In the last 2-3 years, there has been more success with indie games and their revenues, marketing and funding than some AAA-games have seen in years. It’s hard to deny independent studios now and even after the Flappy Bird phenomenon. The last successful free game that hit this amount of press and revenue in a short period was Angry Birds and that IP is still going strong with new installments of Angry Birds, cross promos, etc., unlike Flappy Bird. Flappy Bird might not be currently available in the Google Play and Apple iOS stores, but its developer continues to make money off of it and its success remains to be actively deconstructed.
I know you have the #2 money questions: How can a free-to-play game or free app make so much money? How is the developer still making money off of Flappy Bird even though it’s not available to download?
You have to understand the basics of monetizing digital products before you can understand how an application or software makes money. Here are the most popular ways of monetizing digital products:
- Retail/Digital Prices – You simply set the prices of your products/services.
- Affiliate Marketing – It’s like a referral program. If you know a store or marketplace offering products you like, you may then link or refer to their products on your website/webpage in which they get business and you get a percentage of sales.
- Advertising – There’s many forms of advertising but this is where you make the big bucks if you can reach the threshold of visitors/customers to produce your level of success. You simply put ads in your software/app or on your website. You may even put ads on your social profiles.
- Memberships – Charge membership fees for accessing your service or product.
- Sponsorship – Get a brand to pay for all your expenses while helping you marketing and operate your product or service.
- Investors – Get investors to put money into your product or service if you promise (or try your hardest) to give back interest.
- In-app purchases – If you have micro transactions, they can be a good source of revenue.
Monetizing a product does not automatically equal success. You have to unleash the beast that is marketing so that people will know you and your product exists, has value, is entertaining, is easy to use and has a reasonable cost. If you fail at marketing, then you fail to snag potential revenue sources. *Cough* Nintendo…*Cough*. Of course, it’s not so clean, cut, and dry. A lot of processes go into creating the best marketing strategies for your product or service. But the main tip is to always stay on top of marketing trends for your niche or industry.
Enough of that little lesson…now back to the Flappy Bird success…
How is Flappy Bird making money when its a free app? In-game advertising! Any pop-ups non-related to the game are in-game ads. How does it work? A company or brand pays Dong Nguyen to put their ads in his game. Whatever the type of advertising program, which the most popular is Pay-Per-Click or PPC but not necessarily used by Flappy Bird, each click or impression generates money. Also, the visitor or player is redirected to the advertiser’s website, product, service, etc which they can further make money off of you. If you don’t understand this, let me offer another example:
When you visit a Youtube video, watch or skip an ad in the video, you are giving the video creator/channel money based on views/impressions. Your eyeballs are dollar signs, literally. Why? Because companies/brands pay for the POTENTIAL of customers. POTENTIAL goes a long way…POTENTIAL gets you the big bucks.
In hindsight, Flappy Bird is making money off of the POTENTIAL of its advertising clients customers. And if you want to learn how to make money off of mobile apps, I’ll talk about that at my Rich, Born and Became blog in the future.
Flappy Bird currently makes $50,000 or more per day in advertising revenue according to Business Insider. There’s two reasons why: Word-of-mouth due to three major events that pushed the visibility of the game and its addictiveness. AppFreak.net discusses the psychology behind the addictiveness and the three major marketing events that slingshot Flappy Bird, including a video review by PewDiePie, the Bro Master.
The most popular advertising platforms are Google Adsense and Google AdWords. Flappy Bird uses AdWords. AppFreak.net recommended Dong Nguyen to use Chartboost or RevMob to get “higher pay-offs and more relevant offers”, which are both advertising networks. But so far, AdWords is just working fine because Dong is continually making money off of Flappy Birds. How?
According to CNET News, Flappy Bird’s in-game advertising isn’t switched off, therefore ad impressions are still going for the millions of people who already downloaded the game. Their addiction will still be a valuable source of revenue. Some are even taking it to the extreme as to selling the app for profit or bundling it with a phone, tablet or laptop and overpricing the product. In either way, this is probably the most interesting case of indie game success I have ever seen.