Game Demographics & Metrics

Stick with the PC, Indie! Xbox Live Arcade has seemingly joined the iPhone as yet another platform where indie developers cannot make money. Indies can thrive on Facebook, do pretty well with Flash, Unity, or old fashioned self-publishing.. but proprietary platforms just don't seem to be in the cards.

GamerBytes has an excellent analysis of Indie sales on Xbox Live Arcade (XBLA) and the top indie game earned $129,500.

Not very impressive. At least the top indie iPhone game developer has earned a fair chunk of change.

R. Langley (2010), "XBLA: In-Depth: Xbox Live Indie Games Sales For 2009, Plus Some Perspective", http://www.gamerbytes.com/2010/01/indepth_xbox_live_indie_games.php

Blue Lion Mobile is a mobile social gaming company which does skill games... and they've come out with a bunch of metrics for their mobile application qeep:

3.2 million registered users
280 monthly mobile page views (almost 3 page views per user per day)
1 million monthly game sessions
14 minutes per game session
10 percent of games paid for money - 100,000 for money game sessions per month
$0.70 average wager
Blue Lion gets 25 percent of wagers
$17,500 per month

Some additional information:

Maintaining connections is difficult
as is sufficient numbers of players to ensure a player can always find a game.
Legal issues for skill games:

Skill gaming is legal in the UK, Germany, France, Sweden, the US and other countries, but games need to build on a "significant" element of skill, be played for small amounts of money only, and be restricted to over-18s

Payouts are also a problem.

S. Dredge (2010, "MGF 2010: qeep talks mobile skill gaming", http://www.mobile-ent.biz/news/35699/MGF-2010-qeep-talks-mobile-skill-gaming

Magic Online, the online game based on Magic: The Gathering, may have earned $100 Million since its launch, according to Randy Bueller. If you were alive and a gamer in the 1990s, you ran into (or away from), the phenomenon that is Magic: The Gathering. Magic was the first collectible trading card game and spawned innumerable imitators and really popularized gaming beyond hardcore D&D players and Avalon Hill grognards in the US, at least.

Randy Bueller, formerly of Wizards of the Coast, mentioned in an aside at his blog that the game has earned around $100 Million since its launch in 2002. The game apparently generates 30 to 50 percent of the total "Magic" business, according to Wikipedia (which also cites 300,000 accounts and an average of 2000 to 4000 concurrent users in Feb. of 2007).

Why do I mention Magic Online? Well, because no one seems to talk about it in the endless articles about World of Warcraft, Eve Online, Zynga, Popcap, and everyone else in the online game business.

Magic bridges hardcore and casual gamers, is one of the pioneers in the "Free-to-Play" business, probably THE pioneer tying an online product to a physical one, and is pretty darn huge.

R. Bueller (2010), "Thinking Gamer Video Game Decade in Review", http://thethinkinggamer.com/2010/01/04/thinking-gamer-video-game-decade-in-review.aspx

A survey of console gamers by Frank N. Magid Associates found that 27 percent of those who were aware of downloadable content (DLC) had purchased it.

No data was provided on PC game customers.

Which is odd.

Of the total population of around 800 console gamers surveyed:

15 percent had purchased downloadable content
41 percent were aware and had not purchased DLC
43 percent were unaware of downloadable content (unspecified was information about this group though it was asserted that many of these individuals had consoles that did not actively promote DLC such as the PS2 and the Wii ... I guess WiiWare is not promoted enough).

I'm sure you can get useful details if you go buy a report from these guys.

J. Reilly (2010), "Survey: Only 15 Percent Of Gamers Purchase DLC", http://au.xbox360.ign.com/articles/105/1059699p1.html

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Kotaku.

25 percent of US Internet Page Views are on Facebook. Amazing. Its kind of like a return to the old days of AOL and Compuserve.

"With great traffic, comes great responsibility"... maybe

Spammers and scammers are the early adapters in terms of exploiting the opportunities offered by Facebook. Dennis Yu wrote an article at TechCrunch on the glories of Facebook marketing which is well-worth reading.

Rachel Maddow, of MSNBC, did a nice expose about how lobbying groups are using Facebook and other offers on the Internet to "buy" real lobbying messages from citizens in exchange for virtual goods.



Facebook is probably the most significant opportunity for game developers today. However, the industry is getting tarred based on some of the tactics to monetize its games... which could result in regulation or oversight for the game industry, not just the advertising and marketing industries.

Yet another reason for an Online Game Industry Association - to create an promulgate Best Practices before someone else does.

H. Blodget (2009), "Facebook Now Accounts For 1 In 4 Internet Pageviews", http://www.businessinsider.com/henry-blodget-facebook-accounts-for-1-in-4-internet-pageviews-2009-10

D. Yu (2009), "How To Spam Facebook Like A Pro: An Insider’s Confession", http://www.techcrunch.com/2009/11/01/how-to-spam-facebook-like-a-pro-an-insiders-confession/

"Rachel Maddow - Political Scams on Facebook", http://www.videosift.com/video/Rachel-Maddow-Political-Scams-on-Facebook

Mochi Media did a survey of Flash game developers and found that 16 percent earn $1000 or more per month with 1 percent earning more that $25,000 per month. 5 percent make more than $5000 per month and 2 percent make more than $10,000 per month.

