Fame From a Game: 5 Game Developers Dealing With Overnight Success

The mobile app market has completely overhauled the video game market. In an industry that once required thousands of dollars and a legion of programmers to produce a product, individuals and small groups of entrepreneurs can now produce games grossing millions of dollars from their bedrooms. However, the success of a #1 selling game does not come easy and sometimes causes more problems for the now wealthy developer. Here are five examples of successful game developers who had to learn how to handle success almost overnight.

Which game development tools help you become successful? Let us know of your favourites in the Developer Economics Survey.

Halfbrick Studios (Fruit Ninja)

Image via Flickr by Rosenfeld Media
Image via Flickr by Rosenfeld Media

Before Fruit Ninja, most people had never heard of Halfbrick Studios. They had worked on a handful of games like Rocket Power: Beach Bandits, Age of Zombies, Monster Dash, and a variety of Avatar — The Last Airbender installments. However, Fruit Ninja had the right combination of addictive and visceral gameplay to make it a virtual overnight success. For others dealing with a windfall of cash, Halfbrick Studio’s story is a good one to follow. Instead of tripping over their own feet after a massive growth spurt, the close-knit group of developers decided to focus on quality over quantity, avoiding the route companies like Zynga took (how many “___-ville” games can you name?). The developers said the success of Fruit Ninja has given them breathing room to perfect games they want to make.

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OMGPop (Draw Something)

Image via Flickr by ljguitar
Image via Flickr by ljguitar

Second in our list of successful game developers comes the OMGPOP team. A mobile gaming take on the classic pen-and-paper game of Pictionary, Draw Something is a study in how persistence can lead to huge success in the app industry. Before their top-selling drawing game took off, developer OMGPop had produced around 30 games that quickly fell into relative obscurity (do you remember Hamster Battle? No? Didn’t think so). A short time after Draw Something started topping charts relatively overnight, Zynga bought OMGPop for roughly $200 million, and the CEO of OMGPOP, Dan Porter, later went on to work for them as the vice president of their mobile division for a little over a year. Porter now continues to climb the corporate ladder and currently serves at the Head of Digital at William Morris Endeavor, the world’s largest diversified talent agency.

.GEARS Studio (Flappy Bird)

Image via Flickr by naka_hide
Image via Flickr by naka_hide

Not all overnight success stories end well as the tale of .GEARS Studio’s Flappy Bird shows us. Dong Nguyen’s creation was pulling in $50,000 a day—a veritable golden goose—making it one of the most popular games for smartphone users. However, a litany of complaints ranging from the game’s addictiveness, difficulty and resemblance to Super Mario 3 was too much for Nguyen to handle. Something about the fame mixed with user criticisms struck a nerve with the overnight app celebrity, who ultimately took down the game from app stores in mid-February 2014 without selling out to another company. It also begs the question—Was success too much for Nguyen, or was it all a stunt to generate interest for his next title?

King Digital Entertainment (Candy Crush Saga)

Image via Flickr by David Guo's Master
Image via Flickr by David Guo’s Master

Candy Crush Saga, produced by King Digital Entertainment, is one of the mobile gaming world’s most addictive releases yet. To capitalize on their virtual overnight success, King decided to try their luck on Wall Street by announcing their intent to file for an IPO, following Twitter’s example.

Rovio Entertainment (Angry Birds)

Image via Flickr by Garrett Heath
Image via Flickr by Garrett Heath

The Angry Birds franchise is the most successful smartphone game the world has ever seen. The series’ multiple installments have garnered over two billion downloads worldwide, but things weren’t always up for Rovio. It took them 51 tries on other apps before Angry Birds came around. Rovio’s strategy to deal with the success was simple—diversify. Expanding beyond the mobile platform, Rovio now produces Angry Birds clothing, books, cartoons, educational materials, movie franchise tie-ins, and more. They’ve even been eyeing the Hello Kitty franchise, looking for some indication in how they can expand their own enterprise.

Overnight success in the gaming industry is happening more and more everyday thanks to mobile technology. However, millions made in a night is no guarantee for smooth sailing. Developers soon discover they need savvy business acumen to stay afloat.

– Joe
Joe Fortunato is a tech writer based out of Tampa, FL. His extensive work for T-Mobile has afforded him the opportunity to explore many different avenues of the mobile world. App development, NFC technology, and new device specs are some of his favorite areas to cover. To get in contact with Joe, give him a shout on Twitter at @joey_fort.

