New Pre-Reviews Temporarily Turned Off

We’ve turned off the pre-review system for a couple weeks, as we work out some kinks in the system. If your game is already in the pre-review queue, it will still be handled as normal. But new games won’t be able to enter the queue.

Thank-you, everybody who’s done a pre-review so far! We’re using your feedback to make the process more straightforward. It will be turned back on shortly!

Monetizing Your Web Game Part 1

Monetizing Your Web Game Part 1

Currently there are many choices when it comes to monetizing a web game. It can be daunting to decide which model is best for a developer. On top of this, there are conflicting reports as to which ones are truly lucrative. The hope of this series of articles is to shine a light on many of the monetization methods to choose from by presenting hard facts based on case studies from a number of developers as well as statistics we have been tracking at FlashGameLicense.com and GamerSafe.com.

Part 1: Sponsorship and Licensing

Before I get into the ins and outs of licensing a web game, let me define some terms:

Sponsorship

  • A deal made between an entity (the sponsor) and a developer in which the sponsor pays to have their branding/ads in one of the developer’s games. The terms Sponsorship and License are used interchangeably in most cases (and in all cases for the purposes of this article).

Primary License/Sponsorship

· A sponsorship where the Sponsor has their branding in every copy of the game on the web except where the developer has explicitly sold a Secondary License (defined below) to another entity. The developer has complete freedom to remove the primary sponsor’s branding and make any other changes to the game as long as it is licensed and locked to the other entity’s domain.

Non-Exclusive License/Sponsorship

· A Sponsorship where the license of the game is not exclusive to the buyer. The buyer is purchasing one custom version of the game.

Secondary License (aka Non-Exclusive Site-Locked License)

· A Sponsorship where the license of the game is not exclusive to the buyer. The buyer is purchasing one custom version of the game, and this version must be “locked” to the buyer’s domain. This is the most common type of non-exclusive license and it is compatible with the primary license.

Performance Bonus

· A bonus paid by the Sponsor to the Developer based on pre-defined performance milestones. Bonus structures take many forms. A couple of examples are: a lump sum payout if a game gets a certain number of plays, or a CPC (cost per click) deal where the Developer is paid for each unique user sent back to the Sponsor’s site.

There are many more licensing types, but these are the most popular and most important for this article. You can find a longer list of licensing types and terms here: http://www.flashgamelicense.com/view_library.php?page=license-terms

At its core, the Primary Sponsorship model is simple: A Sponsor is interested in getting his or her branding into a game that will potentially be viewed and played by millions of people. In most cases, the ultimate goal is to get those users to click back to the Sponsor’s site via the links in the game.

So, this is why your game is worth money to sponsors, but how do you get the most money out of the deal as possible? The trap many developers fall into is assuming that their game has a set worth to a sponsor, and that if the sponsor pays $x for the game, then they must surely be making more than $x from the game. This isn’t entirely accurate. Sponsors make money by licensing games in two main ways. One, is they plan on the long term funnel of new users a game will bring them. And two, they sponsor many games in hopes that a handful will be successful. So, what this means is that they are investing in your game so that they can make their money back long term or, if that doesn’t happen, that your payment will be absorbed by another – more successful – game. Of course, it is slightly more complex than that in the sense that they are getting brand association with your game and other perks like having high quality content for their site, but when thinking about how to get the most out of a deal the two main factors of long term earnings and uncertain returns should be considered the most. In short, if you can convince a sponsor that your game will have massive, long term, appeal and that their investment is well spent, you can make more money.

Easier said than done, right? Maybe not. Having a great game is definitely most of the battle when it comes to sponsorships, but there is a lot you can add to a game to increase its worth to a sponsor (as an aside I want to mention that you should NOT release your game before you seek a sponsorship. Once a game is released “into the wild” it is virtually worthless to a sponsor). The easiest way to do this is to give players a strong incentive to click back to a Sponsor’s site. This can be done by adding bonus content that is only playable on a Sponsor’s site, or linking to walkthroughs on the Sponsor’s site, or any number of other things. Take note, however, that you have to be extremely careful in how you execute, and present, this sort of tactic. You need to make sure that the game, on any site, is fully playable and not limited in any way. If players perceive the game as being nothing more than an advertisement, or that it is trying to trick them in some way, the game will undoubtedly be rated down and hidden on sites.

