CoG/HG business model

I was looking on appbrain to get insight into how many units were downloaded. Again, this model isn’t perfect. This is how many times it was downloaded, not necessarily sold, because people can download a lot of these games for free before paying for them. That’s why I put the word downloaded in my final estimate and not sold.

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That’s not a bad idea. Discussing it here is good, but the consensus seems to be everyone wants more money. Comparatively, I think people are saying that COG isn’t the worst in terms of royalties.

Personally, facing a layoff soon, I’d love to do this full-time, but a realistic income, like Patreon, is needed.

It’s been mentioned multiple times in this thread that COG has a substantial fan base, as acknowledged by Dan in his response, with thousands on their mailing list. Additionally, we use the Choicescript software, not our own. The only free one out there so far is Twine and it uses different coding languages.

So if we really want something to change, I believe a petition with authors signing and presenting it to COG can’t hurt. The worst they can say is no.

Having published on all three platforms, you can find a “what to expect when self-publishing”. here.

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This is something I think a lot of people forget as well. CoG is not just a “platform” or “store”, you’re also getting what is essentially a game “engine” or “SDK” (depending on how grandiose you want to be about it). Steam, GPS, Apple, i.e. “platforms” often don’t give you much at all beyond an API for achievements - you still have to source the underlying technologies for your game or app yourself.

And as Dan mentioned in his IF post, even if you could write your own interactive fiction parser tomorrow, ChoiceScript has had years of work to integrate it into the aforementioned APIs of all those platforms. The work to do that has value and isn’t a null cost. Don’t also forget the community and resources available surrounding the language add value to its use over alternatives (even if much of that is community driven; but that’s a whole other discussion!). Tutorials, the wiki, the tests and community tools, they all make it so much easier to develop really great games – and that’s more than can be said for a typical platform or web store.

To be clear, I haven’t written a game and don’t have a strong opinion on the revenue split. I just think there’s some value offered by the model that’s being overlooked here.

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I have no idea if I’m typical, but I currently charge CoG $30 an hour (less than what I charge most of my editing clients since we have a great relationship and because the editing level is relatively light) and I clock an average of 6k words per hour, which includes the obligatory spell check of each file (which maybe gets about 10% of the errors, but it’s good to clear them out), checking the grammar across each goto or gosub, a full read through, and compiling a detailed document listing people, pronouns, other proper nouns and special terms, common features, and any queries for the author or large changes I’ve made.

I don’t know if the process is the same for copyediting Hosted Games, but this is at least my process for CoG. Most bills for whole games these days are in the high 3-figure to low 4-figure range.

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Have you considered raising Patreon tier prices or get a kofi account.
Like maybe create a Tier solely for those that want to help and are willing to pay a bit more for the same rewards as lower tier. I would gladly pay more for the tier or donate via kofi to help during your layoff

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CoG’s royalty rates are based on how much we can afford to risk in advances

As I said in my intfiction.org post, professional authors mostly ask us for higher advances, not higher royalty rates. We just raised our CoG advances to $10K advances against a 25% royalty and $15K advances against 10% royalty, to make our deal even more compelling to experienced authors.

(We’ve been planning to raise our advances for months; it’s not in response to the forum thread unfolding this week.)

Note that advances are always in the author’s advantage and to our disadvantage until the game earns out its advance. On the 25% royalty rate, if a game makes $20,000, even though we haven’t paid out any royalties, the author still has their $10,000 advance, which is 50% of the game’s proceeds.

When we stake an advance, we’re placing a bet that the game will earn out its advance. On 25% royalties, we’re betting that the game will have at least $40,000 in proceeds, or closer to $50,000 in sales (since Apple, Google, and Valve each take a 15%-30% cut of their own).

Some games haven’t earned $30,000 in proceeds after more than five years on the market. Some games haven’t even made $10,000. These games are total losses for us; those authors have collected more than 100% of the proceeds.

Taking these bets is expensive, but it’s absolutely worth it for CoG’s business.

CoG’s royalty rate puts a limit on HG’s royalty rate

We made a decision when we launched HG that we wouldn’t offer higher royalties on HG than we would on CoG, to give authors no reason to prefer the HG deal over the CoG deal.

