Current Licensing Market

[dmitsuki]

Hi everyone!

A while ago I made some HTML5 games and licensed them for money. Recently I made some flash games but that market seems to be dying. Is the HTML5 market doing any better? Is it worth it to make a HTML5 game?

 

Let's say I take a week to two weeks to make the game. Would I be able to get at least 1k from exclusive or non-exclusive deals? What quality target am I looking at? Anything shining light onto the topic is greatly appreciated!

 

 

[mattstyles]

Take a look at True Valhalla's site and this thread, he's journalling his adventure with making money out of web games, should give you loads of insight into what is possible.

[istvan89]

I would handle with caution that numbers on Matthew's blog, because he doesn't disclose the portion of the exclusive, non-exclusive deals, it's just 'HTML5 Games' in his reports. It can be work for hire revenue, ad revenue, brokerage fees ( http://enigma-dev.org/forums/index.php?topic=2069.msg20484#msg20484 ), basically anything regarding html5 games. Following his blog for longer time period I've never seen him revealing what exclusive deals he did. So seeing some nice numbers is probably not the best insight to know what is possible...

[dmitsuki]

Sorry, but the numbers on True Vahalla's site are not really helpful.

The first thing is it says he makes a lot of money. That's great! I too would like to make a lot of money! If it's from licensing that's also exactly the market I'm in!

The problem is the numbers are really high. Not only that, but every tactic on the site seems like it's designed to sell me something to also get me those numbers.

 

That could all be well and good, maybe it's just a way to diversify income (even though it's barely any income judging from the numbers on the site) but the problem is I don't really see anybody reproducing said numbers for the licensing market.

I know through contract work those numbers are hittable, but I have not seen anybody saying they could replicate the numbers with the licensing market. That means, regardless of if TV did or did not make 32k in 4 months, it's largely irrelevant to me because the average earned is most likely much lower than that. That means even if I produce games on the same quality, I can not expect realistically to hit those numbers.

So what are realistic numbers? I have no idea, but chances are the answer is not $130 thousand dollars a year, because that beats almost every programmers average salary in a company and the competition for HTML5 games would be extremely fierce considering all the money to be made.

[b10b]

Yes, it's sensible to apply some normal distribution thinking to any success stories.  A top tier income of $8k per month, for example, may easily correspond to a median income of $800.  if we then attribute 90% of that top tier income to sales of back-catalogue, then the median income for a newcomer, without any back-catalogue, may actually be closer to $80.

To answer the OP, I found the list of currently-active HTML5 license purchasers would change so frequently that it was hard to carry any momentum from one game to the next - often spending more time communicating, closing and integration than on games dev.  Therefore, if a developer does not already have a substantial back-catalogue, or social following / relationships, spending two weeks pursuing $1k (from start to sale) is probably optimistic.  A 52 week plan may yield better results - e.g. build a small catalogue first, then sell collections - but will also require capitalisation to bridge the cashflow gap.

 

[totor]

If you look at marketjs.com you have suggested negotiable max prices for non-exclusives then go to http://www.html5gamedevs.com/topic/16500-my-talk-about-html5-games-during-respawn-cologne/ to have recent real world figures. TL;DR : $ 200-500 / non-excl with discount on bulk purchases. So unless you have a catalogue, it seems tough.

[ozdy]

I know many high earning Flash/HTML5 developers and none of them wants to reveal their secrets publicly on how to make money. And that's for a very good reason. Assuming TrueValhalla really makes $10K/month it would make very little sense financially that he produces a worthy competitor for $500 via his consulting or $50 with his e-book, as the market is small enough that a good developer will take a chunk out of your earnings via saturating the market or getting some of your clients. When you look at TV's site, 80% of the emphasis is how much he makes and to buy his book/services, which is odd if it only attributes to 20% of his earnings.

That being said, I do believe he is very good at marketing, which is a useful skill to have and most developers should acquire. I also believe $10K/month is possible by producing 3-4 high quality games a month, but I'm just not seeing this output from him, unless he is hiding a lot of his new games.

[OkijinGames]

On 28/05/2016 at 7:04 AM, dmitsuki said:

Let's say I take a week to two weeks to make the game. Would I be able to get at least 1k from exclusive or non-exclusive deals? What quality target am I looking at? Anything shining light onto the topic is greatly appreciated!

I don't think there is a straight answer to your questions.

From experience, some games make much more money than others and it has nothing to do with the time it takes to create them. To give you an idea, the revenue generated for each of my games varies between $6000 to $53000 in HTML5 non exclusives and there is no correlation with the development time (from 1 week to half a year). Some games have also generated more in 1 month than others in a year.

What I can say is that, yes it can be worth making HTML5 games (I make a living from my business). But there is no magical formula. As for anything if your catalogue / products raise above the competition you will have an easier time selling. And there is not only one viable strategy here. In any cases, it takes hard work to find prospects, work out the best deals to get the most out of your catalogue and improve your offering again and again...

