In early 2009, I came up with an idea for a Flash game. At the time, I had enough saved up to take a short break from regular work, and I decided to try out game development on my own for a little while. That first idea eventually became Chroma Circuit, a cool little puzzler released by my new company, Bowler Hat Games. Since then, I’ve released two other free-to-play Flash games, one iPhone game using Adobe’s upcoming Packager for iPhone in Flash CS5, and I’m working on another iPhone game as I write this. The other day, I realized that I started creating games in January, right at the beginning of the year. With that in mind, I thought I’d take a look at how I did, financially speaking, in my first full year as an indie game developer. Get ready for some numbers!

Time Breakdown

To start, let’s look at the time I spent on various projects in 2009. Unfortunately, it wasn’t all fun and games. Though I had a decent savings to get me started, I needed to refill my treasure chests mid-year, and that meant time away from game development. Here’s a pie chart to visualize the breakdown:

As you can see above, I spent six months working exclusively on my own games full-time. For a month and a half, I worked on some contracts that involved developing games for other people (the next best thing to working on my own games, I suppose). In addition, I spent another four months on contracts building some Flex RIAs (non-game development, obviously). Finally, I took a couple weeks off in December to relax and enjoy the holidays.

As we take a look at my income next, please note that I will omit the amount I earned from things other than developing games. I want to focus more on what I earned specifically as a game developer rather than as an RIA developer. Regardless, I’ve mentioned this additional income because many game developers take the same approach: contract work funds the things we really want to do. Though I won’t give you specific numbers about the non-game income, I will note that well over half of my overall income this year falls into that bucket. In short, games did not pay the bills this year.

Quick Income Breakdown

In total, games earned me $29,413 USD in 2009. This year, I had five sources of income from games: primary sponsorships, non-exclusive licenses, advertising, iPhone game sales, and custom game development for clients. I’ll explain each of these below, for those who might not be familiar. However, let’s start with a simpler comparison to make one important point.

As you can see from the chart on the left, about 58% of my game-related income came from contract work. Once again, even focusing specifically on game development, we can see that contracting is still where the real money is. Big clients pay big money to bring in developers to get their projects done. For comparison, the chart on the right shows the amount of time I spent on each. As you can see, the majority of the income from games comes from only 20% of the time I spent on them. If I were only interested in the size of my paycheck, I think it should be obvious which type of work I’d want to choose.

Detailed Income Breakdown

Now, let’s go one level deeper. The games I built entirely under the Bowler Hat Games banner earned me $12,413 in 2009 with six months of work. Assuming I didn’t live in the San Francisco Bay Area, I might have been able to stick to games the whole year with only a small loss, hoping to make up for it as revenue continues to grow in 2010. However, my current location is pretty expensive, so focusing on my games exclusively is still not possible yet.

The majority of revenue comes from primary sponsorships, which are sold to game portals who want their branding and links to appear in any distributed version of a game. Sponsorships help them bring traffic back to their sites. They usually pay an author a lump sum for this privilege. Sometimes, sponsors offer performance incentives so that very popular games can earn more, but usually, a sponsored game only earns money from the sponsor once. I found this form of revenue useful to start out, but I’m not sure how often I will pursue it in the future. I’m starting to feel that they make it harder to build my own company’s brand because my games promote the brands of others so strongly.

Next in line is the non-exclusive, site-locked license, which allows game portals and virtual worlds to customize a game by adding their high score APIs, removing advertising, and making other small changes. By getting the game site-locked to one website (in other words, no distribution), they can offer a quality game directly on their portal for a lower price than sponsorship, but without the audience reach that a sponsorship offers. A non-exclusive license can earn as much or more than the primary sponsorship in the long run because you can sell as many licenses as you want. Generally, it only takes 2-3 hours for me to whip out a customized version of one of my games, and I earn more per hour for this work than what a primary sponsorship gets me for the original game.

By the way, FlashGameLicense.com provides an excellent service for Flash game developers to connect with publishers and sell sponsorships and licenses. I found primary sponsors for all three of my games there, and many of the portal owners that made non-exclusive deals with me initiated contact on FGL.

Often, advertising earnings can be a pretty low percentage of a game author’s revenue. However, my game Gridshock has found itself among the top games on the popular MindJolt portal (and Facebook app) for some time now, having received over 16 million plays overall as of the time of this writing. My all-time eCPM for all three games combined right now is $0.26 from MochiAds, though I’m showing a custom ad in Chroma Circuit right now to promote the iPhone version so that’s not earning anything at the moment. Gridshock alone is a tiny bit higher, at $0.28. I also use Google AdSense on the Bowler Hat Games website for some extra ad revenue, but their Terms of Service are mean, so I can’t really share anything about that.

Finally, there’s my iPhone game. I released it in October, and, as you can see, it hasn’t brought in much revenue, relatively speaking. The App Store isn’t an easy win these days, and that’s pretty much what I expected. However, Chroma Circuit has always done a little poorly compared to my other two games (other than the larger-than-average primary sponsorship), and that means I expect those to do better in the App Store once I finish polishing them up for the iPhone. If the iPhone version of Chroma Circuit had been released much earlier in the year, that percentage would have been higher overall, so I’m not ready to say that iPhone development isn’t worth the effort yet. Plus, it’s been a lot of fun learning to optimize for a mobile device and developing with a touch screen, so I’m happy to explore this area more in the coming year just because I enjoy it.

On to 2010!

As I noted above, my earnings as an indie game developer are pretty low in comparison to the salary I used to earn (and what I still earn as a part-time independent contractor). However, I’ve seen steady growth throughout the year from game-related revenue, and I’m expecting that growth to continue into my second year. I don’t know for sure how many months I’ll be able to focus on my own games exclusively in 2010, but it should be at least six again. Hopefully more!

My main goal for this coming year is to explore new sources of revenue. The mobile games space still deserves some of my time, and that will likely include more devices than the iPhone, if they don’t require too large a commitment. Should Adobe offer Flash Player 10 (I’m not interested in Flash Lite) on a device, I’m more likely to play with it. I’m also looking to explore micro-transactions. From what I’ve seen, games that use MochiCoins seem to do pretty well with players (though some portals seem to dislike them), and I definitely want to try adding them (or maybe another service, like GamerSafe or Heyzap) to some totally new games I have simmering in the back of my head. Desktop versions of my existing games are certainly a possibility too. Who knows if I’ll get around to all of that, but I will say that I definitely have a barrel full of ideas for the future of Bowler Hat Games.