It is absolutely true that HG is offering a worse royalty rate than we would if we weren’t paying advances on CoG.

It makes sense that HG authors would be frustrated by that, especially authors who aren’t eligible to write for CoG.

Choice of Games and Hosted Games operate on a mullet model: business up front, party in the back

CoG is our primary business, and maintaining our advances is essential to maintaining and expanding CoG’s audience.

But growing CoG’s audience also grows HG’s audience. The vast majority of every dollar that HG makes, especially for newbie authors, came from users who were originally drawn to the platform via CoG.

Without CoG’s audience, HG’s royalty rate could be higher, but HG’s top-line proceeds would be a fraction of what they are today.

HG does contribute a lot to CoG, but CoG grows HG’s business in exchange.

Each author has to decide whether HG’s deal is right for you

Since HG offers a 25% royalty rate on proceeds (after the app stores take their cut), you should only publish on HG if you believe that your game will sell at least 4x as much with HG as you would if you published yourself.

Some authors have a large, dedicated audience, who will buy all their stuff. Some authors have the technical chops to publish their own apps on Steam, on the Google Play Store, and on Apple’s App Store.

If you think that publishing under HG will only double your sales, then you should probably just publish yourself.

But if you don’t have an existing fan base, if you don’t know how to publish an app on mobile and Steam, if your go-to-market plan is to upload a Twine to Itch.io and hope that people find it organically, we believe HG will earn you significantly more.

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Perhaps a comparison to unreal engine and epic store would be a more fair comparison, but that number is about the same, if I’m not mistaken (it might even be lower for games that aren’t gigantic)?

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I must really have misunderstood the advance/royalty system.

If someone has a $10,000 advance and it makes $20,000 dollars wouldn’t CoG have started paying royalties after the game sold more than $10,000?

No, they would start paying out when the royalties earned equalled $10,000, which, at a 25% royalty rate, would be when the game had earned $40,000.

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Yep. I totally misunderstood. That actually makes more sense so no idea why I thought what I did.

Sigh. I am an idiot…

Respectfully that’s not quite true. I find there’s sometimes a little tunnel vision as to what can be interactive fiction as there’s a whole other world of IF out there including coding languages many of which are free. Twine is the most common, but there are also ones like Ink, bitsy, ren’py, quest, inform etc (I even saw someone manage to make a game in google pages).

Each of the systems has their own strengths and weaknesses and styles. There’s no one size fits all types and styles of games. Choicescript is very good for replicating gamebooks ported into a digital format and tracking variables/stats easily. The main reason why you hear people using it that I’ve seen off these forums is because it is easy to learn and use, and has a built in platform to release (HG) if you want to make something commercial. There are also a number of reasons from licencing to CSG audience expectatons (long length, MC type (blank, always the main character, romance focus etc) to style (visuals vs gamebook interface, parser vs choice style etc) as to why some might choose to use a different system.

Some other perspectives on choicescript: Why isn't everyone writing fiction for choicescript? - Authoring - The Interactive Fiction Community Forum

Some other perspectives on motivations for writing IF commercially/non-commercially: Would you write IF for a living if you could? - Publishing - The Interactive Fiction Community Forum

A bit of a parallel conversation on self publishing vs other options over at intfiction also happening: Self/-- Publishing and Marketing IF [Split topic] - #31 by 8bitAG - Resources - The Interactive Fiction Community Forum

Just a respectful question (I’m genuinely curious but feel free not to answer as I’m poking into business decisions that are not really my business here :slight_smile: ), wouldn’t it benefit COG to have more people take the HG deal by offering a higher royalty rate there? I mean wouldn’t that mean for COG that per release there’s less risk (no advances to be paid up front that need to be earned out before (hopefully if) you make a profit), less costs (no artwork, not having to pay staff to work with the authors while creating the game, less marketing), any games you feel won’t do well don’t go to steam so you don’t have editing (only steam HG games are copyedited) or steam costs to get them onto that platform for those etc?

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Hypertext fiction is a thing, so I’d be more surprised of no one managed.

