Flash game development is not a guaranteed way to make money. For instance hosting your games on your own site (and having ads) is only worthwhile if you get a massive amount of web traffic or you are someone like Electronic Arts with Lord of Ultima. It’s certainly possible to make money from developing games, but it’s hard work and you can probably make more money in the same time flipping burgers.
The best bet is probably through licensing your game to one or more sponsors. There are a number of of sites that bring developers and sponsors together. So how does it work?
One site that is prominent in this area: FlashGamelicense.com (FGL), which sold/licensed an average of three games per day in Decemnber 2011. Set up by two game developers, it has done almost 7,000 deals worth over $10 million.
FGL is a marketplace where developers showcase their games to several thousand buyers. If you want to run a Flash game website, you can buy (i.e. license) any of the 10,000+ games that are offered. Mind you that only averages $1,428.57 per game, but I’d guess that there will be a spectrum of games prices and possibly more if the deal is exclusive.
Or it may follow some power law like smartphone apps, where some developers earn millions and others can barely afford peanuts. The FGL blog raises some interesting points like one on icon quality, which points out that a well designed game icon earns, on average, $100 more than a less well designed one. The blog provides plenty of examples.
Their FGLopedia is equally worth reading; it covers the basics of how Flash games make money given that they’re free. The newbie developer guide is a must read for anyone who wants to develop and sell Flash Games through them or similar websites.
HTML5 Games will inevitably go down the same route as it’s a tested business model, but there are obvious distinctions between the two. Flash games have to be bundled up, usually as one file, and once a game is out, it can be hard to update it. A website, however, can be updated behind the scenes and may consist of many files not just one, so it’s harder to manage for multiple files.
This is an area ripe for innovation. There’s the question of protecting files as well. Websites aren’t exactly difficult to copy in the same way, whereas Flash games can at least be sitelocked. So perhaps web games will use secure systems such as ion cube which protects many php sites.
Newer methods of monetizing, such as micro-transactions, may change things as well. Flash developers like Rob Donkin are testing these, but they’re likely to crop up mainly in newer games, not the older ones. The lesson seems to be that the games are best designed around them, not just shoe-horning these new methods onto existing games.