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What Does It Take To Be Profitable Selling Mobile Games?

Tom's Hardware Interviews Four Android And iOS Game Developers
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Tom's Hardware: Big-name console and PC game developers enjoy hefty budgets, large teams, and long development cycles to create the next market hit. As a result, big sales numbers are needed for a title to be considered successful. Recently, EA CEO John Riccitiello said Star Wars: The Old Republic needs 500 000 paying subscribers to break even and 1 million subscribers to be profitable.

What are the economics of mobile game development? What is the revenue share of distribution networks like the Apple App store or Google Play? Tell us about the size of your distribution teams, your development cycles, and your break-even and profitability targets for a successful game in the mobile market.

Fishlabs: As the processing and rendering power of tablets and smartphones increases, so do the dev budgets for mobile games. The biggest premium IPs already have budgets within the seven-digit range. Both Apple and Google use a 70/30 rev-share model and take a cut of 30% of both app sales and in-app-purchases. Fishlabs currently employs 60 full-time-employees, and the current development cycle for high-quality games is one to two years.

One thing that distinguishes us from the PC and console space is the fact that we have to anticipate the capabilities of the next generation of smartphones and tablets in order to be able to deliver a perfect build of our game by the time a new device hits the market. If you take into consideration that the mobile market is constantly in motion, introducing new innovations every six months, you might understand that it is not always an easy to be in front of the next trend and one step ahead of the competition.

The aim we always want to achieve with our games is the creation of a highly immersive gaming experience that can be enjoyed on-the-go. Of course, another goal is for the title to be commercially successful, preferably to an extent that enables the company to grow organically and make even bigger games. Depending on the dev budget and business model (pay-per-download on the one hand or free-to-play with in-app purchasing on the other) you usually need to sell several hundred thousand copies to break even.

Madfinger: Our company started with four employees a year and a half ago, and today we employ 16 people. Usually, we try to develop a game using fewer than ten people over a period no longer than eight months, and that helps to minimize our budget. A game developed for mobile platforms with the same budget as a console game cannot be successful, and cannot be profitable. Based on our experience, a mobile game is successful only if it pays for the development of a new game.

We are lucky because we have talented people in our team. Development of new game does not cost as much as it does on the console or PC side, and our games become profitable much faster. A $6 title becomes profitable after around 100 000 copies sold.

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Mediocre: The mobile market is very opportunistic. With the vast majority of all sales representing only a few hundred titles, it is hard to break even if you are not one of those titles. We are a staff of only two people, so we can keep the costs down, but we still need to sell hundreds of thousands of copies of a game to cover the development cost. We focus on high-quality games and spent nine months developing Sprinkle, which is quite a lot for a casual game. I think many developers want to spread their risk by making a large number of simpler games and hope for one of them to take off. We strongly believe that is a bad idea for both developers and consumers.

Vector Unit: Most of the app markets take a 30% cut, with 70% going to the developers. Our strategy generally is to keep our costs down without hurting the overall polish of the gaming experience. We have a three-person team, and our budgets are typically in the range of $100 000 or less. Therefore, we have to sell about 65 000 units of a $2 game to break even—but even that is not easy. By the way, there was a great survey put out by Owen Goss last year that went into some detail about these numbers.

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