How social games make money: Lessons from Farmville
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The Web is fantastic at many things -- e-mail, e-commerce, e-vites, for example. But unless your name is Amazon or Google, making money there has proved elusive.
But Brian Reynolds, chief game designer for Zynga, the company that made the social game Farmville, this week shed a little light on how to get people to buy the farm online during his talk at the Design Innovate Communicate Entertain Summit in Las Vegas.
To start with, Reynolds threw out some bare bones data:
- Social games cost between $100,000 to $300,000 to make.
- Between 3% and 5% of people who play social games pay money for virtual goods in the game or sign up for advertising ‘offers’ that generate cash for the developer.
- Farmville is played by about 31 million people every day.
Now let’s suppose that, given these ballpark figures, that each person who plays a social game generates, on average, a penny a day. Multiply that penny by the number of days in a year, 365, and you get an average of $3.65 generated per year per person.
If you are Farmville, you multiply that by the number of people who play your game on a daily basis:
- $3.65 x 31 million people = $113 million a year
Not bad for a game that perhaps cost $300,000, maximum, to make. Of course, That doesn’t include the salaries for a team of about 40 designers and programmers to continuously update and maintain the game (tack on $4 million to the annual budget).
Reynolds did not disclose how many pennies per day Farmville generates. But if it’s a penny, one could conclude that it’s a $100 million-a-year game. Perhaps that’s why some have valued Zynga as a $3-billion company.
Now let’s say you were especially clever and you figured out...
... ways to get each person to generate two pennies a day. The numbers then begin to look even more compelling. This is where game designers such as Reynolds come in. Reynolds, whose credits include Age of Empires 3 and Sid Meier’s Civilization II, talked about a couple of tricks Farmville uses to get players to part with their cash. (He had other tips related to game design that do things such as hook people into the game and then keep them engaged, but which aren’t directly related to monetization.)
The first is to sell items that let players differentiate themselves from the crowd (flamingo-shaped topiaries, which need to be purchased, have been especially popular on Farmville).
The second is to let players pay to advance faster in the game, thereby saving time, which is, after all, money.
-- Alex Pham