Remedy's $1 million Death Rally success example of revenue console devs can accrue on iOS, reckons analyst
High launch price and IAPs win the day
Despite having a background in big budget console releases for major third parties Alan Wake and Max Payne to name a couple Remedy was able to evolve Death Rally into a $1 million hit on iOS over a nine month period.
Most interestingly, all this was achieved with a marketing budget of just $10,000.
Kuittenen argues that the release highlights a growing trend in the games industry, whereby established middle-hitters in the console arena have begun exploring new strategies and pricing models in the mobile market.
The price is right
In an eight point scale designed to detail the factors behind the game's success for Forbes, Kuittinen begins by pointing out Death Really launched on the App Store for the high price of $4.99.
"Remedy priced it high, but spent only nominally on marketing - $5,000 on a FreeAppADay campaign, $5,000 on a tightly focused PR initiative," offers Kuittinen, before pointing out the game recouped Remedys development costs in three days as a result.
"Modest early marketing spending can trigger a snowball effect if the game is appealing. Getting Apple to feature the game is a bigger boost than any ad campaign."
Dropping the price down to 99c resulted in the game becoming the best selling iPhone game across the globe for five days, topping the charts in 80 individual territories in the process.
In Kuittinen's view, Death Rally's initial high price gave the game an "exclusive sheen".
In-app purchases (IAPs) have also a key revenue driver: Death Rally amasses 60 percent of its revenue from IAPs, with that revenue split in half between so-called 'experience speed-ups' in single player mode, and unlockable vehicles in multiplayer.
"This implies that catering to both single-player and multiplayer audiences is important for maximizing revenue generation," said Kuittinen.
Further to this, giving away the game for free during the European 'Midsummer weekend holiday' saw downloads jump by 2 million - any loss of revenue incurred from giving the game away made up by a surge in IAPs.
"Giving the game away can boost sales, but it's not an easy trick to pull off," admitted Kuittinen.
"It may not be the best option for all games, at least during the early months. It requires an intricate and well-balanced framework of in-game shopping features."
Expanding beyond Death Rally, Kuittinen also suggests that, on average, Android games make about 30 percent of the revenue that iPhone games do though, naturally, this isn't always the case.
"Some Android titles eke out [a] mere 10 percent of the iPhone version revenue, some actually generate more," he said.
"Much depends on how the vendor handles the tricky task of juggling in-game purchases.
"Android games can exploit the so-called 'offer wall' option, where consumers can download a free game if they opt to also download certain other applications."
Grim future for handhelds?
But Kuittinen's main point is that, though Death Rally arguably had a head start (the game was based on an existing franchise from 1996), mid-range console developers can deliver fast earning content on smartphones if they deploy their apps in the right way.
"Recouping development costs in three days is something that is hard to pull off in the console world," added Kuittinen.
"Cutting off distributors and minimising marketing spending holds powerful appeal. The risk/reward ratio of mobile phone games is starting to suck in console game developers.
"What this means for portable console vendors like Sony PS Vita and Nintendo 3DS is likely to become clear over the next 24 months."