It was revealed this week that Rovio's hit mobile title Angry Birds cost only $140k to create and has already generated an estimated $70 million. That's 500 times more than what it cost to make.
It's truly a stunning figure, if you think about it, but it got us wondering, could Angry Birds be the most profitable game ever? In short, the answer is likely no, but it's clearly among a handful of incredibly high return titles. We chatted up a few analysts to get their take, since it's rather hard to pin down exact costs and profits on titles.
EEDAR's Jesse Divnich pointed out, "The 140k was the development costs and given the marketing and auxiliary products (plush toys), the actual cost to maintain and operate the Angry Birds brand is certainly higher, but still, it is fair to say that Angry Birds is by far one of the most profitable games in history, relative to costs."
He added, "Keeping in mind that from an absolute perspective, games such as Call of Duty and World of Warcraft do bring in a substantial amount more in profits. And of course that is the current conundrum in our industry. The big publishers know the margins are much higher in the mobile and social markets; however, the size of the actual profit potential remains limited. Angry Birds is an outlier and for every Angry Birds there are hundreds if not thousands that fail in the iOS environment. Of course, I am NOT attempting to subtract from Angry Birds' success, it succeeded against all odds and should be relished as a prime example of where our industry and consumer interest may be heading."
Wedbush Securities analyst Michael Pachter was more succinct, noting, "I bet Pong was more profitable." The Pong machines by themselves clearly weren't. According to Al Alcorn, it cost about $500 to manufacture the first Pongs, and then they were sold for about $1,200 apiece and the operators paid cash up front [source]. That said, Pachter may be on to something, as the transition to home consoles for Atari was huge for Pong, and the Pong software was quite cheap.
DFC Intelligence's David Cole also noted the extra porting costs and merchandising costs for Angry Birds, but in terms of other big return titles, he commented, "Those simple games that become big hits are definitely the most profitable in the industry. Tetris is probably the biggest hit - it cost essentially zero to develop and continues to make money after 20+ years."
Cole continued, "More recently you have Bejeweled from Popcap which I bet cost less than 140k and has made a lot more than $70 million. So I would say no it is not an ROI basis the most successful ever. However, I would say it falls into that rare category of games like Tetris and Bejeweled where if you have a hit the ROI is amazing."
5 Comments
11 months ago
This is an interesting discussion. You can only take it so far, because there are some games that were essentially developed for free (the only thing invested was time) that made a lot of money. So they're essentially infinitely profitable.
But it's still interesting to think about which games have posted the greatest ROIs of all time.
11 months ago
Totally agree Justin.
11 months ago
Hard to imagine that Pac-Man wouldn't be on the list, if not at the top, especially with all of the ancillary revenue and licenses to other platforms. And there are still new games every year. Angry Birds certainly seems to be on that path, though.
The game is good, but I don't get all of the hoopla. Why has this broken out and not Plants vs Zombies or Fieldrunners...? Shorter time investment, I guess. It just seems like they hit the lottery, as opposed to changing the metaphorical game.
11 months ago
To me, the interesting part is not so much the ROI, but the fact that this is the most profitable third-party game on a mobile platform, ever. From what I can tell, the best-selling third-party DS title is Dragon Quest IX, at a little over 5 million copies... which pencils out to about $45 million in revenue. Granted, New Super Mario Bros. is at 26 million copies, so it's made somewhere north of $250 million.
Still, when I hear people in the industry pooh-pooh smartphone games, saying they'll never make as much money on them as they do on a handheld console game, the Angry Birds example effectively quashes that argument. Plus, development costs for 3DS or NGP titles will likely be around $1 million or more. Yes, probably 90% of smartphone games don't make money... but the percentage of games that make money on consoles isn't all that terrific these days, either. There's certainly a benefit to a lower development cost, since it allows you to try out more ideas... Rovio did 51 games before Angry Birds hit it big.
11 months ago
I still think Tetris would be near or at the top of that list. It didn't take much to make so most of it's cost would be in marketing and porting it to new systems. It's just too bad that the man that created it didn't get the lions share of those profits(I think I read somewhere that he received very little if anything).