Unsurprisingly YoYo Games are yet to make a profit

on June 7, 2009 - 12299 Views

YoYo Games CEO Sandy Duncan is not rolling in piles of money

At the GMC users with little knowledge of how a business works expect to get it all without paying anything. As Sir Alan Sugar would say these people “haven’t got a bloody clue” of economics and hold delusions that YoYo is some big bad corporate enemy that has snatched Game Maker away from its creator and spend their days rolling around in big piles of Game Maker user’s money.

It may not be common knowledge amongst the teenagers that inevitably dominate the demographics of those uploading to YoYoGames.com but to many of the more financially aware of us it is blatantly obvious that YoYo Games are not laughing all the way to the bank. Indeed Sandy has confirmed that YoYo Games are not making a profit.

As of March this year YoYo Games had invested over $1 million and the site is currently home to over 35,000 user-created games which have been played more than 7.9 million times.  The website itself serves upwards of 10TB of data every month to over 500,000 unique visitors.

YoYo’s Costs:

  • Servers:  YoYo are not simply serving text and graphics.  Almost 12,500 game plays were recorded per day between May 5th and June 6th this year – one every 6.9 seconds.
  • Staff:  Support tickets don’t answer themselves.
  • Development costs:  Foundation 9 Entertainment led by YYG director James North-Hearn are currently developing Game Maker 8 under their Sumo Digital subsidiary which, if on schedule, should be released later this year.

YoYo’s Income:

  • Advertising revenue:  The “YouTube for games” idea revolves around on-page advertising.  However serving large amounts of data is expensive and YouTube are yet to make a profit.
  • Upgrade income:  Earlier this year YoYo increased the cost of upgrading from the free to the Pro version of Game Maker 7 from $20 to $25.  However a large proportion of users have received the full version of Game Maker 7 for free having previously upgraded their copy of Game Maker 5 or 6 and being granted a free registration code for Game Maker 7.
  • Investment:  Presumably by directors.  Not publicly known.

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31 Responses to Unsurprisingly YoYo Games are yet to make a profit

  1. Hye Reynaldo says:

    Great post! GA can be my greatest earning. On the other hand, it’s not a a lot.

  2. AAKN says:

    the picture is far from the observation domain, that why this topic is shown , in every company base building take these actions and events , these guys thinks for the future more than the present , to briefly clarify my point, just compare the community’s growth between the gamemaker 5 to gamemaker 8 versions

  3. […] know YoYo Games are not making money from Game Maker and a recent look at GMB’s finances got me pondering just “who is […]

  4. […] last figures we had previous to this were “upwards of 10TB a month” in June last year. See also YoYo […]

  5. […] “$150″ a month.  By comparison the latest figures we have for YoYoGames.com are “upwards of 10TB a month“. The site was put up for sale a week ago with an asking price of $1000 but no buyers came […]

  6. […] figures, listed at Companies House, put numbers to a comment made by Sandy about YoYo’s profitability (or current lack of it) five months back. YoYo Games Ltd Abbreviated Accounts for year ending 31st […]

  7. Seamus says:

    Wow, i cant believe some of the posts here, @ mathewh and derme, have you ever even made a game? or started a website? is money the only thing that matters to you? the ENTIRE indie gaming genre is no profit, (most of it anyways) people are spending long hours and hard work like you said, to express their creativity and have their creation be praised by others, not to pocket some money. first comes expression, money is a side effect. if everyone wanted money for their games there would be exactly 0 games on yoyogames right now.

  8. Broxter says:

    Mattthew_H Think. You have a company, where you make games. You put hard and long hours into these games, and so does all of your employees — Although, you don’t make a profit after you’ve released the game. You get downloads, but no return.Would you want to do it again, and put more money into it, more hard work & more long hours into it?Would you do it again?

    Return (I’m assuming you mean revenue) is not the same as profit. Just because the company makes no profit, it doesn’t mean you don’t get paid for making a game. And I never said a company could survive with no revenue.

  9. @Caniac First one is from Sandy’s xBox days so not exactly recent.
    Second is from a CNN Money article so I wouldn’t want to use that.

