I know we’ve been here before, but when Angry Birds Space can shift 10 million units in three days it does seem worth taking a look at the future of the industry again. Oh I know it only shifted that many because it’s free on some platforms, and even when it’s paid it’s hardly anything.
All those arguments can go round and round for hours, but I don’t think Rovio really cares: they got people to hit that all important download button 10 million times in three days: that’s about 38 people a second hitting the all important link on whatever screen is in front of them.[drop]Oh, and before we go any further lets address that free version. Way back in 2010 Rovio stated that the ad-supported version of was projected to hit $1 million a month by the end of that year. In an interview with Wired in April of 2011 they stated that their ads on Android were netting them £600,000 a month, which is pretty much in line with their $1 million* projection.
In that same interview they revealed that the Angry Bird brands had, at the time, netted them $70* million overall, for an initial cost of around $140,000* dollars.
Anyone who thinks there’s a gaming executive that isn’t paying attention to figures like that is, quite frankly, deluded. Sure, not everyone is going to reach the success of Angry Birds, that’s certainly a given. However, if someone can make something that’s only one-tenth as successful as Angry Birds that’s still a seventy-fold return on the original investment; those are the kind of figures that make anyone’s eyes light up.
All of this is before we even get to the 10 million figure for Angry Birds Space, something that I’d imagine has caused a few executives to book some extra meetings today.
Of course these kind of games aren’t going to rule the gaming in its entirety, but it’s very easy to envisage them being one of the big money drivers in the industry of tomorrow. If a publisher can create an entirely new property that does similar volume to Angry Birds they’ll have a huge chunk of change in their pocket, why not funnel that back towards full console titles?
Although there’s more money in gaming now than there’s ever been before, it’s does seem to continuously get tougher for smaller console projects to find their way through publishers. If the app market could inject some fresh excesses of cash back into a publisher you’d hope they’d use it in new and creative way, although with the potential for very highly performing mobile games (performance in terms of profit margins anyway) we might see things swing the other way.
Imagine it, you’ve got your top five games (say FIFA (above), Madden, Battlefield, Need for Speed and Mass Effect for EA) that you know are going to sell in a terrifying volume. The profits margin aren’t a lot percentage wise, but with the amounts of money involved it’s more than enough.
At the other end you’ve got mobile games with low development costs and the potential for very high margins. Now potentially this gives you money to pour from the top and bottom into the middle, but with the potential for huge chunks of the top and the bottom would anyone want to put money into projects that might make a bit of cash if you’re lucky?
Obviously you need to take some risks, but I wonder if the “make a profit or die” mentality will be pushed even further?
The industry seems to be getting to one of those transition points where there’s the potential for everything to change, where we could see everything pivot and re-align around one concept. There’s so many ideas and concepts popping up this time it’s impossible to tell where things will go but I’ll tell you this; if anyone thinks they can successfully emulate Rovio they’ll do it without hesitation.
*All currency conversions are based on exchange rates at the time the figures were quoted.