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vinnyvicious

Financial Current market state for web games

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I used to earn a lot of money with Flash games 5 years ago. Either by selling whitelabel games to portals or just publishing them on MochiMedia, i was earning about $500/month. Since MochiMedia died and the popular FGL website all died, and everyone went to mobile, i stopped working with that. I was thinking about returning, but i'm curious about the current market state.

  • Is anyone earning money selling games to portals? Are portals buying that? If so, where's the current hub for people to do business on?
  • Is anyone earning money by putting ads into their games and publishing to portals?
  • Is anyone dedicated to desktop web games?

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If you did decide to go back into this I would look at picking up an html5 framework as flash is almost dead.

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Hi,

It is a very interesting topic indeed and one that I've had the chance of discussing at length recently. 

I don't think there's much of a 'public market' for web-minigames. Sure, there's Kongregate, which is still awarding games of the week / month and allows for rev-share on ads, but I don't think you'll profit a lot from that.

What you could end up finding however is a larger business that intends on maintaining a strong web presence but generally won't work with vendors because of their fee. By undercutting on price (which virtually has little to no effect for a man going solo with or without freelancers for art) you can become a valid solution for a business like Warner and the likes. If you've made a lot of flash games before, show them, might work out.

 

As for HTML5, I'm really not sure about that. There are a lot of frameworks, and it feels like making anything requires to learn something new. Would suggest using Unity's webGL exporter which has come a long way, and is progressively getting more traction with browsers.

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I'm not really worried about learning curves, or learning a new system. That's not really relevant and usually is fun. What really matters here is that if there's is good money to be grabbed.

Does anyone know any public revenue reports from developers on Kongregate or other portals? Are we talking about few cents a day or more Flash-like numbers like 1 or 2 dollars a day, from ads?

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Well, there's True Valhalla and another guy who posts regularly on /r/gamedev (I'm afraid I can't remember the name and therefore can't currently search for a link) (devMidgard) who both make decent money making HTML5 games and publish monthly income reports. Both of them seem to make the majority of their income either licensing games or doing work-for-hire.

Edited by jbadams
Fixed broken link, added additional link.

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I'm not really worried about learning curves, or learning a new system. That's not really relevant and usually is fun. What really matters here is that if there's is good money to be grabbed.

Does anyone know any public revenue reports from developers on Kongregate or other portals? Are we talking about few cents a day or more Flash-like numbers like 1 or 2 dollars a day, from ads?

I have figures, though I don't believe the devs would like me to share them.

I have it on good authority you could make a few Ks on ads alone if you have something good enough.

The big difference between then and now is using incentivized ads instead of just relying on the usual ads.

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Marketing is incredibly important.

Consider that in games with an already established brand, about the same is spent in marketing as is spent in development. In brands that are not established the spending is often even higher, 1.5x or 2x the cost of development.

So if you're considering your own pay for development, if your professional wages would have been $10K or $20K or $50K, then the marketing spend might be $15K or $30K or $120K until the brand is established.

Also, one game is not a business plan. The first several games help you build your skills and talents. It often isn't until the developer has put out multiple products that success comes. Then people will play one game, find it fun, and look at the others and purchase them too. The more you put out and the more advertising and awareness that exists, the more they'll come pick up other products and build a community of repeat players.

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Marketing is incredibly important.

Consider that in games with an already established brand, about the same is spent in marketing as is spent in development. In brands that are not established the spending is often even higher, 1.5x or 2x the cost of development.

So if you're considering your own pay for development, if your professional wages would have been $10K or $20K or $50K, then the marketing spend might be $15K or $30K or $120K until the brand is established.

Also, one game is not a business plan. The first several games help you build your skills and talents. It often isn't until the developer has put out multiple products that success comes. Then people will play one game, find it fun, and look at the others and purchase them too. The more you put out and the more advertising and awareness that exists, the more they'll come pick up other products and build a community of repeat players.

Are you sure about this marketing ratio for solo html5 devs?

I'm the small sample I'm well acquainted with, I was happily surprised to see a grassroots approach had a lot of ROI and therefore allowed to focus on development of multiple smaller titles (as opposed to 50k games for example).

My advice would be to focus on 1-2 games per month and hit all the portals you possibly can. Ads revenues won't be impressive at first, but they will stack.

