By Brand Creative on May 11, 2023 in Blog Posts
By: Andrew Paradise, CEO of Skillz
Skillz was founded on the idea that everyone has skills and deserves an epic win. Games capture our imaginations, enrapture our attention, and challenge us to bring forward our best selves. For this reason, game developers are the lifeblood of Skillz – they’re the ones who dream big and create games that players love.
We empower game developers to build thriving businesses on our competition platform, so they can focus on their craft: creating games. By doing so, we are also enhancing the player experience. I strongly believe that competition is one of the most player-centric monetization tools. It immerses us with content rather than relying on ad campaigns or in-app purchases that disrupt game play. With that in mind, and as part of our unwavering commitment to game developers’ success, we recently introduced a new revenue model enabling them to achieve greater financial results while pursuing their passion for building engaging games.
The truth is that game development hasn’t always been a fair playing field.
Let me share an example: in 2013, Flappy Bird was the most popular game in the app store. It was created by the Vietnamese video game artist and programmer, Dong Nguyen, who was making roughly $1.8 million a year. That is no small feat, but the game that ended up taking the number one spot that same year, Clash of Clans, was making roughly $3.5 million a day. The difference was not that gamers were enjoying or spending more time playing Clash of Clans – in fact, the engagement was relatively similar. Clash of Clans retention was higher because it was built by a giant mobile game development company that had significant venture capital financing to optimize monetization. Clash of Clans’ systems of monetization put Flappy Bird at a disadvantage; one that, in my opinion, was incredibly unfair.
At Skillz, we passionately operate with fairness so everyone can win – players and developers alike. This philosophy extends to our new revenue share terms.
Skillz’ New Revenue Model for Developers
The new Skillz revenue model is an opportunity for developers to earn more money, based on the number of paying players on their game. If they have a hit on their hands, they have the potential to maximize their profit up to 94% of available revenue. We built this sliding scale to acknowledge an individual developer’s contribution to Skillz, and they’re able to earn almost all available revenue for their effort.
Rather than capping revenue opportunities, we are empowering game developers to maximize revenue potential. Put simply – the more they achieve, the more revenue they make. A tiered system where developers scale up the percentage of revenue they receive based on game performance is core to our values as a company and our belief that competition is the true enabler of achievement.
Revenue transparency plays a big part in ensuring the model is successful. Through a dedicated Developer Console, developers have easy access to actionable insights such as total installs and traffic, revenue, game performance, and near-instant user analysis and data to inform game development. That way they are always on the pulse of the business and able to calculate how they are performing whenever they want to.
More Revenue Potential Enables Better Gameplay
As an example of how our new revenue share model works: let’s suppose a developer’s game earns $1,000,000 in entry fees in November and the best month performance for the game over the last three months (September, October, and November) was 200,000 new user installations and 600 first time payers. In our new revenue share model, this would be a Tier C ranking for November and the developer would receive $1,000,000 times 5%, or $50,000, less any applicable taxes. The 5% of entry fees that the developer receives is actually about 63% of the available revenue for November.
Something often overlooked in mobile game monetization is how complicated taxation on a nationwide platform can be. Taxes vary across all the countries and states based on where players are located, but it’s commonly a very small amount, relative to the available revenue. A huge benefit we bring developers is navigating the tax complexity for them – developers don’t have to deal with any of the tax processes or forms, because that’s part of what we do for them as the platform.
Long-term customer Tether Studios sees the potential for the new model. Tim O’Neil, Co-Founder and CEO at Tether, added, “Thanks to Skillz’ forward-thinking approach, we can now fully monetize our games and build a sustainable business, driving our passion for game development to new levels.”
At Skillz, we love gaming and have a deep respect for game creators. We work hard to support developers in unlocking economic opportunities through their craft, in a way that’s beneficial for everyone. Our new revenue model opens a door to monetization for mobile game developers that rivals the other methods, and we’re excited to see the impact it’s already having on the industry.
Developers are imperative to the games we know and love, and we’re proud to provide a new revenue model that doubles down on their success.
If you’re a game developer or studio interested in adding your game to Skillz’ growing platform, please contact Skillz Developer Relations at firstname.lastname@example.org.