Before I continue I think it is important to point out something that will be a reoccurring theme in this series. It is important that you choose a monetization model for your games that you are comfortable with and that suites you. There are pros and cons to any path you choose. Some may have high risk, high reward. Others may be low risk low reward. Some may provide you with the creative freedom you desire, but limit you in how you can monetize the game, and so on. So, with this next bit of advice I caution you to decide what model you are most comfortable with. Based on what has been discussed this far, my recommendation is to strive to invest in the success of your game. This is usually a little bit more risky, but ultimately it drives everyone involved to push for the game’s success. The reason it is more risky is because it usually means you take less up front in the deal. Here are a few examples of how you can invest in your game’s success:

- Aim for a performance bonus (preferably based on CPC to the Sponsor’s site).

- Include links in your game to your own, Developer, site where you have site ads.

- Aim to include Ads in the game and Microtransactions if appropriate. Implementing either or both tastefully is key.

Notice that none of these investments harms the sponsor. In fact, they should increase the value to the Sponsor as well. Services like GamerSafe and CPMStar have built in mechanics to share revenue with Sponsors. And since you make more money by making the game more successful, the Sponsor is benefiting from a very motivated developer wanting to make sure the game does as well as it can.

Another great thing about Sponsorships is that you get to benefit from the Sponsor his/herself. Sponsors want the game to do well, and in most cases they know what players like. A Sponsor’s advice can be invaluable. Of course, you should never feel forced to make changes you feel will hurt the game, but you should be open to any suggestions a Sponsor may have.

Once you have accomplished these steps, the real fun starts. This is the point where you are actually pitching your game to sponsors. The easiest way to do this is at FlashGameLicense.com where we have an entire system built to assist you in this exact situation. The easiest and fastest way to find out your game’s worth in Sponsors’ eyes is to get them to bid on your game. Bidding wars often get heated and in the end the most motivated Sponsor ends up on top. And who else would you rather have investing in your game?

And once your Primary Sponsorship deal is complete you can start to sell non-exclusive licenses. This has proven to be a great secondary source of income for the Developer, but also a harmless condition for the Sponsor to allow. The point of a non-exclusive license, for the buyer, is not to drive traffic but instead to retain traffic and acquire quality content. Most sites who buy non-exclusive licenses would never take the distributed version of the game anyway since they do not allow branding other than their own on their site. What this means is a sponsor is not losing any traffic, but the developer is able to resell their game indefinitely. Oftentimes a sponsor will ask for a short period of time after the Primary Sponsorship deal is done before you can sell non-exclusive licenses, however.

This is merely an introduction to the world of sponsorships and licenses with web games, and is not meant to be all encompassing or definitive. I invite all readers to visit our site: FlashGameLicense.com to find out more. FGL is also THE place to buy or sell web games, so be sure to visit if you are hoping to do either or both.

To summarize what has been covered here:

- Make a great game (or have it nearly finished)

- Don’t release your game!

- Give players an incentive to click to the Sponsor’s site

- Invest in the success of your game (if it is right for you)

- Be open to Sponsor’s suggestions

- Get your game in front of as many Sponsors’ eyes as possible and have them compete to get you the best deal

- Sell non-exclusive licenses

As a final note I want to stress that the Sponsorship model and all of the models that will be covered in future articles in this series are not mutually exclusive of each other. Developers can, and should, take advantage of all of them. I am merely presenting them individually as to make them less confusing to understand. The final article in this series will cover the best ways to combine as many of these monetization models as possible to maximize the revenue generated by your game.

