Follow this 4 step process to make infinite sums of money making flash games!

The Steps!

Step 1: Make a game. Preferably a clone of an existing Flash game.

Step 2: Integrate in-game ads.

Step 3: Release on Newgrounds.

Step 4: Profit. Or Cry.

Mythical Money

If you think that’s the key to creating a viable business making Flash games, then you’re in for a bit of a reality check. Don’t get me wrong. There’s a percentage of people that will actually pull it off. It’s not quite as unlikely as winning the lottery but it’s not the type of business plan that’s going to impress anyone but your 13 year old nephew.

The myth of the Flash Rockstar is real. Media, even the smaller channels that cover Flash games, like to report on success stories because they tend to be more interesting than failures. “Developer Made $400,000 with Successful Flash Game” is always going to be more interesting to research and write about than “Yet Another Developer Fails To Recover Costs on Flash Flop.”

For every Flash game developer who is making a living off his latest runaway Flash hit, there are literally thousands more who are getting what amounts to nothing for hundreds of hours of hard work.

Diversify for Success

The reality is that becoming a successful Flash developer without relying on the “Luck Factor” requires you leverage every possible income stream available to you. You have to hustle. You have to work your contacts. You have to cut corners and save costs wherever possible. You have to work with people you trust. You have to take risks when it is smart. You have to avoid unnecessary risk like the plague. You have be brutally honest about your strengths and weaknesses. Mostly, though, you have to work your ass off. And you have to do it despite the constant stream of obstacles and setbacks you will encounter.

Sources of Income

The good news is that Flash development is one of the best ways for a talented developer to make money while working on games. There are many creative ways to generate income from Flash game development, and the start up developer needs to do their best to leverage these as much as is reasonable. Here are what I consider to be the primary sources:

Contracting

Generally speaking, this is when a client comes to you and says “We want a project that does XYZ and looks like ABC.” You build it and then they cut you a check. Sometimes you get to reuse the source code on future projects, but generally it’s Work For Hire. This stuff tends to be pretty faceless as it is contracted and sub-contracted down a long line of people with their hands stuck out. I can’t really point to any specific companies that are leveraging this for success, but the richest Flash companies out there are the ones doing this sort of work.

Licensing

This is what I call a “spec” projects that are created without the commitment of an external party. The majority of this income comes from sponsorships, but a notable portion of it comes from licensing older games and doing site-locked licenses for 3rd parties. It seems that Nitrome is basically printing money with this technique.

Advertising

This includes income received from anything related to ads, including Mochi and Google Ads. Generally it ranges from really crappy CPMs from in game ads, to respectable CPMs from custom deals negotiated directly with ad providers via something approximating a developer-run portal (the Ninja Kiwi method).

Upsell

This method of income generation usually requires some level of creativity on the part of the developer. Basically it means converting your free users into paid users by either charging for a premium version, a subscription, or integration with some sort of mictrotransaction driven setup. Fantastic Contraption rocks this technique.

There are definitely other ways to make money with Flash game development, but I consider these to be the most accessible to the average Flash developer.

Risk Versus Reward

Each one of these techniques has its various pro’s and con’s. Contracting tends to be very lucrative, but also very grinding and creatively bankrupt requires you to be constantly networking. Upselling tends to be SUPER risky, and very labor intensive to set up, and has a history of failing far more often than it succeeds but in the right situation it can pay off handsomely. Advertising tends to be low effort and low risk but generally it performs very poor in all but the best cases, but it can create some reasonable residual income. Licensing is far more reliable than Advertising and Upselling, but it tends to have a glass ceiling and doesn’t consistently generate remarkable income.

Where Urbansquall Makes Its Money

In 2008, Urbansquall’s income from these techniques broke down as follows:

1. Contracting
2. Licensing
3. Advertising
4. Other (includes Upsell and other miscellaneous sources of income)

The first year I started making Flash games the rough distribution was 90% Contracting versus 10% Licensing with negligible income from the other sources. Over the course of the last six years, the Licensing portion of the distribution has been steadily increasing. 2008 was our best year for advertising, and yet it failed to even make a dent in the big picture.

My hope is that 2009 is the year in which Upsell and Licensing combined overtakes Contracting as Urbansquall’s primary source of income. Bloody Fun Day is helping make this a reality with its sponsorship contributions and I have high hopes for the upsell portions of the upcoming Battalion games. So far, though, contracting is already setting the curve. It should be a good fight.