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We think our editors, art, and marketing all provide value! It’s certainly lower risk to us to offer the HG deal, which is part of why we can/do offer it, but we don’t think it makes any game better to avoid working with our team.

Maybe a better proposal (for us) would be to offer three CoG alternatives: the existing two, plus another alternative deal including editorial+artwork+marketing support, with a higher royalty rate, but no advance.

That deal would allow us to take more money from underperforming games, decreasing risk to us.

But… that’s not what CoG is trying to do! We’re not trying to take more money from CoG authors who earn less. We’re trying to help CoG authors be very successful, and to minimize risk to authors, who have to invest months of their life toward writing an interactive novel for us.

Unfortunately, CoG’s advances leave HG authors with a relatively worse deal, in which they’re getting a lower royalty rate without the benefit of an advance. And, to be clear, I can certainly see why that’s frustrating.

(This topic thread is called “CoG business model,” but I don’t think we’re actually getting a lot of complaints about the CoG business model here; we’re getting complaints about the HG business model.) [Edit: Havenstone just changed the topic title to reflect this]

Nonetheless, I think first-time authors are getting a great deal with HG, much more than quadruple the earnings they would have made self publishing.

HG isn’t for everyone. But it might be right for you.

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True but they actually did it quite well and got the game to remember events and things to an extent rather than the click through type. I can’t quite remember where I saw it, possibly ifcomp? It was set on a boat.

A good point – and it’s also worth us all remembering CoG’s strong desire not to be a vanity press. That’s directly relevant to the suggestions upthread that CoG could withhold royalties (or offer less favorable royalty rates, though I recognize that’s not quite the same proposal) until a HG has paid for its costs.

Looking back today to what Jason wrote there, a couple of things jump put at me. First, because it’s also come up in this thread:

Hustler’s written above calling that a “myth”… and I can well believe both 2017 Jason and 2024 Matt. The “everything’s eventual” mindset and business models based on it make sense when you’re confident that the business is going to last a long time. That sure wasn’t clear back in 2017.

From the outside it looks like it’s truer now – a platform with a bunch of hits, an extended deal with a valuable IP holder that should yield more of the same, more employees, a longer track record of survival. But we don’t see the business numbers, and if they’re more fragile than they look to a casual observer, CoG’s wise not to share them. I’m broadly a fan of transparency (hence my active participation in threads like these) but bank runs have their analogies in the small business world; there are plenty of cases where a business would have survived but for a short-term crisis of confidence that caused its suppliers and other key stakeholders to pull back and take a wait-and-see attitude.

And even a business on stable financial footing today faces the risk of disruption tomorrow. All of us who are earning royalties from CoG/HG should be keen for them to be here in another ten years, and thus for them to be hedging against shocks. In part, they do that by not locking themselves into contracts on the bleeding edge of what they can (today) afford. The idea that “a business that isn’t maximizing distributions to its key stakeholders is culpably inefficient” is wrong whether it’s being delivered by the WSJ looking at investors or labor activists looking at workers. Maximium efficiency is brittle and failure-prone.

The closely-entangled CoG and HG business models (changed the thread title to reflect that) are just different enough to increase the overall resilience of the business. The set of shocks that can hit a small publishing house isn’t identical to the shocks affecting an open platform for choicegames. A downturn in one business might not need to lead to contraction or closure if the other sibling business is able to pick up more of the slack. (There are of course limits to how much one legally distinct company can support another, but there are enough options available that I think the broader point is valid.)

So whether we write for CoG or HG, we should be cheering on the health of the other side of the business. This links into what @Dvalor53 has been writing above about the ecosystem of CoG/HG, and how business decisions that seem to be clearly optimal for one side might not be the best when we look at both.

