Calvin’s Hub

With dozens of addicting Facebook games out there it got me thinking… how do those game developers earn money?

Zynga, who has 4 games in the top 10 and pulling roughly around 36 million monthly active users must be raking in a LOT of money. But how?

First thing that popped into my mind is through those ads that appears on the side of your Facebook. Just like blogging with Google Adsense, those ads can become great moneymakers.

Upon researching some more, it’s not those ads that’s bringing in the money. Besides, if I’m playing Mafia Wars or any other games I wouldn’t bother clicking those ads.

So how do game developers earn money with Facebook? 2 ways.

Direct Sale of Game Currency

Game developers are banking on those competitive or elitist players to buy items to give their character an edge over others or look better or simply just to feed their desire to play more.

In Mafia Wars, people can buy Godfather Reward Points via Paypal or credit card and use those points to improve stats, energy refill or to buy special, rare items.

Poker addicts will generally buy poker chips just so that they can continue playing. There are people who just can’t wait another day to receive a new batch of poker chips.

I know someone who actually bought Restaurant City coins just so that she can have the grandest looking restaurant among her peers. Hehehe.

Basically, revenue from the sale of virtual goods is a tried and tested way to earn money from online games. This has been true with those free MMORPG and other online community games.

Revenue from Offer-based Advertising

You probably have seen the option to get those Godfather Reward Points by simply downloading and installing a software, signing up on a dating site or order an anti-snoring product. These are called offer-based advertising.

Companies like Offerpal and Super Rewards have tools that allow game developers to incorporate offers from advertisers to be exchanged for the game’s currency. These tools handle everything from tracking, analytics and integration so that developers can focus on building the game itself.

So how much are they earning?

According to this report, a company as successful as Zynga has an annual run rate of $50 million to $60 million revenue as of March but it is expected that it would reach to $100 million by the end of the year.

Playfish, the makers of Pet Society and Restaurant City, is on track to make around $30 million in 2009.

Smaller developer teams, if successful, can make between half a million to a million dollars annually.

Ready to jump in the bandwagon and start creating your own Facebook game?

I would suggest aiming for the 18 and up market when designing your game. 75% of Zynga’s revenue is from the sale of poker chips! Too bad you can’t top their Texas Hold’em game anymore.

• Top 10 Facebook games for March 2010
• Top 10 Facebook games for December 2009
• Top 10 Facebook games for September 2009
• Top 10 Facebook games for January 2010

Filed under: Gadgets n' Games, Think About It