  10. josh says:

    this is an awesom web site.

  11. Caniac says:

    Josh, yes it is a great site 🙂

    Phil, yeah, there is a shortage 😛
    here are some pictures I did find hanging around though:
    http://dailygamesnews.com/2008/03/consoles-will-disappear-in-5-10-years.html
    http://www.diggreader.ru/2007/07/28/tridtsat-odin-samyiy-%C2%ABgoryachiy%C2%BB-startap-za-predelami-ssha/
    (I can’t read Russian like the last site is, but it said “CEO: Sandy Duncan” (and then went on in Russian) so I guess thats good enough for me :p

  12. Derme says:

    I wouldn’t pay any more than $30 for Game Maker. And I wouldn’t even use GM if it was $300.
    Its not all that surpriseing that YoYo hasn’t made a profit, Though you would of thourght that those adds you see on ever page would be worth somthing?

    Mattthew_H :Basically. They need a profit to continue.Tom’s, NPT’s & Eyas’ all point that out.
    As Eyas puts out a very good point about staying interested.
    Think. You have a company, where you make games. You put hard and long hours into these games, and so does all of your employees — Although, you don’t make a profit after you’ve released the game. You get downloads, but no return.Would you want to do it again, and put more money into it, more hard work & more long hours into it?Would you do it again?
    I’m not sure if that helps anymore, again, Tom, NPT &Eyas all had very good descriptions and points.
    I don’t fully agree with what Tom said with his idea about selling a game. Because, I’m sure there are still a lot of YoYo-haters out there. I mean, even after all that they’ve done for GM.
    Schwiggy: That’s why I don’t buy many games anymore.I do think that $30 is fair, but someone mentioned (I’m not sure if it was Phil or someone who posted on one of his posts, but) they said that if you brought GM7, you should get a percentage off GM8’s price tag.
    GM8 isn’t being made by YoYo anyway, so, they may get some sort of return, but if they do, it wouldn’t be a substantial one, I’d think.
    As long as GM8 has quite a few more features, people will buy it — hopefully.

    Exactly the point why unless you sell your games what do you get out of it???
    And if you don’t get money from your games how are you surposed to pay for GM8?(In a bussiness sense)

  13. […] much discussion by users of the software Sandy Duncan has given the first glimpse into who will have to pay for an […]

  14. Chronic says:

    As i understand it Sumo Digital are only involved in the C++ runner, and Mark Overmars has been working on GM8 (i was recently talking to him via email about a new feature he’s added).

  15. scoz says:

    When you say they are yet to make a profit do you mean they are yet to have had turnover exceed costs in one year, or are you talking about in the long term; IE they have yet to get back the $1 mil investment?

  16. Mattthew_H says:

    Basically. They need a profit to continue.
    Tom’s, NPT’s & Eyas’ all point that out.

    As Eyas puts out a very good point about staying interested.

    Think. You have a company, where you make games. You put hard and long hours into these games, and so does all of your employees – Although, you don’t make a profit after you’ve released the game. You get downloads, but no return.
    Would you want to do it again, and put more money into it, more hard work & more long hours into it?
    Would you do it again?

    I’m not sure if that helps anymore, again, Tom, NPT &Eyas all had very good descriptions and points.

    I don’t fully agree with what Tom said with his idea about selling a game. Because, I’m sure there are still a lot of YoYo-haters out there. I mean, even after all that they’ve done for GM.

    Schwiggy: That’s why I don’t buy many games anymore.
    I do think that $30 is fair, but someone mentioned (I’m not sure if it was Phil or someone who posted on one of his posts, but) they said that if you brought GM7, you should get a percentage off GM8’s price tag.

    GM8 isn’t being made by YoYo anyway, so, they may get some sort of return, but if they do, it wouldn’t be a substantial one, I’d think.

    As long as GM8 has quite a few more features, people will buy it – hopefully.

  17. Eyas says:

    Broxter, If a company does not make a profit (even if it doesn’t lose), then its owners have absolutely no motivation to invest time, effort, and capital in it, and will thus lose interest in running the business. Profit is unnecessary for charities, which YYG obviously isn’t.

