Is this a good idea?

[Oven]

I recently had an idea to create a website where people play games for money. Many people love playing games but it's just a hobby for most, the way my site would work is basically you'd sign up, there would be a list of current tournaments going on for different flash games. You would enter the tournament and play a small flash game. The top 3 players with the highest scores would be rewarded with some sort of points, they could use these points towards gift cards, paypal money, hats/shirts.etc the reason I'd use flash games is because they are really simple, you don't need to download them and it's easy to implement.

I know that there are other point sites like swagbucks and I think some even have the option to play games for points but mine would focus only on games and the target audience would likely be teenagers who are looking for some spare cash. I'd generate revenue in the beginning from just adsense but in the future I'd like to give people the option to buy points and there would be tournaments that you would have to pay points to play (With higher rewards). I'd also like to contact some companies or something like that, games could be created around their brand and they'd pay me, I think I could charge a good amount for this considering that people are literally interacting with the brand opposed to watching a video or looking at an ad.

My biggest problem is I'm on a very small budget, I think I could create the site with my budget but I don't think I could afford to advertise it. Do you think this is a good idea? Would it be worth trying?

 

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[OzGrinder]

A few years ago I created a freeware application. My idea was that I would release the application for free, which would drive traffic to the site (through download sites) and the adsense would make me money, I even had companies approach me to host their ads on my site for their related products.

The application became a featured download on a number of the world's largest download sites, it was featured in magazines etc. I was number 2 or 3 on google for some very common search terms, and on the first page for all other terms relating to the type of software I had released. I can't remember traffic figures, but it had 10's of thousands of downloads a month, and when you installed and opened the application for the first time it would direct to the website, where you would see ads. I didn't go down the path of packaging adware with the software.

All that and the site only made me mid to high 4 figures. In other words it was a waste of time financially and only served as a good learning experience.

My thoughts are that your business model will not be supported by ads and the ads certainly won't support paying people to visit your site, find a business where people will pay you money for a product or service and go with that instead.

 

[tafy]

That sounds quite interesting idea actually, you have a low budget but you dont have to make any games. The hardest part is to find games with rewards for winners and find traffic, chicken egg kinda thing right?

Start by asking flash game websites if they want to offer prizes for the top players on one of their games, the prizes could be free subs or something that wont cost them anything, they will look at this like free advertising.

 

[OzGrinder]

Just another note on this. With any online games where a reward is on offer you need to ensure that all of the processing that has any bearing on the outcome of the game is done server side (think online poker). The reason being that anything that's processed client side can be easily cracked/hacked.

Back when I was a teenager flash was the hot new thing and all these companies were releasing online flash games/tournaments to promote their brands and rewarding high scorers with cash & prizes. You could just crack the game client side in RAM using system debuggers like softice and submit high scores that always landed you at the top of the leader board.

Then it got even easier with tools like firebug and swf disassemblers. You wouldn't even have to bother cracking the game, you could just forge HTTP posts to the high score table...

When it became that easy a lot of people started doing it and they caught onto this pretty quickly, and these sort of online flash game tournaments with real prizes dried up. Do they still run these things? If so have they secured them somehow? Haven't looked into it for years.

 

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[Nick]

Flash games website monetized with adsense have a very hard time making any money at all - since no one clicks the adsense ads, since they are there to play the game and don't want to leave the page. Take a look at the industry and see how many people complain about a lack of good monetizing for flash games websites.

You won't be able to afford to pay prize money from the adsense earnings.

 

[Oven]

My thoughts are that your business model will not be supported by ads and the ads certainly won't support paying people to visit your site, find a business where people will pay you money for a product or service and go with that instead.

I appreciate you sharing your story, although I did mention adsense as a way to monetize in the beginning it isn't the long term plan. The reason I would start with adsense is because it's easy to setup and will provide some sort of proof that this could be a viable business. Eventually I would want to create games for companies, I think companies would be willing to pay a lot for this. I would also make some tournaments cost points to enter and I think there would be a few people who would buy points and use them to enter those tournaments in hopes of winning a big reward. You also have to keep in mind that most players will likely never get enough points to buy something of value unless they are pretty skilled or play a lot.

That sounds quite interesting idea actually, you have a low budget but you dont have to make any games. The hardest part is to find games with rewards for winners and find traffic, chicken egg kinda thing right?

Start by asking flash game websites if they want to offer prizes for the top players on one of their games, the prizes could be free subs or something that wont cost them anything, they will look at this like free advertising.

Finding the right kind of games might be a bit difficult in the beginning but wouldn't cost anything, I think Facebook ads could do very well for this or even google ads just simply saying "Get payed to play games" I think lots of people in my target market would be willing to try it. Also tons of flash game sites sponsor games in order to get more players, I could definitely imagine them being interested in sponsoring a tournament or something similar

Just another note on this. With any online games where a reward is on offer you need to ensure that all of the processing that has any bearing on the outcome of the game is done server side (think online poker). The reason being that anything that's processed client side can be easily cracked/hacked.