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<div class=WordSection1>

<p class=MsoNormal>Monetizing Your Web Game Part 1</p>

<p class=MsoNormal>Currently there are many choices when it comes to monetizing
a web game.<span style='mso-spacerun:yes'>  </span>It can be daunting to decide
which model is best for a developer.<span style='mso-spacerun:yes'>  </span>On
top of this, there are conflicting reports as to which ones are truly
lucrative.<span style='mso-spacerun:yes'>  </span>The hope of this series of
articles is to shine a light on many of the monetization methods to choose from
by presenting hard facts based on case studies from a number of developers as
well as statistics we have been tracking at FlashGameLicense.com and GamerSafe.com.<span
style='mso-spacerun:yes'>  </span></p>
<p class=MsoNormal>Part 1: Sponsorship and Licensing</p>

<p class=MsoNormal>Before I get into the ins and outs of licensing a web game,
let me define some terms:</p>

<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
line-height:normal;mso-outline-level:2'><b><span style='mso-fareast-font-family:
"Times New Roman"'>Sponsorship<o:p></o:p></span></b></p>

<ul type=disc>
 <li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
     line-height:normal;mso-outline-level:2;mso-list:l1 level1 lfo2'><span
     style='mso-fareast-font-family:"Times New Roman"'>A deal made between an
     entity (the sponsor) and a developer in which the sponsor pays to have
     their branding/ads in one of the developer's games. The terms Sponsorship
     and License are used interchangeably in most cases (and in all cases for
     the purposes of this article).<b><o:p></o:p></b></span></li>
</ul>

<h2><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Primary
License/Sponsorship<o:p></o:p></span></h2>
<p style='margin-left:.5in;text-indent:-.25in;mso-list:l1 level1 lfo2'><![if !supportLists]><span
style='font-size:11.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;
mso-bidi-font-family:Symbol'><span style='mso-list:Ignore'>·<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>A
sponsorship where the Sponsor has their branding in every copy of the game on
the web except where the developer has explicitly sold a Secondary License (defined
below) to another entity. The developer has complete freedom to remove the
primary sponsor's branding and make any other changes to the game as long as it
is licensed and locked to the other entity's domain. <o:p></o:p></span></p>

<h2><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Non-Exclusive
License/Sponsorship<o:p></o:p></span></h2>

<p style='margin-left:.5in;text-indent:-.25in;mso-list:l1 level1 lfo2'><![if !supportLists]><span
style='font-size:11.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;
mso-bidi-font-family:Symbol'><span style='mso-list:Ignore'>·<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>A
Sponsorship where the license of the game is not exclusive to the buyer.<span
style='mso-spacerun:yes'>  </span>The buyer is purchasing one custom version of
the game.<o:p></o:p></span></p>

<h2><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Secondary
License (aka Non-Exclusive Site-Locked License)<o:p></o:p></span></h2>
<p style='margin-left:.5in;text-indent:-.25in;mso-list:l1 level1 lfo2'><![if !supportLists]><span
style='font-size:11.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;
mso-bidi-font-family:Symbol'><span style='mso-list:Ignore'>·<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>A
Sponsorship where the license of the game is not exclusive to the buyer.<span
style='mso-spacerun:yes'>  </span>The buyer is purchasing one custom version of
the game, and this version must be “locked” to the buyer’s domain. This is the
most common type of non-exclusive license and it is compatible with the primary
license. <o:p></o:p></span></p>

<h2><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Performance
Bonus<o:p></o:p></span></h2>

