How Do Flash Games Make Money?
Before we can delve into the details of licensing and sponsorship, it helps to know something about the underlying business model of Flash games.
Flash Games are Free
Flash games have a unique business model. Most software makes money from sales to the user: a developer creates the software and then either sells it directly to the user, or possibly sells it to a publisher who sells it to the user. But Flash games are almost always free for the user.
Flash Games Generate Web Traffic
Instead of making money from sales, Flash games make money by generating web traffic. For example, hosting a good Flash game (or a whole bunch of good Flash games) on a portal website can lure visitors to the website in order to play the games. Alternatively, advertisements or links can be embedded into a Flash game. Then the game is distributed around the Internet and people play the game -- and hopefully follow the links back to the advertised site.
Developers Sell Traffic, Sponsors Buy Eyes
The money in Flash games comes from this potential traffic. Flash games can generate web traffic in different ways: by attracting visitors to the host site, via custom branding such as scoreboards (that link back to the originating portal), through in-game advertisements, and so forth. So developers and sponsors use different types of licenses to buy and sell these different sources of potential traffic.
And that's how Flash games make money! Individual license deals can get rather complicated: for example, a sponsor might buy branding and distribution rights with a two week exclusivity clause but allow the developer to retain income from third party advertisements. But under all the details, it's really about creating good games that people want to play.