If you are trying to hit the successful game developers list, then you first need to understand the Science of Mobile Game Marketing.

Which are your best and worst game development tools? Let us know and you might win amazing prizes and gear, in our Developer Economics Survey.


Mobile Gaming’s Dirty Secret

Mobile gaming is a major growth industry. Revenues and profits are soaring and the most successful companies are attracting valuations in the billions of dollars. However the market dynamics are such that very few can succeed and those that do have incentives which are a long way from maximising fun for players. Where are all the revenues coming from? Is the market fundamentally broken? If so, why aren’t the platform owners trying to fix it?

Mobile Gaming's Dirty Secret

Spectacular Growth

[tweetable]In 2013, games accounted for around 40% of all app downloads across the iOS App Store and Google Play[/tweetable] but approximately 75% of the revenues (according to App Annie). Game revenues more than doubled year over year on the App Store and more than quadrupled on Google Play. By the end of 2013, revenue from games on Google Play was still only about 60% of the iOS App Store equivalent. Since Apple had $10 billion in App Store sales in 2013, we can estimate very roughly that [tweetable]there were around $10 billion of games revenues across the two stores[/tweetable]. This is not far from Gartner’s estimate of $13.2 billion for all mobile games in 2013, projected to rise to $22 billion in 2015.

Increasingly Freemium

According to Distimo 90% of all games revenue on the iOS App Store came from free apps with in-app purchases in November. The percentage of revenue attributable to freemium apps in the entire store grew from 77% to 92% across the year. [tweetable]On Google Play 98% of all revenue was generated by freemium apps in November[/tweetable], so the games revenue there clearly favours the freemium model to an even greater extent than on iOS.

Now there are very good arguments that all successful digital content will eventually use some kind of freemium model, here’s a good recent summary. However, there’s a special subset of freemium that’s really generating all the growth and revenue, so called free-to-play games selling virtual goods (e.g. coins, gems, lives). Only a small fraction of users pay at all, only 1.5% according to Swrve, then a fraction of those pay so much more than you could ever get for a paid download or unlocking levels that the average revenue per user (ARPU) is higher than all other models – at least when the game mechanic and purchases are well designed to optimise for this behaviour.

Winners Take All

The games with a combination of high ARPU and broad appeal (so they get high conversion rates on user acquisition spending) can afford to bid the most for new users, squeezing others out of the best user acquisition channels. This creates a feedback cycle with the store charts, bringing in even more users organically. Our Developer Economics survey data confirms this: the typical games developer monetising via freemium and in-app purchase business models makes only about twice as much on average as those using the roughly equally popular paid download and advertising models. This difference is nowhere near enough to account for the highly skewed revenue distribution in the app stores. A large fraction of the total revenues are being made by a handful of top publishers.

Who’s Paying, How Much and Why?

Up to this point it sounds like the industry has hit on a fantastic profit formula to be emulated by all. However, if you look at the numbers and their implications then things start to look a little darker. Of the 1.5% of players who pay anything for their “free” games, 10% of those account for more than 50% of the revenue (see Swrve report above). Indeed just 1% of paying players, that’s 0.015% of all players, account for 13% of revenue; contrast with 11% of revenue from the bottom 50% of payers. Even with the astronomical size of mobile user bases, some basic arithmetic suggests the top 1% are spending more than $10k a year each on these games, even the top 10% are spending hundreds of dollars.

The free-to-play games industry likes to call these high spending players “whales” after the high rollers in the casino industry. However, high rollers only account for a small fraction of revenues in the gambling industry and they have a very real chance of winning big too, even if the odds are tipped in the favour of the casino. A better analogy from the gambling industry would be the slot machine addicts who generate a large fraction of the revenues. In fact, these mobile games are designed to be “addictive” it’s just that for some players the addiction becomes very real and they lose all rational control of their spending. So rather than hunting for the high-spending whales, this part of the industry is really exploiting vulnerable digital narcotic addicts.

