Comments on: Virtual goods making money for Zynga, but $50 million a year? http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/ News About Tech, Money and Innovation Mon, 23 Nov 2009 07:11:08 +0000 http://wordpress.org/?v=2.8.5 hourly 1 By: Mike Gomez http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876094 Mike Gomez Wed, 04 Feb 2009 22:47:32 +0000 http://venturebeat.com/?p=102483#comment-876094 Wow $50 big ones. I never imagined people would spend this much on virtual goods, and they say we are in a recession. Wow $50 big ones. I never imagined people would spend this much on virtual goods, and they say we are in a recession.

]]> By: Azam Khan http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876093 Azam Khan Fri, 16 Jan 2009 21:24:20 +0000 http://venturebeat.com/?p=102483#comment-876093 LOL@ the cynnicism.<br><br>wake up and smell the world of virtual goods. Apps could easily make over 10,000 a day and some can go way higher. Bring traffic in and with a good game concept you could engage users succesfully. Offerpal's network-wide average rate is $75 per day per 1,000 active users with eCPMs often above $150. 80% of top 25 companies use Offerpal to monetize their apps using CPA offers and direct buy.<br><br>As virtual goods and currency proliferate, especially on iphone, expect these companies to be raking in large profits. Traffic is key. TRAFFIC AND HOOKS. LOL@ the cynnicism.

wake up and smell the world of virtual goods. Apps could easily make over 10,000 a day and some can go way higher. Bring traffic in and with a good game concept you could engage users succesfully. Offerpal's network-wide average rate is $75 per day per 1,000 active users with eCPMs often above $150. 80% of top 25 companies use Offerpal to monetize their apps using CPA offers and direct buy.

As virtual goods and currency proliferate, especially on iphone, expect these companies to be raking in large profits. Traffic is key. TRAFFIC AND HOOKS.

]]> By: Tim Chang http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876092 Tim Chang Thu, 15 Jan 2009 22:17:10 +0000 http://venturebeat.com/?p=102483#comment-876092 Some clarification regarding Zynga's potential revenues:<br><br>The $30-40M annualized revenue runrate is a hypothetical response to the question "how big can social gaming really get -- isn't it just widget hype all over again?" A leader in the space like Zynga could reach a $30-40m annualized runrate quite feasibly in 2009, based on a very simple back of the envelope calculation: a hit social game can generate $1M+/month, and thus three concurrent hit social games including an early breakout title like Texas Hold Em could easily add up to a $30-40m annualized gross revenue runrate (this extremely oversimplified figure obviously ignores game lifespan, churn rates, rev splits, etc. of course).<br><br>NVP is not an investor in Zynga nor have we seen any of the company's actual data -- the key takeaway is that social gaming (and it's eventual extension to mobile) as a sector is a bright spot of hope and growth in what looks to be a gloomy 2009. I remain a fan of the company and the overall space as an investment category.<br><br>Tim Chang<br>Norwest Venture Partners Some clarification regarding Zynga's potential revenues:

The $30-40M annualized revenue runrate is a hypothetical response to the question “how big can social gaming really get — isn't it just widget hype all over again?” A leader in the space like Zynga could reach a $30-40m annualized runrate quite feasibly in 2009, based on a very simple back of the envelope calculation: a hit social game can generate $1M+/month, and thus three concurrent hit social games including an early breakout title like Texas Hold Em could easily add up to a $30-40m annualized gross revenue runrate (this extremely oversimplified figure obviously ignores game lifespan, churn rates, rev splits, etc. of course).

NVP is not an investor in Zynga nor have we seen any of the company's actual data — the key takeaway is that social gaming (and it's eventual extension to mobile) as a sector is a bright spot of hope and growth in what looks to be a gloomy 2009. I remain a fan of the company and the overall space as an investment category.

