OK. Hello, everyone.
It's a pleasure being here.
It was a really well-designed presentation, so to say.
I hope ours will not look badly, compared to that.
It will be hard to measure up to a person that specializes in design.
OK, so hopefully everything works, yes?
We were just trying out some remote-control software,
that's why I'm holding this device.
We would like to tell you a little bit about the Black Sheep strategy.
We'll try to keep it very simple,
and we'll try to come up with some practical cases,
to make it all a bit interesting.
And, of course, the black sheep is really black here, actually.
(Laughter)
Yeah, it's so black that you can hardly see it.
I hope that Zynga --
That's a black sheep that I found on the Internet.
It's from Farmville. I hope they will not sue us.
I didn't ask them for permission.
There was not enough time for it.
So actually, with Michał, we started following this strategy
unconsciously, when we were in high school.
So, it was the Black Sheep strategy.
It didn't reflect well on our grades, you know?
We were the black sheep of the class.
It was the two of us, and we were apart from the herd.
So, let's... (Laughter)
Michał Kiciński: What actually resulted was that I,
for example, didn't finish high school.
Marcin Iwiński: You did, in another way. M.K.: In a sense, yes.
(Laughter)
M.I.: I did, but I had to change the class.
So, it's not easy, what we're going to tell you about.
So that's a flaw, because you see it's very nice,
it's warm, it's cuddly, you feel safe.
Actually, we changed the Farmville black sheep,
as they have only black sheep, into white.
So right now, you'll see the black sheep...
(Laughter)
You just see the eyes of it.
You just see the eyes of this little sheep.
But it means it's really not a very cool place to be in,
at least on the slide.
So, how do we see that?
we really see that there are two main problems with the herd.
Let's start with the first one.
Following the herd is easy, it's very easy for everyone.
And what we really see,
as we are in business, we are entrepreneurs,
it's all about delivering value.
With the herd, people just follow.
So whenever there is a certain solution, they just follow, because...
They feel safe, and that's the second thing.
M.K.: You can see that everywhere on the market.
For example, Marcin has an iPad here,
and right now everyone is doing pads on the market, right?
And it was very difficult for the first company,
in this case Apple,
quite often being the black sheep, in our opinion,
to invent this device.
But now, every hardware manufacturer is doing some kind of pad.
So it's pretty easy to follow the one who set the trend.
M.I.: Yeah, that's really funny, because, I mean,
in our 15 years in business, we talked to a lot of experts,
a lot of analysts,
a lot of, so to say, knowledgeable people.
But they just follow the trend.
So, in our opinion, they follow the herd.
When something is set in stone, there is a standard,
industry standards, a certain way of [doing] certain things,
the most convenient way is just to follow.
Because it's easy, and you feel safe.
If you work in a big company, if you don't cross the line,
you'll most probably not be fired, you'll be safe.
Until the company runs into some big trouble,
and then there's massive firing, but that's another story.
M.K.: It's visible in very big companies, where people are afraid to take decisions.
If they go the way everyone else is going, they are safe.
Nobody can accuse them
that they're doing something the wrong way,
because they are doing it the way everybody else is doing it.
M.I.: So if you look at the herd, it's a really nice place to be in.
It's warm and safe.
(Laughter)
And, you know, we wanted to ask you this question:
"Do you dare to be different?"
We think that first of all, it's a way of life,
and there is a big reward.
I mean, whatever you do, it can be business,
it can be just, you know, things in life.
M.K.: Being in high school. M.I.: Yeah.
In high school, it's kind of cool, people like you.
(Laughter)
Because you don't really care.
But actually, you do, because you have to change the school,
but it gets all complicated, so...
So, as we are entrepreneurs, in business,
there is a big reward.
Because if you don't take the risk,
if you don't try to come up with something that really delivers the value --
And what is important to stress here is,
you have to try to be different for a reason.
We are not talking about rebels without a cause.
The high school example taught us a lesson, you know.
"We're just rebels and, um..." Yeah.
We were penalized for it.
It didn't really make [so much] sense.
But in business, it does.
It does if you have a cool idea.
You have to go against the herd, you guys.
You have to go against certain trends which are set in stone,
and it's really hard to break through them.
M.K.: So, it's important.
It's not "to be different for the sake of being different,"
just like that.
M.I.: So let's move to the next slide.
And that's actually a practical example.
"Black Sheep makes a computer game."
So on the left we have the flock, or the herd.
On the right, we have the very black sheep.
And that's the example of the first game we've developed,
"The Witcher."
So at the time when we started the process,
the main trend was the gaming consoles, so...
Everybody who was talking to us was saying,
"Hey, you have to make a console game, or it will not make money.
You will go bust with the company."
Then, the second trend was:
"If you don't want to make a console game you have to make an MMO."
