Ten Ways to Monetize Your Flash Game

I'd love to be able to make Flash games for a living. But the way things are right now, only the biggest success stories are able to sustain themselves on Flash alone. The rest of us must approach Flash game development as a hobby, on the side of school or work.

Part of the problem is that while Flash games are amazingly popular, there are very limited opportunities to actually make money from them. The vast majority of Flash games make money through ads or sponsorships or both. Originally, sponsorship was the main way for developers to make money, through sites such as Armor Games. Then in-game advertising became widespread, with the emergence of easy-to-use services like MochiAds. But so far, few games have succeeded in taking the next step - taking money from the actual players.

Lately I've been doing a lot of research into how games can make money, particularly Flash games. I've come across some very intriguing new monetization models, including some that have been successful in other games but have not yet been widely applied to Flash. I'd like to share what I've found, and hopefully inspire you to try some of these new strategies in your own games.

Before we get started though, this guy has one piece of advice for you: decide on your monetization model before you make the game! When you know how you're going to make money, you can design your game from the ground up to support your decision. It's a lot harder to tweak an existing game. Just think of monetization as just another component of your design, along with interface, progression, gameplay, graphics, and so on.

As this guy says, again,

"New monetization models open up new design possibilities."

You should be excited. This is exciting. New ways to make money equals new stuff to design.

Let's get started.

1. Advertising model

This is the most common way to monetize a Flash game. You can put ads in the loading screen of your game with services such as MochiAds or CPMStar, or just stick the game in a web page and put Google AdSense around it. You get money based on how many times these ads are viewed, so the more people playing your game, the better.

With ads embedded in the loading screen, you'll get money whenever your game is viewed, no matter what site it's on. If you have your own web page ads, these will only give you money when people play the game on your site, though they usually pay more per view.

2. Sponsorship model

Another common way to make money is to have your game sponsored. This means that a game portal, such as Kongregate, will pay you to put their logo in your game along with a link to their site. This helps bring more visitors to the portal site, which means that they get to make more money from their own web page ads.

Sponsorships are a good way to get a lot of money upfront, but you can only sell one sponsorship per game, and often your sponsor will not let you put your own ads in the game. This arrangement is called an "exclusive" sponsorship, because you can only have one sponsor. But other options are gaining in popularity, such as the primary sponsorship, where you still have one primary sponsor, but you are also allowed to sell restricted licenses to other websites.

3. Licensing model

This brings us to the next monetization model, licensing. Here, a game portal will pay you to make a special version of your game with their logo in it, and maybe connect up with their high score system. They will then host this special version on their site, but you are free to use a different version when putting your game on other websites. It's site-locked and non-exclusive. That means that you can sell separate licenses to a bunch of different websites, and make money from each one.

Individual licenses bring in less money than a typical sponsorship, but they are much more flexible, and they add up. You can combine them with advertising, with primary sponsorships, or both. You can also combine them with hosting a version on your own website.

4. Portal model

How can game portals afford to spend so much money sponsoring and licensing games? They must make even more money somehow, and that somehow is through web page ads. Some say that the best way to make money is to make your own website and host your game there. Lock the game to your site so no one else can steal it, and put some AdSense around it. Then spread the word about your game and hope it becomes popular.

If you don't have enough games of your own to keep people on your site, you can easily add other games with the MochiAds Publisher service. There are a number of tutorials out there explaining how to build your own portal. Here's one of them. This may help too. You can then sponsor your own games, by putting your logo in them with a link to your site. It may take more work, but the payoff can be greater than simply getting a sponsorship with an existing portal.

5. Premium model

Now here's where things get interesting. The methods we've discussed are all very indirect - your money comes from advertisers or portals. But now let's talk about taking money directly from your players.

The premium model means that you make a free game, and then you sell some extra, premium content to players who want more. This approach is slowly catching on, from an early, well-documented experiment with Drunken Masters, to the more recent success of Fantastic Contraption, making over a hundred thousand dollars in premium content sales. If you can make a game that's as good as Fantastic Contraption, and it makes sense to charge for extra features like a level editor, then selling premium content directly to players can be much more lucrative than advertising or licensing alone.

