Deep dive into state of adult games market, its risks and trends: roundtable discussion

What is the state of the adult games market today?

Andrey Postnikov, senior business developer at Nutaku

Essentially, it’s a large, growing volume of paying “whale” audiences and a small amount of quality content. Demand far exceeds supply.

The market can also be segmented on the basis of distribution channels:

• Nutaku (worldwide) — #1 in terms of popularity and audience size in Europe and the US. Focused on free-to-play titles;
• DMM Games (FANZA), DLsite (Asia/Japan) — 18+ hentai/anime-style games. Mainly premium monetization;
• Steam (worldwide) — popular platform that features various adult genres from developers across the globe. Mainly premium monetization;
• Erolabs (China) — “boutique” of quality free-to-play hentai/anime projects.

Major technology platforms for content distribution are .APK files for Android, PC (web browsers), and mobile browsers.

We can’t calculate the total market volume in terms of money because in all of the studies, the KPIs for the adult games segment are included in the total figures for all adult entertainment. Even taking this into account, I can assure you that we’re talking about hundreds of millions of dollars a year. Given the small number of new quality projects, I think that’s an excellent figure.

Booty Calls (3X Entertainment Limited, Nutaku Publishing)

Steve Yuan, business manager at Erolabs

In today’s games market (not adult), the manpower and art specifications invested need to reach a certain level to produce products that meet the needs of players. However, the burden of development costs has become larger and larger, causing developers that focus on mobile games to reconsider product positioning. As a result, some smaller teams choose the adult games market.

In particular, the development of AI technology has gradually matured in recent years, allowing the studios to save more art costs and produce more products with a mature and profitable framework.

However, this has also resulted in the product’s art style and gameplay being too similar and featureless. The adult games market is currently filled with homogeneous products, so it is crucial to find the special features or highlights of the product.

Bearcore, lead developer at Anduo Games

According to Graphtreons, the adult games market generates over $2 million per month on Patreon alone. Compared to the overall gaming market revenue of almost $350 billion (via Statista), it is not exactly a large share as a whole.

Still, the niche of adult games is growing consistently, and developers in the scene are becoming professionals. Games like Wild Life and Subverse have been picked up by mainstream game press and show quality, that is in a similar ballpark as some AAA productions.

Big publishers, however, seem to stray far away from adult games, likely fearing repercussions. Thus, most if not all of adult gaming is indie and self-funded.

Evgeny Belousov (Texic), creator of Milf’s Plaza

The adult games market is a free space for creativity, with a minimum barrier to entry for a developer. To create visual novels with 2D graphics, it is enough to draw beautiful art; for 3D games, a powerful video card is enough.

Of course, not all titles stand out because of art. There are also projects capturing the audience thanks to the story. But the lion’s share of teams try to stand out with their graphics and parasitize on well-known franchises.

What are the non-obvious risks and challenges faced by companies creating adult content?

Andrey Postnikov, senior business developer at Nutaku

This depends on whether we’re talking about developers or publishers.

From a developer perspective, the main issue is the lack of market data that everyone is used to in the mainstream. Devs don’t have to work completely blind, but most of the data may just be inaccessible.

There’s also a lack of end-to-end analytics tools and solutions for testing theories. In most cases, adult game distributors only provide the pre-reg page and soft launch tools by default.

In addition, audiences vary depending on the distribution platform. A project can show excellent metrics on Nutaku, but at the same time, it can completely fail on Steam due to its more rigid monetization. It is essential to constantly adjust the project’s “monetization profile” for each platform.

If we look at publishers, they usually face the following challenges:

• Regulatory requirements — you have to adjust to the constantly changing and non-obvious requirements;
• Payment processing difficulties — the adult industry often faces challenges with payment processing;
• Potential legal issues with AI — laws regarding AI content may become restrictive, which could impact the feasibility of using AI in adult games in the future;
• Lack of in-game ad monetization;
• Lack of quality content.

Steve Yuan, business manager at Erolabs

When dealing with different ethnic groups or regional cultures, special attention needs to be paid to sensitive topics. For example, the Chinese market is relatively resistant to NTR themes, while the European and American markets have an absolutely taboo about underage characters.

Bearcore, lead developer at Anduo Games

Adult games face an issue with discoverability. Steam doesn’t show users adult games at all, unless they explicitly turn on a setting. Of course, this is a sensible step to hide content from minors. However, it does also hurt the bottom line of adult game creators, as adult customers, potentially interested in such games, might just not even know about this setting and will never see these products.