A Massive Multiplayer Online game, like World of Warcraft.
At a certain point in time,
almost everybody in the world was doing World of Warcraft clones.
That's a very "flockish" approach, I would say.
And there is no reward at the end.
A lot of these guys really went bust,
and that was happening during the crisis,
and a little bit afterwards.
M.K.: So when we started the development of The Witcher,
somebody [calculated] that there were 200 projects,
MMO projects, started in the world.
So everyone was doing MMOs,
because analysts, consultants,
everyone was advising that that's the future of gaming.
M.I.: I remember the reports we were getting from big publishers,
and the reports were saying, like,
"Make a console MMO, that would be the best.
It would really kick ass, and you would rule."
"And make sure that it appeals to everyone,
so then you have all the market in the world,
and you will make a lot of money."
So what we did...
We did a PC game.
A dying platform.
So PC computers versus consoles, I mean,
the retail having its problems.
We do not have time to elaborate, but yeah, it was tough.
It was almost like that sentence.
And then, we did single-player,
because we wanted to tell a story,
the story of an iconic hero,
Geralt, the monster slayer.
And then, we designed it for a specific audience,
a mature audience.
So, the whole story
was written in a way that a mature audience would enjoy,
and would find it witty, would find it intelligent.
I don't want to say that other games are not intelligent,
but if you're making a game designed for all,
which is getting an R rating or 12 rating in the US,
I mean, it has to be pretty flat in many places,
or you'll not get this rating, so it won't appeal to this group.
M.K.: And one of the hardest parts of making this game
was not actually making the game itself,
it was to sell this game to a publisher.
Because we were approaching different companies,
and they were asking us questions.
It was a standard set, from all the publishers.
"What about the multiplayer mode?"
And we were like, "We are telling the story, you know.
It doesn't fit in this kind of game.
So, we decided to make it single-player."
And people looked at us like, are we crazy or something?
And the other question was, "Do you plan it for consoles?"
"No, we would like to focus on the PC."
And then, it was end of story, basically.
M.I.: We were coming with a story based on Andrzej Sapkowski's books.
It's defined.
It makes sense, it's a believable world,
millions of people read the book, and so on.
We didn't come up with it.
And they were asking us:
"Could the main protagonist be a female?
Maybe a dwarf? How about that?" (Laughter)
And we said, "Yeah, maybe we could tweak it a little bit,
so let's talk another time."
But really, people come up with these kinds of ideas,
because it comes out of a certain market service.
M.K.: This female character is kind of a company story,
it's told from person to person,
because that was what actually happened.
One of the representatives came from the second meeting,
and told us that they had done the research,
and gamers would love to play a female character.
And could we change the witcher Geralt from Sapkowski's books
into an elvish woman?
Because that was something that gamers supposedly expected. (Laughter)
M.I.: We are already running 10 minutes,
and we are halfway there, so let's end here.
So what's the result?
Just very briefly.
So the flock was saying:
"Working in a dying genre, on a dying platform."
That's pretty much the verdict.
And we sold 1.5 million units worldwide,
and received over 100 awards.
Why? Because...
(Applause)
Simply because the game was different, it was appealing to a certain audience,
We delivered what we wanted to,
and not some mass-market "blah-blah" pulp,
which we really hate, by the way.
Oh and by the way, the game was good, too.
That's kind of important.
M.K.: That's important too, yeah.
So the next example is: "Black Sheep does digital distribution."
So, direct delivery of games.
We are gamers, we're running a gaming company.
And again, you have the flock,
and you have the very black sheep, on the right.
And what was the flock doing and saying?
So, "only new games."
Digital distribution is, basically,
the concept of downloading the game directly to your computer,
and playing it, in one way or another,
without the necessity of going to a store and buying the game.
So basically, Video on Demand, but in the gaming world.
So, only new games.
High price points, because new games are expensive,
so that's the best market.
If it's a high price point,
and you have a certain share of the revenue,
you'll obviously get higher revenue.
The region restriction.
The platforms were usually originated in western Europe and the US,
and quite often you were not able, being a Polish customer,
Thai customer, Russian customer,
whatever that was, really, outside the US and Western Europe,
you weren't able to buy the games because there wasn't a license for the region.
M.K.: It works pretty similar to what we know from iTunes.
You cannot buy many things.
M.I.: Or it doesn't work.
M.K.: Yeah, you cannot buy many things which US customers can buy.
M.I.: And different region pricing.
So, in the US, the game was 50 dollars,
in Europe it was 50 euros. Kind of unfair.
Of course, depending on the period of time.
And the last thing, which is very important, DRM protection.
So you'd download a game,
and it's protected, you have to be online to play it,
even though it's single-player.
It just makes your life really difficult and cumbersome.
If you're traveling with a laptop, you cannot play the game.
