This is one of the most important questions for anyone interested in this business. After a year or so of puttering around in this genre, I’m still looking for a solid answer, but I’ll throw out a few opinions…
First, the use of the word ‘average’ in my question posed above is intentionally sloppy. The average can be either the median or the mean, and in this case, there’s a very big difference. If 10 casual games are released, with 9 of them earning $1000, and the last one earning $1 million, then the mean is just over $100K/game, but the median is only $1K. 9 of the 10 developers are likely NOT going to be happy with their measly $1000 for many months of work, and various costs that almost certainly add up to well over $1000.
The hypothetical I’ve just outlined is in fact, not that far from the truth. Casual games sales, so far as I can tell, are on a huge geometric curve.
The hits (Zuma, Bejewelled, JewelQuest, Luxor), will generate multiple millions in revenue over the course of a few years. Developed by small teams with low costs, the vast bulk of that revenue is pure profit.
But don’t quit your day job too fast. These hits are rare. I would venture that:
The average* casual game loses money.
Most casual games are made by small developers spending $1-5K out of pocket on things like contract art and music, plus whatever value you attach to their own time that they’ve put in. If you put in a reasonable estimate of the value of the programmer’s time (say $10-20K for 3-12 months of part time work), I doubt many of the games recoup. Even looking at the out-of-pocket (i.e. cash) costs alone, many games lose money.
The Cursed Wheel – a competent, but undistinguished match-3. Distributed on Big Fish, Reflexive, GameFiesta, and the developer’s own site. Hard costs – a bit under $4K. Revenues – around $1K. Data here.
Xmas Bonus – a competent JewelQuest clone with a Christmas theme (released in December). Distributed on BigFish and Reflexive and the developer’s own site. Hard costs – about $500. Revenues – about $3.5K. Data here.
Cactus Bruce and the Corporate Monkeys – a cross between breakout and a bubble popper. Distributed on various (smaller) portals and the developer’s own site. Hard costs – ???. Revenues – ‘tens of thousands’ (probably about $20-40K, by my estimate). Note that this game had a 5 man team developing it, probably about 10 man-months of development, and salary costs probably well above revenues. Data here.
If you browse the Business forums at IndieGamer, you’ll find other similar examples.
My point is not to beat up on the games or developers listed above – I thank them for publicly sharing some of their sales/cost data. But I want to make clear that, while a few well-known hits make a lot of money, there are very likely far more small developers in this area losing money or at best earning a VERY low return on their own time.