What to do to make your game pay off: 13 tips and a market overview

Game development is an industry where business and art go toe-to-toe. We will tell you about 13 tricks to create a profitable game, calculate how much the highest-grossing games have earned and draw conclusions about making money in the game industry.

The challenge of paying off games in 2020

The gaming industry is constantly raising the standards of quality in graphics, gameplay and storytelling. The old classic games were made by teams of 1-20 people with budgets ranging from $100,000 to $10 million. There are now hundreds of people working on large games, and marketing costs sometimes exceed development costs.

The cost of game development is rising because developers have to put more man hours into the product. For example, GTA San Andreas was made by 100 people, the cost of development together with marketing amounted to $100 million. GTA V was made for 5 years by 1000 people. It cost $265 million to develop and $200 million to advertise. GTA San Andreas made about $1 billion in profits from sales, while GTA V made $1.6 billion.

The problem with single-player games is that the player will only buy it once. For franchises like Call of Duty, The Elder Scrolls, or GTA, net sales are enough to break even on development and turn a profit. But if enough players don’t buy the game, it will fail.

Evolution of the game monetization system

Before 2012, all major projects on PC and consoles only made money from sales of the game itself and DLC. After release, the developers would release patches and switch to new projects. But after 2012, most developers started using additional monetization even in single-player games.

In the second half of the 1990s, browser-based online RPGs introduced in-game stores with cosmetic items and power-ups to speed up character progression. In 2002 space simulator EVE Online invented a paid subscription system, in 2003 the same system was introduced by World of Warcraft. The in-game store and subscription brought in more money per player in the long run than if they just bought the game for $60.

Then in 2006, Chinese MMORPG Zhengtu Online introduced a monetization system using loot boxes (Loot box). In addition to purchasing an item from the in-game store, players could buy a “chest” and a key. When the chest was opened, the player received one random item.

In 2008, another Chinese studio, Zynga, introduced lootboxes into its mobile games and browser-based RPGs. Lootboxes brought them between $50 million in profits a year.

In the 2010s, lootboxes started to be used by big developers. For example, Valve bolted chests and keys to Team Fortress 2 in 2011, then to DotA 2 and CS:GO. In 2015, Valve admitted that chests in DotA 2 brought in $238 million for the year.

Valve decided to use chests for additional advertising of their games: at the end of a TF2, DotA 2 or CS:GO match every player had a chance to get a free chest or item. Some players only played Valve games because of the hope of getting an expensive item and selling it on the market for real money.

After Valve’s successful experiment, lootboxes appeared in all online projects regardless of their genre. Some publishers like EA went overboard and sold items in lootboxes that directly affected the balance of multiplayer: FIFA, NBA, Battlefront 2. Chests and in-game purchases have also appeared in single-player games like Middle-Earth: Shadow of War and Assassin’s Creed: Origins.

Now developers are forced to use lootboxes, subscriptions, and other monetization mechanics to recoup development costs. The gaming market is facing a crisis of overproduction: too many games, too few buyers. Therefore, developers see nothing wrong with selling additional content for real money.

How do you make the game pay off?

Here’s what you should do to boost your gaming profits:

1. Evaluate the competition in the genre. For example, MOBA games Heroes of the Storm by Blizzard and Paragon by Epic Games couldn’t compete with DotA 2 and League of Legends and failed. The same thing happened with Battleborn and Lawbreakers, which tried to squeeze Overwatch.
2. Choose a monetization system based on the genre of the game and the platforms you will release it on. For mobile online games, a conditionally free scheme with advertising and microtransactions is suitable, for single-player games on console – direct sale and DLC. For example, the developer of Minecraft made money on direct sales alone and sold 200 million copies of the game.
3. Come up with an interesting world and hire a good concept artist. Players primarily evaluate the setting, world design, and characters. For example, the Souls-lite game with samurai and demons Nioh was bought by 3 million players, while the Souls-lite game with robots and exoskeletons The Surge was bought by only 1 million players. That’s not to say that players don’t like robots. It’s just that for games of a certain genre, some setting suits it best.

4. Come up with unique mechanics. This is especially important for successful sales in a highly competitive niche. Examples: Shovel Knight is about a knight with a shovel, Angry Birds is about throwing birds, Paperama is about folding origami. You can build a full-fledged mobile game on one good idea, and if you fit the idea into the gameplay properly, you can create a new genre. That’s how Minecraft, PUBG, Overwatch, and other super profitable games came to be.
5. There should be a lot of content at the start of the game. If you want to make money from in-game purchases, then give players variety. For example, Overwatch had 21 heroes at launch and several colorful costumes for each, the game quickly pushed back Team Fortress 2 with 9 heroes. Other MOBA shooters came out with little content, causing players to quickly get bored and quit.

