Why do devs bother with virtual goods?

[TylerBetable]

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!

[Justinmichael]

Originally Posted by TylerBetable

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!

I read an article a couple of days ago about the success of virtual goods. Personally, I think it is a way of improving the value of a customer, therefore allowing more room for customer acquisition costs. I really see this is as being the way forward out of this race to the bottom - $0.99.

[Falcon80]

Originally Posted by TylerBetable

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!

Can you resubmit the URL of your blog? Unable to access.

[visualizefree]

Thanks tyler, the link seems to be working now. nice post on virtual goods!

[TylerBetable]

Thanks InternetTalk I appreciate it