Back when I was a teenager flash was the hot new thing and all these companies were releasing online flash games/tournaments to promote their brands and rewarding high scorers with cash & prizes. You could just crack the game client side in RAM using system debuggers like softice and submit high scores that always landed you at the top of the leader board.

Then it got even easier with tools like firebug and swf disassemblers. You wouldn't even have to bother cracking the game, you could just forge HTTP posts to the high score table...

When it became that easy a lot of people started doing it and they caught onto this pretty quickly, and these sort of online flash game tournaments with real prizes dried up. Do they still run these things? If so have they secured them somehow? Haven't looked into it for years.

I actually have thought about security issues, in the beginning I would just search for games that are harder to hack but in the future I would definitely need to create my own games with good security but I think if this becomes an issue my site would be popular enough that I could either afford to pay for a developer to create secure games or possibly even find someone willing to help me cover the costs in exchange for part of the business. I wouldn't mind giving 100% first year revenue to someone willing to help pay for it. I actually had no idea that companies used to hold these tournaments in the past, I guess they don't do it anymore since I've never heard of it, I'll see if I can find something about it would be interesting to see why they stopped, I would imagine that if it was really profitable they would of continued doing them and found a better way to secure the games.

Flash games website monetized with adsense have a very hard time making any money at all - since no one clicks the adsense ads, since they are there to play the game and don't want to leave the page. Take a look at the industry and see how many people complain about a lack of good monetizing for flash games websites.

You won't be able to afford to pay prize money from the adsense earnings.

I actually own a flash game site, I'm not really sure what the standard ctr is for most sites, I guess it heavily depends on your industry but I always thought that some kids click on ads without even realizing they are ads, especially if you use an ad network that specializes in flash games since many of the ads are obviously just trying to trick people into clicking on them. Despite the fact that arcade sites might require more traffic I think they are also fairly easy to get traffic to compared to other industries, but maybe that's just because I know the arcade industry best.

 

[mayana]

My instinct tells me that your basic idea is good, and will definitely work. Instead of focusing on adsense, I would spend some time figuring out how to finance your prizes.

Why can't they be gift cards from retailers where people can "purchase" them with points earned from your games? You could work out deals with advertisers and even offer affiliate products...

You might have to start it off for free (its the whole two sided market problem) though.

Definitely worth a shot... who would've believed that people would pay money to get lives in candy crush?? When it comes to games, I think there are a lot of opportunities.

Sent from my Venture using Tapatalk 2

 

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[Oven]

My instinct tells me that your basic idea is good, and will definitely work. Instead of focusing on adsense, I would spend some time figuring out how to finance your prizes.

Why can't they be gift cards from retailers where people can "purchase" them with points earned from your games? You could work out deals with advertisers and even offer affiliate products...

You might have to start it off for free (its the whole two sided market problem) though.

Definitely worth a shot... who would've believed that people would pay money to get lives in candy crush?? When it comes to games, I think there are a lot of opportunities.

Sent from my Venture using Tapatalk 2

I've never really done anything like this, how difficult is it to find advertisers that might be interested in something like this? I think if I could find the right companies having them sponsor tournaments would be the best way to go. My biggest concern is my budget, I think I could get the site built but this is the type of thing that relies on having players or it won't work. I'd definitely start with free to enter tournaments and add the paid ones once I have enough players, to be sure that they'd fill all the slots. Also if I get the site built but don't have players yet do you think it would be very difficult for me to find someone who would possibly help fund it in return for equity? I guess it would be kind of difficult considering I don't have any previous projects to prove myself, but I really can't afford much more than hosting to be honest...

 

[OzGrinder]

I actually had no idea that companies used to hold these tournaments in the past, I guess they don't do it anymore since I've never heard of it, I'll see if I can find something about it would be interesting to see why they stopped, I would imagine that if it was really profitable they would of continued doing them and found a better way to secure the games.

Snack food companies, soft drink companies etc. all dabbled in it at some stage.
They stopped doing it because it's a technical impossibility to secure. Anything client side is crackable, no matter how much security you put into it. If you stick to turn based games, ie. poker, chess, turn based strategy etc. then it's doable because everything that has a bearing on the result can happen server side.

Eventually I would want to create games for companies, I think companies would be willing to pay a lot for this.

This is what you want to do. We just paid $50k+ to get a flash game developed to promote our brand on facebook etc. (don't ask, it wasn't my decision ). It was an extremely average game, probably 2 weeks worth of work for a single developer on a game maker like multimedia fusion 2. No cash or prizes, the game was just used as a promo. So there's certainly money in that if you can win the contracts, but it is a time = money proposition.