Just keep in mind that there is a very delicate balance between how much of the game you make available for free, and how much you reserve for paying players. If you are charging money for an experience that people could get for free somewhere else, then you will not be successful. But if the premium content doesn't feel valuable and 'premium' enough, few people will choose to buy it. This article suggests that you make the most popular parts free, so more people will try it out and like it, and only charge for specialized, niche content that very dedicated players will want. Advertising will pay for the free players.

And don't be afraid to charge a lot. Make the extra content worth it. Drunken Masters charged $1.50 for its premium content. Fantastic Contraption charged $10. Which do you think made more money? The hard part is getting players to pay at all. The difference between paying a dollar and paying ten is very little, once you've got your credit card out. Make your game worth ten, and ask for as much as you can.

6. Subscription model

So you've gotten your players to pay for premium content. But they're only paying you once. Wouldn't you rather have them pay you again and again and again? That's what subscriptions are all about - recurring revenue. Make premium content and special features only available to players who pay every month.

But hardly any Flash games are meant to be played for more than a month. If you want to get into subscriptions and really make some money, you need a different kind of Flash game, one that players can invest in, with their time and money, and feel like they are accomplishing something worthwhile. By far the easiest way to create this sort of feeling is to build a community around the game. Social bonds connect a game to reality, and can make a mediocre experience much more compelling.

This doesn't necessarily mean multiplayer, but if you want community, there has to be some way for players to interact with each other, whether that is by sharing custom-made levels or racing in real time. And there must be some form of persistent, saved data from the game that players can build up over time. Achievements and high scores are simple examples of this. But for the subscription model, you will need something more significant, such as a virtual world, customizable characters, or an in-game economy. You provide this larger context where the gameplay means something, and you charge money every month for players to get in.

But how much do you charge? If you set the price too high, some players might just give up and play something else. If you set the price too low, you could be leaving a lot of money on the table. But there's an alternative! Make the basic game free, the same way you would when selling premium content, and then have several "stackable" levels of subscription that players can buy. Maybe if players buy the first level subscription, they get access to some special clubhouse but they also get twice as many coins from playing the game as a free player would. Then players who pay twice as much and buy the second level of subscription get four times as many coins, and so on. Let players spend as much or as little as they want!

7. Micropayment model

This philosophy reaches its extreme in the micropayment or microtransaction model, where the game is largely free to play, but players can also spend real money in the game to buy special items. The way it usually works is that there are at least two different currencies in the game world: one earned by playing the game, and one that players get by putting in real money. Some items can be bought solely with currency earned in the game, and some can only be bought by spending real money currency.

You must be very careful when designing for this monetization model, or else free players will feel cheated when their skill and effort is thwarted by someone who simply paid to get ahead. For this reason, micropayment games often sell only decorative items for real money, and require players to earn the items that give them an advantage over other players. This works if there is a strong social component to the game. But in a cooperative game, players like it when someone else pays for a powerful item, because it will help them out too! Take a look at this article if you want a more detailed discussion of the design considerations involved.

If you're going to make a micropayment-based game you're going to need some sort of payment system, so players can spend money in the game. Fortunately, there are a number of payment providers all ready to be plugged into your virtual economy. Gambit is one example. But if you're looking for something even easier to integrate, a bunch of new virtual currencies have popped up for Flash recently. If you don't mind sharing your currency with other games, one of these might be the right choice for you.

8. Rental model

This model is crazy. It's a variation on the micropayment model, but adapted for a highly skill-based competitive style of game, such as the first-person shooter Combat Arms. In the rental model, you earn points and use them to buy items, but as the name implies, these items only last for a limited amount of time before they expire and you have to buy another one. Because players always return to the same baseline of power as their items expire, these rental items can provide significant gameplay enhancements without making the game feel too unfair.

You could allow players to pay real money for these items directly, but to make the game feel more fair you can instead let players spend real money on enhancements that help them earn points faster. That way everyone still has to play and earn their way through the game, but players who pay won't have to work quite as hard. And of course this can be combined with a more typical micropayment approach, selling purely cosmetic items for real money.