<p style='margin-left:.5in;text-indent:-.25in;mso-list:l1 level1 lfo2'><![if !supportLists]><span
style='font-size:11.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;
mso-bidi-font-family:Symbol'><span style='mso-list:Ignore'>·<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>A
bonus paid by the Sponsor to the Developer based on pre-defined performance
milestones. Bonus structures take many forms.<span style='mso-spacerun:yes'> 
</span>A couple of examples are: a lump sum payout if a game gets a certain
number of plays, or a CPC (cost per click) deal where the Developer is paid for
each unique user sent back to the Sponsor’s site.<o:p></o:p></span></p>
<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p>&nbsp;</o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>There are
many more licensing types, but these are the most popular and most important
for this article.<span style='mso-spacerun:yes'>  </span>You can find a longer
list of licensing types and terms here: <a
href="http://www.flashgamelicense.com/view_library.php?page=license-terms">http://www.flashgamelicense.com/view_library.php?page=license-terms</a><o:p></o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>At its
core, the Primary Sponsorship model is simple:<span style='mso-spacerun:yes'> 
</span>A Sponsor is interested in getting his or her branding into a game that
will potentially be viewed and played by millions of people. In most cases, the
ultimate goal is to get those users to click back to the Sponsor’s site via the
links in the game.<o:p></o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>So, this
is why your game is worth money to sponsors, but how do you get the most money
out of the deal as possible?<span style='mso-spacerun:yes'>  </span>The trap
many developers fall into is assuming that their game has a set worth to a
sponsor, and that if the sponsor pays $x for the game, then they must surely be
making more than $x from the game.<span style='mso-spacerun:yes'>  </span>This
isn’t entirely accurate.<span style='mso-spacerun:yes'>  </span>Sponsors make
money by licensing games in two main ways.<span style='mso-spacerun:yes'>
</span>One, is they plan on the long term funnel of new users a game will bring
them.<span style='mso-spacerun:yes'>  </span>And two, they sponsor many games
in hopes that a handful will be successful.<span style='mso-spacerun:yes'>  
</span>So, what this means is that they are investing in your game so that they
can make their money back long term or, if that doesn’t happen, that your payment
will be absorbed by another – more successful – game.<span
style='mso-spacerun:yes'>  </span>Of course, it is slightly more complex than
that in the sense that they are getting brand association with your game and
other perks like having high quality content for their site, but when thinking
about how to get the most out of a deal the two main factors of long term
earnings and uncertain returns should be considered the most. In short, if you
can convince a sponsor that your game will have massive, long term, appeal and
that their investment is well spent, you can make more money.<o:p></o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Easier said
than done, right?<span style='mso-spacerun:yes'>  </span><span class=GramE>Maybe
not.</span> Having a great game is definitely most of the battle when it comes
to sponsorships, but there is a lot you can add to a game to increase its worth
to a sponsor (as an aside I want to mention that you should NOT release your
game before you seek a sponsorship.<span style='mso-spacerun:yes'>  </span>Once
a game is released “into the wild” it is virtually worthless to a sponsor).<span
style='mso-spacerun:yes'>  </span>The easiest way to do this is to give players
a strong incentive to click back to a Sponsor’s site.<span
style='mso-spacerun:yes'>  </span>This can be done by adding bonus content that
is only playable on a Sponsor’s site, or linking to walkthroughs on the
Sponsor’s site, or any number of other things.<span style='mso-spacerun:yes'>
</span>Take note, however, that you have to be extremely careful in how you
execute, and present, this sort of tactic.<span style='mso-spacerun:yes'> 
</span>You need to make sure that the game, on any site, is fully playable and
not limited in any way.<span style='mso-spacerun:yes'>  </span>If players
perceive the game as being nothing more than an advertisement, or that it is
trying to trick them in some way, the game will undoubtedly be rated down and
hidden on sites. <o:p></o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Before I
continue I think it is important to point out something that will be a
reoccurring theme in this series.<span style='mso-spacerun:yes'>  </span>It is
important that you choose a monetization model for your games that you are
comfortable with and that suites you.<span style='mso-spacerun:yes'> 
</span>There are pros and cons to any path you choose.<span
style='mso-spacerun:yes'>  </span>Some may have high risk, high reward.<span
style='mso-spacerun:yes'>  </span>Others may be low risk low reward.<span
style='mso-spacerun:yes'>  </span>Some may provide you with the creative
freedom you desire, but limit you in how you can monetize the game, and so
on.<span style='mso-spacerun:yes'>  </span>So, with this next bit of advice I
caution you to decide what model you are most comfortable with.<span
style='mso-spacerun:yes'>  </span>Based on what has been discussed this far, my
recommendation is to strive to invest in the success of your game.<span
style='mso-spacerun:yes'>  </span>This is usually a little bit more risky, but
ultimately it drives everyone involved to push for the game’s success.<span
style='mso-spacerun:yes'>  </span>The reason it is more risky is because it
usually means you take less up front in the deal.<span
style='mso-spacerun:yes'>  </span>Here are a few examples of how you can invest
in your game’s success:<o:p></o:p></span></p>
<p style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='font-size:11.0pt;font-family:"Calibri","sans-serif";mso-fareast-font-family:
Calibri;mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Aim
for a performance bonus (preferably based on CPC to the Sponsor’s site).<o:p></o:p></span></p>

<p style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='font-size:11.0pt;font-family:"Calibri","sans-serif";mso-fareast-font-family:
Calibri;mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Include
links in your game to your own, Developer, site where you have site ads.<o:p></o:p></span></p>

