Game Marketing Tips, Analysis, and News

Wednesday, February 2, 2011

Social Games Revenue Revealed

The Call of Duty numbers are slightly cut off in this view, but it's 12 million players.
While it's pretty clear that social games are virtually printing money, since the major players are private companies the exact height of their stacks of cash has been a matter of some conjecture. Estimates appear in the press, but they're just educated (or wild-ass) guesses. Now we have a bit more of an attempt to add up the numbers by IGN, and they compare the results to some of the top console games. The results probably shouldn't surprise you: Zynga's making a lot of money. More so than any console game except the latest Call of Duty title, which has set new records for a console game.

These numbers are guesses, though, for the social games. They may well be wrong... probably on the low side, is my guess. This gives you some insight into why EA and Disney are trying to buy their way into the social game market with purchases of Playdom and Playfish. (Though it doesn't explain why Activision is avoiding it.)

Game development costs are, of course, far lower for social games than for console games. I have no doubt that Zynga spent a lot more developing CityVille than they did on previous titles... and I also have no doubt it's still an order of magnitude or two less than Activision spent developing Call of Duty: Black Ops. Another key advantage of a social game is that the developer can continuously tweak it to optimize revenue (and user enjoyment). Given the number of players, social game developers have a huge stream of data to work with, and they can try things out and see the results very quickly. And they see how those decisions affect revenue right away, so they can optimize revenue rapidly.

It's because of this inherent feedback advantage that I see social games continuing to expand their revenue. They'll keep finding ways to get new players, and ways to get them to spend money. I've been resisting playing social games too much because of the time required, but now that my son has beaten my gladiator in Spartacus I'm tempted to buy a new fighter to whup him good... and so the social games tweak my amygdala to make themselves some money. Damn, that combination of game design, marketing and psychology is powerful...

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