The advantage of the rental model is that players will keep buying the same items over and over again, so you can produce a smaller set of items than you would if players were buying a different item everyday like they might in a typical micropayment game. It also makes it feasible to charge lower prices for a given item, since each player will buy it more than once. Overall, the rental model may prove to be the most appropriate for a multiplayer game too small to justify a subscription or a huge number of items to sell.

9. Ransom model

If integrating a real money currency system and creating a bunch of items for your game seems like too much work, you could always just hold your game for ransom. In this model, you set the amount of money that you want to get from the game, and then you don't release your game until you've received that amount in donations. Once you release the game, though, it's free for everyone. And if you want to be nice, you could refund everyone for their donation if your ransom isn't met. This is called a threshold pledge.

The nice thing about this is that you don't really have to do any extra work. Just start making a free game and get donations for it. There's a nice little site called Kickstarter that takes care of all the details for you. Of course, you have to have enough of a reputation that you can get a bunch of people to pay you to release your game in the first place. It probably won't make you rich, but if you can attract enough support it could be perfect for small projects.

10. Patronage model

Last but not least, we have the patronage model. Like the ransom model, it is based on donations. But here, people are encouraged to donate larger amounts in exchange for exclusive and personalized recognition. A recent example of this is the donation system Daniel Benmergui set up with the release of his artistic game Today I Die. If you donate a certain amount, you get your name in the credits of his next game. If you donate one hundred dollars, you'll get a poster of one of his games with the characters replaced by whoever you want. And the first person to donate a thousand dollars gets to choose the characters and a new ending for a custom version of the game. Judging by the donation page, the game has brought in at least two thousand dollars in donations so far.

The key here is to make the people who donate, the patrons, feel special. People will pay more because they've gotten something unique and personalized. This approach requires that you give a lot of attention to your fans, and that you can attract enough of them, first of all. If you want to be an artist, and you are prepared to cultivate one thousand true fans, patronage may be the best option for you.

Want to learn more about making money from Flash games? Have a look at some of these other articles on the subject. Let me know if you have anything to add!

The ultimate treatise on Flash game monetization has arrived, in the form of Daniel Cook's Flash Love Letters! Make sure to read both Part 1 and Part 2. Oh, and don't miss the music video, either! ;)

If you like those, check out Cash Cow Part 1 and Part 2, an excellent set of articles on how you might put the Flash Love Letters into practice.


Forging a New Deal for Flash

I just wrote a comment on my blog that was longer than the original blog post! :p I thought it deserved a blog post of its own, so here it is.

I have been involved in a lot of discussion about Flash micropayment systems lately. It's exciting. A lot of things are happening at once, with the announcement of so many new payment systems for Flash games in such a short amount of time.

I was delighted to see that Daniel James, CEO of Three Rings, the creator of Puzzle Pirates and Whirled, somehow found my blog and took the time to respond to my latest post, in which I somewhat dogmatically urged developers to Demand More Money.

Comment by Daniel James:

"I feel that you're ignoring the considerable costs involved in operating a platform. If all you are doing is a payment system for credit card/paypal, then I agree entirely that a high revenue share to the developer is appropriate.

I'm not sure what Mochi is exactly offering, but stored value, brand and cross-game network adds a lot of value, and some costs. They are probably sharing some of their revenue back to portals, which I think is good news in general.

On Whirled we offer a lower-yet revenue share; a three way split between developer, affiliate (sometimes the developer, sometimes a player, sometimes a portal) and us... and we give 10% to charity! Maybe we'll have to change that in the price war you talk of, but in the end I don't think the revenue share percentage is the thing, it's getting players to pay.

That will require a complex platform that rewards everyone in the ecosystem -- which means money has to be split.

Bear in mind also that a lot of the payment methods most popular with the younger (e.g. Flash) audience take ~50% of the transaction (Mobile, pre-paid cards, etc.) So if you don't want to cut off these potential significant sources, you're going to have to drop the developer %."

Thanks, first of all, for the detailed reply! It's an honor.

I will admit that I'm not aware of the costs of operating a Flash micropayment system, but I'm assuming something fairly light, basically aggregating various payment providers such as PayPal or Super Rewards.

I have heard that mobile and prepaid cards do take a significant cut, as you mention. So maybe exceptions will have to be made for those, or they could be somehow subsidized by profits from the other providers or advertising. I wouldn't use those expensive methods as the baseline though.

