
People often ask me how I make money developing flash games since they are free for people to play. Hopefully this short article will offer some insight into how to monetize flash games and provide some data that might be of use (or at least interest) to other developers or people wanting to make money from flash games.
The short answer is that almost all of the money in the flash games industry comes from advertising. I make some money from having adverts in games and I have a site (BadViking.com) where I also show adverts. Sites with bigger user bases are able to make significant amounts of money by showing adverts. In order to obtain those user bases these sites pay to sponsor games (among other things).
What that means is that they pay for the right to have their logos and links put into a game. Because of the viral nature of a flash game it will quickly spread to many sites (provided it is good enough) and will be played several million times generating a significant amount of traffic (and therefore advertising revenue) for the sponsor of a flash game.
Of course it doesn’t always work out that way. Some games will flop and the sponsor could make a loss so they have to choose carefully which games to sponsor. Make a good enough game though and you could certainly net a very nice sponsorship deal which is what can make being a flash game developer profitable. At the short end of the spectrum there are games that go for a few hundred dollars but at the other end there are games that can sell for tens of thousands. Primary sponsorship deals make up almost 70% of my revenue.
It doesn’t stop there though. Most sponsors allow you to sell secondary licenses of your game. In these versions of the game you switch out the branding for that of another sponsor with the condition that the new version is locked to one site and is not allowed to spread virally. Obviously these sell for less than the main sponsorship but are still a valuable source of income and currently account for 10% of my revenue.
The rest is made up by advertising, whether that be in the game or on my website. The one source that we don’t get any revenue from oddly enough is our user base. We rely on the users to generate advertising income but they don’t actually give us anything in return for the right to play our games. In some ways that does seem like an untapped source of income but on the other hand it would be a huge shame to have to make users pay for the wealth of free games that can be found on the internet.
It seems though that we are on the verge of change as micro-transaction systems are starting to crop up in many of the top quality games on offer. Happily this does not mean that we are about to see the end of free entertainment on the internet. Almost the opposite in fact. Every day free to play games with higher production values than ever before are being developed.
I myself have implemented micro-transactions in one of my newest games, Toxers. Players can spend a bit of money to buy extras for the game such as fun weapons or in-game currency. I had been hopeful that this could be a great additional source of income without compromising the free to play philosophy but it seems that the majority of players do not share this viewpoint.
Some people do pay for some of the extra content in Toxers which is great but the income from that has been somewhat disappointing. It is hard to tell whether Toxers simply wasn’t the right game for micro-transactions. Certainly there have been some big successes with micro-transactions but we will have to think hard about whether they are worth the extra effort spent developing the additional content in future games, not to mention the negative response from players who don’t appreciate the idea of spending money in flash games.