[ozdy]

Thanks for the correction, but my point is still valid with these new numbers - It's just suspicious that you focus so much on consulting, selling books, and showing off your money/lifestyle when it only attributes 10% of your income. Introducing well informed competitors should do much more financial harm than good.

[OkijinGames]

@TrueValhalla And the revenue from your book would not reflect the exposure and leads it generates for your licensing activity.

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(...) a very important lesson in life-that anytime you find someone more successful than you are, especially when you're both engaged in the same business-you know they're doing something that you aren't.

One of my favorite quote from Malcolm X Autobiography

An example, I see very few of us competing for the top business generating key words on Google... and this is one drop in the ocean.

Finally, I think that there is much growth potential in this market because there is so much that is still left unexploited right now. Helping each other is the way to go because the success of one would probably mean more business for others at the time being - the market is far from being saturated.

[blackmoondev]

I tried to stay away from this subject, but I guess it's time to add my few cents. 

@ozdy - you said you want somebody to confirm @True Valhalla numbers. I confirm - you can make around $10k in non-exclusive licenses per month. (see below for "but")

@OkijinGames - it would be good to mention, that within the $50k per game revenue you've mentioned there's $40k prize money from Tizen, right?. Since it doesn't look like Tizen is going to have another competition of this kind - this level of income could be hard to repeat. 

The "but" part:

To everybody who would like to enter this niche and develop Html5 games - TV has 40 games listed on his site, Okijin has 10 (with super high quality). We have 64 games listed from around 80 created and published. When we started 5 years ago (btw. after 5 years of making Flash games - so that's 5 years of experience in browser games at the start) you could make really simple games and still sell multiple licenses for big $$. I'm afraid those times are over. Right now we have enough passive income to continue full-time game development - and if a new game just adds $50 per month to the passive income - we're happy about it. 

I saw "indiepocalypse" on Steam - people I know dropped good-paying jobs to make PC games, inspired by "first indies" success stories. Most of them are broke now. As much as I want Html5 games to conquer the world - I wouldn't want anyone to get false high hopes and suffer. 

So - make your first game after day job. See how much time it would take you (in hours). See how much money it would bring you. See if you could repeat the same income on the next game. Calculate your hourly rate (I've mentioned counting the hours you put in the games, right?). Would you be able to survive on such hourly rate? If the answer is yes - go for it full-time. Making Html5 games is super fun:) Just don't drop your job before you'll do those tests, ok?

 

 

[OkijinGames]

1 minute ago, blackmoondev said:

 

@OkijinGames - it would be good to mention, that within the $50k per game revenue you've mentioned there's $40k prize money from Tizen, right?. Since it doesn't look like Tizen is going to have another competition of this kind - this level of income could be hard to repeat. 

 

No, the $53000 is actually for Zombies Can't Jump - not Jelly Slice which is the game which has won the Tizen prize so it is not accounted for in this amount.

[blackmoondev]

2 minutes ago, OkijinGames said:

No, the $53000 is actually for Zombies Can't Jump - not Jelly Slice which is the game which has won the Tizen prize so it is not accounted for in this amount.

You've got my highest congratulations about this result than:)

[Goblet Ed]

All very insightful posts.

I like many of your approaches and I want to thank you for your openness on this subject.

[OkijinGames]

11 minutes ago, blackmoondev said:

You've got my highest congratulations about this result than:)

Thanks you. 

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if a new game just adds $50 per month to the passive income - we're happy about it. 

To counter-balance the pessimistic numbers, I could give examples like this game which is a simple reskin of Zombies Can't Jump and was licensed for a number in the 5-digit range - higher quality games offer more monetization options. My latest game Jelly Doods (developed in a week) is about to hit the $10k in licensing deals and was released 2 months ago - should the sales stop right now, it would still give me 200 months of revenue at your estimate rate.

I agree it is not easy (but what is?) and newcomer should expect to pull a lot of work but, in light of my own experience, I cannot share the pessimistic view you have on this market

[blackmoondev]

16 minutes ago, OkijinGames said:

To counter-balance the pessimistic numbers

Oh, I'm not pessimistic at all;) We're selling quite a lot of non-exclusive licenses - what I've meant is that even if we would create a game that would be a flop - that wouldn't be bothering us, as there's a steady income from all the back catalog that we have. I'm just worried for devs who don't have such "pillow". 

[OkijinGames]

1 hour ago, blackmoondev said:

I'm just worried for devs who don't have such "pillow". 

basically saying that it gets better as the catalogue grows

And I would agree since I realised after a year in business that I needed to increase my "production rate" (from only 2 games in the first year) to provide my business with this kind of pillow that is needed to generate more steady money and more importantly, provide income while undertaking more important projects (Zombies Can't Jump 2 last year and Sailor Pop this year).

