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Why do devs still bother with virtual goods?

08-16-2011, 04:37 PM
#1
Why do devs still bother with virtual goods?

I don't see why devs still bother with virtual goods. A lot of people have been chasing the virtual goods carrot recently, but are they still the best way for small developers to make a game?

The problem with virtual goods is that you need millions of users in order to reach $1M in revenue, especially with free-to-paid conversion rates for most social games being in the single digits and average revenue per user (ARPU) often hovering around $1.

I wrote a in-depth blog post about this (read it here) and would love some feedback. Thanks!

Hey all, I am doing marketing for Betable, a new platform that gives game developers the ability to legally integrate real-money betting into their games.
08-16-2011, 04:58 PM
#2
99cent iphone apps work in general because iOS has a large user base. Thats why freemium works!
Its still not a 100% guarantee. But if you can get a large user base like you said, you'll make more revenues than a paid app.

08-16-2011, 05:00 PM
#3
Joined: Feb 1983
Location: Barcelona
Posts: 1,268,691
Did you seriously register here to pimp your blog?

edit: Normally I'd delete stuff like this but this whole scheme seems so ridiculous that I'll allow it.
08-16-2011, 05:59 PM
#4
Look At NimbleBit's Tiny Tower, Its got to be in the top 20 grossing app on the store right now. They have virtual goods but I guess its currency. He's an indie, or at least indyish.

- Matt
08-16-2011, 06:12 PM
#5
Joined: Jul 2011
Posts: 1,201
Kinda off topic but - Gameloft is sure paying a whole load of people to rate their freemium app. If it's that bad, I think it's safe to assume they are practically losing money from that game. What a shame I thought it was quite good. (note the heavy sarcasm btw)

Side note: don't bash me please
08-16-2011, 06:51 PM
#6
Quote:
Originally Posted by mehware View Post
Look At NimbleBit's Tiny Tower, Its got to be in the top 20 grossing app on the store right now. They have virtual goods but I guess its currency. He's an indie, or at least indyish.

- Matt
Wow, they are? That's pretty incredible, I've played that game and one of the reasons why I like it is because it doesn't have a lot of plugs for it's for-pay currency. You can have a perfectly good game experience without it.

Also Hodapp I didn't just register to pimp the blog, I asked you guys for feedback because I'm actively trying to learn from you guys. People have a lot of strong opinions on our idea (adding real-money gambling to gaming) and it's good to hear them so we can figure out how to address them in the future

Lastly, Ziggy and Madman100 raise two interesting, competing points. On the one hand, iOS has tons of users already bought-in so if you make a popular game, thousands of people will play it and it'll make tons of money. On the other hand, a game can pour thousands of dollars into a game and end up in the red on that game. In the end, what we are trying to build is a way for game developers to make more money per dedicated player (gambling ARPPU is something absurdly high like $300, so even capturing a portion of that would be huge) to help them stay profitable and grow.

Hey all, I am doing marketing for Betable, a new platform that gives game developers the ability to legally integrate real-money betting into their games.
08-17-2011, 12:24 AM
#7
Joined: Aug 2011
Posts: 3
There are some more interesting points here:

http://blog.flurry.com/bid/70096/Fre...hey-Don-t-Keep

Including some stats to show 65% of all revenue generated among the top 100 games now coming freemium games

I would also like to know how fremium compares to paid apps for a smaller number of app installs.
08-17-2011, 01:19 AM
#8
Didn't you read the recent news about iAP revenues surpassing paid app revenues? I think it says everything. It's not a matter of ARPU. True, maybe 5% of players will buy iAP, but in the end, that's still more money than paid apps. Right now, freemium+virtual goods/currencies seems to be the best way to monetize an app that otherwise would cost 1$ and would still require more than 1million users to gross 1m$.

But feel free to buy 40 bucks game on 3DS if you prefer
08-17-2011, 01:50 AM
#9
Joined: Mar 2011
Posts: 230
Quote:
Originally Posted by Hodapp View Post
Did you seriously register here to pimp your blog?

edit: Normally I'd delete stuff like this but this whole scheme seems so ridiculous that I'll allow it.
My first impression is that he wanted to pimp his blog, lol

Btw, what's going on with your avatar?
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08-17-2011, 03:16 AM
#10
Joined: Jun 2009
Location: Hollywood, CA
Posts: 1,869
30-man code in Contra. Come on, you've used the internet before :P