Video Game

How Profitable Is A Video Game? (Updated for 2024)

Pat Walls

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Updated: September 4th, 2024

How Profitable Is A Video Game? (Updated for 2024)

So you want to start a video game?

And the first question that came to your mind was, “well, are video games actually profitable?”

With a market size of $155B - there’s plenty of business to go around.

Especially considering:

You could start a video game with as low as $100
Based on our data, video games generate an average of $62.6M per year
You could see gross margins as high as 100% with video games

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a video game.

Let’s dive in!

Is a video game profitable?

Yes, a video game is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $62.6M per year with an estimated gross margin of 65%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your video game.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your video game is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a video game worth it?

If you’re wondering if a video game is worth it, the answer is a big YES. With video games, you have the potential to earn $62.6M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $155B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a video game to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful video games case studies.

Examples Of Profitable Video Games

Here are a few examples of profitable video games, and a few more details about them:

1. Scirra Ltd ($1.2M/year)

Thomas and Ashley Gullen, founders of Construct 3, were passionate about computer games from a young age. Ashley's struggles to build his dream game led him to develop a general-purpose game engine called Construct Classic. They launched Construct 2 as a commercial product, focusing on HTML5, which proved to be a successful gamble. They now generate around $100k per month in revenue and have learned important lessons about running a business and listening to customer feedback.

Is it profitable? Yes
How much money it makes: $1.2M/year
How much did it cost to start: $1K

We Created A $100K/Month No-Code Tool For Video Game Developers

Construct 3, a browser-based game engine that allows anyone to create games without coding, has grown from a pay-once model to generating $100k per month in revenue through a subscription-based system, after launching with the help of early-adopter customers and a focus on organic growth, customer feedback, and white-hat SEO.

Read this case study

Read by 11,139 founders

2. Stardew Valley ($300M/year)

In 2011, Eric started working on the video game Stardew Valley as a way to improve his chances of getting a job.

Is it profitable? Yes
What's the gross margin? 100%
How much money it makes: $300M/year

Profile: Eric Barone Built A $300M/Year Video Game By Himself

Stardew Valley: An indie video game sensation making $300M/year, started by Eric Barone in 2011, with initial sales of $1 million within three weeks.

Read this case study

Read by 4,311 founders

3. UltraShock Gaming ($15K/year)

Hassan, the founder and CEO of UltraShock Gaming, came up with the idea for his indie game marketing firm when he noticed the struggles indie game developers faced in getting their games on large PC platforms like Steam. Inspired by their frustrations, he decided to create a platform to help these developers with marketing, copywriting, and beta testing in exchange for a percentage of profits. With a community of over 500,000 gamers, UltraShock Gaming has generated $15k in revenue per year, with $12k in profit.

Is it profitable? Yes
How much money it makes: $15K/year
How much did it cost to start: $4K

How I Started And Sold A $15K/Year Video Game Marketing Business

Aspiring founders looking to start a profitable business can learn from the story of how Hassan founded UltraShock Gaming, an indie game marketing firm, built up an audience of over 500,000 gamers, and generated $15k in annual revenue (with $12k profit) in just 2 years by offering marketing and advertising services for indie game developers.

Read this case study

Read by 4,467 founders

Learn more about starting a video game:

Where to start?

-> How much does it cost to start a video game?
-> Pros and cons of a video game

Need inspiration?

-> Other video game success stories
-> Video game names

Other resources

How much can you make with a video game?

With a video game, you can make an average of $62.6M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $100. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a video game make a week?

Based on our data, average weekly revenue for a video game ranges around $1.31M. As such, you could see monthly revenues of $5.22M.

To know if your video game achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your video game.

How much do video games owners make?

The income of a video game owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established video game is about $1.31M. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a video game owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Video Game Profit Margins

Generally speaking, a video game can expect profit margin of around 65%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a video game, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, video game owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, video game owners can ensure long-term sustainability and profitability for their business.

Video game owner salary

The salary of a video game owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established video game, in a prime position, might see an average weekly salary around the ballpark of $848K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a video game may be a promising business to start - but the success of your video game mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable video game.

Part of

Createing A Video Game: Everything You Need To Know

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