Three Rings Dishes Digits: Casual Game Studio Estimates $7 Mill+ Revenue in ’07

The world of independent game development is one of rocky shores and frightening peaks. But when a company finds a path to true profitability, those hills and valleys can sometimes be far above the ground, suspending an indy game house in the clouds of success.Bang! Howdy

Such success has found Three Rings, the Indy developer in San Francisco that created that MMO puzzle hit Puzzle Pirates. That game launched in 2004, and has since formed the foundation for a wildly successful and original development house. At the Game Developers Conference, this week, Daniel james, Three Rings’ CEO, gave us the skinny on just how profitable the indy MMO business can be. Of course, profits are relative: Three Rings has been dumping all of its dough into rapid expansion and on a shwanky new downtown SF office that features a bar, exquisite wooden molding, and secret passages.

Three Rings has mastered the virtual purchases market in Puzzle Pirates, and its most recently published title, Bang! Howdy (pictured), has begun to pull in dough as well. By July 2006, Three Rings was receiving $300,000 a month in revenues from a combination of monthly fees and in-game purchases of virtual currency and items. According to James, Puzzle Pirates has over 90,000 paying accounts. Of those players, 2500 to 3000 a month will spend money to buy in-game currency. Of those players, most will spend $30 a month on game items, while the more hardcore players will spend $50.

All this has translated to total revenues of 2006 hitting $3.39 million for 2006. James predicts that 2007 should see 100 percent growth of revenues: he foresees $7.24 million in revenues for the current year.

Why such growth? Puzzle Pirates’ success has begun to wain, as revenues for that game peaked out when the company added the ability for players to buy pets in-game. Pets added a significant one-month growth of revenues, but today, Puzzle Pirates is hovering around $300,000 monthly, and slowly dwindling.

But Three Rings’ newest game is only just now gaining traction. Interestingly enough, James said that Bang! Howdy’s economy is currently such that in-game money is quite cheap at the moment. The game offers two types of currency: gold, which can be purchased directly through real-world money, and scratch, which is earned by playing the game. A natural exchange rate is created through in-game currency auctions held by players. As Bang! Howdy is currently popular with kids and students, and has not yet broken into the mainstream, the price of gold is extremely high, in terms of scratch.

But James sees that balance shifting, as players with more money then time begin to find the game. And he’s also predicting even further growth as his company’s next title begins to surface later this year. Titled Whirled, the game will take the form of a Web-portal where numerous puzzle games can be played and mashed together by users. As with any Three Rings game, the title looks to be long on innovation, and short on complication.