The profitability of web-based games

With the growing releases of Web based games I thought I would look further into how profitable web based games REALLY are. The world wide web is often overlooked when we talk abou the games industry, with the powerhouses Steam, Xbox and Playstation making themselves known across the world, web based games are often associated with smaller, independent usually flash based games. This however just isn't the case. One major example is runescape.

As with all video games there are many strategies you can execute, for this post I’m going to follow the standard free to play model (it's quite unusual to charge for access to a website). Within this model you usually have 5 tiers of income:

1. Advertisements

2. 'Gold' or 'Premium' membership for an annual/monthly fee

3. Micro-transactions (in-game payments for items or DLC)

4. Accompanying Mobile App (contain a wiki, account management etc)

5. Merchandise

Let’s start with advertisements.

 By placing advertisements around the outside of your game (in the header, footer and sidebars) as well as the possibility video overlays it is entirely possible to earn up to six figures through this platform.

*rough math approximations because Google doesn't release payouts*

If your average CPC is £0.25 then you need 100,000/0.25 = 400,000 clicks a year (or approximately 1,000 clicks a day) to earn £100,000 a year from adverts. Assuming that your Page CTR is 1% you need approximately 100,000 page views/players a day.

Now, let’s say your “Bounce Rate is 100%. It means that you need 100,000 UNIQUE visitors a day itself to generate 100,000 page views a day.

So basically if you have 100,000 players a day you can earn approximately £100,000 a year from advertisements (with a CTR of 1% and CPC of £0.25). It’s worth noting this is entirely subjective and your personal results may vary widely.

Premium or 'Gold' Membership often has a much lower purchase rate than the advertisements 1.2% but with an average price tag of around £9.99/month the addition of gold membership is highly profitable.

Micro-transactions are not much fun for players if done incorrectly and avoiding the 'Pay to Win' scenario is a must! I have no experience with implementing micro transactions from a developer stand point so I can't relay much context as to how profitable they actually are. BUT as a player I’m guessing they are pretty lucrative based on the amount I have spent on DOTA 2...

Most games now also have an accompanying Mobile app in my experience and while its not just for web based games, it is another platform you can explot. Mobile apps also have a download rate of roughly 1.2% so a 99p mobile app will earn around £356/1,000 views your game achieves a month.

Merchandise usually has a low sale rate at around 500 sales per 12,000 views a year (1,000 a month) however, merchandise is usually expensive with your average store containing content averaging £19.99 and so, 500 sales per year per 1,000 views a month £9,995

This is highly speculative, based on averages and based on a low performance game reaching 100,000 players a day when truly, a high quality game should earn 100,000 players a day relatively easily with a decent enough marketing campaign. These financing options combined are highly lucrative when executed correctly and since this is a self-hosted option with no store fees that revenue will all be yours, and not just a 60% or 70% from the use of multiple stores and taxes taken from using publishing 'partners' such as steam, kongregate and windows store.

Anyways, I thought this was interesting as to how lucrative web can be so hope I made you reconsider targeting the web in the near future.