Tim Chang
Norwest Venture Partners

]]> By: Grant http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876091 Grant Tue, 13 Jan 2009 22:43:57 +0000 http://venturebeat.com/?p=102483#comment-876091 Not sure about the numbers, but the Zynga games I've played on FB are really buggy.. a lot of "launch and hope it works" situations where something crashes and is down for days. User feedback on their customer service is pretty bad. Maybe it is growing pains, hopefully, as some of the games are nice pasttimes.. but I never trust e-commerce systems that involve my credit card if the site seems buggy. Not sure about the numbers, but the Zynga games I've played on FB are really buggy.. a lot of “launch and hope it works” situations where something crashes and is down for days. User feedback on their customer service is pretty bad. Maybe it is growing pains, hopefully, as some of the games are nice pasttimes.. but I never trust e-commerce systems that involve my credit card if the site seems buggy.

]]> By: GeekdomRulez http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876090 GeekdomRulez Sun, 11 Jan 2009 22:47:34 +0000 http://venturebeat.com/?p=102483#comment-876090 I'd definitely bet there is some creative accounting going on there as well. Also, most of that money is made from poker, which is vulnerable to gambling laws. It's a castle built of sand. I'd definitely bet there is some creative accounting going on there as well. Also, most of that money is made from poker, which is vulnerable to gambling laws. It's a castle built of sand.

]]> By: plin http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876089 plin Sat, 10 Jan 2009 04:34:19 +0000 http://venturebeat.com/?p=102483#comment-876089 $50 million sounds like a lot. If Facebook was projected to make $300+ million in revenue last year Zynga will be making 1/6th of Facebook. If that is true Facebook should really pay attention and create a specific gaming division. $50 million sounds like a lot. If Facebook was projected to make $300+ million in revenue last year Zynga will be making 1/6th of Facebook. If that is true Facebook should really pay attention and create a specific gaming division.

]]> By: Joe Lectual http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876088 Joe Lectual Sat, 10 Jan 2009 00:49:14 +0000 http://venturebeat.com/?p=102483#comment-876088 indeed... if what you want is another Ponzi schemer in charge of Commerce... indeed… if what you want is another Ponzi schemer in charge of Commerce…

]]> By: verozon http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876087 verozon Sat, 10 Jan 2009 00:44:28 +0000 http://venturebeat.com/?p=102483#comment-876087 Mark Pincus for Secretary of Commerce! Mark Pincus for Secretary of Commerce!

]]> By: Joe Lectual http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876086 Joe Lectual Sat, 10 Jan 2009 00:43:52 +0000 http://venturebeat.com/?p=102483#comment-876086 not only that... guess what discretionary consumer spending by which socioeconomic class will be the first to go, or has already gone, but Zynga convinced dumbass investors otherwise.... yes, you guessed it, virtual good expenditures for games... what Zynga probably worries about, but investors don't yet have the smarts for, is that Zynga's revenues were based on peoples behaviours and outlooks of the past... where they had jobs and credit was easy. That has turned 180 degrees now and people will simply shut off the spigot.... <br><br>the investment commty needs to get back to basics, with companies doing basic innovations for new industries... Zynga, Dogster... good god... we still have not hit capitulation yet.... limited partners... call your GPs and tell them to stop this madness. not only that… guess what discretionary consumer spending by which socioeconomic class will be the first to go, or has already gone, but Zynga convinced dumbass investors otherwise…. yes, you guessed it, virtual good expenditures for games… what Zynga probably worries about, but investors don't yet have the smarts for, is that Zynga's revenues were based on peoples behaviours and outlooks of the past… where they had jobs and credit was easy. That has turned 180 degrees now and people will simply shut off the spigot….

the investment commty needs to get back to basics, with companies doing basic innovations for new industries… Zynga, Dogster… good god… we still have not hit capitulation yet…. limited partners… call your GPs and tell them to stop this madness.

]]> By: Gadget Sleuth http://venturebeat.com/2009/01/08/virtual-goods-making-money-for-zynga-but-50-million-a-year/comment-page-1/#comment-876085 Gadget Sleuth Sat, 10 Jan 2009 00:35:22 +0000 http://venturebeat.com/?p=102483#comment-876085 $50 million? Let me see the books. I'd be willing to bet, in this economy, there's some "creative accounting" going on. $50 million? Let me see the books. I'd be willing to bet, in this economy, there's some “creative accounting” going on.

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