user is better.

294
00:13:40,124 --> 00:13:42,224
So this is a really sick concept.

295
00:13:43,816 --> 00:13:45,636
And what is the result?

296
00:13:48,368 --> 00:13:51,226
M.K.: So GOG, because that's our platform,

297
00:13:51,251 --> 00:13:52,650
started two years ago.

298
00:13:53,027 --> 00:13:56,875
So that's actually the youngest
digital distribution platform

299
00:13:57,000 --> 00:13:59,680
of the top digital distribution platforms
right now,

300
00:13:59,705 --> 00:14:00,984
working in the world.

301
00:14:01,174 --> 00:14:05,611
We showed here the 5 biggest
digital distribution platforms.

302
00:14:05,878 --> 00:14:07,962
The first one, the biggest,
is Steampowered.

303
00:14:07,987 --> 00:14:11,031
They were the first on the market,
and they are the leader.

304
00:14:11,190 --> 00:14:12,724
M.I.: That's the pioneer premium.

305
00:14:12,749 --> 00:14:15,987
So if you are different, and a pioneer,
you'll really rock the world.

306
00:14:16,394 --> 00:14:19,087
M.K.: And the other ones
are the followers.

307
00:14:19,112 --> 00:14:21,980
And our GOG is the blue one.

308
00:14:22,005 --> 00:14:24,791
Just recently, a few weeks ago,

309
00:14:25,715 --> 00:14:28,245
we came to the position
of number one, as you can see.

310
00:14:28,689 --> 00:14:30,463
And what is important --

311
00:14:30,488 --> 00:14:33,431
For example,
the one that we overcome here,

312
00:14:33,456 --> 00:14:36,581
the yellow one, it's Direct2Drive.

313
00:14:36,698 --> 00:14:38,483
That's the platform which is connected

314
00:14:38,508 --> 00:14:44,200
with one of the biggest gaming magazines,
websites, in the world.

315
00:14:44,225 --> 00:14:46,174
So they have very big leverage

316
00:14:46,199 --> 00:14:49,177
from the fact that they are connected
with the online magazine.

317
00:14:49,202 --> 00:14:51,961
M.I.: [It says] "15 minutes" there,
it sounds kind of scary.

318
00:14:51,986 --> 00:14:53,867
We still have 25 slides more to go, so...

319
00:14:53,892 --> 00:14:54,944
(Laughter)

320
00:14:54,969 --> 00:14:56,204
Give us a moment.

321
00:14:56,583 --> 00:14:57,997
Black Sheep makes PR.

322
00:14:58,022 --> 00:15:02,049
And that's about the platform,
about what we did recently.

323
00:15:02,074 --> 00:15:08,478
So, a lot of people we were talking to
about signing deals for our platform

324
00:15:08,503 --> 00:15:10,324
were asking about our marketing spend.

325
00:15:10,349 --> 00:15:12,550
And we'd say,
"We don't spend on marketing."

326
00:15:12,695 --> 00:15:14,937
And they were like, "Hm, kind of strange.

327
00:15:14,962 --> 00:15:17,897
Because everybody spends on marketing,
and it really works."

328
00:15:17,922 --> 00:15:19,677
But we have a different approach.

329
00:15:19,702 --> 00:15:22,963
We really think that PR builds more value.

330
00:15:22,988 --> 00:15:25,035
This is the way we've handled The Witcher,

331
00:15:25,060 --> 00:15:27,042
and the same way we approached GOG.

332
00:15:27,521 --> 00:15:28,606
So, what we did...

333
00:15:28,974 --> 00:15:30,839
We planned a big relaunch,

334
00:15:30,864 --> 00:15:32,354
getting out of beta,

335
00:15:32,379 --> 00:15:36,114
because the site ran in beta
for two years.

336
00:15:36,875 --> 00:15:39,885
We planned to announce the new version,
come up with new features.

337
00:15:39,910 --> 00:15:42,470
We signed really exceptional content,
great RPG games,

338
00:15:42,495 --> 00:15:46,718
and wanted to use this opportunity
to boost the traffic

339
00:15:46,743 --> 00:15:48,665
and get more customers going.

340
00:15:48,965 --> 00:15:52,127
So what we did was,
we decided to shut the site down.

341
00:15:52,370 --> 00:15:55,541
I mean, some of you are probably dealing
with Internet business.

342
00:15:55,566 --> 00:15:57,718
If there is no site, it's kind of scary,

343
00:15:57,743 --> 00:16:00,649
because that's your only connection
to the end customer.

