GDC 2012: Apple killing offerwalls has had a big impact on the viability of iOS F2P gaming, says Riptide's Brian Robbins
However, when you're trying to run a development studio, the most important number is your monthly burnrate and cashflow.
That was the conclusion of the talk from Riptide president Brian Robbins at the Smartphone & Tablet Gaming Summit talk entitled 'Life in the Funds Lane'.
What your number?
Providing a quick MBA recap of how to run a business, he said a good rule of thumb is that your monthly burnrate is twice the cost of your salaries (or 1.5x if you can be a cheapskate). The multipler is costs such as rent, hardware, insurance etc.
As an example, four employees, each at $60,000 a year gives a burnrate of around $30,000 to $40,000 a month.
This means that a game development project of three months costs at least $90,000.
But because app stores don't pay out immediately, you have to factor in another 10-12 weeks before you get paid for a project, if successful.
That means that if you're looking to make a game in three months, you actually need $180,000 of funding to cover the cashflow during that period.
"Raising $50,000 is relatively easy, but raising $100,000 is hard," said Robbins.
"You have to spend a lot of time meeting people and showing them your game, and dealing with a tug-of-a-war between different publishers and funders."
Shutting off the siphon
There are some areas of development that are easy to fund though; such as raising cash to port a successful iOS game to Android. But finding funding for single platform development is now very difficult.
"iOS-only development is hard. Apple can be a kind of a pain in the ass," Robbins said.
"Offerwalls were huge in 2011, and then Apple killed them, and that has put a huge crimp in available funding for freemium games.
"We have an offerwall in an iOS game for 2 months and we generated more from that offerwall than we have via IAP in six months."
That's one of the reasons that Riptide plans to release its first Android game; offerwalls still being allowed on Android.
Robbins' conclusion was that the easiest development funds to access are those who are interested in porting, marketing and promotion; from companies such as Tapjoy and W3i are looking to build up their platforms.
In contrast, the likes of Gamevil, CrowdStar and TinyCo are running more traditional publisher funds, which means they want to own your IP.
Riptide worked with W3i's AppX fund in 2011, gaining a rate of 10-12c per install compared to an industry average of 20c to 50c; a process Robbins said had worked well.
Other options include crowdfunding, although Robbins wasn't convinced that Kickstarter would be a good option for most mobile developers.