I think it is inevitable that developer cuts will increase, and most likely stabilize to similar amounts across all the competing Flash virtual currencies. With ten different competing systems, I don't see how it could not. I can't imagine how all of these systems could coexist, in the long run, given the trend in the in-game advertising space with GameJacket dropping out recently, leaving MochiAds as by far the dominant player. Though perhaps it would be a good exercise in creativity to try to visualize such a situation. ;)

I don't see Whirled as on the same playing field as the others, really. You have your own little island, distinct from the general Flash games space. I wouldn't imagine that the revenue split would be the biggest item of consideration for developers on your platform. And who would be so heartless as to resent your 10% set aside for charity? :)

Kongregate's system might also be less affected, though I think Nonoba is spreading itself too thin between trying to reinforce its portal's brand and also become some sort of universal Flash currency. What I'm mainly talking about are the systems vying to be *the* universal Flash currency, like Andrograde, GamerSafe, Heyzap, and MochiCoins. The trend seems to be toward expansion and dominance. Because as you know, the more universal it is, the easier it is to get players to buy in and the more money you can make.

And this brings us to what I thought was your strongest point. Thank you for bringing it up. As you imply, the big issue now is not the percentage you get from the pie, but the size of that pie. Right now the pie is very small, and I would agree that there is more to be gained in growing that pie than there is in fighting over shares (like startup equity?). This will of course require cooperation from portals and developers, and plenty of resources for the payment providers, to make the whole deal enticing to players in the first place.

But I think we're already headed that way. The momentum is there. But I don't see enough momentum toward ensuring a good deal for developers. I see developers just jumping onto this new trend without in any way trying to steer it based on their own judgment.

Maybe it's just too early. Maybe once these systems are out and in use developers will start to respond, and critique. But I don't want to wait until it's too late. I want to at least start the discussion now, before the portals and providers set the tone of the conversation on their own terms.

We need developers talking about this. Not just providers telling everyone how great they are and portals complaining about their revenue share. We need developers complaining too. Because it is really the developers who will have the most influence in whether microtransactions succeed or fail in the Flash games space. Good games will carry a platform, just like in the console space. That is my opinion, at least.

And we also need players talking. I'm sure that they will complain mightily once this really gets going, but why not get them in the discussion now? The players will make this whole new movement possible.

The main objection I've heard is that players don't know what they want, if it's new, like this. They only know what they've already experienced. I suppose the same could be said of developers. Or even portals. In this sort of situation the best response is usually to prototype and test, build something to demonstrate and learn, to bootstrap some concrete understanding based on real products and real responses. How do we do that here?

Is it simply a matter of taking an experimental attitude to this whole deal for the first few months? Should payment providers pay some high-profile developers to experiment with their system and try to come up with something that works? How do we get the players involved in a way that will be constructive?

Any ideas? I'm very curious what you think. All of you. Let me know.


Developers, Demand More Money!

It seems that everyone and their mother is releasing a Flash virtual currency these days, from Nonoba's early entry into the arena, Kongregate's Kreds, and Andrograde's simple system, to the new and still-in-beta GamerSafe and MochiCoins. And let's not forget Whirled, OpenBAR, or CarrotPay. And oh, looks like another one just popped up today, Heyzap.

I've been finding it interesting to watch the discussions that have unfolded around the initial introduction of these systems. Developer reactions are suprisingly positive, despite the poor revenue splits that have been quoted so far. Reading the latest thread on MochiCoins, I ended up writing a response urging developers to demand more from these payment systems, which I've copied below.

Post by simianlogic:

"This all seems like much ado about nothing--Mochi has consistently done what's best for the developers. The ad-based rev share for publishers comes out of Mochi's 50%--nevermind that 50% for us is a great rev share to begin with."

I think this is a dangerous assumption. A 50% split may be fine for ads, but when it comes to players directly paying developers I think that a payment provider taking anything close to 50% is ridiculous. Remember Dan Hoelck's article on MochiLand about his experiences selling premium content with Drunken Masters? He described the difficulties with PayPal's taking a 24% cut of all his transactions. If 24% was too high, how would you describe a 50% cut?