If you want to see an example of what that looks like in real life, read the New York Times interview with George Yao, a long time top player in Supercell’s Clash of Clans. He spent $3k of his own money on the game in 3 months before wealthy clan mates started to bail him out. At one point he was taking 5 iPads into the shower with him to help maintain his ranking. In his own words about the experience:
“Looking back, I think I must have been insane,” he told me, with a mix of pride and revulsion. “I was so immersed in it at the time. I knew it was abnormal, but never to the extent that I see it now.”

What Next?

Apple and Google could easily stop this with some sensible limits on monthly IAP spending per app. That could cut off billions in revenue through the stores of which they take a 30% cut. However, the revenue itself is not that significant to either business. More important are the headline revenue and growth figures enabled by this that maintain developer interest in the platforms. As such we’re likely to see external regulatory action before any strong voluntary action on the part of the stores. Apple have already created the Kids section in their store which has extra review criteria to protect children from IAP and targeted advertising but they’re not currently doing anything to stop apps targeting children with purchases that aren’t attempting to list in this new “safe zone”. In most countries, children are not the only consumers protected from questionable business practices. The EU has just announced meetings with the app industry to discuss consumer protection issues – this is likely to repeat elsewhere until the real cost of “free-to-play” games is made more clear to consumers.

If you are interested in Business Models in Mobile Gaming, have a look at the three part series on battle insights by a mobile game CEO.


Flappy Bird vs Angry Birds – a tale of Hobbyists and Hunters

Here are the stories of two successful birds on the app store. See if you can spot the difference.

Angry Birds vs. Flappy Bird_639px

Flappy Bird was a mobile game developed by Dong Nguyen, a Vietnamese indie game developer, in a few evenings after work. He launched the game in May 2013, but only 7 months later (in January) did it unexpectedly gain immense traction. It reached the top of the US charts, and Nguyen was reportedly earning about $50,000 per day from ads. He couldn’t cope with the pressure and abusive comments however, saying it “ruined his simple life”, and removed the game from the app store on February 10th.

Angry Birds was developed by Finnish game maker Rovio Entertainment. It was a runaway success… on the 52nd try! (That’s how many games the good people at Rovio had developed before Angry Birds). Rovio has expanded to be a successful franchise and merchandising business, counting its revenues in the hundreds of millions of Euros. Today, Rovio employs over 700 people according to its website.

Why did Flappy Bird become a flappy Icarus, crashing after flying too close to the sun, and not a new Rovio? In truth, Nguyen and Rovio represent very different groups of developers. Their motivations are not at all alike, and so neither is their behavior.

Developer motivations wildly differ

Dong Nguyen and his indie game studio .Gears sits on the border of a Hobbyist and an Explorer profile in VisionMobile’s developer segmentation model. Hobbyists are motivated by the fun of making an app, and like Nguyen often do it in their spare time after work. They don’t care about success – killing off a successful project that interferes with their sense of fun and peaceful life wouldn’t seem strange to them. Arcade games like Flappy Bird and the other .Gears projects are a typical project for Hobbyists (professional game developers rarely touch the arcade category).

Our Flappy Bird protagonist also shows traits of an Explorer, however. He presents a formal face with the .Gears studio, complete with email address and copyright notice. Put simply, Explorers are “practicing” to become successful app developers (either as contractors or with own apps): their main motivation is learning how to become professionals and they define success by knowledge gained as well as having a lot of fun developing. Some speculate that Nguyen might have tried to artificially boost the app using review bots, which would be more Explorer than Hobbyist behavior. (Nguyen himself denies having done any kind of promotion.)

Whether Hobbyist or Explorer, Nguyen clearly wasn’t in it for the big money. Contrast that with Rovio, a clear Hunter company. Hunters are revenue driven: their goal is to build a successful business and make money from apps. The 50+ games that Rovio built before Angry Birds are a testament to their persistence in achieving that objective. Success is measured strictly in business terms: app revenues (in the case of Rovio enhanced with merchandising) and user reach. Hunters are professionals, out to build real, lasting companies, exactly what Rovio has achieved. The difference couldn’t be clearer.

Understanding the motivations of developers is key to understanding the choices they make. This includes fundamental choices, like the one between lifestyle and business success that Dong Nguyen faced when his project became a huge success overnight. It also includes all the minor and major decisions that app development involves: business models, tools, platform selection, and much more. [tweetable]If you’re working with developers, gaining insights in their motivations is crucial[/tweetable].

— Christina & Stijn