Here’s How Game Developers Make Money

Game developers are making more money, according to a recent study from Developer Economics. That’s good news for developers who are afraid their games (which often take years to build) won’t earn more than a few bucks from the app store of their choice.

The pathways for generating income are diversifying, too. The report says advertising is paying less, as are in-app loot boxes for both game currency and things like extra levels. The subscription model is showing promise for game developers, as is selling branded merchandise.

But developers are also making money from other developers. One of the more lucrative methods for generating income is selling services to other developers. Similarly, selling or leasing assets and plugins is an income generator, with Developer Economics writing: “Our data shows a small but steady increase in the number of developers making money through selling services, assets and plugins to other developers.”

Streaming and cryptocurrency are also generating income. With more players streaming their achievements for an audience, developers are paying them to play their games as a form of promotion. From Developer Economics:

Cryptocurrencies are another trend that is helping spread the wealth across the industry by enabling developers, streamers and gamers to make micropayments to influence behaviors. Gamers can tip streamers when they are entertained and developers can pay streamers to promote their games, all through cryptocurrencies. Bits, the cryptocurrency within the Twitch platform which allows viewers to tip streamers, generated $12 million in the service’s first 10 months.

Citing JavaScript JIT compiling and React as coming-of-age technologies, the study also shows game developers are moving to the web. Year-over-year (YoY), web gaming has grown nearly ten percent, while mobile and native desktop gaming has dropped off each quarter.

Fortunately, the pipelines for making larger sums are opening up. Tracking the average monthly revenues of game developers, the percentage making zero on their game has dropped dramatically to around 30 percent (from roughly 50-55 percent). The number of game developers making $1-$100 from their games each month has also dipped slightly versus last quarter (but is stable YoY).

Salary Income Money Pay Wages Developer Game Developer Dice

The percentage of developers making over $1,000 per month has jumped noticeably, as has the percentage making over $10,000 each month. Unfortunately, the deltas for these particular markers are wide; there are segments for developers making $1,001-$10,000 and $10,001-$100,000, respectively. While these dollar figures represent a reachable goal for game developers, we don’t think a developer making $12,000 per month is comparable to one making $94,000 every 30 days, so we wish there was a more granular look.

Developer Economics’ survey is still a good overview of how game developers are making money, and a glimpse at how the landscape of monetization is changing. There are still ways to make money publishing simpler games to the App Store and securing funds via in-app purchases, but it seems the game developer ecosystem is now a mesh network of leasing or selling off services and assets while turning the advertising soil on self-published games.

One Response to “Here’s How Game Developers Make Money”

  1. Julian Webb

    Hey, just wanted to submit a point of clarification, Twitch Bits themselves aren’t cryptocurrency any more than the in-app currency of mobile games. It’s just an abstraction so Amazon can make it fuzzier how much people are spending on streamers.

    That said, there are 3rd party applications that allow you to donate in cryptocurrency, but they aren’t officially endorsed by Twitch/Amazon because they don’t give a percentage to them.

    Otherwise, great article!