Google Chrome Web Store: The 5 Percent Heard around the Casual Games World

Google released details for its upcoming Google Chrome Web Store at GDC Europe in Germany. There are few surprises in what was quietly announced except for one: Google will only take a 5% revenue share from the sales on any games through its store.

This bold decision may finally make Google a big player in casual games and could perhaps change the world of casual games, including downloads, forever.

The games editorial Web site 1Up.com videotaped and posted pictures of the presentation on its web site.

The main details are:

• The Chrome Web Store is launching October 2010

• The Store will feature games developed in flash, HTML 5.0 , and C++ (the primary languages that casual games are developed in today and in the future)

• The product combines the best of Apple’s iTunes store (production recommendations, user reviews) with the social sharing of Facebook and Twitter. As Techcrunch notes, the screen shots show “like” and “follow” buttons, two features not in any current Google product.

• Games will be purchased with Google Checkout. Users will be able to purchase the full game (transaction), do micro-transactions (like games on Facebook), and subscriptions.

• The revenue share is 5%, and that includes the credit card fee. That means, the developer makes 95% off of each sale.

I can’t emphasize to you how huge this 5% number is. Google Chrome Web Store by itself is a neat product. But the 5% revenue share is unheard of.

In the good old days of digital distribution, the distributor shared kept 50 – 70%, only paying out 30 – 50% to the developer.

But then Apple launched the iPhone and iTunes and reversed the revenue share, keeping 30% and giving the developer 70%. By giving developers a bigger cut and letting them set the price, developers could offer a lower price for games on the iPhone (e.g., $1.99) and still make money since their of their bigger cut. With Facebook Credits, Facebook is also only taking 30% of the revenue share per each game transaction sale.

Now, Google is taking it to the next level, giving developers 95% of the revenues.

By offering a higher revenue share, they hope to get iPhone, iPad, and all game developers to move over to Chrome Web Store (and we can assume, Android phones as well). Their plan is to make money through advertising and Ad Sense.

Google’s main targets are Apple and Facebook.But, the world of game downloads may be impacted as well.

Though downloading a game and playing on your PC or Mac is not the same as playing a game within your browser, it's close enough for Google Chrome Web Store to have a huge impact on downloads.

Many readers may be thinking that the demographic of someone who plays download games may not be the same person who wants to play a game within a browser. I totally agree with that statement today, but not necessarily tomorrow.

I am currently reading a graphic novel about Momofuku Andou, the inventor of Cup Noodles instant ramen. Everyone thought he was crazy and said that no one will eat instant ramen in a cup since they are used to eating ramen in bowls at restaurants for hundreds of years. Today, 8.2 billion Cups Noodles are sold worldwide a year. Just like noodle-eating, gaming behavior changes and money talks.

If the same game that is sold as a download at $7 to $20 but is offered as a browser-based game at $2 -3 (which the developer is willing to price at since they earn 95% of the full price), where are you as a game consumer going to buy the game?

Many download games (including the popular hidden object games) are coded today in C++ so they will be relatively easy to port over to Google's App Store and HTML 5.0 is a programming language of the future for casual games. PopCap has already announced they will support the Google Chrome Web Store with the release of Plants vs Zombies. I imagine this is the first of many casual game developers who will be looking more closely at Google, all because of the 5% magic number.

With all the attention on Google’s efforts on mobile (Android) and social, the Chrome Web Store could end up as Google’s dark horse in its quest to become a leader in casual games. In the process, it could change the world of download games as well.