If Mochi does not seriously increase the fraction of revenue flowing to developers using this system, then MochiCoins will never be a serious way to monetize Flash games. Right now it is commonly acknowledged that developing Flash games is not a feasible way to make a living. Sponsorships and MochiAds make it easy to make a little extra spending money on the side of a real job, but only the most successful and prolific developers could ever hope to make a living on such revenue alone.

The promise of micropayments is that selling directly to players could make Flash games profitable enough to live on. But if Mochi continues on the precedent it has set with MochiAds, it will do nothing to further this dream.

Given that the FGL team has recently announced its competing GamerSafe system, and accounting for earlier efforts by Nonoba and Kongregate, I can only hope that a price war will cause these Flash payment systems to undercut each other to a level that can support truly self-sustaining Flash game development. But if you are serious about putting microtransactions in your game, take a look at Gambit or Super Rewards, and drop one middleman from the loop.

Mochi is great, I like what they've done, I'm wearing a Mochi t-shirt right now, in fact, but that is no reason to cut them any slack when it comes to setting expectations for as big of a new wave as MochiCoins is sure to be. ;)

As developers, we've got to know what's a good deal and what's not, and be ready to ask for what we're worth, not simply take what we're given, however shiny it may be. You want this dream? Then start making it happen now.


Twitter is Good for You

And it might be good for me too.

I just read an article in Time magazine about Twitter and how it is becoming the next big thing, the next big platform for information on the web, on par with Facebook or even Google. Naturally, I had to give it a try and see what the hype is all about.

And here I am. I also added a little feed on the side here with my latest tweets. Nifty.

So what's the big deal? Well, according to Steven Johnson, the new way of sharing and filtering information made possible by Twitter, with its networks of followers and tiny status updates, is transforming a number of important information channels:

News and Opinion
  • The links passed by people on Twitter function as a sort of customized newspaper. News we read may be more diverse, but also more insulated.
  • Finding info through your network on Twitter will be an alternative to Google. Instead of a generic PageRank guiding our search, we have direct recommendations from friends.
  • Businesses will be highly motivated to attract Twitter followers. This necessitates a new form of customer interaction, to keep people following the feed.
I've found a few other articles along similar lines. This one had some interesting points to make. Even more intriguing is this article on bit.ly, one of the link shorteners often seen on Twitter. Just like Twitter could be the next Google, bit.ly or one of its competitors could be the next Digg. It all seems to point to "the complete disaggregation of the web in parallel with the slow decline of the destination web."

It's enough for me to get an account and try it out for myself. So far it's been pretty fun. :) I'm eager to really get into this and hone my tweeting skills.

What makes me really excited about Twitter is that I think it could really fit into my process, better than blogging, even. See, I have several layers through which I filter and organize my thoughts. At the most immediate level is my notebook, which I started a couple months ago at the prompting of this blog post. There I write thoughts, lists, notes, ideas, and basically anything that I want to remember later or get down on paper, and it has been very helpful. It's like freewriting, except for life instead of, well, writing.

The next level is my idea notebook, which I write in every day, choosing one or two worthwhile ideas or observations to explain more fully. And my retroactive planner, in which I summarize the events of the day in order to reflect and realize how much time I wasted doing unimportant things.

And after that is my blog, this thing you're reading. I use this blog to finalize my thoughts, to make them public and therefore solid and defined. The problem is that it usually takes me multiple hours to craft a decent post, and I can go for weeks without finding the time to do so. Even now I've had one post sitting around, unfinished, for almost three weeks and I'm still not sure when I'll be done with it.

So to me, Twitter looks like a good intermediary step between my rough notebook and my idea notebook. I can write more or less the same sort of thoughts I would record in my notebook, but with a bit more attention paid to clarity of expression and relevance to other people. And it's so much easier for me to write these short little tweets than it is to write these excruciatingly long blog posts.

Hope you like tweets. You'll probably be seeing a lot more of them!

And look, I've already found some cool stuff through Twitter. Here's a fascinating interview with Jenova Chen, where he really goes into detail on what he wants to do with games. We're getting there! :) Social play, emotion, thoughtful fun - these are all new areas to explore. I can hardly wait to get going.