That cuts both ways, though. Dan’s been clear that right now, decisions are mostly being made looking at the CoG side of the ecosystem–the business up front rather than the party in the back. (I’m not sure yet whether I prefer Jason’s coffeeshop to Dan’s mullet.) And I get that. When you look at how the business has grown and the snapshots of their thinking that Jason and Dan have given over the years, here’s how the “evolution of the business model” story reads to this outside observer:

  1. ad-supported open platform making beer money
  2. pay-to-play (after getting kicked off AdSense) struggling to even provide a job for the founders, since it’s mostly attracting hobbyists and people who take forever to finish a game in their spare time, not full-time writers
  3. publishing house model (advances and royalties) brings in pro writers who massively grow the audience (starting with Zach Sergi, and yes I know every forum we have is now full of vocal anti-fans, but the Heroes Rise trilogy was a game-changer, and still holding down the #3 and #4 spots on the May '23 CoG bestseller list)

The book-publisher model and that side of the business has also clearly made possible another, more recent big jump in audience size and business sustainability: licensed IP. (Hello, #2, #10, and #13 on the bestseller list, most probably in higher ranks by now!) IP holders want to partner with an established publisher, one that’s been around for a while and looks like it’ll continue to be. The “open choicegame platform” alone would not have any WoD games on it.

I’m 100% sure the CoG team continue to work to bring in new IP, in ways we won’t hear about unless/until they succeed. We should all be cheering that on; and it can only be done through the publishing-house side of the business. (And btw, for the many CoG/HG fans who hated SotS but loved any of the other Vampire CoGs: IP holders care about the profile-raising effect of things like Nebula nominations too. So try to give at least a tiny cheer for the success of a game you didn’t like, because it makes it more likely that we’ll get more that you do.)

With all that recognized, it’s easy, and maybe ultimately justifiable, to treat the CoG publishing house as the core business–the keystone species of this ecosystem–and the HG platform as a secondary benefit made possible by the continuing success of the core business. Keep HG as healthy as you can, but not by any means that puts strain on the keystone.

But maybe the business model story needs another key turning point:

  1. The increased audience brings in ever more good and popular non-pro authors to the HG side, who write a growing string of blockbusters that put pretty much all the CoG games in the shade, income-wise.

That’s a hypothetical. I know a lot of HG fans think it’s obviously true; from my more skeptical perspective, none of us have any real idea how Choice of Robots and the -havens (Way and ZE Safe) compare to each other in sales. But the now well-documented fact that my #5 CoG has significantly undersold Malin’s #9 HG gives the hypothetical a jump in plausibility.

Historically, CoG’s steady success and string of big hits anchored HG’s much more erratic performance – especially back before it was clear that the overall business was viable enough for an “everything’s eventual” long tail to reduce the number of truly unprofitable HGs to negligible numbers. But for the last few years, has HG been the core moneymaker whose even bigger string of hits anchors the publishing house, rather than vice versa?

And if so, with royalties calibrated to the needs of the publishing house, are we getting too close to what 2017 Jason said CoG was keen to avoid?

Of course that’s not literally true even for a vanity press; it’s a question of exploitative terms. And whether the terms are exploitative here looks very different depending on whether we see CoG or HG as the keystone species/anchor business.

In closing [sighs of relief all round]: giving CoG authors the option of a higher-royalties-no-advance contract would absolutely increase risk to the CoG authors who chose it, but also increase returns to those who were willing to accept that risk. I don’t think most folks would suspect CoG of trying to push risk onto its authors, Dan, especially as you keep offering more generous advance terms and actively encourage pro authors to take them! Rather, it would open up the option to boost HG rates without creating an incentive clash with the CoG half of the system.

Maybe it sounds like I’m trying to angle for a better future deal for myself as a high-selling CoG label author, but (a) I am genuinely delighted with the generous terms CoG took the initative to offer me for XoR 2, and (b) I’m not at all confident that future XoR games will hit the bestseller list. Sure, I’ll write the best games I possibly can, but they sell based on luck, not just quality; reversion to the mean is a thing, and the mean CoG sales are low and variable enough that CoG advances are a terrific deal. If Pon Para 2 can end up on the underrated games list, I’m confident that Rebels 2 and subsequent sequels might too.

No: the key reason I’m gently advocating for giving CoG authors the higher-royalties-no-advance option is that I think it could improve the health of the HG side of the system. And whether HG really has become the current anchor business, finance-wise, or is just an equally (or near-equally; I don’t think any lower assessment is plausible) important contributor to our ecosystem’s overall success, I think that’s worth doing.

