Our switch to Subscription Billing
With our new forum up and running I thought I'd give it a test drive by writing up our thinking behind moving Glyph Designer to be Subscription based.
When we released Glyph Designer 2 back in May this year we moved away from a perpetual one off license fee. This is something we had used for the previous five years and while it had served us well we were struggling to generate enough income to warrant further updates to our products.
Glyph Designer and Particle Designer are niche products. They are serving a very specific need within a specific community of users. This community is made up of developers and designers who are working on a project that requires either bitmap based fonts and particle systems. This normally means games although we have also seen our products used in other projects we had never considered, like rendering text on set top boxes.
Because the market we are working in is small we make fewer sales than a consumer project, and while the norm is to increase the price to compensate for that we are dealing with a lot of indie developers who are price constrained. For that reason we have tried to keep our prices as low as we can but high enough that it supports our business.
What we found was after an initial jump in sales following a new release, sales would drop very quickly and then bump around until the next large release. Over the last five years we have not been very good at releasing major versions of the apps. We fell into the trap of simply releasing new features, even some large ones as a dot release, which current customers automatically got at no extra cost. At the end of 2014 it was obvious that this was not the right thing to do as we were not charging for larger updates which was causing us significant issues in terms of revenue. We had just been excited to get releases out and not really thought through the consequences to the business. This was going to have to change or our business would not survive.
With this in mind we decided to change directions. Glyph Designer 2 was close to completion and this gave us an opportunity to change how we charged for it. Subscriptions is a way of life in so many industries right now and it is not something that is going away. When we sat down and reviewed how we should charge for Glyph Designer 2 it became obvious that subscriptions would allow us to keep a price point that was not prohibitive to our users while at the same time providing us with a more predictable revenue stream. This would remove the lumpy revenue we had been seeing from our historic sales and allow us to settle into a much smoother rhythm.
It was important to us that using Glyph Designer 2 through subscriptions should be simple and put the user in control. By offering Monthly, Quarterly and Yearly subscriptions the user can decide how much they will be using Glyph Designer and pick the appropriate subscription. As soon as they are finished with Glyph Designer they can then cancel the subscription and start it up again should they need too in the future.
This can significantly reduce the cost of use for light users while still not costing a great deal more over a year than purchasing the product outright. This more predictable revenue stream also gives us the ability to work on new features that may take some time without the need to get things out early to help with the revenue drop off after a large release. Subscriptions would also mean no more major release cycles with all the complexity of upgrade pricing and the confusion that can bring as well as the infrastructure often needed to support it.
So how has it gone? We are learning all the time about how subscriptions are being used by our customers and based on how things have gone since launch we'd say it was a success. We see customers using all the tiers of subscriptions we offer as well as signing up and cancelling as their needs change.
Its not been a completely smooth road. When we first released Glyph Designer 2 some feedback was very negative about the new subscription approach. We expected this as even though the likes of Adobe are using subscriptions now it is relatively new for a niche product such as Glyph Designer.
We're continuing to monitor how things go but for now we don't have any plans to revert back to perpetual licenses. We really believe that our customers are benefiting from having greater control over how much they want to spend on using Glyph Designer and the benefits to our business mean we can continue to add features and provide ongoing support which are key goals for us. Based on this there is a distinct chance that the next release of Particle Designer will also see it move to subscriptions.
The end result of this is that it has helped us plan for the future of 71Squared that helps to ensure we can continue to make and support applications that we enjoy but also our customers enjoy as well. To all those who have purchased our products in the past or who are current users we thank you for your support. It really does mean everything to us.