Featured Listing: 8-Year-Old Online Videogame Business

About the business

Tell us a little about yourself. What’s your background? How did you start the business?

The business was started by 3 brothers back in 2014, however, ‘Opium Pulses’ goes back to 2002. You can find an in-depth timeline here: https://www.opiumpulses.com/site/aboutus

As an eCommerce business, where are your products made?

We are a digital goods business only and do not sell any physical products.

Where possible we use APIs that will only purchase stock when it’s sold. This removes the requirement and risk of holding lots of stock.

To a customer the process is seamless. They order a product, our API makes the order with our supplier and it’s delivered to the end customer in a matter of seconds.

The exception to this is for our Microsoft Office and Windows products where we have long-established suppliers that we purchase upfront. It’s worth it for these products as the margin is so high (50-90%) and they sell through quickly.

The main benefit of a digital goods business is you can easily sell to any country in the world without having to worry about shipping costs. And everything is delivered instantly to the customer!

What can you tell us about your Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC)

Because marketing is our weak area, all our customers have been acquired at no cost, either organically or from our social activity (Discord group, etc).

We also have a Google Shopping feed that automatically pulls any products in our store and lists them in Google Shopping results. This really helps with discoverability.

We have some very loyal customers that have made over 250 orders with us and some B2B customers that have spent hundreds of thousands.

How have you marketed the product and where are your customers originating from?

The store is mostly marketed via Google Shopping feeds and social media.

However, the website was designed from day 1 to be much more than JUST a store, with other content to attract traffic to the site.

Articles, Arcade, and giveaways are the main draw for a lot of customers. Articles are often sponsored by partners and giveaways are either developer sponsored or purchased very cheaply. Effectively all these sections are cost neutral, they simply require time and a person to manage this content.

We go into more detail on this in our presentation attached to the Flippa listing.

Is the asset on your listing owner-operated, how much time does it take to run the business, who else is needed on the team, and what is automated?

It’s possible to run the business on as little as 2-3 people if you have a full-stack developer on board.
Due to our time constraints, our core team currently consists of 5 part-time staff:

1. Business Manager – General management of the business including finances and B2B relationships.
2. Store Manager – Creates new product listings in the store, links to applicable APIs, and runs promotional campaigns advertised on the homepage banner to drive sales.
3. Content & Support Manager – Creates content for the site including articles (self-written and sponsored), updates the Arcade, manages social channels, and responds to customer support queries.
4. Giveaways Manager – Secures games and ensures there are always at least some giveaways running that users can enter. Includes setting them up and monitoring.
5. Developer – Adds functionality to the site and fixes any issues that arise. Right now we are not using our developer much as the site is set up to be self-running and the rest of the team can manage the general day-to-day operations.

What does someone need to do to continue operating the business in its current form?

As a bare minimum, I would recommend you have a full-time business operations manager and full-stack web developer. However, if you wish to carry on producing content then some kind of content manager also manages this side of things.

You may also consider some kind of marketing expert to promote the business. This is something we currently lack but the right person could make a big difference.

Order delivery is fully automated and instant so the only time you will need to manage sales is if manual approval is required (triggered when a very large order is made from new customers) or there is an issue with a key and general support is required.

90% of sales require no input whatsoever and are self-servicing.

Growing the business

Can you list a few opportunities for a potential new owner to continue growing the business?

Marketing, promotion, and spreading awareness is the key area of focus we have struggled with and believe will make the biggest impact on the business.

We also highly recommend spending the time nurturing potential B2B customers (we will share our entire contact list) as this has the potential to drive serious revenue.

We have an account with DLCSoft (official PlayStation UK digital stock distributor) that we were previously allowed to purchase stock in bulk that we sold B2B, which made a huge profit over the last 2 years. They have recently changed their rules which means orders can only be made via their API which we’ve not had time to set up yet. However, this should certainly be a focus as DLCSoft is the only approved PlayStation distributor in the UK and it’s very difficult to secure an account that we already have.

Once their API is set up, you will be an officially approved seller of PlayStation digital products which there is a big demand for both B2C and B2B.

Finally, I would advise continuous further development of the platform as things can break and stop working if the framework becomes outdated. When there are no issues, the website is mostly self-running with the exception of adding new content and products to the store.

What has been the evolution of this asset since its launch?

This is best described in our timeline at the bottom of this page:
https://www.opiumpulses.com/site/aboutus

How does this business make money? What are the current revenue streams?

This has changed over the years and can even change month to month!

The website store runs on around an 8-10% margin and so requires a volume of sales to be a big moneymaker, which absolutely has the potential to be with the right marketing and team behind it. Our strategy has always been to be as competitive as possible to attract regular and loyal customers.

Because our team has had very little time to commit to OP right now (reason for the sale) and lack of marketing experience, a big focus has been on B2B sales that generally require less up-front time and can generate large amounts of revenue/profit. However, this still requires time to nurture relationships and build trust/loyalty.

So there’s so much opportunity in both B2C and B2B sides of the business to be a serious income driver given the right people who can commit their time and experience.

Two other areas of revenue are sponsored articles and ads. Revenue from both these channels is relatively low right now but has the potential to grow significantly with an increase in traffic. Also, we made the decision to severely restrict how many ads are shown on pages such as articles as we didn’t want to be like other news sites that are 90% ads. However, we potentially restricted ad placements a little too much and our ad provider (Monumetric) is always telling us we can generate a lot more revenue with more / larger / scrolling ads. Therefore there is certainly untapped revenue potential here.

What marketing channels are most profitable for the business?

As explained, marketing is our area of weakness, and getting an ROI has been a challenge as we simply don’t have the right experience in this area or time to explore.

The majority of marketing to date has been either via organic search, Google Shopping feeds, or social media activity on Discord / Steam / Facebook, etc.

How does the business currently acquire customers and what is your breakdown for marketing costs?

As above

How big is your current team? How many people does it take to run this business?

As above

What’s the reason for selling your business on Flippa?

I would honestly say the business growth potential is huge, given that the video game industry continues to grow every single year and is expected to generate over $200 Billion in revenue in 2022!

Not only that, but everyone’s going digital these days. Downloading your games instead of buying them physically is the new normal. What customers want is pretty simple really… Great prices, great service, instant access, and a sense of community. Our business checks all of these.

I would say the two main reasons for selling the business are our lack of time and our lack of marketing expertise. These things alone have really held us back. This business has been a passion of ours for over 8 years. We’ve built a solid foundation but have come to accept that we are simply not the right people to take it to its next level.

We have come to accept that our lack of time and marketing experience will significantly limit our potential growth and therefore, would like to pass the reigns to someone else who is confident that these obstacles can be easily traversed with a focus on the correct areas.