The problem with virtual goods

TylerBetable 101 Aug 05, 2011 at 17:58

Making a business out of a game is hard work. It takes great design, unique mechanics, creative marketing and some serious dedication to build a successful game. Turning this successful game into a business requires all of the above, plus a large amount of users that are willing to give you their money. And, if you want to give away access to your game or app for free, as many game makers now do, you will need an even larger number of total users to derive your paid user base from.

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!

5 Replies

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rouncer 104 Aug 05, 2011 at 18:36

so your solution to the problem is add gambling to the game, theres something not moral about this at all man.
why dont you make money by actually making something worthwhile… no thats impossible!

like this

TylerBetable 101 Aug 06, 2011 at 00:10

I don’t think gambling is immoral, especially if the people hosting the gambling enforce responsible practices. Not everyone in the gambling industry has to be a shark.

Stingray 101 Aug 18, 2011 at 03:50

I dont think its imoral either though in some states and countries gambling is illegal. So you may have some legal issues to deal with. A possable way to get around it is offer ingame currency for real currency, also Id make the “games of chance” limmits so it amounts penny poker. Ya dont want your players losing their homes over your game. Something like this added to a good game would be very inovative.

fireside 141 Aug 18, 2011 at 04:20

Personally, I think it would be better to dispense with all the gimmicks and have an annual fee. Let them try it for a month free, then a small charge per year like maybe 30 dollars.

rmachardy 101 Aug 31, 2011 at 07:27

TylerBetable, at the time of this post, the link to you blog,, is broken. Therefore I cannot comment on the “gambling solution”.

On the subject of “making a business out of a game,” check out the 6 Mistakes of Indie Game Developer post on Edy Zahid’s blog.
It makes several good points. Especially consider Mistake 5 about not taking initiative to build community around the game project.
Basically, start small and grow the business and content over time.