12 thoughts on “Using probability to build a game portfolio likely to succeed

  1. David Hamm says:

    I think your message is valid, but even accepting the 25% figure, you’re being optimistic Lloyd! For 3 games, each with an independent 25% chance of success, I’d put the odds of at least one success at 1 – the chance of all failing (.75 x .75 x .75) = only about 57.8%.


    • You are right on both points, David. Math mistake on my side, I should of done the math your way (I neglected a possibility and double counted). I may have been optimistic but it really depends how you define the group. If you take it very broadly to include poorly capitalized devs working out of a basement, the odds are much lower. I was thinking if you do everything right, you are closer to that 25% number. Regardless, having several independent projects has a huge impact on your chance of success (or survival).


  2. Great article Lloyd. I would add something that we have found is also an argument for the portfolio approach and it is that it forces you to think in terms of toolchains and the capability to have strong live ops capability.

    When you only have one type of game, or even worse, one game, you might not feel the need to invest in developing these set of tools. But once you are operating 4-5 different games live, you will need to have the ability to make changes, and insert content into the game more effectively.


  3. Hey Lloyd,

    Interesting article. Though it’s missing the one almost guaranteed advantage to taking a portfolio approach: cross-promotion and creating your own internal network between games. Having a network of games on iOS right now decreases CPI substantially through optimizing cross-promotion between multiple titles.

    To me, that’s more important than the ‘odds of having a success’. Great post though =) I always love your content here.


    • David Hamm says:

      In my experience (on iOS) a diversified portfolio approach actually works against cross-promotion, since each title is targeting a different audience, minimizing the chance of cross-over appeal. In fact when targeting different ages, it can even be inappropriate. I still like Lloyd’s argument because you’re nowhere without those initial successes – but it’s not the road to maximizing cross-promotion.


  4. Hey Lloyd,

    this is an awesome topic you have raised. So how will you define “success” or “being a hit” in your example? Does it mean that one “successful” game will cover the costs related to development and marketing of all three + some additional margin? I don`t know the rate for casual titles but i remember that for traditional console games the number everyone was using a couple of years ago while defining “successful” was x6-x8 times compared to budget. If you mean something similar to that (at least) then consider this – to be THAT successful all three games in your example need to be either of significantly higher production quality compared to competition (costs go up, more difficult to break even) or somehow riskier in terms of design/mechanics in order to be distinguished in the crowd (which correspondingly reduces that .25 chance for success for each particular title). In the end, won`t you end up in a situation where the more you do to increase your chances the lower they get? And is there any balance here?


    • This model is not meant to be that precise. As David Hamm pointed out, the 25 percent number to begin with is probably too optimistic. What I had in mind was actually at a minimum a game that supported itself, the cost of running the game (and acquiring users) was less than the revenue it was generating. In my mind, it did not necessarily even recoup development expense. The goal of my post was to show the benefits of multiple projects over one game and the math behind that. The actual P&L has many other variables and probably has to do more with the discussion on LTV.


  5. Yeah, thanks for clarification, in this case the model completely makes sense. I was initially thinking if one can use this model to potentially bring risks down to zero. While using David`s math, you will have to release approximately 15 titles to take your chance of success with at least one of those close to 99%. In real world it sounds like a very true statement for a game that just needs to cover its ongoing costs (as you explained) but not necessarily true for a game that would need to have 15x ROI (as I initially thought). That`s why I was asking about your definition of “success”.


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