You are currently viewing our desktop site, do you want to visit our Mobile web app instead?

How this app accidentally made $5m in two weeks

The app was meant to drum up excitement for the next version of the popular Fallout franchise.

For a fleeting moment, mobile gaming meant more than Candy Crush, Game of War, and Clash of Clans. At last month’s E3 conference in Los Angeles, Bethesda Softworks, a company normally focused on high-end titles for consoles and PCs, launched a smartphone game called Fallout Shelter, intended to drum up excitement for the next version of its popular Fallout franchise. In the game, players control their very own nuclear fallout shelter, known as a vault, which resembles a post-apocalyptic ant farm. The cheeky little game was an instant hit.

It might not seem surprising that a reputable video game company could make a popular mobile game, but Bethesda’s success with Fallout Shelter is actually pretty unusual. Companies that make games for consoles and personal computers have generally not done well with smartphone apps. The mobile gaming market is often discussed as though it’s completely distinct from the other wings of the gaming industry, and never the two shall meet. The experience of Fallout Shelter bothundermines and reinforces this narrative.

The free app brought in $5.1 million in its first two weeks by selling players “lunchboxes” that speed along their progress in the game, according to data released Thursday by market- research firm SuperData. It was the most downloaded iPhone game in the US for most of the days over the next three weeks and was one of the 10 top-grossing games in the country almost every day until last Monday. At some point during its brief run, it was the most downloaded iPhone game in 48 countries and the highest-grossing game in 11. But its early success seems to be ending, as it drops down the charts in terms of both downloads and revenue.

Bethesda has been noodling around with the idea for Fallout Shelter for years. You can actually see what looks like the gameplay for it in a 2008 trailer for Fallout 3:

Todd Howard, the game director at Bethesda, says the company was surprised by the success of the app, which it saw primarily as a way to promote Fallout 4, the next full game in the franchise. “The main thing it has done is give us more faith that the gaming audience is enormous, and they don’t care what device they’re playing on,” he says. “They all have phones and iPads.” 

People might be interested in playing both mobile and console games, but the economics of the two formats are completely different. Large releases for consoles can cost upwards of $100 million to produce and market, but then bring in huge chunks of cash when people wait in line at GameStop all night to fork over $60. Mobile games cost much less to make, and the money comes in smaller increments over time.

Howard declined to say how much Fallout Shelter cost to develop, but he says its success made it almost “infinitely profitable.” Still, $5 million is a drop in the bucket for a company like Bethesda. While Nintendo looks to finally be preparing a big bet on the smartphone market, it seems unlikely that many other developers who didn’t start off in mobile see smartphones as a large business opportunity in and of themselves. “This is a nice conversation piece during the meetings, but it’s not going to make or break the model,” says Joost van Dreunen, chief executive officer of SuperData.

It’s also peanuts compared with what companies such as Supercell and King bring in on their mobile games. Clash of Clans made $113 million in revenue in May, while Candy Crush Soda Saga made $46 million. There are rare exceptions, including Fallout Shelter and Flappy Bird, but they usually fade quickly. The winners in the mobile market have mastered the art of persuading people to pump money into free games with in-app purchases, and they also use their successful games to market their newer ones. So far, it has proven nearly impossible to break their hold on the mobile gaming industry.

Kris Graft, the editor-in-chief of gaming site Gamasutra, says Fallout Shelter’s quick decline is unsurprising. It’s a relatively short game, leaving people without much new to do once they’ve gotten the hang of building out their vaults. “They didn’t really have a plan to keep it going, to keep extracting money from people who were playing it,” Graft says.

Howard acknowledges that Bethesda put practically no thought into how it might make money from a mobile app, and the fact that it made any at all was essentially a bonus. But the company is trying to extend the life of Fallout Shelter. It’s coming out with an Android version, and Howard says there are other plans for expansion in the works, although he wouldn’t say what they are. If anything, the app’s long-term impact is likely to be that other publishers will try to build excitement for their major projects by giving gamers something to do with their smartphones while they wait for the real thing.

©2015 Bloomberg News

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


You must be signed in to comment.






Follow us:

Search Articles:Advanced Search
Click a Company: