7 ms·
How one Japanese gaming startup is generating $3.8 million in revenue per day
- chronic25 13y agoNo one cares.
- RyanZAG 13y agoI don't believe this kind of in-app pay-to-win style games will last much longer. It's the kind of thing someone new to games will pay for, but after paying for a bit, those same people seem to 'wise up' eventually. I think you'll see these kind of games slowly decreasing in profitability over the next 5 years. It's similar to many other forms of short term profit in which the value provided does not equal the amount paid - eventually the market will dry up as it becomes common knowledge.
- robotmay 13y agoI'm not too sure. I see a lot of people these days, and unfortunately even kids, becoming hooked on quick fixes; pay-to-win games, AAA games with 10-hour single-player campaigns, and pretty much all mobile games. I gave a copy of Pokemon Black to a friend's kids (same age as when my brother and I, and all of our friends, were obsessed with them), and they couldn't get more than 15 minutes in without getting bored. Obviously that's a very small sample group, but it seems like a lot of the big companies are moving over to mini-game filled nonsense rather than requiring anybody to utilise their brain or imagination for more than five minutes. I hope you're right though; I really miss the days where I'd buy a complete game on release, rather than only getting half the experience.
- hayksaakian 13y agoI think he means it will go the way of Facebook games.
- robryan 13y agoWhat is wrong with 10 hour single player AAA games? These generally offer the most refined interactive story type experiences. I much prefer one of these to most movies.
- yareally 13y agoMostly the price of the typical 10 hour single player AAA game tends to be $60 + additional DLCs or special preorder things making up go up to the $80+ range. That might not seem so troublesome on the surface, but there's generally little motivation to replay such games most of the time. Also, the knowledge that there have been many games with much more single player time as well as re-playability for a comparable or lesser price now or in the past. The more those 10 hour games become popular, the more it's considered acceptable and even normal for games in general. The problem compounds when a new generation plays such games and never realizes how games were in the past. I've already noticed it with PC gamers and that many use controllers now even for typically keyboard/mouse games like FPSs. Companies end up failing to user test for keyboard/mouse players and things like custom key bindings or keyboard/mouse UX get ignored. Probably the worst example I've seen recently was Sleeping Dogs on PC. No custom key bindings (except for keys you didn't care about changing). Things like exiting a vehicle were set to the right mouse button without a way to change. I ended up accidentally pressing it at least 40-50 times throughout the game and had to repeat at least a few missions. Typically, these type of games are bought for the multiplayer aspect (which is why I assume the single player game is so short and limited). I'm not much for multiplayer gaming unless it's with friends and not random people. Co-op gaming can be especially fun if done right (Saints Row 3, Terraria, Borderlands, etc). In the end though, it's all about preferences. You might like such games yourself (and many others), but not everyone does. I think such games fill a niche for those that like them, but I loathe seeing them become the majority of PC/Console games as they're not the type of game that usually interests me.
- incision 13y ago>"Mostly the price of the typical 10 hour single player AAA game tends to be $60 + additional DLCs or special preorder things making up go up to the $80+ range." As an adult, paying $6-8 per hour for "AAA" interactive entertainment isn't terribly expensive, it's quite cheap even.
- fhd2 13y agoI'm also not quite as optimistic as the parent. However, I do wonder if legislators will step in at some point. Both the gambling and weapon industries, to which this has been compared below, are being regulated. Well, in Europe at least. Just anecdotal evidence, but there seem to be very few weapon owners or people with gambling problems here in Germany. Edit: Just noticed this comment below, it's already being regulated in Germany: https://news.ycombinator.com/item?id=6088903 https://news.ycombinator.com/item?id=6088903
- Kiro 13y agoHaving worked at a gambling company I can assure you gambling problems are probably as common in Germany as in any other country (FWIW about one third of our support staff was german). Regulations can't really prevent you from playing online, no matter how innovative the restrictions are.
- koralatov 13y agoI really miss the days where I'd buy a complete game on release, rather than only getting half the experience. Having just played through Mass Effect 2 and 3, I couldn't agree more with you. The singleplayer `DLCs' felt like bits of the game they'd deliberately chopped out so they could sell them to me later. Nothing in those add-ons was essential, but it all felt like stuff that would have been included in the game proper ten years ago.
- BillyMaize 13y agoThis. Honestly, how can they act like we should pay for the DLC when it was ready for ME3 on day one! I am totally against DLC and have only ever bought DLC for Skyrim because it added enough gameplay to be worth the cost.
- dspillett 13y agoI cancelled my pre-order for Bioshock Infinite because Steam offered what I saw at the time as "day 1 DLC", and paid half price for the game a couple of months later. You want to sell me half a game? Fair enough, but I'll wait until I can pay half the price. Of course it turns out that on this occasion I picked the wrong target as they are doing the DLC thing right (they started work on it after the main game was complete rather than it being cut out of the main game and sitting on the disk from day one ready to be activated by a DLC code) but that wasn't made obvious in the sales blurb I saw at the time. But my principal still stands: if the DLC is genuinely an extra or an extension then I don't mind, but when it seems to be a core part of the content removed to get a few extra $ I'l adjust what I'm willing to pay for the main game accordingly.
