I bootstrapped my cloud gaming service to $2K MRR, then decided to cancel all subscriptions. AMA!
Hi everyone, I'm Sven (@svenfrese on Twitter),
I'm the founder of airgpu, a cloud gaming company that I bootstrapped to $2K MRR and I recently cancelled all paid subscriptions for the service. This is my story in short:
I have been indie hacking for over 4 years next to my day job. My projects haven't been very successful though, I either didn't finish them or failed to get paying customers.
Last year, out of frustration about GPU prices, I started getting into cloud gaming. Following cloud gaming communities on reddit I found that many people don't have cloud gaming services available available that offer the games that they like playing.
That's why in December last year I started building airgpu, a cloud gaming service that gives full access to a gaming pc in the cloud so you can play the games you own from any of your devices. I launched into closed beta in April offering 30 hours of use for $30 per month. I messaged a few people on reddit who were looking for a service like mine and got the first beta sign ups that way.
One of those early users connected me with someone running a fairly big youtube channel on cloud gaming who agreed to do a review of my service. The review turned out very positive and the result were roughly 1000 signups over the course the weekend after the video was released.
While continuously working on improving the service over the following months and onboarding more and more beta users, I found a few problems with my offering though. Churn was fairly high as were the server costs. An update to the software used for streaming games caused additional unexpected costs which led to the service no longer being profitable while generating just over $2k MRR.
From in-app user feedback I learned that many of my users churned out as they are occasional gamers who would only pick up a game every few months, so they didn't like the idea of an ongoing subscription. Based on that feedback, I decided to revise my offering and make it more attractive for occasional gamers. I cancelled everyone's subscription and switched to a pay-per-use model with new pricing guaranteeing profitability for me and more flexibility for my users. I expected complaints about the higher price tag but luckily only received nice words and support from my user base.
I launched the new offering earlier this month and invited some of my most loyal customers to test it. I have made $225 in revenue so far while turning a profit again :)
My journey with airgpu hasn't been as straightforward as I would have liked, with many challenges on the technical and business side of things, but I'm excited to work towards getting airgpu into public beta and ultimately out of beta next year.
I'm curious to hear your thoughts and questions, cheers!
Another inspiring story, I'm really liking coming back to indiehackers
What hosting service you use to process such high gpu consuming games? Is it allowed without enterprise partnership?
Currently everything is running on AWS. Getting the required GPU quota requires a special application but after contacting their account team that wasn't a problem.
Great! Have you considered running Android games in the cloud ? Mobile User is largest!
That's actually on my list of things to experiment with, a few users reached out to me and asked for Android support already.
What kinds of games do you find that your users generally want to play?
Are all of your users US based or worldwide?
I've always been intrigued by cloud gaming and do think it could be the future, specifically for certain kinds of games. I'm not sure it will ever totally take over in certain niches (e.g. latency sensitive shooters or other timing/skill based competitive games), but I think there's a super good market for this for those without access to a good gaming PC!
I think you made the right choice with pay per use. Gamers really hate spending money. The industry is in an interesting state right now, with all the high quality free to play games available and things like Xbox GamePass.
I'm mostly seeing users play games that are not on GeForce Now, Xbox Game Pass, or other library-based cloud gaming services. Otherwise there's no real pattern to it.
My customers are from all over the world, I'm seeing a lot of demand specifically in Asia.
The industry is definitely in an interesting place right now, the nice thing about the project is that I'm not trying to win cloud gaming but find my niche that the big providers, who undeniably have a big advantage by manufacturing their own hardware and/or having their own ecosystem, are not serving.
Xbox or PS Game is closed system, mobile or pc game is profitable
How does it work, in practice? Do you actually run their games somewhere on the virtual machines and then send back the videos, or not? Thanks!
Yes, indeed. That is pretty much exactly how it works.
How did you find customers? 1-10, 10-100, 100-1000
1-10: Personal messages on Reddit to users in cloud gaming communities that were looking for a similar service
10-1000: Mostly through coverage of my service on YouTube by one fairly big channel that I have an affiliate deal with, a few more through Reddit posts
Very interesting!! How did you approach YouTuber and how much affiliate do you give? any tips. Thanks
I was introduced to the youtuber by one of my early customers so I guess I got a bit lucky there. But at least in my space the bigger youtubers are pretty accessible via Discord. I found most of them by checking out the servers of my competitors.
The youtuber gets a few dollars for every paying customer they refer.
Interesting story. How do you pick which games you're offering? And more importantly, how do you handle licensing?
As far as I know, most online games have terms against cloud gaming. I.E. many users were banned because they were using GeForce Now.
I'm offering full access to a gaming pc in the cloud. My customers purchase their games on Steam etc. and then just install them on the cloud pc, therefore licensing is not really an issue.
Shadow-bans are indeed an issue when running some competitive online games on virtual computers like airgpu or GeForce Now. If publishers prohibit running a game on virtual machines in their terms, it's up to the person who purchased the game to follow that imho.
Ahh I see. Sounds pretty straightforward and I'm glad licensing won't be a huge issue for you. I hate when bigger companies just destroy great projects like these.
How does the new pricing work? Also, I'm assuming people who opt into a cloud gaming pc are from countries that struggle economically. Are there any latency issues?
By the way, I think projects like these deserve better recognition outside of gaming communities. Gaming is an expensive hobby. I don't game nowadays but it would be great to just hop into some games without the initial investment. So kudos to that!
Seems like a good move. As Indie Hackers we have to be laser focused on profit. I’m curious if you explored any way of changing your subscription price to increase profitability?
Absolutely, there's obviously a fun component to it but in the end it is a business.
I did experiment with different subscription prices and conditions. A full flatrate was too much risk as I pay the servers by the hour, also with mining in mind. Other options I tried were just too complicated and still lacked flexibility so I went for pay-per-use.