A great idea doesn’t automatically translate into market success. Just ask the developers of Anthem, a AAA game that cost over $200 million to create but failed to find its audience. Or consider Stardew Valley, developed on a shoestring budget, which has sold over 30 million copies.
The difference often comes down to understanding market potential before investing significant resources. Whether you’re developing a game, launching a product, or starting a company, you need to know if there’s a viable market for what you’re creating.
What is Market Potential?
Market potential is the total revenue you could generate based on the number of customers who might be interested in your product or service. To determine market potential, multiply your market size by your unit price:
Market Potential = Market Size × Unit Price
For example, if you’re developing a mobile puzzle game priced at $4.99, and there are 500 million mobile puzzle game players worldwide, your theoretical market potential would be:
500 million × $4.99 = $2.495 billion
However, this basic calculation is just the starting point. Real market potential requires a more nuanced analysis.
Why Market Potential Analysis Matters
Consider these real industry examples:
Cyberpunk 2077 spent $316 million on development, targeting the entire RPG market
Fall Guys spent under $10 million, targeting a specific segment of party game players
Among Us had almost no initial budget but found massive market potential in social gaming
The difference between success and failure often comes down to understanding your true market potential before major investment. This is where the Market Potential Analysis Framework comes in.
The Market Potential Analysis Framework
Through studying successful and failed game launches, we’ve developed a five-step framework for analyzing market potential. This framework helps you move from theoretical market size to realistic market potential.
Step 1: Create Your Initial Concept
Start by defining your basic product concept and initial assumptions.
Hypothetical Example: Mobile Puzzle Game “MindBuster”
Product: Adaptive difficulty puzzle game
Initial Target: Mobile gamers aged 25-45
Price Point: $4.99
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