And what did we come up with?
PC classics.
Why? A few reasons.
Because we found it a perfect niche,
we had experience in it in our Eastern-European markets,
in our retail, brick-and-mortar activity.
And also, the big battle of the big guys was happening in the new games.
So why enter there and you know, fight with the big guys.
Then, we introduced lower price points.
So 5 to 10 dollars, pretty much.
No restrictions, and one price for all.
"All different customers,"
I lost that in this presentation.
So, no regional restrictions.
Actually, I was very proud that we had some customers from Cambodia.
We are still looking for some customers from Somalia.
I think, you know, in a few years we'll get one or two.
And 100% DRM-free.
So you download it, and have a feeling of ownership.
Although it's a license, it's a real feeling of ownership.
You own the game, you can back it up,
you can install in on your notebook.
M.K.: This is quite important,
because most companies are afraid to give the file to the end customer,
because they imagine that the customer will start copying it endlessly,
and broadcasting it on the Internet.
M.I.: "The customer will steal it." (Laughter)
And they can go at any time to the torrent sites,
and download any of the new games totally for free.
And quite often, because these pirated games are cracked,
so they have no protection, the functionality for the user is better.
So this is a really sick concept.
And what is the result?
M.K.: So GOG, because that's our platform,
started two years ago.
So that's actually the youngest digital distribution platform
of the top digital distribution platforms right now,
working in the world.
We showed here the 5 biggest digital distribution platforms.
The first one, the biggest, is Steampowered.
They were the first on the market, and they are the leader.
M.I.: That's the pioneer premium.
So if you are different, and a pioneer, you'll really rock the world.
M.K.: And the other ones are the followers.
And our GOG is the blue one.
Just recently, a few weeks ago,
we came to the position of number one, as you can see.
And what is important --
For example, the one that we overcome here,
the yellow one, it's Direct2Drive.
That's the platform which is connected
with one of the biggest gaming magazines, websites, in the world.
So they have very big leverage
from the fact that they are connected with the online magazine.
M.I.: [It says] "15 minutes" there, it sounds kind of scary.
We still have 25 slides more to go, so...
(Laughter)
Give us a moment.
Black Sheep makes PR.
And that's about the platform, about what we did recently.
So, a lot of people we were talking to about signing deals for our platform
were asking about our marketing spend.
And we'd say, "We don't spend on marketing."
And they were like, "Hm, kind of strange.
Because everybody spends on marketing, and it really works."
But we have a different approach.
We really think that PR builds more value.
This is the way we've handled The Witcher,
and the same way we approached GOG.
So, what we did...
We planned a big relaunch,
getting out of beta,
because the site ran in beta for two years.
We planned to announce the new version, come up with new features.
We signed really exceptional content, great RPG games,
and wanted to use this opportunity to boost the traffic
and get more customers going.
So what we did was, we decided to shut the site down.
I mean, some of you are probably dealing with Internet business.
If there is no site, it's kind of scary,
because that's your only connection to the end customer.
We shut it down, we posted a really lame-looking screen,
saying that, you know, there were too many challenges,
and a certain era had ended, and blah-blah-blah.
We thought it was very straight-forward,
a true hint for the people:
"Hey, it's a game, you know, we'll reopen!
We're just having fun here."
A lot of people didn't get it this way.
We had to say a big sorry afterwards.
But one thing happened in the social-media driven world,
and the mass-market TV and Internet stations.
We were covered in every single biggest gaming place in the world
as a top story.
"GOG went bankrupt."
"Why did they close?"
And you know, all the different theories.
We really loved that.
Of course, we were really scared at the same time.
(Laughter)
Changing our diapers, so to say.
So, we thought we planted some hints on the shutdown page.
Some people thought we didn't.
We were, of course, trying to manage it somehow,
and we were posting hints via Twitter and Facebook.
And then on the second day of the closure
we posted a trailer, which was already showing something.
"It's a glimpse, there is something coming."
Some people still didn't get that.
And then we hosted a very unusual PR conference.
(Laughter)
(Applause)
So, we told everybody that on Wednesday,
we'd host an unusual PR conference.
That the management would have an official statement.
"Management," "official statement," I like these words.
And so, we appeared -- I'm the guy on the left, actually --
dressed as monks, and we asked people for redemption.
We also had a couple of videos about that.
We have to be going, so...
M.K.: Just a short note.
For the press conference,
we had more than 600 journalists from all over the world,
checking what's going on with GOG.
So, a huge number of journalists.
M.I.: So, as you see, it was only the 23rd,
so we peaked, and the final message to deliver:
Guys, dare to be different.
We believe there is a lot of value
and there is a lot of great things to come up with.
So, we're begging you, dare to be different.
Thank you.
(Applause)
Paul Klipp: Thank you very much.
(Applause)