Comments on: Articles of Interest http://www.edery.org/2008/06/articles-of-interest-119/ For those interested in the business of making good video games. Entrepreneurial spirit a must. Mon, 08 Mar 2010 04:52:33 +0000 http://wordpress.org/?v=2.9 hourly 1 By: Kim http://www.edery.org/2008/06/articles-of-interest-119/comment-page-1/#comment-189417 Kim Wed, 18 Jun 2008 04:30:25 +0000 http://www.edery.org/2008/06/articles-of-interest-119/#comment-189417 >As always, the truth is probably somewhere in between (though I’d lean towards the higher end for free MMOGs that do a good job of serving niche audiences and/or that have more creative revenue-generating mechanisms Isn't this a bit like saying (a) "revenue will be higher for people that have the better products", uh, ok I agree, and (b) to the point about niches, it's generally the case that as you go larger, margins fall, or in this case, ARPU (and I'd guess margins with it). So I agree, but I'd say that's basically built into the model. The question is not what the ARPU is, but what the margins are. I'd rather do a $2ARPU (I'm assuming that's monthly) for an audience of 500k, bringing in $1M/mo on a product that cost 2M to develop, than the risk involved on a $100M that would need to hit 5x the ARPU on 10x the user base to break even in the same time. >As always, the truth is probably somewhere in between (though I’d lean towards the higher end for free MMOGs that do a good job of serving niche audiences and/or that have more creative revenue-generating mechanisms

Isn’t this a bit like saying (a) “revenue will be higher for people that have the better products”, uh, ok I agree, and (b) to the point about niches, it’s generally the case that as you go larger, margins fall, or in this case, ARPU (and I’d guess margins with it).

So I agree, but I’d say that’s basically built into the model.

The question is not what the ARPU is, but what the margins are. I’d rather do a $2ARPU (I’m assuming that’s monthly) for an audience of 500k, bringing in $1M/mo on a product that cost 2M to develop, than the risk involved on a $100M that would need to hit 5x the ARPU on 10x the user base to break even in the same time.

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