By James Brightman
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 Dinvich 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 andWorld 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 forAngry 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 Tetrisand Bejeweled where if you have a hit the ROI is amazing.”