The business of games
We were invited to the Telenor Smartphone Academy, to present our games and to make a presentation entitled The business of games. This was the second event of this kind where we appeared. Similarly to the first event here we could also take part in interesting discussions. We met a young group of game developers who asked us about our experiences, and also met some, who have already published games, and gained experiences. Naturally the gamer audience took part as well, expressed their opinion concerning our beta games, and we also managed to involve them in our team of testers.
At the beginning of my presentation I faced a minor technical problem, and I was nervous too, as I had not made a presentation in front of such a large audience. I am not completely satisfied with my presentation, but I will do better next time. The topic itself is enormous, we could spend hours talking and debating about it. It wasn’t easy to summarize it in just 10 minutes, thus I thought it deserves an extra post.
The business of games
The presentation can be viewed here.
The mobile game business is the most dynamically improving area of the game market – more and more people have smart devices and more people are spending more money. For 2013 it is forecast tobecome a 12.3 billion Dollar-business. So, it offers plenty of opportunities, as the entry threshold is relatively low – anyone can publish a game from their home which can then reach the whole world.
I summarize three (four) business models, each of which requires a different approach:
- Paid games
This may be the simplest model, as the game can be downloaded from the stores for a charge. In case of a paid game, we have the opportunity to decrease or increase the price, and thus get featured on different special offer sites. There are several sites and applications dealing with reviewing the games the price of which has decreased of which have become free. This way, if we make our game free for a couple of days, and several people download it, we can step higher in the ranking of stores.
This is the most popular model on the mobile games market at the moment, and this one yields the highest revenue as well. The game can be downloaded and played free of charge, but we can pay for different features within the game. I would divide this type of games into two areas, into the ones that can be played out free (we can get everything if we play a lot), and the ones that cannot be played out free (we need to pay for certain contents).
Jetpack Joyride is a game that can be played out completely free. Well, in case of an “endless runner”, playing out might not be the correct expression. 🙂 Every, or nearly every bonus, clothes, vehicles, etc. is available for the money that can be gathered in the game. I have found two items that are not free: the doubling feature (the coins gathered within the game are worth double value) and they have an “early bird” offer at the moment, it is possible to get a vehicle for real money. So those who play a lot and well can get almost anything without spending real money. Those who are impatient, or would like to progress faster in the game, can buy “game money” for real money.
Candy Crash Saga for instance can’t be played out free, and sooner or later you have to pay to proceed in the game. All the bonuses have a charge too, so you can’t proceed even if you play a lot. What’s more, if you can’t solve the levels, you lose a life too. So, you can’t play as much as you would like, except if you pay.
In my opinion there are plenty of opportunities in freemium games, but you have to really understand your game and what makes is enjoyable. You have to take it apart into its elements, together with the user experience, and insert the opportunity of payment at the appropriate points. Michail Katkoff (Rovio, Supercell) writes excellent posts in the topic on his blog.
Full-screen or narrow-strip advertisements appear in your game. Several companies deal with the sale of adverts. I would divide the adverts into three categories: those that yield revenue after appearance, after clicks or after installation. Here we must be careful not to incorporate too many adverts into the game, as it can ruin the users’ experience if they have to watch a full-screen advert on every second screen, or there is a narrow strip of advert featured on each screen. Fortunately the different suppliers offer plenty of opportunities to set when, where and how frequently the advert will appear in the game.
If we have managed to create a brand, cuddly toys, cola, or cartoons can be made based on it (Angry Birds), which yield extra revenue. However, the game must be successful and widely known first.
Which one to choose?
It is not easy to decide – there are games that fit several models. I am going to list some factors that can help in making a decision (naturally, an example could be mentioned against each one).
The aim in an endless-runner is to advance as far as possible on a single existing track. The character evolves as you can gain points and complete quests for rewards. This is a typical example for a freemium model. Points can be gathered (bought) and spent on advancing farther in the game.
Adventure games: these are paid models, as you play them out once, solve the tasks, and that’s it.
Adverts are less common on iOS platform, the free version with adverts is more wide-spread on Android (most often, you can pay for advert-free play within the game).
At present the two largest markets are the American and Chinese ones. On the Chinese market the players are not willing to pay for the games, but spend a lot of money while playing games. Besides, they like if the game is localized for them– several companies deal with this. On the Hungarian market the players are not willing to pay for the applications either, nor do they spend a lot of money inside the game.
The market is large, but competition is even bigger. Many people develop games, from single-person (indie) developers to enormous firms. It is difficult to stand out among the huge number of (good) games. The mobile game market has stirred up the whole game market, as anybody can “easily” publish a game and reach the whole world with it. With in-game purchases a whole new business model has appeared. It has turned out that the players are willing to pay for games – this model has had an effect on the entire game market. Excellent, unique games are created, which is good for players and a great challenge for developers. A good business model is not enough to make our game successful, hard work, creativity, marketing activity and/or money is needed to promote our game.