PS: I am actually one of those guys who left their high paying job (technical lead for a large brokerage firm) to jump into the HTML5 dev adventure and I have nothing to regret even if the job is actually harder than ever.

[Goblet Ed]

43 minutes ago, OkijinGames said:

PS: I am actually one of those guys who left their high paying job (technical lead for a large brokerage firm) to jump into the HTML5 dev adventure and I have nothing to regret even if the job is actually harder than ever.

That is a pretty big jump. Why HTML5 game development and not something else? Did you have previous experience developing games? I find it impressive that it only took you 2-3 years in a high-wage country to get where you are.

 

Do any of you have accountants that help organize your finances? Just curious.

[OkijinGames]

1 hour ago, Goblet Ed said:

That is a pretty big jump. Why HTML5 game development and not something else? Did you have previous experience developing games? I find it impressive that it only took you 2-3 years in a high-wage country to get where you are.

 

Do any of you have accountants that help organize your finances? Just curious.

I worked on a 2D game engine with Direct3D (C++) as a hobby but had no previous experience in game development per se (never made or released a game). What I like about HTML5 is the ability to target both mobile web and native platforms.

For finances, it is highly advisable to use an accountant, for the rest bootstrapping has been the key for me. The UK and London especially is an expensive place (if not the most expensive) but the nature of this business also allows travel with prolonged stays abroad – a nice way to recoup.

[Goblet Ed]

Having corresponded with a couple of publishers / portal owners it has occurred to me that they all have a slightly different agenda when it comes to licensing games at any given time. Good games are always welcome but sometimes it does not fit their current strategy. I suppose the genre of the game is an important factor.

Do any of you look at current trends and and ask publishers what they are currently looking for?

[mentuat]

To add another voice of optimism, I've been doing the html5 thing full time for about 3 years now and seem to be doing just fine

I've seen the licensing market change quite a bit in that time - but new and better opportunities seem to arise as older ones diminish

To echo other's comments - having a back catalogue of games is a big advantage as it means you are more likely to be approached for the better potential deals and/or a higher chance that at least one or two of your games is going to fulfill a clients needs

to answer some questions from my point of view:

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Do any of you look at current trends and and ask publishers what they are currently looking for?

If I don't ask then normally I'm told by some regular clients about the kind of games they are currently looking for.  If I hear the same thing from enough potential clients/publishers then I will likely make that my next game

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Do any of you have accountants that help organize your finances? Just curious.

I have a UK based limited company and have an accountant to handle exciting accounty things

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Let's say I take a week to two weeks to make the game. Would I be able to get at least 1k from exclusive or non-exclusive deals? What quality target am I looking at? 

As others have said, I've found little correlation between length of development time and resulting income.  The quality target is an easier thing to define - basically my plan of attack once I've decided on a game type is to find the current best html5 example then make sure mine is better in some way.  I will ditch a game idea if I see someone else has made an excellent version or if there are simply too many variations of them already around.  Ideally, make a game that won't have a lot of competition!

[ecv]

 

12 hours ago, mentuat said:

I have a UK based limited company and have an accountant to handle exciting accounty things

[Goblet Ed]

@mentuat Great input. This approach confirms some of my own beliefs. Hearing it from somebody that has been doing this for three years is nice. 

When I saw your latest game (Street Race Fury) I couldn't believe you managed to make that game mechanic exciting. It works great on mobile!

 

I don't want to gush but pretty much all of you devs and your games have been an inspiration to us. It helped us catch up to some of the common practices when it comes to developing HTML5 games.

[plicatibu]

16 hours ago, mentuat said:

The quality target is an easier thing to define - basically my plan of attack once I've decided on a game type is to find the current best html5 example then make sure mine is better in some way.  I will ditch a game idea if I see someone else has made an excellent version or if there are simply too many variations of them already around.  Ideally, make a game that won't have a lot of competition!

The fact that a type of game has too little options (a.k.a competition) isn't a signal that it may not be profitable ? I mean, if it well a popular kind of game, it probably would have a lot of competition.

Maybe I'm deadly wrong but for me competition is signal that the game idea (or any other kind of product / service you may imagine) has a huge amount of players (consumers). Am I wrong?

[mentuat]

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The fact that a type of game has too little options (a.k.a competition) isn't a signal that it may not be profitable ? I mean, if it well a popular kind of game, it probably would have a lot of competition.

Maybe I'm deadly wrong but for me competition is signal that the game idea (or any other kind of product / service you may imagine) has a huge amount of players (consumers). Am I wrong?

ya, fair point

To clarify -  I meant to try and do games that have little competition in 'html5 world'

For example I made one of those side-on drag racing games that are all over the app stores but not so many in html5 - so it was a dumbed down generic clone of an already popular concept but moved to a platform where there was little competition.

No harm in making another bubble shooter or another 2D physics game - but it's going to have to be better than all the others out there if you want it to sell!