6. Give a potential player a goal so they want to achieve it and buy the game. In good games, it’s immediately clear what the player has to do:

• in Angry Birds need to return stolen bird eggs;
• at The Bard’s Tale to meet the princess;
• in The Wolf Among Us to solve murders.

In multiplayer projects, the goal is even easier to set – create a rating table and divide players into groups by rating. Players will instinctively want to get out to a higher ranking and will be willing to pay for it.

7. Make mobile games – they generate more revenue. Mobile games earned $77.2 billion in 2020, while PC and console games earned $82.1 billion. Mobile users are used to advertising and in-game purchases and are less demanding of game quality.

How not to kill game sales

Here’s what not to do if you don’t want to be in the top 10 failed games:

1. Don’t forget about advertising. People don’t find out about a good game just because it’s good – they need to be shown it. You can order reviews in profile publications, give the game to bloggers or promote it in the store. Remember Me, Spec Ops: the Line and Enslaved: Odyssey to the West failed due to lack of advertising.
2. Choose the right monetization system so as not to upset the balance of the game and cause player dissatisfaction. For example, sales of Battlefront 2 and Need for Speed: Payback were much worse than expected due to lootboxes affecting game balance. Players didn’t like the fact that they had to buy the game and then still pay for the ability to win.

3. If you’re developing a single-player game, don’t spare the money for a screenwriter. For example, the indie game Valiant Hearts was bought by 2.5 million players thanks to a good story. At the same time, the hyped Agony, Fallout 76 and Metal Gear: Survive failed due to lack of a coherent plot. Players didn’t understand why they were playing it and demanded a refund.
4. Don’t spend money on casters when you can spend it on programmers and 3D modelers. Hellgate: London is being developed by the team that previously made the iconic Diablo 2. The developers saved on game designers, modelers and scriptwriters, but made great cinematics. The following year after the game’s release, the development studio declared bankruptcy.

5. Don’t release a boring or cheesy game. Even AAA games from famous developers won’t buy if the game crashes, has boring gameplay and no promised content. Examples include Anthem, Death Stranding, Left Alive, Ghost Recon: Breakpoint. Conversely, players can forgive technical problems and plot holes if they’re having fun playing. Examples: successful Battlefield 4, PUBG and TES: Skyrim with a mountain of bugs at launch.
6. If you make a game on PC or consoles, don’t release it close to the release of major projects. Respawn Studios released Titanfall 2 a week after the release of Battlefield 1 and a week before Call of Duty: Infinity Warfare. While the game was good, players had already either spent their money on BF1 or put it aside for the new CoD and didn’t buy Titanfall 2. Respawn then corrected itself and released the successful Apex Legends in February 2019, when the only other high-profile releases were strategy game Civilization VI and slasher God Eater 3.

The most profitable games in the world

Here’s who made the most money from mobile gamers:

• Honor of Kings is an exclusive MOBA for the Chinese market. We can find it here under the name Arena of Valor. Since 2015, it has earned $6.7 billion from the in-game store;
• Clash of Clans is the ancestor of hyper casual strategy games on smartphones. It has earned $6.4 billion since launching in 2012;
• Candy Crush Saga is a casual game of the 3-in-a-row genre. The creators made $5.4 billion from in-game purchases.

Clash of Clans, $6.4 billion in revenue

Examples of console and PC games with excellent profit margins:

• League of Legends, the most popular MOBA game, has earned $10 billion solely from cosmetics sales;
• World of Warcraft is an MMORPG that charges players $10 for a monthly subscription. The result is $9.7 billion in profits over 16 years of existence;
• GTA V and GTA Online – $6 billion in profits and 130 million copies sold. Rockstar has turned GTA V into an MMORPG hybrid and is selling in-game currency for real money.

To promote skins in League of Legends music videos are filmed

Conclusions

As of 2020, portal Newzoo counted 2.5 billion gamers, including mobile device owners. GTA V, which cost $465 million to develop and advertise, now has 100,000 players. And on the development of mobile Clash of Clans spent only $400,000, while it is played by 850 thousand players.

Hyper casual mobile games are the most profitable. They are designed for the person who is willing to pay for the opportunity to skip a difficult level or loot a neighbor’s village in the game. There are so many clones of successful games in the AppStore and Google Play. You can make money there if you copy the mechanics of a popular game and wrap them in an interesting setting.

Developing computer and console games is already more of an art than a business. A quality game with a proper marketing campaign and positioning is sure to make a profit. And if you come up with a new genre of competitive online games – success is assured.

Conclusion: if you’re confused about which direction to take, get in on the trends and make games for phones.

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