Piracy is rampant in the adult games industry. In part due to the lack of large publishers holding rights to adult games, some sites have made the user experience of pirating an adult game surprisingly easy. As no sizable legal team is stepping in to stop such piracy websites, the best developers can do is to issue DMCAs to the file hosters. Due to a number of reasons, however, this is ultimately ineffective.

The content that is allowed on platforms also varies. Recently, Patreon banned high-profile creators. Such disruptions in the stability of Patreon as a platform for adult content creators have sent waves of distrust throughout the adult developer community. Being mindful of what fetish is allowed on which platform can be difficult at times. Especially when the rules change multiple times per year.

Usually being associated with adult content sometimes pushes your business into a shady corner in the eyes of some, despite the fact that you’re just another game developer.

Evgeny Belousov (Texic), creator of Milf’s Plaza

99% of developers quit in the first six months to a year due to unjustified expectations. Most of those who begin the path of an adult Jedi have a deceptive feeling that there is nothing easier than parasitizing on the physiological needs of people. Then it turns out that this game development is no different from any other: here, too, you have to strive and put enormous efforts into achieving the desired goals.

In addition, the rules regarding adult games are becoming stricter every year. Therefore, before entering this niche, it is worth thoroughly familiarizing yourself with the complete list of dos and don’ts.

How does developing and marketing adult games differ from games that do not belong to this niche?

Andrey Postnikov, senior business developer at Nutaku

The differences can be significant, though there are some nuances:

• Production costs — some quality mobile adult games have budgets that are large and comparable to quality mainstream titles. These games need to be well-built to be successful;
• Art — although AI can reduce the cost of art production by creating appealing characters efficiently, not all audiences are loyal to AI-generated artwork;
• “Adultification” — there’s a practice of adapting/reskinning existing mainstream games to adult content, which typically requires a lower budget than creating a project from scratch.

There is clearly a significant market demand for adult games. Rule 34’s popularity continues to reinforce the idea that sex sells.

Overall, while there are cost-saving opportunities in adult game production, there are also significant investments and considerations necessary to ensure the game’s success and compliance.

Steve Yuan, business manager at Erolabs

The advertising channel for adult games is different from traditional games, which has unified advertisers such as Google Ads, Apple Search Ads, Facebook Ads, etc. Advertising in this niche is a more complex issue, so the distribution platform needs to be carefully selected.

Bearcore, lead developer at Anduo Games

When marketing an adult game, it can be difficult to get a sizable reach. Most ad services, such as Google AdSense, do not allow adult content. Usually you also cannot upload your trailer to YouTube. Much of advertisement ends up relying on having a sizable following on sites like X, itch.io, Discord, and Steam. Thus, especially starting out can be a difficult task, when you have no established audience.

At the same time, standing out amongst adult games with a quality game is easier compared to the mainstream indie market due to the general inexperience of many developers in the niche. There is a sizable audience out there, actively looking for new quality adult games. More so than in the mainstream indie market, in my observation.

Third Crisis (Anduo Games)

Evgeny Belousov (Texic), creator of Milf’s Plaza

Practically they’re no different from traditional games, except that adult titles are very limited in the possibilities of PR (you know, you can’t advertise this everywhere). And the games themselves, due to their primitive component, don’t require large teams, because they won’t be able to recoup their production costs in this case.

Of course, there are “heavy” projects made in full 3D, but more often than not these are hyper-ambitious masterpieces that take a lifetime to develop and rarely see the light of day. Those that are released are rather hackwork (by the standards of traditional video games). And I wouldn’t follow their example.

Is simply adding new graphics of a sexual nature enough to turn a regular game into a full-fledged adult project?

Andrey Postnikov, senior business developer at Nutaku

No, it’s not enough. Despite the small number of projects, the audience for adult games is “growing up” — whereas in the past a simple insertion of nudity could still pay for itself, now this type of thing just doesn’t work. The quality is growing alongside the audience.

Organically implementing a “porn meta” into an existing mainstream project is far from easy. Just like creating quality adult art has a different labor cost versus mainstream games.

While it’s essential to integrate adult content seamlessly, a game that is genuinely good doesn’t necessarily need a “porn meta” to succeed. However, users will respond better to a fully adult experience rather than a mainstream game with added adult rewards. It’s about providing a cohesive and immersive adult experience that meets the evolving expectations of the audience.

Steve Yuan, business manager at Erolabs

Broadly speaking, this is fine, but not enough to make a good game. There are many things that attract players to adult games, such as the creation of a plot atmosphere and presentation.

Simply adding pictures cannot satisfy players, especially since many high-quality adult games have been launched in recent years, including Ark Re:Code, Cherry Tale, Rise of Eros, TenkafuMA, and Nu: Carnival. It is no longer possible to gain a foothold in the adult games market just by using adult pictures.

