PHILADELPHIA, Feb. 15, 2020 – Sam Kaufmann is on somewhat of a digital island. His company, Random Salad Games, is the largest ad-supported app developer on Microsoft Windows, which has become an afterthought in the mobile market now dominated by Apple and Google.
It’s still a nice business for Kaufmann. He says annual revenue is in the seven figures, enough to pay his handful of developers. Random Salad’s most popular title is “Simple Solitaire.” The company has about 20 other casual games, including “Simple Mahjong,” “Hearts Deluxe” and “Dice King,” mostly played by people who are bored at work on their PCs or perhaps at home tooling around on their Surface tablets.
So when Microsoft announced in a short blog post last month that it was shutting down its service that lets developers make money through ads, nobody was more at risk than Kaufmann. Fortunately, he had a sense based on the performance and quality of the ads, that such a move was coming and had been preparing for it for months.
Rather than just letting his nine-year-old business wither away, Kaufmann started building his own software development kit (SDK) that could tap into the same type of programmatic ad networks Microsoft had been using. It let him keep his games populated with money-making banner promotions. He’s calling the product Pubfinity and, while it’s currently just being used for Random Salad’s games, he plans to soon roll it out to other developers.
“My immediate need was to monetize my own apps,” said Kaufmann, who’s based in Philadelphia. “The ultimate goal is to position Pubfinity as a replacement for the Microsoft SDK going away.”
In Microsoft’s march to a trillion dollar market cap and CEO Satya Nadella’s transformation of the company into a cloud powerhouse, not every strategic effort has worked. Microsoft is way behind Amazon and Google in voice-powered computing, for example, and has struggled to cut into Salesforce’s massive lead in customer relationship management software, despite spending $27 billion on LinkedIn in 2016.
But no failure has been as glaring as mobile, where Microsoft had grand plans for a smartphone operating system as part of the Windows 10 release in 2015. At its launch event for Windows 10 devices in October of that year, Nadella told an audience in New York that “we’re building the most productive phone on the planet.” Panos Panay, who at the time was vice president of the devices group, described “the power of putting Windows in your pocket.”
Opportunity lost
For developers like Kaufmann, who live and breathe Windows, this appeared to be the opportunity to reach a broader audience with their mobile-friendly apps. Random Salad has some titles on Android but doesn’t even try to compete on the sprawling iOS marketplace, where millions of developers duke it out for downloads. Kaufmann counts on Microsoft for substantially all of his company’s revenue.
But despite its hefty investment and marketing push, Microsoft could never crack the Apple-Google duopoly. In January 2019, the company said it would no longer support Windows Mobile and advised customers to switch to an iPhone or Android device.
From there, Kaufmann started getting the sense that Microsoft was losing its appetite for helping out ad-supported games across other Windows devices. There were spammy ads, and black hat actors were taking advantage of their ability to infiltrate the system and make a cheap buck. Kaufmann said it became clear that Microsoft, which wasn’t taking much, if any, revenue from the ads, viewed the effort as more of a hassle than it was worth.
In its blog post on Jan. 31, Microsoft said it will shut down the monetization platform starting June 1, and will pay out developer earnings on a regular schedule until then.
A Microsoft spokesperson declined to make an executive available for an interview. In an emailed statement, the company said, “We’re always looking for ways to evolve the business for the long term and this is a case where we saw a chance to let partners and the market step in and provide better support for in-game and in-app Ad solutions.”
In trying to fill the void, Kaufmann has had to redirect the focus of his development team toward a market that was entirely new for him: ad-tech. He spent months talking to advertisers, researching best practices and trying to figure out what Microsoft got right and what went wrong. He also had to contend with Europe’s General Data Protection Regulation (GDPR), privacy legislation that went into effect in 2018, giving consumers more control over their digital data.
“It was a huge undertaking for me,” Kaufmann said.
Pubfinity is open for business for other apps, Kaufmann said, but he only plans to work with a few high-quality developers until the network is ready for a broader rollout. Kaufmann said the business model is in the works but will be designed to ensure that the products can reach as many developers as possible.
One potential partner is Fons Sonnemans, a developer based in the Netherlands. His company, Reflection IT, has spent almost a decade creating Windows-based games, including “Sudoku Free” and “Hearts Pro.” Sonnemans said he’s heard from Pubfinity as well as other Microsoft replacements, like Vungle, about using their networks for his apps.
“I will try a few with my games and see which one works best and then move my games to the best one,” Sonnemans explained. He said it’s easy to incorporate new ad tools into the games, but in terms of whether he will be able to make as much money with them as he has in the past, “the proof will be in the eating of the pudding,” he said.
Online games are a side business for Sonnemans, whose primary job is in software development training. But he said that his apps provide significant revenue, especially during times of the year when his training business is slow.
“It’s not my only income, but I need that income,” Sonnemans said.
If Kaufmann can turn Pubfinity into an attractive alternative for Windows developers, Random Salad stands to benefit, because advertisers and users would be less likely to flee. Kaufmann said he’s targeting the June shutdown date for making Pubfinity more widely available.
“We’ll have a very strict review process,” he said. “We want it to be an improvement and make it a place where developers can make money but not sacrifice the quality of their offerings.”
Read Original Article: https://www.cnbc.com/2020/02/14/random-salad-ceo-offers-own-ad-network-after-microsoft-cuts-support.html