I’m starting to realize that one of the largest roadblocks to the growth and evolution of the gaming industry is the poor profitability of many experimental games. I realize that stories about the success of the indie game Braid and its game designer, Jonathon Blow, driving around in his crimson Tesla Roadster sound pretty lucrative and fantastic but the reality is that most indie game don’t make money.  In fact, according to a recent article on Fierce Developer, 97 percent of App Store revenues are taken in by only 20 percent of the iOS developers on the iTunes store. Half of the games on the iTunes store make less that $3000 in revenues. That is a sobering statistic that any indie game development shop should consider before they spend the next year living in a damp basement apartment.

There seem to be a number of reasons but a lot of it seems to due to increased competition and consolidation of the best companies. Basically if you start producing profitable games you’re likely to be purchased by one of the larger companies, keeping that 20 percent with a tight grasp on the top.

So, what do you do as an indie game company with a great idea? You need to have a monetization strategy in place before you even start to design. The number of players out there buying apps is dropping, there is a growing movement towards freemium models. It the dominant trend in game development at the moment with 9 out of 10 games are being distributed for free. You basically give your game away for free and hope that you’ve created a compelling enough experience that people will want to purchase items inside the game to improve their experience. Building this model into your game takes a careful consideration to see if it matches the design you’ve chosen and making changes, if necessary. There are also companies like GetJar who are building monetization and advertising services into their system for developers.  These kinds of tools warrant an examination. It is estimated that in-app purchases accounted for only $970 million in sales last year but they will grow to $5.6 billion by 2015.

Aside from creating a meaningful and amazing gaming experience, you next biggest challenge is figuring out how to make it profitable. Hopefully this post made those decisions a little easier.