Casual game markets and revenue streams 12/03/2014

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I thought I would start to research into the  Revenue Streams of casual gaming in order to get a better understanding of the market. The Casual gaming market currently has over 200 million people to play casual games through the internet.

The casual games market is booming, with over $2.25 billion in yearly revenue despite virtually no brick-and-mortar representation or advertising and marketing costs –

Casual games are typically distributed online and go by the ‘Try before you buy’ business model allowing players to play game for a limited number of times before needing to purchase the game itself or ‘in game content’ in order to continue playing. Once the player has made this payment, usually through online transactions, the player can then play the game to their leasuire. Typically only 1% of players actually purchase the game in order to continue playing it, and if the game reaches 2% then it is considered a hit title. Typically it costs around £100,000 to develop a casual game if you were to generalise the pricing according to some websites but according to the Casual Game Association it costs between 200,000 – 500,000 dollars for development, so if we were to generalise this it would cost roughly around £150,000. Casual games make their money numerous ways, these are paying for the downloaded game, paying for a subscription, through advertising or even through supporting other games. Depending on the platform would also affect the cost of development so this would need to be taken into account when developing the game.

According to the CGA’s 2007 Market Report  updating an online casual game for: iOS, mobile & PDA versions  cost 20,000 USD, hotel room versions cost 10,000 USD, Console versions  cost 230,000 USD and handheld versions cost 300,000 USD

It is a well known fact that it costs a far lot less to create a casual game then it does a ‘hard core’ console game. Just to really put it into perspective, I found this image during my research which I thought strung out the fact really well.

revenue

To summerise this, this shows the total revenue at the beginning, then all costs are subtracted so you are let with your margin value. At the end of subtracting what is owed out, console games typically make around 37%, while social/casual games make 87% once money is deducted from the profits. This means that Console games much charge a larger value for the game in order to cover costs such as packaging and marketing in comparison to casual games which spend no money on packaging and require little to no marketing. Other things that need to be taken into account are royalities and development/marketing costs. I was personally suprised the figures were so high, although I already knew that casual gaming was cheaper to develop and ship then console games.

References taken from:

http://www.casualgamesassociation.org/news.php

http://gigaom.com/2008/05/02/casual-games-the-bottom-line/

http://www.businessinsider.com/casual-gaming-profit-margins-near-90-2009-10

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