Justin Kan’s Stash gives game devs a platform for alternative web shops

By
VentureBeat
Jan 18, 2024

This article was originally published on VentureBeat. Read the full piece here.

Justin Kan said the gaming industry is witnessing a significant shift towards D2C models due to mounting anti-competitive regulations targeting major platforms like Apple and Google, coupled with challenges in user acquisition.

In fact, many of the game developers felt too reliant on the major platforms’ unilateral decisions – a snowball effect that started with IDFA deprecation in 2021, Stash said. Since then, there have been calls to reduce or nix the 30% platform fees and allow alternative payments and billing solutions.

Epic Games won an antitrust lawsuit against Google. And while it lost to Apple, the U.S. Supreme Court held this week that Epic had won one small point in its antitrust case against Apple. The court held that developers like Epic could steer their customers to alternative stores on the web where consumers could pay lower prices and skip the 30% royalty payment to Apple. On top of that, the European Union’s Digital Markets Act will force gatekeepers like Apple and Google to allow alternative stores starting in March.

“We’re creating this new product called Stash. And it’s a new way for developers to engage their customers and sell in-game items to their customers,” Kan said. “We address a couple problems that developers have.”

He added, “The No. 1 big thing is Apple and Google effectively gatekeep all their customers and Steam does to some extent. Developers have to pay Apple and Google this massive tax, which is the 30% tax, and Steam as well.

The second hardship for mobile game developers is that Apple retired the Identifier for Advertisers (IDFA) and that made it harder to track users and target ads at them.

"You don’t know who your customer is anymore, and you can’t remarket at them"

“You don’t know who your customer is anymore, and you can’t remarket at them,” he said. “So more games are going to direct to consumer, so they can recapture the customer relationship and basically be able to own the customer by selling to them directly through their own managed web shop.”

They can also avoid the “App Store monopoly fees,” Kan said.

“It’s the right time because there are all these antitrust laws coming out and regulatory changes in Japan, where they announced they will require Apple and Google to allow third-party payment systems, Kan said.

Stash said it is responding by offering game developers a platform to completely own player relationships, eliminating the need for intermediary platforms. The benefits of embracing D2C with Stash include reclaiming the 30% store tax, gaining direct access to player data for improved user acquisition and retargeting, boosting player loyalty and retention, and achieving more control over in-app purchase management.

Kan said the product is kind of like Shopify for games

Kan said the product is kind of like Shopify for games, a white-label store that any game can roll out as their own ecommerce portal. The store enables personalization, dynamic pricing, loyalty programs, volume-based offers and a basic ability to understand your customers, Kan said.

Borstelmann likened it to the Amazon Kindle experience on iPhone. You go to buy something and the store links to a browser, which gives you more ecommerce customization and control. You buy the item and it appears immediately inside your app. The tech works on mobile and the PC.

Cofounder Dan Borstelmann showed a demo of the shop working where you can buy something from within the game without having to be signed into the web shop. You can easily grant permissions and make payments.

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