<p style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='font-size:11.0pt;font-family:"Calibri","sans-serif";mso-fareast-font-family:
Calibri;mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Aim
to include Ads in the game and <span class=SpellE>Microtransactions</span> if
appropriate.<span style='mso-spacerun:yes'>  </span>Implementing either or both
tastefully is <span class=GramE>key</span>.<o:p></o:p></span></p>
<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Notice
that none of these investments harms the sponsor.<span
style='mso-spacerun:yes'>  </span>In fact, they should increase the value to
the Sponsor as well. Services like <span class=SpellE>GamerSafe</span> and <span
class=SpellE>CPMStar</span> have built in mechanics to share revenue with
Sponsors.<span style='mso-spacerun:yes'>  </span>And since you make more money
by making the game more successful, the Sponsor is benefiting from a very
motivated developer wanting to make sure the game does as well as it can.<o:p></o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Another
great thing about Sponsorships is that you get to benefit from the Sponsor
his/herself.<span style='mso-spacerun:yes'>  </span>Sponsors want the game to
do well, and in most cases they know what players like.<span
style='mso-spacerun:yes'>  </span>A Sponsor’s advice can be invaluable.<span
style='mso-spacerun:yes'>  </span>Of course, you should never feel forced to
make changes you feel will hurt the game, but you should be open to any
suggestions a Sponsor may have.<o:p></o:p></span></p>
<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Once you
have accomplished these steps, the real fun starts.<span
style='mso-spacerun:yes'>  </span>This is the point where you are actually
pitching your game to sponsors.<span style='mso-spacerun:yes'>  </span>The
easiest way to do this is at FlashGameLicense.com where we have an entire
system built to assist you in this exact situation.<span
style='mso-spacerun:yes'>  </span>The easiest and fastest way to find out your
game’s worth in Sponsors’ eyes is to get them to bid on your game.<span
style='mso-spacerun:yes'>  </span>Bidding wars often get heated and in the end
the most motivated Sponsor ends up on top.<span style='mso-spacerun:yes'> 
</span>And who else would you rather have investing in your game?<o:p></o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>And once
your Primary Sponsorship deal is complete you can start to sell non-exclusive
licenses.<span style='mso-spacerun:yes'>  </span>This has proven to be a great
secondary source of income for the Developer, but also a harmless condition for
the Sponsor to allow.<span style='mso-spacerun:yes'>  </span>The point of a
non-exclusive license, for the buyer, is not to drive traffic but instead to
retain traffic and acquire quality content.<span style='mso-spacerun:yes'>
</span>Most sites who buy non-exclusive licenses would never take the
distributed version of the game anyway since they do not allow branding other
than their own on their site.<span style='mso-spacerun:yes'>  </span>What this
means is a sponsor is not losing any traffic, but the developer is able to
resell their game indefinitely.<span style='mso-spacerun:yes'> 
</span>Oftentimes a sponsor will ask for a short period of time after the
Primary Sponsorship deal is done before you can sell non-exclusive licenses,
however.<o:p></o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>This is
merely an introduction to the world of sponsorships and licenses with web
games, and is not meant to be all encompassing or definitive.<span
style='mso-spacerun:yes'>  </span>I invite all readers to visit our site:
FlashGameLicense.com to find out more.<span style='mso-spacerun:yes'>  </span>FGL
is also THE place to buy or sell web games, so be sure to visit if you are
hoping to do either or both.<span style='mso-spacerun:yes'>  </span><o:p></o:p></span></p>

<p><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>To
summarize what has been covered here:<o:p></o:p></span></p>
<p class=MsoNormal style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]>Make a great game (or have it nearly finished)</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]>Don’t release your game!</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='mso-fareast-font-family:"Times New Roman"'>Give
players an incentive to click to the Sponsor’s site</span></p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='mso-fareast-font-family:"Times New Roman"'>Invest
in the success of your game (if it is right for you)</span></p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='mso-fareast-font-family:"Times New Roman"'>Be
open to Sponsor’s suggestions</span></p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]>Get your game in front of as many Sponsors’ eyes
as possible and have them compete to get you the best deal</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.25in;mso-list:l2 level1 lfo3'><![if !supportLists]><span
style='mso-bidi-font-family:Calibri'><span style='mso-list:Ignore'>-<span
style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span></span><![endif]><span style='mso-fareast-font-family:"Times New Roman"'>Sell
non-exclusive licenses</span></p>
<p class=MsoNormal><o:p>&nbsp;</o:p></p>