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Okay, you see it. Are you going to do anything about it?

I entered this thread in a largely academic fashion. I’ve mentioned offhand for literally years that author royalty rates could and should be higher, but I appreciated this place too much to make a thing out of it. But I have to say, if you only came in this thread to explain why you came up with the business model you did, say it sucks for the HG authors, and offer no actionable solutions, you realllllly should not have posted, mate.

You can’t act like your hands are bound and there’s no room to change anything for HG authors when in the same breath you are offering healthier compensation to CoG ones. At this point you are quickly turning my passive observation that the company could pay out more into a much more active aggravation that you know full well you’re underpaying Hosted Games authors to keep the coffers full while still insisting the CoG model is the far more desirable of the two. It’s time for harsh reality: it isn’t. It hasn’t been for years. We all know it. You more than anyone, since you don’t have to just speculate off the meager data publicly available. CoGs can still succeed, of course, but the structure and uniformity they provide is no longer being regarded as a selling point by the general buyer. It is, if anything, a detriment.

@Havenstone has the right of it from what I can tell: embrace that HG has gone from a sideshow to the cash cow. Give the no advance option (or maybe a much lower advance, like $2.5k-$5k) with higher royalties for CoG, and raise the HG royalties to match. If the editing, art assets and higher marketing push for going with CoG do have value (and I think we all know they do), you’ll still have no shortage of people wanting to publish on the prestige label. Why wouldn’t they? HG would be the same royalty rate with none of those extras. But for those who want more freedom, we can know we get that option without having to choose between writing what we want and earning what we deserve. Stop punishing HG writers for daring to make your company money on their own terms. That should not be a controversial statement.

Y’all may or may not know this, but I made a concerted effort to clean up my vocabulary when I became a father. So trust that I use language like this very sparingly and only when I feel it merits it. If you know we deserve a larger cut, and this thread certainly seems to have determined that we do and that it’s feasible for the company to provide it, cut through the bullshit and make it happen.

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One more thought about the relative merits of seeing one side, another, or both as the “core business” of the CoG/HG ecosystem.

Personally, I’m only a CoG-label author because I snuck in during the odd Phase 2 of the business model evolution mentioned above. Yes, I’ve published before, but I’m not a professional writer. In any other phase of CoG’s evolution, I’d probably have fallen on the HG side of the tracks.

And for most of the last 12 years, XoR has been my spare-time creative project. I do it first and foremost for the intrinsic enjoyment it gives me. Even now when I’ve left the day job and am putting more time into writing than into anything else, I’m still trying to keep that intrinsic motivation rather than getting sucked into a dollars-per-hour mindset. (Had a great conversation about this with a high school buddy over Christmas, who’s similarly trying to keep his awesome laser-carving side business as something he can do for the sheer joy of it, rather than slipping into maximizing his profits.)

You can’t build a business on writers like me. You need pros–people who can be counted on to hit their milestones while delivering good quality stuff that people want to buy. Being a pro writer isn’t first and foremost about meeting some criteria of literary elitism, but about basic criteria of reliable output. A company especially needs that reliability if it wants to work with a bigger IP property like World of Darkness.

Fortunately, CoG has a critical mass of reliable pros, so it can afford for its roster to include a few writers of rambling megafictions like me (and Kreg Segall–who’s much much more of a pro than me, but still delivering work on a scale and timeframe that you probably don’t want as the cornerstone of your business).

When we’re now discussing the extent to which the publishing house side deserves “core business” status…I think it’s worth stating clearly that HG also has that critical mass of reliable talent, and has for years. Sure, there are plenty of hobbyists and odd ducks and Devon’s free-time-rich college students, but the core of the HG business, as the bestseller list makes pretty clear, is in authors who produce popular, quality work and are also able to reliably churn it out year after year. You might not have wanted to bet the stability of your business on that talent base in 2017-18 – the quality was clearly there, but not necessarily the reliable pace of production – but I’d never argue against the reliability of the core HG authorship today.