 

[Mexanik]

Well, being a gamer myself, I know that this would gather a lot of attention, both if it's crackable and if not. If it is crackable, users will start questioning top scores and very many members/impressions/clicks will drift away.

That being said, you have to come up with some smart way of earning from this, as from my experience, gamers are very rarely interested in ads.

Sent from my GT-I9100

 

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[Oven]

Snack food companies, soft drink companies etc. all dabbled in it at some stage.
They stopped doing it because it's a technical impossibility to secure. Anything client side is crackable, no matter how much security you put into it. If you stick to turn based games, ie. poker, chess, turn based strategy etc. then it's doable because everything that has a bearing on the result can happen server side.


This is what you want to do. We just paid $50k+ to get a flash game developed to promote our brand on facebook etc. (don't ask, it wasn't my decision ). It was an extremely average game, probably 2 weeks worth of work for a single developer on a game maker like multimedia fusion 2. No cash or prizes, the game was just used as a promo. So there's certainly money in that if you can win the contracts, but it is a time = money proposition.

Wow, I'm surprised how much that game costs that's crazy. I think at first I'd have to stick with client side games because it would just be too expensive to do anything server side but in the future, as soon as the site makes enough money I would definitely want to make a few server side games and maybe just re-skin them with different brand logos or something for different companies, if a company really wants something unique they could pay extra to have a unique game created. That way I think I could target small and big companies. Although I'm a bit afraid of the games getting hacked before I even get a chance to make any money which would pretty much kill the whole site. I'd definitely have to do a bit more research before starting, do you guys usually create a business plan with estimated costs and stuff before starting, might be a silly question but I want to do something really seriously and possibly try to find someone to help fund it if I could get a basic proof of concept working.

Well, being a gamer myself, I know that this would gather a lot of attention, both if it's crackable and if not. If it is crackable, users will start questioning top scores and very many members/impressions/clicks will drift away.

That being said, you have to come up with some smart way of earning from this, as from my experience, gamers are very rarely interested in ads.

Sent from my GT-I9100

If I could find some companies to sponsor the games this would probably completely fix the problem with using ads. Even though it's technically one huge ad.

 

[Mexanik]

If I could find some companies to sponsor the games this would probably completely fix the problem with using ads. Even though it's technically one huge ad.

Consider getting in touch with Steam, advertising games coming up, weekend sales, etc.

Sent from my GT-I9100

 

[exige]

Aren't you just describing online penny arcade sites? There seemed to be a craze over them a few years ago. There's a bunch on Flippa but they don't seem to sell for much.

 

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[mayana]

I've never really done anything like this, how difficult is it to find advertisers that might be interested in something like this?

This is one of your barriers to entry (like what MJ talks about in his book). It will be tough, and you'll have to learn how to approach companies and step out of your comfort zone. If it were super easy, then everyone would be doing it (and it wouldn't be a good idea).

My biggest concern is my budget, I think I could get the site built but this is the type of thing that relies on having players or it won't work.

Also if I get the site built but don't have players yet do you think it would be very difficult for me to find someone who would possibly help fund it in return for equity?

Probably, but you would have to really have your business model ironed out. You'll need to have a really good sense of how you are going to make money, and potentially even talk to advertisers in advance and feel out how interested they would be in something like this (in fact, this is something you could do even right now).

I think I could get the site built but this is the type of thing that relies on having players or it won't work.

Yup. Here is another one of your barriers to entry. You figure out how to get traffic to your website (and, thus, players for your games) then the rest of your problems will be much easier to solve. Is this going to take a while? Definitely. Will it be easy? Of course not.

If you are willing to put in the grueling work to pull this off, it will probably work... but I'm a little concerned that you are asking about how difficult it is to do this. I'd rather hear you ask "How can I" instead of "How hard is it to".

I see that you are only 17. It's great that you are already thinking along these lines and trying to start a Fastlane business. It's going to take you a lot of work, and you might fail big time. If this happens, you'll be a better, stronger person for it, and it will set you up to have a better chance of success on your next project. Or, you might succeed and sell your website for 5 million dollars in three years... who knows?

Don't worry about how hard it is going to be... try it out!

 

[tafy]

You dont have much to lose really, get a domain, dont outsource its design at the start, do it yourself (education)

Go do it, ask for more advice later from us here when you have a website set up

 

[Vick]

I'd generate revenue in the beginning from just adsense

You need a shit load of traffic to earn revenue from this. Like in the millions I think. I'm sure MJ would know.

Where do you get the games from? Do companies just let you use there games for free, or do you have to pay for them all?

You'll need a lot of games. With a lot of variation.

You'll probably need server space as well right?

What would be cool.

Is if you did something like Steam. But people earn money playing those kinda games. A huge network of multiplayer games, where the winners earn cash. That would be pretty frigin hard to implement though.