<p class=MsoNormal><o:p>&nbsp;</o:p></p>

<p class=MsoNormal>As a final note I want to stress that the Sponsorship model
and all of the models that will be covered in future articles in this series
are not mutually exclusive of each other.<span style='mso-spacerun:yes'> 
</span>Developers can, and should, take advantage of all of them. I am merely
presenting them individually as to make them less confusing to understand. The
final article in this series will cover the best ways to combine as many of
these monetization models as possible to maximize the revenue generated by your
game.</p>

</div>

</body>
Monetizing Your Web Game Part 1

Currently there are many choices when it comes to monetizing a web game.  It can be daunting to decide which model is best for a developer.  On top of this, there are conflicting reports as to which ones are truly lucrative.  The hope of this series of articles is to shine a light on many of the monetization methods to choose from by presenting hard facts based on case studies from a number of developers as well as statistics we have been tracking at FlashGameLicense.com and GamerSafe.com.

Part 1: Sponsorship and Licensing

Before I get into the ins and outs of licensing a web game, let me define some terms:

Sponsorship
  • A deal made between an entity (the sponsor) and a developer in which the sponsor pays to have their branding/ads in one of the developer's games. The terms Sponsorship and License are used interchangeably in most cases (and in all cases for the purposes of this article).

Primary License/Sponsorship

  • A sponsorship where the Sponsor has their branding in every copy of the game on the web except where the developer has explicitly sold a Secondary License (defined below) to another entity. The developer has complete freedom to remove the primary sponsor's branding and make any other changes to the game as long as it is licensed and locked to the other entity's domain.
  • A Sponsorship where the license of the game is not exclusive to the buyer.  The buyer is purchasing one custom version of the game.
  • A Sponsorship where the license of the game is not exclusive to the buyer.  The buyer is purchasing one custom version of the game, and this version must be “locked” to the buyer’s domain. This is the most common type of non-exclusive license and it is compatible with the primary license.
  • A bonus paid by the Sponsor to the Developer based on pre-defined performance milestones. Bonus structures take many forms.  A couple of examples are: a lump sum payout if a game gets a certain number of plays, or a CPC (cost per click) deal where the Developer is paid for each unique user sent back to the Sponsor’s site.

Non-Exclusive License/Sponsorship

Secondary License (aka Non-Exclusive Site-Locked License)