  18. NakedPaulToast says:

    “I don’t understand what you’re saying Tom. I’m sticking with my previous post.”

    No, you don’t understand basic economics.

    Companies need to make profit to exist. Ever hear of Chrysler and GM. They are not making any profit, and on the verge of folding. The difference between them and most companies; is the government recognises the importance of these companies to the long term US economy. Thus the bailouts.

    If you had a business and had $100,000 in cash and lost $40,000 a year, in your second year, you would only have $60,000 left. In your third year you would have $20,000 left. Half-way through your forth year you would have $0 remaining.

    At this point you can’t pay your bills, your creditors, your rent, your employees. Nobody. You file for bankrupcy and any assets you have, get sold to pay off your creditors.

  19. Nottud says:

    Pity about the profit business. In many ways its a pity because it could mean the site and work on game maker may cease to exist but it also means measures like increased advetising and increased charges for game maker could be introduced!

  20. Broxter says:

    I don’t understand what you’re saying Tom. I’m sticking with my previous post.

  21. Danny says:

    @Rick
    Man owns a popular blog, that he can post ANYTHING he would want.
    And you want to call him out, on some mistake that isn’t present?
    Rethink that one.

  22. Rick says:

    It would be nice if Mr. Gamble were to take a refresher course in grammar, particularly on verb and subject agreement. I think that he has totally forgotten that the word “is” even exists. Who says the internet isn’t “dumbing us down!”

  23. Tom Russell says:

    Broxter:

    If a company doesn’t make profit, or if they are losing money (which, in all likelihood, is the case with YoYo), they will cease to exist. Their employees will lose their jobs. They will have no one to maintain their site and no way to pay for it. We, in turn, as GM users, will have no future versions of Game Maker, no support for it, and one less place to host our games.

    Every company needs to make some kind of profit unless, like YouTube, they have some kind of sugar daddy like Google.

    It’s too bad some brave soul doesn’t make a (good) commercial game with Game Maker and split/donate the proceeds to YoYo– while it wouldn’t make up for a ginormous deficit, I think I’d be more likely to shell out $20 if I knew part of it was going to YoYo. And I’m sure I wouldn’t be the only one who’d do so. That, in turn, would help the game developer increase their profile, yes?

    I’d do something like that myself if I thought my games were good enough.

  24. Broxter says:

    I don’t really think YoYo need to make a profit. I mean, profit is pretty much used to expand, but for an eCommerce business (a newly started one, especially) like YoYo Games, there isn’t really much they can do to expand using capital. It would be good for them, but I don’t believe profit is necessary.

    Oh, by the way – you could have used Sandy’s Twitter avatar; that would’ve been more interesting than the same old photo of him.

  25. scoz says:

    @CompanionCube
    Regardless of what people do, they would inevitably make more money charging for it than if they didn’t. If some people choose to stay at GM7 they still get the revenue from those who choose to update and those new to the program, whilst if they give out a free lunch then they only get the revenue from the newbies.

  26. I still think that if they charge for a GM8 upgrade most people will stick to GM7.

    People wouldn’t even use a FREE upgrade to GM7 from GM6. If Yoyo starts charging for updates I might wait a few versions each time before purchasing.

  27. scoz says:

    I think this might change when they inevitably charge for GM8. Having bought pro GM7 earlier this year I wa not one of the people who got th free upgrade, and I was quite surprised to hear of the free upgrades. Having forked out $300 for the flash CS4 upgrade at around the same time I must admit I was quite bewildered as to why they would hand out the free meal when the norm is to charge for upgrades.

  28. Schwiggy says:

    It would be fine even if they moved the cost up to $30 for Game Maker. I mean, you pay 60 dollars for a game… and then you only have to pay half to make as many as you want? That’s a great deal! There’s no reason for whining and protesting.

  29. @CompanionCube
    There is a shortage of YYG Sandy photos 🙂

  30. :O! That is a shame…

    … that picture has been so overused. Is there not another one? ^_^

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