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      - You must have done your research. This includes knowing your personal financial goals and how the prospective offer changes, influences or diminishes those goals.
      To the first point, the more experience one has, the better. If the candidate is a junior employee (roughly defined as less than 3 years of industry experience) or looking for their first job in the industry, it is highly unlikely that a company will entertain a conversation about sign-on bonuses. Getting into the industry is highly competitive and there is likely very little motivation for a company to pay a sign-on bonus for one candidate when there a dozens (or hundreds in some cases) of other candidates that will jump at the first offer.
      Additionally, the candidate must have confidence in succeeding at the desired role in the company. They have to know that they can handle the day to day responsibilities as well as any extra demands that may come up during production. The company needs to be convinced of their ability to be a team player and, as a result, is willing to put a little extra money down to hire them. In other words, the candidate needs to reduce the company’s risk in hiring them enough that an extra payment or two is negligible.
      And finally, they must know where they sit financially and where they want to be in the short-, mid-, and long-term. Having this information at hand is essential to the negotiation process.
      The Role Risk Plays in Employment
      The interviewing process is a tricky one for all parties involved and it revolves around the idea of risk. Is this candidate low-risk or high-risk? The risk level depends on a number of factors: portfolio quality, experience, soft skills, etc. Were you late for the interview? Your risk to the company just went up. Did you bring additional portfolio materials that were not online? Your risk just went down and you became more hireable.
      If a candidate has an offer in hand, then the company sees enough potential to get a return on their investment with as little risk as possible. At this point, the company is confident in their ability as an employee (ie. low risk) and they are willing to give them money in return for that ability.
      Asking for the Sign-On Bonus
      So what now? The candidate has gone through the interview process, the company has offered them a position and base compensation. Unfortunately, the offer falls below expectations. Here is where the knowledge and research of the position and personal financial goals comes in. The candidate has to know what their thresholds and limits are. If they ask for $60k/year and the company is offering $50k, how do you ask for the bonus? Once again, it comes down to risk.
      Here is the point to remember: risk is not one-sided. The candidate takes on risk by changing companies as well. The candidate has to leverage the sign-on bonus as a way to reduce risk for both parties.
      Here is the important part:
      A sign-on bonus reduces the company’s risk because they are not commiting to an increased salary and bonus payouts can be staggered and have terms attached to them. The sign-on bonus reduces the candidate’s risk because it bridges the gap between the offered compensation and their personal financial requirements.
      If the sign-on bonus is reasonable and the company has the finances (explained further down below), it is a win-win for both parties and hopefully the beginning a profitable business relationship.
      A Bit about Finances
      First off, I am not a business accountant nor have I managed finances for a business. I am sure that it is much more complicated than my example below and there are a lot of considerations to take into account. In my experience, however, I do know that base compensation (ie. salary) will generally fall into a different line item category on the financial books than a bonus payout. When companies determine how many open spots they have, it is usually done by department with inter-departmental salary caps.
      For a simplified example, an environment department’s total salary cap is $500k/year. They have 9 artists being paid $50k/year, leaving $50k/year remaining for the 10th member of the team. Remember the example I gave earlier asking for $60k/year? The company cannot offer that salary because it breaks the departmental cap. However, since bonuses typically do not affect departmental caps, the company can pull from a different pool of money without increasing their risk by committing to a higher salary.
      Sweetening the Deal
      Coming right out of the gate and asking for an upfront payment might be too aggressive of a play (ie. high risk for the company). One way around this is to attach terms to the bonus. What does this mean? Take the situation above. A candidate has an offer for $50k/year but would like a bit more. If through the course of discussing compensation they get the sense that $10k is too high, they can offer to break up the payments based on terms. For example, a counterpoint to the initial base compensation offer could look like this:
      $50k/year salary $5k bonus payout #1 after 30 days of successful employment $5k bonus payout #2 after 365 days (or any length of time) of successful employment In this example, the candidate is guaranteed $55k/year salary for 2 years. If they factor in a standard 3% cost of living raise, the first 3 years of employment looks like this:
      Year 0-1 = $55,000 ($50,000 + $5,000 payout #1) Year 1-2 = $56,500 (($50,000 x 1.03%) + $5,000 payout #2) Year 2-3 = $53,045 ($51,500 x 1.03%) Now it might not be the $60k/year they had in mind but it is a great compromise to keep both parties comfortable.
      If the Company Says Yes
      Great news! The company said yes! What now? Personally, I always request at least a full 24 hours to crunch the final numbers. In the past, I’ve requested up to a week for full consideration. Even if you know you will say yes, doing due diligence with your finances one last time is always a good practice. Plug the numbers into a spreadsheet, look at your bills and expenses again, and review the whole offer (base compensation, bonus, time off/sick leave, medical/dental/vision, etc.). Discuss the offer with your significant other as well. You will see the offer in a different light when you wake up, so make sure you are not rushing into a situation you will regret.
      If the Company Say No
      If the company says no, then you have a difficult decision to make. Request time to review the offer and crunch the numbers. If it is a lateral move (same position, different company) then you have to ask if the switch is worth it. Only due diligence will offer that insight and you have to give yourself enough time to let those insights arrive. You might find yourself accepting the new position due to other non-financial reasons (which could be a whole separate article!).
      Conclusion/Final Thoughts 
      When it comes to negotiating during the interview process, it is very easy to take what you can get and run. You might fear that in asking for more, you will be disqualifying yourself from the position. Keep in mind that the offer has already been extended to you and a company will not rescind their offer simply because you came back with a counterpoint. Negotiations are expected at this stage and by putting forth a creative compromise, your first impression is that of someone who conducts themselves in a professional manner.
      Also keep in mind that negotiations do not always go well. There are countless factors that influence whether or not someone gets a sign-on bonus. Sometimes it all comes down to being there at the right time at the right place. Just make sure you do your due diligence and be ready when the opportunity presents itself.
      Hope this helps!
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