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Game developers on social networks can expect $1.20/mth/Daily Active User August 29, 2008

Posted by jeremyliew in advertising, business models, games, games 2.0, gaming, social games, social gaming, virtual goods, virtual worlds.
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Inside Facebook has a terrific interview with $uperRewards, one of the two major CPA ad networks for social networks (and increasingly outside of social networks as well). [Offerpal is the other major CPA ad network for social networks]. In the interview the $uperRewards team give some great stats and advice for game designers:

On who to focus on when thinking about monetization:

You should support all kinds of players well, while remembering that your hardcore users will generate 90% of your revenue….

…Also, keep in mind at that a majority of the revenue generated per user is generated early in the lifetime of the users’ interaction with the games. People spend money developing their characters, climbing the leader board, and unlocking new elements of the game. Once their character is strong, they have many prizes, and have unlocked all the levels – naturally there is less desire to complete offers and pay. It is those top guys though that motivate the little guys to climb and thus spend.

On what monetization a game developer can expect:

The core metric we use is dollars per click. We hope our developers can get 25% of their daily active users through a Super Rewards page at some point. Of those, if the economy is balanced correctly, you should see a 40-50% click through rate, and ultimately a net 8-10% conversion rate. Developers get about $1.00-$1.50/conversion for US users, but less for international users. We’re lucky to get $0.06/conversion in China, but we have games operating in Europe and other parts of Asia at $0.25 and up.

So assuming all of a developer’s traffic is US traffic, the developer could see up to $83 per day per thousand DAUs. However, on an average basis across all geographies, we are about half that number. It goes without saying that there is a wide distribution around the average based on quality of app and balance of virtual currency economy.

$83/day x 1/2 x 30 days = ~$1200/mth per thousand DAUs, or $1.2/mth per DAU. That sounds like real opportunity. When Facebook rolls out an API for micropayments, this number will likely go up even further.

Promising numbers for game developers.

Read the whole interview.

Comments»

1. Stacey Derbinshire - August 29, 2008

I finally decided to write a comment on your blog. I just wanted to say good job. I really enjoy reading your posts.

2. Adam Caplan - August 29, 2008

Thanks for the post Jeremy. I just wanted to clarify that the $1.00-$1.50 is a per click number, not per conversion. The actual conversion average is much close to $4-5 per completed offer.

Also,$83 per thousand DAUs is by no means a cap. $200 per day per thousand DAUs is completely possible depending on game quality and balance of the economy. The important thing is here is that developers can and do earn significant amounts of money in this space.

Cheers,

Adam Caplan

3. Revenue data and other metrics of virtual asset sales market | VERN - September 29, 2011

[…] Game developers on social networks can expect $1.20/mth/Daily Active User @ Lightspeed Venture Partners […]


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