- incision 13y agoI agree with your overall point, but I nothing wrong with "AAA games with 10-hour single-player campaigns". There was a time when I wanted tens if not hundreds of hours of play time out of every game. These days, 8-10 hours is just about perfect for me - something I could play through over the course of a month or two and complete with some sense of finality.
- Semaphor 13y agoGood thing Civilization still has a huge fan base. 370h for V on steam and counting for me.
- derefr 13y agoIt's "common knowledge" that you will lose money, asymptotically, at a casino or playing the lottery. Yet casinos and lotteries thrive.
- 6ren 13y agoArms dealing has a long and profitable history. Is the dynamic different, for the consumer, in an artificial world? Even cyclists happily pay top dollar for fancy components - and though they may appreciate the engineering, advantage and prestige are the key motivation. (note: prestige is also zero-sum).
- ig1 13y agoEverything you said could be applied to pay upfront games as well. i.e: "I don't believe this kind of "pay before you play" style games will last much longer. It's the kind of thing someone new to games will pay for, but after paying for a bit, those same people seem to 'wise up' eventually. I think you'll see these kind of games slowly decreasing in profitability over the next 5 years. It's similar to many other forms of short term profit in which the value provided does not equal the amount paid - eventually the market will dry up as it becomes common knowledge."
- rmc 13y agoAh, but these are new, and different. So they must be worse. Duh.
- levosmetalo 13y ago$3.8M/day * 365 days = $1.387B/yer With a profit margin of only 20%, one can become a billionaire in a little more than 3 years? There's plenty room to find another way of making money after 5 years of reading the wave this way, even if this kind of business suddenly drops to $0/day after five years, which won't happen.
- clueless123 13y agoRegarding 'wise up'... No one has ever lost money by underestimating the intelligence of the masses (P.T. Barnum)
- marcamillion 13y agoI would love to see more evidence. "A report suggests..." doesn't quite cut it for me. Not saying the author is lying, but his maths could be off or maybe he could have misread something somewhere (e.g. maybe it is $3.8M/year vs /day).
- abhimir 13y agoThe numbers are correct. These numbers have been reported by GungHo (the company that has made Puzzles&Dragons). They have to report their revenue numbers as they are traded in the Osaka Stock Exchange. [1] Also these are April numbers, recent revenue estimates will be even higher as the game is now climbing up the top grossing charts (iTunes) in US too. [1]http://www.gameskinny.com/bdbci/gungho-made-376-million-a-day-in-april-with-puzzle-dragons http://www.gameskinny.com/bdbci/gungho-made-376-million-a-da...
- patio11 13y ago+1 for "The numbers are correct." See, among numerous other places: http://www.gungho.co.jp/ir/uploads/irk20130509_2.pdf http://www.gungho.co.jp/ir/uploads/irk20130509_2.pdf If you don't understand what an audited financial statement written in Japanese says, that's cool, you can default to "Trust Patrick that Puzzle Dragons is a cultural phenomenon right now and that it is one of the first Japanese companies which has truly absorbed the spirit of Zynga with respect to monetization."
- marcamillion 13y agoI can't read Japanese, so I will trust you Patrick. Soo...given that the numbers are real...that's crazy.
- cnipb 13y agoOn a side note, I find showstringmedia.com.au as an interesting company with three different businesses under it - media, applications (though there is only one) and lead generation. Are you aware of similar businesses that have successfully built independent media business, bootstrapping it with other services?
- mbesto 13y agoI'm going through this market with a friend right now. This is very real. For example look at DeNA.[0] This statement right here is simply amazing: As a result, revenue of the Social Media Business was ¥179,627 million, up 37.9% year-on-year, and segment profit was ¥78,106 million, up 29.4% year-on-year. Their YOY revenue from Social Media (mobile games) is $1.8bil. [0]http://v4.eir-parts.net/v4Contents/View.aspx?template=ir_material&sid=21726&code=2432 http://v4.eir-parts.net/v4Contents/View.aspx?template=ir_mat...
- kayoone 13y agoYep, but its also a very crowded market, for ever startup that makes huge money with free to play games, there are hundreds (or even thousands) that fail.
- coffeeaddicted 13y agoOur highest law court in Germany made a judgement recently which can make selling that kind of games a lot harder here in the future. They forbid advertisement for online game items if the advertisement is targeted at children. The concrete example which triggered this could be translated as "Take the chance bargain and give your armor and weapons that certain something." German link: http://www.heise.de/newsticker/meldung/BGH-verbietet-Internet-Werbung-fuer-Kinder-1919592.html http://www.heise.de/newsticker/meldung/BGH-verbietet-Interne...
