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So here’s a couple ways to create a successful game online: a), Find an investor who’s crazy enough to give you millions of dollars, or b), Put it on a distribution network and hope you get enough customers willing to buy it as a download.

Then there’s c), Make a Flash mini-game, let people play it for free, and watch the ad revenue pour in when the site gets 20 million pageviews a month. That’s the option Paul Preece took with his phenomenally popular Desktop Tower Defense, and though he has no professional experience with game development, the Visual Basic programmer is now making, by his estimate, high four figures monthly for his ferociously viral little game.

As such, it’s an ideal case study for an often-overlooked revenue model for online games, one that developers and investors would do well to learn from. Working with a low budget on a game designed for maximum stickiness, a small team of developers can create a single title which earns thousands yearly— or in Preece’s case, close to six figures. [digg=http://digg.com/playable_web_games/Desktop_Tower_Defense_the_story_behind_the_hit_Flash_game]

After the break, Preece explains some of the secrets to Tower’s success.



Take a Well-Known Genre, Make It Better

There are numerous “Tower Defense”-style games with the same premise—stop a horde of monsters by building a variety of defense towers. “I have been mulling over doing a proper ‘mazing’ Tower Defense for a year or so,” Preece says, “but I felt that the learning curve for Flash was too great. Then a good friend of mine created the successful Flash Element Tower Defense, and when I chatted to him about his experience… it suddenly seemed much less difficult than I had thought it was.” [His specific inspiration was a mini-game from one of Blizzard’s classic real-time strategy titles: “The basic map layout was based on Autumn Tower Defense, which was one of my favorite Warcraft III TDs.”] Though most of these games are fantasy-oriented, Preece gave his version a quirkier, more cartoonish feel, and added a number of elements that made it more viral— particularly a group-based ranking system which encourages competition between friends and co-workers.

Promote through Web Aggregation Sites

“I didn’t do any promotion of the game beyond sticking it on StumbleUpon.com,” Preece tells me. “It gave the game a slow start for a week or so— which was good to weed out the bugs. Then it got ‘picked up’ by a few large game sites, then Digg and then I-am-bored.com. When DTD got Dugg the first time, the server overloaded and I realized that it was becoming popular game.”

How popular? “I am unsure as to the number of unique visitors,” he says. “My logs show 4 million visitors and 20 million page views for April. The game itself has had 9 million plays during April (excluding older versions).”

Debuting in March, his site, http://www.handdrawngames.com, is already among Alexa’s top ten thousand sites.

Profit Through Ad Revenue and Keep the Budget Low

DTD’s main revenue source is AdSense, but with its avalanche of popularity, advertisers have approached Preece directly, leading to “Affiliate deals, sponsorship, custom versions for other companies etc. The last two are in the pipeline but I thought I’d add them in at a low level.”

Preece’s main expense is running the server. “Hosting fees are negligible,” he says, “at $130 per month. But I am getting very close to the 1200GB bandwidth allocation!” That plus “the continuous supply of late night Red Bull” comprise the bulk of Desktop’s budget.

“I do feel that with a little more market place knowledge I could make a good living from DTD until it stops being popular,” Preece e-mails me. “With less popular games I would probably need two-three on the go every month to make a good living. That would equate to releasing a game every month which I think is doable.”

But what’s that odd voice you hear, when you win the game? “It comes from a children’s cartoon I grew up with in the UK called ‘Ivor The Engine’,” Preece explains. “It was about a Welsh train, which is where the accent comes from.” But keeping the budget low is his main consideration. So, he adds, “I have removed it in the next version for bandwidth reasons.”



Update, 5/28: Added Preece’s acknowledgement of Warcraft III as an inspiration for DTD.