Performance Bonus

There are many more licensing types, but these are the most popular and most important for this article.  You can find a longer list of licensing types and terms here: http://www.flashgamelicense.com/view_library.php?page=license-terms At its core, the Primary Sponsorship model is simple:  A Sponsor is interested in getting his or her branding into a game that will potentially be viewed and played by millions of people. In most cases, the ultimate goal is to get those users to click back to the Sponsor’s site via the links in the game. So, this is why your game is worth money to sponsors, but how do you get the most money out of the deal as possible?  The trap many developers fall into is assuming that their game has a set worth to a sponsor, and that if the sponsor pays $x for the game, then they must surely be making more than $x from the game.  This isn’t entirely accurate.  Sponsors make money by licensing games in two main ways.  One, is they plan on the long term funnel of new users a game will bring them.  And two, they sponsor many games in hopes that a handful will be successful.   So, what this means is that they are investing in your game so that they can make their money back long term or, if that doesn’t happen, that your payment will be absorbed by another – more successful – game.  Of course, it is slightly more complex than that in the sense that they are getting brand association with your game and other perks like having high quality content for their site, but when thinking about how to get the most out of a deal the two main factors of long term earnings and uncertain returns should be considered the most. In short, if you can convince a sponsor that your game will have massive, long term, appeal and that their investment is well spent, you can make more money. Easier said than done, right?  Maybe not. Having a great game is definitely most of the battle when it comes to sponsorships, but there is a lot you can add to a game to increase its worth to a sponsor (as an aside I want to mention that you should NOT release your game before you seek a sponsorship.  Once a game is released “into the wild” it is virtually worthless to a sponsor).  The easiest way to do this is to give players a strong incentive to click back to a Sponsor’s site.  This can be done by adding bonus content that is only playable on a Sponsor’s site, or linking to walkthroughs on the Sponsor’s site, or any number of other things.  Take note, however, that you have to be extremely careful in how you execute, and present, this sort of tactic.  You need to make sure that the game, on any site, is fully playable and not limited in any way.  If players perceive the game as being nothing more than an advertisement, or that it is trying to trick them in some way, the game will undoubtedly be rated down and hidden on sites. Before I continue I think it is important to point out something that will be a reoccurring theme in this series.  It is important that you choose a monetization model for your games that you are comfortable with and that suites you.  There are pros and cons to any path you choose.  Some may have high risk, high reward.  Others may be low risk low reward.  Some may provide you with the creative freedom you desire, but limit you in how you can monetize the game, and so on.  So, with this next bit of advice I caution you to decide what model you are most comfortable with.  Based on what has been discussed this far, my recommendation is to strive to invest in the success of your game.  This is usually a little bit more risky, but ultimately it drives everyone involved to push for the game’s success.  The reason it is more risky is because it usually means you take less up front in the deal.  Here are a few examples of how you can invest in your game’s success: -          Aim for a performance bonus (preferably based on CPC to the Sponsor’s site). -          Include links in your game to your own, Developer, site where you have site ads. -          Aim to include Ads in the game and Microtransactions if appropriate.  Implementing either or both tastefully is key. Notice that none of these investments harms the sponsor.  In fact, they should increase the value to the Sponsor as well. Services like GamerSafe and CPMStar have built in mechanics to share revenue with Sponsors.  And since you make more money by making the game more successful, the Sponsor is benefiting from a very motivated developer wanting to make sure the game does as well as it can. Another great thing about Sponsorships is that you get to benefit from the Sponsor his/herself.  Sponsors want the game to do well, and in most cases they know what players like.  A Sponsor’s advice can be invaluable.  Of course, you should never feel forced to make changes you feel will hurt the game, but you should be open to any suggestions a Sponsor may have. Once you have accomplished these steps, the real fun starts.  This is the point where you are actually pitching your game to sponsors.  The easiest way to do this is at FlashGameLicense.com where we have an entire system built to assist you in this exact situation.  The easiest and fastest way to find out your game’s worth in Sponsors’ eyes is to get them to bid on your game.  Bidding wars often get heated and in the end the most motivated Sponsor ends up on top.  And who else would you rather have investing in your game? And once your Primary Sponsorship deal is complete you can start to sell non-exclusive licenses.  This has proven to be a great secondary source of income for the Developer, but also a harmless condition for the Sponsor to allow.  The point of a non-exclusive license, for the buyer, is not to drive traffic but instead to retain traffic and acquire quality content.  Most sites who buy non-exclusive licenses would never take the distributed version of the game anyway since they do not allow branding other than their own on their site.  What this means is a sponsor is not losing any traffic, but the developer is able to resell their game indefinitely.  Oftentimes a sponsor will ask for a short period of time after the Primary Sponsorship deal is done before you can sell non-exclusive licenses, however. This is merely an introduction to the world of sponsorships and licenses with web games, and is not meant to be all encompassing or definitive.  I invite all readers to visit our site: FlashGameLicense.com to find out more.  FGL is also THE place to buy or sell web games, so be sure to visit if you are hoping to do either or both. To summarize what has been covered here: -          Make a great game (or have it nearly finished) -          Don’t release your game! -          Give players an incentive to click to the Sponsor’s site -          Invest in the success of your game (if it is right for you) -          Be open to Sponsor’s suggestions -          Get your game in front of as many Sponsors’ eyes as possible and have them compete to get you the best deal -          Sell non-exclusive licenses As a final note I want to stress that the Sponsorship model and all of the models that will be covered in future articles in this series are not mutually exclusive of each other.  Developers can, and should, take advantage of all of them. I am merely presenting them individually as to make them less confusing to understand. The final article in this series will cover the best ways to combine as many of these monetization models as possible to maximize the revenue generated by your game. </html>