Written from the perspective of an industry insider.
Era 1:The PC-98XX series of computer's success, despite its inadequacies in processing power and special features had erotic games (Eroge) on floppy disks contributing to its success. (Note: He may be overstating its influence, but the (super?)majority of PC games sold in Japan are eroge, the PC game market is so abysmal that Fallout 3 had to get a fantranslation). For the most part, the eroge just consisted of go to girl -> pick up line -> sex, but this quickly got old. This persisted utnil a company relased Dokyusei (同級生 - Classmate) in 1992 which was the first to implement 'routes' and stop being a simple porn game. The sex was delayed until you had sufficiently wooed a single girl by picking enough correct choices. Each individual girl had a story associated with them and you couldn't just have sex with anyone you met.
Era 2: Hard drives are invented, Eroge acquire more of a story focus, with the release of Denpa game Kizuato in 1996 and ToHeart a year later. ToHeart is mostly notable for being the FIRST instance of a relatively story focused eroge becoming successful, so much it's considered a classic to this day. This paved the way for the modern Visual Novel: Greater focus on story and emotional involvement by the consumer.
Era 3: 'Crying games' are invented. Members of 'Tactics' stumbled on a formula, where a comedic and romantic first half is contrasted by a dramatic, depressing second half. They thought they had something, so they spun off into a studio named Key and made Kanon, a game famously well known for making people cry. it's in this era when the porn becomes less and less of a relevant element.
Era 4 and Era 5 mostly talk about how successful eroge have become, including exploitative examples of console ports (if you think DLC is bad now, try buying Baldr Force four times for about 100 dollars each. One of the releases contained what amounted to bug fixes only and survival mode) and increasing rates of adaption into anime.
The notable thing about this history is that the major players were usually the first movers to break the eroge = porn only stereotype. Of course, this took place in a much different market environment than the American video game industry. So at the very least we can conclude if you want to make a porn game, put no porn into it and make it story focused and emotional. Of course this would entirely depend on good writers and directing ability for a visual novel, which of course rules it out entirely as a viable option for Mr Founder here unless he plans to start another 10000 hours learning how to emulate obscure pornographic video games from Japan.
Break even point usually occurs at less than 5000 (!) copies sold, with about 90 dollars per copy sold and 60~80% of that cost not taken by the distributor. Note that there is an entrenched section of the marketbase who will snatch up any new titles. Liarsoft In particular has somewhere around ten thousand diehard fans that will purchase anything they make (this is true because I saw it on a memo!) even if it's unfinished or a weird sumo wrestler fetish game. Survival rates don't look good though with only 20% of brands making it to the 8 year mark. Eroge studios tend to be a lot more fluid though, with many people hired on for just one or two projects and there are a lot of brands who reform under another name or are absorbed into a sister brand.
So yes, it's a bad option.
Although...
You can get English versions of some of them, but they aren't exactly flying off the shelves, as far as I know.
[JASTUSA][www.jastusa.com] has made a profit on (close to? ) every single one of its games, despite licensing costs, general headaches dealing with Japanese company redtape and risk aversion by buying up cheaply licensed masturbation only games translating them for cheap and releasing them uncensored. Recently they've been buying up fantranslators to do the work at an even cheaper price for the more story centric and text heavy games.
But yes, visual novels don't sell much, and even download stats for pirated fantranslation patches still only peaks around 20000.
Here's some more data on the eroge situation in Japan:
History of Visual Novels
Summary:
Written from the perspective of an industry insider.
Era 1:The PC-98XX series of computer's success, despite its inadequacies in processing power and special features had erotic games (Eroge) on floppy disks contributing to its success. (Note: He may be overstating its influence, but the (super?)majority of PC games sold in Japan are eroge, the PC game market is so abysmal that Fallout 3 had to get a fantranslation). For the most part, the eroge just consisted of go to girl -> pick up line -> sex, but this quickly got old. This persisted utnil a company relased Dokyusei (同級生 - Classmate) in 1992 which was the first to implement 'routes' and stop being a simple porn game. The sex was delayed until you had sufficiently wooed a single girl by picking enough correct choices. Each individual girl had a story associated with them and you couldn't just have sex with anyone you met.
Era 2: Hard drives are invented, Eroge acquire more of a story focus, with the release of Denpa game Kizuato in 1996 and ToHeart a year later. ToHeart is mostly notable for being the FIRST instance of a relatively story focused eroge becoming successful, so much it's considered a classic to this day. This paved the way for the modern Visual Novel: Greater focus on story and emotional involvement by the consumer.
Era 3: 'Crying games' are invented. Members of 'Tactics' stumbled on a formula, where a comedic and romantic first half is contrasted by a dramatic, depressing second half. They thought they had something, so they spun off into a studio named Key and made Kanon, a game famously well known for making people cry. it's in this era when the porn becomes less and less of a relevant element.
Era 4 and Era 5 mostly talk about how successful eroge have become, including exploitative examples of console ports (if you think DLC is bad now, try buying Baldr Force four times for about 100 dollars each. One of the releases contained what amounted to bug fixes only and survival mode) and increasing rates of adaption into anime.
The notable thing about this history is that the major players were usually the first movers to break the eroge = porn only stereotype. Of course, this took place in a much different market environment than the American video game industry. So at the very least we can conclude if you want to make a porn game, put no porn into it and make it story focused and emotional. Of course this would entirely depend on good writers and directing ability for a visual novel, which of course rules it out entirely as a viable option for Mr Founder here unless he plans to start another 10000 hours learning how to emulate obscure pornographic video games from Japan.
Production costs and break even points
Break even point usually occurs at less than 5000 (!) copies sold, with about 90 dollars per copy sold and 60~80% of that cost not taken by the distributor. Note that there is an entrenched section of the marketbase who will snatch up any new titles. Liarsoft In particular has somewhere around ten thousand diehard fans that will purchase anything they make (this is true because I saw it on a memo!) even if it's unfinished or a weird sumo wrestler fetish game. Survival rates don't look good though with only 20% of brands making it to the 8 year mark. Eroge studios tend to be a lot more fluid though, with many people hired on for just one or two projects and there are a lot of brands who reform under another name or are absorbed into a sister brand.
So yes, it's a bad option.
Although...
[JASTUSA][www.jastusa.com] has made a profit on (close to? ) every single one of its games, despite licensing costs, general headaches dealing with Japanese company redtape and risk aversion by buying up cheaply licensed masturbation only games translating them for cheap and releasing them uncensored. Recently they've been buying up fantranslators to do the work at an even cheaper price for the more story centric and text heavy games.
But yes, visual novels don't sell much, and even download stats for pirated fantranslation patches still only peaks around 20000.