It looks like the survey focuses on ad-based revenue models, Microtransactions are mentioned, but Mochi Media's focus is more on ads.

VERY INTERESTING!!!!



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D. Takahashi (2009), "Thousands of Flash game developers make more than $1,000 a month", http://venturebeat.com/2009/12/08/thousands-of-flash-game-makers-make-more-than-1000-a-month/

One does have to be a bit suspicious of numbers for an industry that is a bit, um, illegal, but the Wall Street Journal quotes H2 Gambling Capital as stating that the US online gambling industry revenues (that is revenues from US players) were $5.9 Billion in 2008 with $21 Billion from players worldwide.

One wonders what it would be if it was legal.

People are publishing numbers like this to support the legalization and regulation of online gambling and skill games. The Joint Committee on Taxation estimates that the government could earn $42 billion over the next decade, if online gambling was legalized.

Betfair, which operates the legalized online horse wagering service TVG.com in the US and online wagering elsewhere, earned $50 million in the US and $500 million worldwide in the past 12 months (through late 2009).

No numbers for this year from the existing skill game operators in the US (that I've seen).

T. McMahan (2009), "Start-Ups Hedging Their Bets On Online-Gambling Legislation", http://blogs.wsj.com/venturecapital/2009/11/27/start-ups-hedging-their-bets-on-online-gambling-legislation/

Korea's tax authorities are looking into online gaming... not really interesting. However, Nexon, operator of Maple Story and one of the largest Free-to-Play (F2P) companies, doesn't tend to disclose its revenues.

... which were 437.4 Billion Won (US$ 337.4 Million) in 2008, if I read things properly.

Chosun Ilbo (2009), "Tax Service Probes Online Game Makers", http://english.chosun.com/site/data/html_dir/2009/11/25/2009112500640.html

A recent widely cited report by GamesIndustry.com found that 15 percent of game time was devoted to MMOs. The report also stated that between 35 to 40 percent of gamers pay for MMOs...

which leaves quite a few players playing for free.

... between 60 and 65 percent playing for free to be precise (at least as precise as these surveys get).

It would be very interesting to see how this number has shifted and grown over the past several years as well as how many players are paying while not subscribing (free to play and such).

The report claimed this number for European players with somewhat (unspecified) higher paid rates in the US and is based on a survey of over 13,000 players in the US and Europe.

J. Brightman (2009), "MMOs Account for 15% of All Time Spent Playing Games in U.S. and Europe, finds Report", http://www.industrygamers.com/news/mmos-account-for-15-of-all-time-spent-playing-games-in-us-and-europe-finds-report/

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C. Campbell (2009), "MMOs fill 15% of game time", http://www.mcvuk.com/news/36569/MMOs-fill-15-of-game-time

MMO Focus Report & Data (US,UK,DE,FR,NL,BE)MMO Focus Report & Data (US,UK,DE,FR,NL,BE), http://www.gamesindustry.com/company/542/service/1870

Only 10 percent of game developers think piracy is a serious threat to their business and 60 percent think it is a small threat.

.. make no bones about it, developers do think piracy is real with 60 percent seeing it as an "issue" and 90 percent seeing the problem growing.

The discrepancy comes down to lost sales.

In a world of perfect anti-piracy, how many more sales would a given game gain?

Since so much of the success of any game is due to the game itself (a good thing) and the market (a tricky thing), how much does piracy cost?

I do seem to circle around this issue regularly:

Price and Piracy: PixelJunk and World of Goo

Does Game Piracy Matter?

For conventional "boxed"-type games (games that are sold, not operated as a service), I think the actions of the industry show that the problem is not a big threat to revenue. The obvious lack of attention to piracy in the game development process and underinvestment in anti-piracy techniques demonstrates the "state of the industry" much more clearly than rhetorical posturing by executives and trade groups.

Console piracy is even less of an issue as it seems to merit bi-monthly press releases and aperiodic busts (funded by tax payers, not the companies, it should be noted).

There are just not that many extra sales that can be gained by battling piracy.

Downloadable content (DLC) is another matter. Everyone seems to see DLC as the next game industry gold mine. We don't get a lot of data on DLC and, more interestingly, on piracy of DLC. Given the choice between spending some money on anti-piracy vs. a DLC package, the DLC package wins (and that probably is correct).

If one really steps back, the game industry has to reconsider price. Games are no longer a niche product for early adapters, they are a mass market phenomenon and are competing with other forms of entertainment and other games. While Activision trumpeted Modern Warfare 2 sales in 2 days rivaled those of Titanic, the James Cameron movie sold 128 million tickets compared with a mere 16 million units projected for Modern Warfare 2 on all platforms).

How many copies of Modern Warfare 2 would be sold if the game was $10 (like a movie) instead of $60?

If $5 is the "sweet spot" for indie games (see World of Goo recent sales), is $10 the "perfect price" for a AAA game? or should they be priced the same as a hardback novel - $20 to $30?

Considering there are 1 billion PCs worldwide and 384 million in the US, sales in the modest millions for even the most popular "sold" games is pretty unimpressive.

P. Elliiot (2009), "Developers: piracy a problem, but not threat to survival", http://www.gamesindustry.biz/articles/developers-piracy-a-problem-but-not-threat-to-survival