August 21 0 184

How to Make $2 Million a Year on Mobile Games for Children

How and how much does this small team of developers make on mobile games based on the animated movies like "Masha and The Bear", "Fixies", or "Blue Tractor"? The co-founder of Devgame Max Kochurin told in his interview how his team develops and sells mobile games, their monetization strategies for the apps designed for kids of different ages, the team hierarchy, the cost of development, and so forth.

About the Team's Work   

Max explains that his company develops mobile games for children which are based on the plots of popular cartoons. Every game has a hidden learning component that makes it possible for children to develop while playing. That’s why these video games are popular among both children and their parents.

To date, this team of developers published 80 games on the App Store and Google Play, of which 8 became extremely popular. One of such games is Masha and The Bear, with the largest number of daily installs of 300 000 and monthly earning of about $100 000 to $150 000. Making money on mobile games is all about ads and subscriptions.

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Using personal connections, the guys from Devgame team agreed on using the Fixies brand which is owned by the animation studio of Airplane. Although at that time there were many games based on that story, people from Airplane were interested in the idea the Devgame team came up with. It really stood out among the competitors.

It took 4 months and $15 000 to develop Fixies. Four developers were working on this game, and at the same time, 5 owners were creating the team structure and processes. It paid off. In a month’s time of submitting the game to the App Store and Google Play, it started turning a profit.

Models of Cooperation with Animation Studios

For the first project, Max’s team negotiated to come up with terms and eventually agreed to work on the RevShare model, with the developers getting their 70% share and Airplane the other 30%. They’ve managed to agree to such terms because of their active marketing work which increased user engagement metrics, as well as the popularity of the movie itself.

However, not every brand agrees to cooperate on such juicy terms for developers, many top brands only agree for at least 50%. Max explains that because of the paid advertisement it’s not profitable for them to give away 60%+ to the brand owner. Oftentimes, it’s easier to agree to the appropriate terms with a lesser-known brand.

Given the team’s 5 years of experience, now movie-makers themselves are looking for a business partnership with them.

The partnership with the team of game developers gives the animation studios a relatively free way to promote new movies because of the active game marketing, as well as its characters.

The Terms of Cooperation on the Masha and The Bear Mobile Game             

Masha and The Bear brand is a classic example of a popular movie, and there’s a dozen of the same-name games on Google Play Store и App Store. Max’s team has managed to agree to the terms of cooperation with the brand owners having paid tens of thousands of euros which was a guarantee of their serious approach towards the work.

It’s been a sort of a hold amount that Max could get back at some future point from the share of the brand owner. And yes, it could only be possible had the game become a hit and turned a profit.

A hold amount is not a guarantee for the developers, there could be additional terms and details needed to be agreed upon while creating a game.

All in all, Max evaluates this approach as a good thing, since it sorts reliable teams from the ones that have doubts as to whether they can develop a good game that would pay off tens of thousands of euros in 6 months or so.

How Much for the Brand?

Many animation studios use the same model of cooperation as the creators of Masha and The Bear. Now, a "deposit" amount that the developers should pay has become a standard for this business segment. $5 000 was the smallest amount Max could agree upon with the brand owners.

At first glance, this situation gives new teams of developers a harder time to enter new markets, because as a rule, their budgets are limited. However, it’s not always the case. The co-founder of Devgame shared his story of developing a mobile game without paying a guaranteed amount to the cartoon creators.

Three Cats, the Idea for Newbies 

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Max's team came up with an idea of a game based on the animated film called Three cats. They saw a potential the game could live up to. Even though the film wasn’t that much popular at that time, the developers assumed it could become a real contender to Peppa Pig.  

The team was one of the first ones that agreed on the development of a Three cats game. The most interesting part is that they’ve managed to do it without a deposit and other sorts of draconian terms and conditions. It was a win-win project when both sides got more visibility of their proprietary assets. The developers made the movie even more popular, and in return, as the movie was increasingly getting visibility, the number of installs increased as well, hence the profit.

Three Cats became a successful project, whereupon some other games were released with the same partner and on the same terms and conditions, meaning without a beforehand payment.

The model of cooperation with the Three cats movie proved that it’s possible to come to terms with a lesser-known brand and without the risk of losing money. It all comes down to finding a potentially popular franchise that children of tomorrow will have a soft spot for.