CoG and HG reached that critical mass at different times and by different routes–one by emulating and recruiting from an existing industry of pro writers, the other by just growing a sufficiently big community of creators (drawn by the shared audience of the two labels). Neither CoG nor HG would have got there without CoG going first, with its publishing house strategy. But at this point, and since a good few years ago, I’ll bet you could pretty confidently run a stable, successful business on either body of talent alone.

Like I said above, I think we’re all much better off for not having HG and CoG as entirely distinct businesses–more resilient to have them continuing to share a talent pool, audience, a support team, etc. through the inevitable ups and downs for each label. I’m less confident than Hustler about judging either model to have shown lasting superiority, and accordingly less irate. But I sure haven’t seen any evidence that the HG of today isn’t the more profitable and reliable half of the business…and can’t help wondering if treating CoG as the clear core business is mostly a hangover from a few years ago.

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I sent in a proposal to CoG when I started working on Fallen Hero, but at the time I was already too far along in the process (I had a story, knew what I wanted to write, etc) to be suitable. So, instead, I wrote for HG, which I have never regretted because, as someone with a background in self-publishing other things, I am used to the process and freedom of taking risks and doing what I like. Now writing FH for Hosted Games is what I will be doing for the foreseeable future, and (though other fun offers have been presented) I finish what I start.

I think many people like me prefer the lack of oversight, the freedom to arrange our own editors and art, working with copywriters, and so on. For me, HG has been wonderful in providing what I want, an outside perspective copyediting since I get Steam releases (super helpful), the support for online publishing (of which I know nothing), and above all, pretty much free reign as long as I don’t piss off Apple. For me, self-publishing would have given me more money per book, but I would have sold next to nothing in return. It’s the same reason I priced Rebirth at the low end of the spectrum, betting that having a lower barrier of entry would mean selling more copies to people wondering if it was worth it. I wanted to hook them. So yes, for me, the HG experience is worth it.

Without having access to numbers, it’s impossible to speculate how many sales are on each platform. Or, how much money they make. That being said, I think we can all say with some certainty that over the years, the fanbase for Hosted Games has grown faster than CoG ones. When I started writing, Choice of Robots was what everyone was talking about, now it’s Wayhaven. Mine and Sera’s first books were even released on the same day, funny how that worked in retrospect.

100% true. Honestly, while, as I said, I am essentially happy with the terms for me personally, what is starting to annoy me is that publishing through HG seems to be seen as less professional or an act of desperation. We have many professional authors managing their series, fandoms, and patreons, figuring new ways to make ends meet to keep doing this. Perhaps we are not using the HG platform as originally intended (first game, then transition to CoG), but at this point, I think that HG is seen as something else:

The platform where the edgy and interesting stories/games without much oversight and sanitation get published. For good or bad.

In my prediction, this divide will only grow. HG authors are more open and vocal about their WIPs, they use a lot of social media, Patreon is an incentive for fan interaction, and the fans get more involved in the process for good or bad. In today’s internet, they edge more towards twitch streamers but in words, satisfying people’s need for continual content while waiting for next release. I’m not sure this is good. Or sustainable. It will probably lead to burnout. But nobody can deny that it has got people talking, staying in the hobby, trying to write themselves, and buying more books.

This is something I really want to drive home. A rising tide lifts ALL ships, and right now, much of the rising tide seems to be powered by authors writing for Hosted Games rather than the other way around.

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Omg. Someone said earlier that some of the better games in the past were only 100k-150k words and that blows me away. I remember playing those games when I first joined in 2018 and the bar already seemed really high. Games like Tin Star seemed like a god among mere mortals because of how large it was, whereas nowadays hitting the 1 million mark feels like it’s quickly becoming the new bar that people shoot for. That 100k-150k achievement from before feels like the absolute bare minimum these days. It’s insane how much these games have evolved in what feels like such a short time.

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100K actually is the bare minimum for CoG these days, and it’s true that the trend overall has been in favor of longer games, but I don’t think million-word games are going to be the new normal anytime soon. There have been about 400 games published in ChoiceScript across all three companies, and fewer than ten of these are over a million words, and most of those were written by experienced and established authors. And if you look at the last few releases from CoG, most of them were under 300K.

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