344
00:16:01,647 --> 00:16:05,272
We shut it down, we posted
a really lame-looking screen,

345
00:16:05,498 --> 00:16:09,009
saying that, you know,
there were too many challenges,

346
00:16:09,034 --> 00:16:12,237
and a certain era had ended,
and blah-blah-blah.

347
00:16:12,556 --> 00:16:15,799
We thought it was very straight-forward,

348
00:16:16,081 --> 00:16:17,937
a true hint for the people:

349
00:16:17,962 --> 00:16:20,462
"Hey, it's a game, you know, we'll reopen!

350
00:16:20,651 --> 00:16:21,940
We're just having fun here."

351
00:16:22,151 --> 00:16:24,479
A lot of people didn't get it this way.

352
00:16:24,627 --> 00:16:27,166
We had to say a big sorry afterwards.

353
00:16:27,374 --> 00:16:31,269
But one thing happened
in the social-media driven world,

354
00:16:31,294 --> 00:16:36,649
and the mass-market
TV and Internet stations.

355
00:16:37,066 --> 00:16:41,646
We were covered in every single
biggest gaming place in the world

356
00:16:41,671 --> 00:16:42,999
as a top story.

357
00:16:43,024 --> 00:16:44,436
"GOG went bankrupt."

358
00:16:44,931 --> 00:16:46,468
"Why did they close?"

359
00:16:46,700 --> 00:16:48,603
And you know, all the different theories.

360
00:16:48,628 --> 00:16:49,993
We really loved that.

361
00:16:52,063 --> 00:16:54,353
Of course, we were really scared
at the same time.

362
00:16:54,354 --> 00:16:55,539
(Laughter)

363
00:16:55,540 --> 00:16:57,227
Changing our diapers, so to say.

364
00:16:57,602 --> 00:17:01,466
So, we thought we planted
some hints on the shutdown page.

365
00:17:01,491 --> 00:17:03,868
Some people thought we didn't.

366
00:17:04,387 --> 00:17:07,748
We were, of course,
trying to manage it somehow,

367
00:17:08,473 --> 00:17:11,247
and we were posting hints
via Twitter and Facebook.

368
00:17:11,532 --> 00:17:14,019
And then on the second day of the closure

369
00:17:14,044 --> 00:17:16,630
we posted a trailer,
which was already showing something.

370
00:17:16,655 --> 00:17:18,655
"It's a glimpse,
there is something coming."

371
00:17:18,680 --> 00:17:20,284
Some people still didn't get that.

372
00:17:20,309 --> 00:17:27,618
And then we hosted
a very unusual PR conference.

373
00:17:27,644 --> 00:17:28,782
(Laughter)

374
00:17:29,329 --> 00:17:30,009
(Applause)

375
00:17:35,482 --> 00:17:39,075
So, we told everybody that on Wednesday,

376
00:17:39,100 --> 00:17:41,184
we'd host an unusual PR conference.

377
00:17:42,056 --> 00:17:44,447
That the management would have
an official statement.

378
00:17:44,472 --> 00:17:47,030
"Management," "official statement,"
I like these words.

379
00:17:47,055 --> 00:17:50,005
And so, we appeared --
I'm the guy on the left, actually --

380
00:17:50,514 --> 00:17:53,448
dressed as monks,
and we asked people for redemption.

381
00:17:53,473 --> 00:17:55,559
We also had a couple of videos about that.

382
00:17:55,767 --> 00:17:57,611
We have to be going, so...

383
00:17:57,830 --> 00:17:59,156
M.K.: Just a short note.

384
00:17:59,181 --> 00:18:00,351
For the press conference,

385
00:18:00,376 --> 00:18:04,121
we had more than 600 journalists
from all over the world,

386
00:18:04,146 --> 00:18:05,726
checking what's going on with GOG.

387
00:18:05,729 --> 00:18:07,820
So, a huge number of journalists.

388
00:18:07,845 --> 00:18:11,239
M.I.: So, as you see,
it was only the 23rd,

389
00:18:11,264 --> 00:18:14,270
so we peaked,
and the final message to deliver:

390
00:18:14,858 --> 00:18:16,509
Guys, dare to be different.

391
00:18:16,855 --> 00:18:18,430
We believe there is a lot of value

392
00:18:18,455 --> 00:18:20,828
and there is a lot of great things
to come up with.

393
00:18:20,853 --> 00:18:23,064
So, we're begging you,
dare to be different.

394
00:18:23,634 --> 00:18:24,610
Thank you.

395
00:18:24,635 --> 00:18:27,635
(Applause)

396
00:18:27,781 --> 00:18:29,357
Paul Klipp: Thank you very much.

397
00:18:29,382 --> 00:18:31,755
(Applause)