- w1ntermute 13y agoThere was a similar thing in Japan with the kompu gacha ban a year or two ago, but the companies have just found ways around it and are thriving the same as ever.
- deleted 13y ago[deleted]
- alcari 13y agoI don't like this article because it lacks a source for the revenue figure, has a tenuous grasp of the English language, and doesn't really add anything to the discussion of the business model (it reads like the author's never heard of "free to play" games before). As for the business model itself: I prefer Valve's take on it, where paying doesn't give any competitive advantage (all the Team Fortress 2 items that aren't purely cosmetic are random drops for non-paying players, and Dota 2 is all cosmetic items).
- BillyMaize 13y agoExactly. I wouldn't play Dota 2 anymore if all the big fans could simply dump a couple hundred bucks into it and be better than everyone else. It's the reason I stopped playing games like Magic the Gathering as well.
- babarock 13y agoReports suggest the app is currently making around USD$3.8 million a day or around USD$54 million per month. I don't get it. That's about 15 days per month. Unless I'm missing something?
- lcedp 13y agoYou are not. They messed up something.
- HNLogInShit 13y agoThis "article" sucks because it doesn't delve into any explanation or provide any insight. So what? "You're submitting too fast." You know what, HN? Fuck you. When we take time to submit content to YOUR Web site, you say "thank you." You don't tell us to sit there and twiddle our thumbs in hopes of someday having the PRIVILEGE of posting again. The fucking gall. Piss off.
- dennybritz 13y agoDon't see what's new about this, i.e. why this has so many upvotes. Tons of mobile games have been following on the same model for a while. Is this being upvoted just because the number looks stunning?
- deleted 13y ago[deleted]
- endemic 13y agoYeah, seems like just another scammy F2P mobile game. Kudos to them for making money hand over fist, but I don't think I could sleep at night if I built my business by exploiting users.
- lazyjones 13y agoThe amazing thing about this is how easily these f2p apps/games can monetize "content" while all kinds of web publications struggle with this. Is "serious" content simply to unattractive or is the fact that the payment process is handled by a centralized, trusted mechanism what makes the difference? If the latter, we should probably add payment options to browsers.
- rfnslyr 13y agoMaybe we should further gamify websites? Look at OKCupid, you can purchase a wide array of features. You can buy the ability to be invisible, to disable adds, to send unlimited messages, to receive unlimited messages. We could build an extra layer on top of websites offering additional features to the site that don't take away from the main experience. All I'm seeing similar to this is a few websites offering ad removal for $x, nothing else. These games pop out new games on various platforms by the week, then advertise the new game in all the other X amount of games they have. It recycles itself.
- nicholassmith 13y agoThe most interesting part (for me) was the mention of the pay for credit to continue. Now that is an interesting use of IAP rather than 'shiny golden boots, £3', as it works on an established model that was reasonably successful for a number of years. Does anyone know of any other games using the same mechanism?
- Negitivefrags 13y ago"Time gating" is probably the most common free to play business model on IOS. See the top 10 grossing list in the App Store for other games using that model.
- nicholassmith 13y agoTimegating is different isn't it? You pay X for Y amount of time, whereas this is you pay X for Y amount of lives. Or have I got my definition of timegating wrong?
- Negitivefrags 13y agoTime gating doesn't mean paying for time, it means paying to make a clock go away. Time gating in these games is often in the form of "Pay X to get another life now or wait for 30 minutes". Candy Crush being a good example. It's like having an arcade machine that gets a free credit on it every half an hour.
- nicholassmith 13y agoAh hah, of course. That's much different though, that's the game imposing a limit upon you outside your control, in this case it's if you die you have to make a choice of paying or dropping back.
- makomk 13y agoThere's some discussion of it in the "Reward Removal" section of this widely-linked Gamasutra article http://www.gamasutra.com/blogs/RaminShokrizade/20130626/194933/ http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949..., but their example is again Puzzles and Dragons. Presumably this is the main game that uses this technique aggressively.
- ksk 13y agoHas anyone actually duplicated any form of success exclusively by studying/analyzing the business models of successful startups? In grad school we went through dozens harvard business review case studies on large and small companies. All the reasoning about why they failed or succeeded just seemed too locally connected to actually be true. Honestly I just felt like there was nothing to learn from reviewing them. Yes, people already know that luck plays a factor in success, but someone needs to sit down and quantify it. I secretly suspect that it is much larger that most people think it is. Here I'm talking purely about business decisions/strategies. I'm leveling the playing field by assuming that companies are able to hire qualified people to plan/execute the creation of a high-quality product/service. Edit: BTW. This is a great read for people interested in how chance affects our daily lives. http://amzn.com/0307275175 http://amzn.com/0307275175
- bluekite2000 13y agoAny game designer here wants to collaborate in reskinning my puzzle games Smart Kick (IOS and Android)? We feel like our puzzles are much better. Links are on ndat.org.