Can't really say if the idea is good or not. Maybe it is.

Your biggest challenge is sustaining a year or so with barely any revenue, unless you figure something else out.

 

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[Vespasian]

How come that no one is worried about the legal aspects of this venture?
Every major payment processor either completely prohibits gambling sites (like Paypal) or has strict rules in place. Plus depending on your country of residence you would either have to get a gambling license (lots of headache and costs involved) or shift your business to a jurisdiction that allows gambling (headaches and even more money involved).

Maybe using Bitcoins or other cryptocurrencies would be a viable workaround? Less competition, less saturation, active community that likes to share new sites. This wouldn't be a fastlane business as it lacks control, but could make you some nice cash nevertheless.

 

[Oven]

Consider getting in touch with Steam, advertising games coming up, weekend sales, etc.

Sent from my GT-I9100

Steam seems like it would be an intimidating company to contact because they are so huge, but I might as well try.

Aren't you just describing online penny arcade sites? There seemed to be a craze over them a few years ago. There's a bunch on Flippa but they don't seem to sell for much.

If by penny arcade you mean regular flash games sites like miniclip, my site is different because it's not for people who want to play simple games but for more competitive people who want to try making money from their hobby, I'd say my site is closer to a point site like swagbucks then a flash arcade site. Most of those arcade sites on Flippa are complete scams, I would highly reccomend no one purchase one unless it's well established with proven profit.

This is one of your barriers to entry (like what MJ talks about in his book). It will be tough, and you'll have to learn how to approach companies and step out of your comfort zone. If it were super easy, then everyone would be doing it (and it wouldn't be a good idea).

If you are willing to put in the grueling work to pull this off, it will probably work... but I'm a little concerned that you are asking about how difficult it is to do this. I'd rather hear you ask "How can I" instead of "How hard is it to".

I see that you are only 17. It's great that you are already thinking along these lines and trying to start a Fastlane business. It's going to take you a lot of work, and you might fail big time. If this happens, you'll be a better, stronger person for it, and it will set you up to have a better chance of success on your next project. Or, you might succeed and sell your website for 5 million dollars in three years... who knows?

Don't worry about how hard it is going to be... try it out!

Thanks, for the detailed reply. I think I probably do have a fear of failure because I am afraid of using up my budget on something that won't work, but this is the risk that most businesses take, and in reality I don't have that much to lose compared to a lot of other people who take loans or pour their life savings into it.

You dont have much to lose really, get a domain, dont outsource its design at the start, do it yourself (education)

Go do it, ask for more advice later from us here when you have a website set up

It would really be beneficial for me to build my design skills, and this could definitely be a great way to do it. I should probably start rather than asking so many questions. I'll start a progress thread once I get started a bit.

You need a shit load of traffic to earn revenue from this. Like in the millions I think. I'm sure MJ would know.

Where do you get the games from? Do companies just let you use there games for free, or do you have to pay for them all?

You'll need a lot of games. With a lot of variation.

You'll probably need server space as well right?

What would be cool.

Is if you did something like Steam. But people earn money playing those kinda games. A huge network of multiplayer games, where the winners earn cash. That would be pretty frigin hard to implement though.

Can't really say if the idea is good or not. Maybe it is.

Your biggest challenge is sustaining a year or so with barely any revenue, unless you figure something else out.

One of the reasons I think flash games are great in the beginning is because the companies that have the games developed want other sites to use them since they usually have a link to there site within the game and some branding. The Steam thing would be really cool, but right now I think it's a bit too complex for me, I also think that if I were to do that I've have to have prizes for the top three teams, that are a bit bigger, if you look at tournaments for these games they have pretty good prizes, while my site would be a bit more casual.

How come that no one is worried about the legal aspects of this venture?
Every major payment processor either completely prohibits gambling sites (like Paypal) or has strict rules in place. Plus depending on your country of residence you would either have to get a gambling license (lots of headache and costs involved) or shift your business to a jurisdiction that allows gambling (headaches and even more money involved).

Maybe using Bitcoins or other cryptocurrencies would be a viable workaround? Less competition, less saturation, active community that likes to share new sites. This wouldn't be a fastlane business as it lacks control, but could make you some nice cash nevertheless.

I hadn't even thought about that, it's a really good point. If poker tournaments are considered gambling my site definitely would be too. Maybe if I removed the option to buy points so you could only enter the bigger tournaments by saving up points from smaller, free tournaments. I think this would be completely fine as long as I can find good sponsors. It's funny you bring up bitcoins, originally when I came up with the idea for this site it was all bitcoins but I didn't see a reason to not add more prizes/currencies.

Thanks everyone who's posted in this thread and taken the time to give me advice. I'm finding it really helpful to be able to get advice from people who are in the position that I'd like to be in the future.