Bearcore, lead developer at Anduo Games

In my experience, simply adding adult content to a regular game can work. The popularity of adult mods for games such as Skyrim and Fallout proves this. A number of players enjoy simply adding some spice to the game that they already like.

However, I personally think that adult games can be much more than that. Something that can go beyond adding nude breasts and character models simulating intercourse. Especially in the storytelling of games, adult content can add a unique layer of depth.

Fetishes that cannot easily be explored in other media can be limitlessly indulged in games. Tentacles are one such example that often finds application.

Evgeny Belousov (Texic), creator of Milf’s Plaza

Unfortunately, this may be the case. But these are just costs of universal human culture. The majority of users of entertainment products are the unsophisticated public. So if you give one of the characters in a slasher film a revealing neckline, it will attract the attention of a huge number of people. Accordingly, the more naughty content you add, the more sensation it can cause.

But there is also a downside to this approach. By adding adult content, you cut off the younger audience, which is many times larger than the audience of any hentai niche. In short, devs do this when the game itself is unremarkable and is hardly able to compete with the products of fellow creators.

If we talk about full-fledged adult games, then the gameplay doesn’t matter that much and only serves as an element of the narrative.

Mil’s Plaza

How competitive is the adult games market?

Andrey Postnikov, senior business developer at Nutaku

There’s definitely competition between distribution platforms. There are exclusive projects that have their own tools for working with the audience, their own distribution tools on other platforms (e.g. iOS), unique approaches to working with IP holders, etc.

Competition between games is less saturated compared to the mainstream market. A small number of quality projects, as well as the absence of entire genres and mechanics, gives a game great opportunities to become a genre-forming project.

However, it’s worth noting that if you carve out an experience that players enjoy, your odds of success are much higher. But if someone does what you do better, they can still capture a significant percentage of your player base. There is less “lost in the ocean” competition, but there is plenty of direct competition.

Steve Yuan, business manager at Erolabs

As the traditional games market is monopolized by large developers, more and more small and medium-sized teams are investing in the production of adult games, so the level of competition is gradually increasing.

Moreover, the paradigm has shifted over the past two years. The adult games market is no longer limited to paid titles, having expanded to include online live service products.

Bearcore, lead developer at Anduo Games

The market has become much more competitive over the last five years. Games such as the previously mentioned Wild Life have raised the bar of what an adult game can be. Still, I feel there is much space for the niche to grow. The most commonly asked question I see is “Does anybody know another game like XYZ?” Players involved in the scene tend to not lose interest in the genre after playing the first adult game and the nature of the content makes it so that no game can capture players interest for too long.

Evgeny Belousov (Texic), creator of Milf’s Plaza

There’s a slight paradox here. As I already said, entering the genre is quite easy. Competition is minimal. However, the niche itself is tiny. High-quality games can be counted on the fingers of two hands. The audience almost always overlaps. It’s not hard to grab a slice of the pie, but the pie itself isn’t that big. At the same time, you still have to put in a lot of effort. It’s like in Quake today, where a few people play online, but each of them has years of experience, so you can’t even leave a respawn point. Not to mention shooting the enemy.

What trends are currently observed in the niche and specifically in the development of such products?

Andrey Postnikov, senior business developer at Nutaku

There are three main trends:

• Developing AI tools specifically for 18+ content;
• Using classic mainstream mechanics that are new to the adult segment;
• Great attention to LiveOps. LiveOps is paramount. Any game that fail to deliver on post-launch events and content/expansions will start declining after a few months. Using tools that make working on LiveOps easier and more efficient is crucial for maintaining player engagement and success.

Bearcore, lead developer at Anduo Games

Some creators are pushing the limit of what is taboo and walking up to that red line as close as possible. Incest fetish would be one such example. But there are a number of fetishes fitting this bill.

As for developer trends, visual novels appear to be booming. Especially those which have their artwork created partially with Daz3D. A large marketplace surrounding that platform, which supports adult game developers with assets, has established itself over the past few years. This leads to many adult games in that 3D Visual Novel genre looking quite same-y. I am also seeing a number of AI-generated art in visual novels, though I have yet to see one such project reaching a substantial income.

Evgeny Belousov (Texic), creator of Milf’s Plaza

100% success is to create a game based on a well-known franchise: a cartoon, film, comic book, something popular.

For example, Harry Potter remains one of the most appealing and best-selling brands in this niche.

Actually, erotic content has always been based on parodies. Video games are no exception, providing fan service based on players’ favorite characters.

But there’s a downside. Such a game won’t be allowed on Steam. So think ten times before you decide to make another Witch Trainer.