Lifehacks of Working with Brands      

The team adheres to the principle of agreeing to the details of cooperation at each stage. They try to avoid misunderstandings of any sort because film owners could wrap up an already made product.

The strategy's sum up:

● The idea, agreeing on the basic plot of the game;

● Signing an agreement;

● The concept, a description, and arranging game mechanics (which character does what actions);

● The receiving graphics from the brand, rendering screens, and getting approval;

● Game development and its discussion before the release.

The Time of Game Development 

It could take up to six months to develop the first game for the brand given all the above-mentioned aspects. And then it might take up to 2 to 3 months to develop the second game and the next incarnations. The team cuts the time of further game development by using a builder (the package of unique codes).

The Distinguishing Features of Marketing Mobile Games for Kids         

Max Kochurin considers the category of mobile games for children to be the most limited:

● Lots of limits, there’s no way to gather all the data needed, except the cohort analytics;

● There’s no way to buy a new audience since small children don’t have instant messaging apps to generate traffic to;

● The process of onboarding is rather expensive because you attract news subscribers via their parents, with the cost of the install jumping to $15;

● The ARPU is too low, because it is not the players themselves who pay, but their parents.

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When asked about repeating the success of his team in 2021 Max replied it is quite possible, he pointed out though that a newbie will need to have patience and a financial cushion for things like building in-team processes, hiring developers, negotiations with brands, etc.

According to Max, his team started to get the first tangible dividends after 4 years of work. But before that, it was more or less breaking even, with the team members and other staff only getting a fixed monthly salary and that salary being lower than the market average. On the whole, it took them 12 months to break even.

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The Team’s Structure 

From the very beginning, there were 5 managers in the team besides managing roles they worked as game testers and 4 game developers.

Currently, there are 50 employees working in Devgame, they are divided into two teams with each of them containing two separate departments of production and marketing.  

Two teams work on 20 games each, of which a half is new projects, and the second part is the support of already developed games. Each team includes:

● game developers;

● product managers;

● market managers;

● graphic designers;

● producers;

There are up to 10 games in the buffer. Those are highly unlikely to succeed and the team sees no point in investing in them. The new team will embark on them after the internal coaching where they get the gist of what the company does. This internal coaching is set to train a new team similar to the other two ones which would allow to scale the business up.

In this school, newcomers learn from test games, after that the whole team continues working on commercial projects.

Max Kochurin, the team’s CEO, is responsible for developing strategies and interactions with partners and brands. The COO and CFO take care of all the inner workings.

The founders of the company, including Max, do marketing, creative design, build up connections with brands, and other stuff. The company outsources paperwork to the external legal team for every particular contract.

Mobile Games Monetization 

Subscription is the heart of it. The monthly cost of subscription is $3. There Are three types of subscriptions: for a week, for a month, and for a year. The weekly subscription is in the highest demand since users get 3 free days. Recently, the company started to promote a year subscription.

The percentage of yearly canceled subscriptions is around 98% because that is explained by the fact that children grow during a year and find themselves other hobbies and abandon games at the end. The second source of monetization is ads in free game versions. Games are published in the children category of a given store and that’s why the most profitable advertising (casino, and the like) is not allowed. And because of that, the ad revenues are lower compared to mobile ads designed for the adult audience.

The income is broken down by the platforms:

  • App Store — the subscription to ads ratio is 80/20
  • Google Play Store — 20/80

The Devgame Company Earnings   

Last year's turnover of Devgame was a little bit over $2 000 000, they made a profit of 25%. The most profitable countries were France, Germany, Italy, Brazil, USA, which outperformed Post-Soviet countries as far as the number of installs goes.

The most profitable age groups: 0-3 and 3-6 years old.

The Bottom Line 

The development of mobile games for children is not an easy niche to start, since there are strong competitors, difficult terms and conditions of cooperation with brands.

At the same time, such cooperation allows using unique cartoon’s graphics when developing games which makes life easier for designers. A well-known brand attracts much more users thereby raising the number of installs and increasing the chances of getting on higher positions in app stores.

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So, the upshot is that even with a small budget it’s possible to launch a business in the niche of mobile games for kids. You just need to find a lesser-known animation movie that could become a hit game in the foreseeable future.

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