plus sponsors are salivating with anticipation for his upcoming "games" which are actually nothing more than gameplay prototypes and/or funding infusions.
What? Steambirds isn't really a game? All its polish and carefully refined gameplay doesn't get it past prototype status? Even a seemingly simple game like that takes months to create for just one person. There is nothing about the game that feels unfinished. To me this sounds like if you told people you work as a senior programmer at a (funded) web startup and they ask "Oh, cool! So, what do you do for money?"
One of my favourite tidbits is that he did no direct sales -- he just uploaded to a game licensing site and gave them 10%.
This makes it pretty obvious he is ignorant of the flash market. This is par for the course in Flash games; you almost never see people do direct sales (Captain Forever being a notable exception) and 99% of the games you see are sold to sponsors and then put on the sponsor portals. I find it pretty weird that he thought it was some dangerous and ingenious business model that Andy thought of himself.
Sorry to have one of those "but someone is WRONG on the INTERNET" moments, but I would have liked the article if it just weren't so ignorant of what its writing about.
On the second, my reaction is less about its novelty compared to the rest of the flash game biz, and based more on how it compares to web startups in general. Even a market as commoditized as display advertising still relies on a lot of personal contacts and haggling. It's a nice surprise to see a B2B market that can run so efficiently.
I wouldn't have gone the route he did though, I probably would have invested the original million dollars in something a bit safer than a software company that yields less profit.
After working on my game for a year now and don't ever see myself selling it if/when I release it.
I'd much rather live off a little bit of money and make the game I want.