Playdom: “Upwards of $50 Million” in Annual Revenue, and Growing

Mobsters by Playdom on MySpace AppsZynga has been getting the most attention among social gaming companies lately, for a variety of reasons, but rival Playdom has been busy with some news of its own — although not exactly official news. Its “annual revenue is upwards of $50 million,” a reliable source within the company tells us. This number is higher than any previous estimates we’ve heard.

So how is Playdom making money? Surprise! Through virtual goods — selling items like weapons in its Mobsters mafia-style role-playing game and attire in its virtual world app Sorority Life. These are games that became hits on MySpace, and have more recently been finding users on Facebook and other platforms. We don’t have a revenue breakdown between users who pay for virtual currency with real money versus those who earn currency through advertising offers; the company uses both methods.

In terms of users, Playdom says it has 28 million monthly actives. How do these numbers break down? It’s not entirely clear. The company continues to dominate the MySpace charts, with three games in the top five, according to our latest analysis. MySpace only provides total users, not monthly active users (the metric Facebook uses). But still, we can see that Mobsters on MySpace, for example, has the most total users, with nearly 14 million total as of this past month. It is, by this measure, the number one game on MySpace.

sorority lifeMeanwhile, over on Facebook, we can see that the company has been gaining millions of users over the last few months. It now reaches nearly 12 million monthly active users across its six applications on the platform, according to our AppData service. This number is not deduplicated however, as a large fraction of these users play more than one game, and we can’t tell who these users are — and the same goes for MySpace. Also, Playdom has been busy expanding its product line, including Mobsters, onto the iPhone.

So anyway, these 28 million self-reported monthly actives are adding up to $50 million in annualized revenue. The highest estimate we’ve previously heard about the company was this spring, when one source told us the company was making $10 million in revenue a quarter. Another source said that number was way too high — if nothing else, it no longer is. We also heard at the time that Playdom was looking to raise money, but to our knowledge it hasn’t.

To be certain, many of Playdom’s games are closely patterned after others in the same genre — see the long history of social gaming companies copying and suing each other for more on that. Still, whether through cross-promotion, advertising, and whatever other means of growth it may have discovered, it has managed to be one of the few clear market leaders.

Playdom is also aggressively looking for more ways to bring in more revenue. Yesterday, for example, it announced a deal with paid card provider InComm, whereby users can buy cards in retail stores with cash, then use codes on those cards to access equal amounts of virtual currencies within Playdom games. These cards are aimed at teens who don’t have access to credit card or mobile-account payments — 25 percent of Playdom’s users are teens.

Meanwhile, like many other gaming companies, Mountain View, Calif.-based Playdom is expanding. It has grown from 60 to more than 110 employees in the last few months, opening an office in San Francisco’s tech-heavy SOMA district, and still hiring. And in June, it picked up some gaming industry veterans, including former EA chief operating officer John Pleasants as its new CEO.

So, while Zynga has announced that it has 129 million monthly active users across the same platforms, and while we hear that company could make as much as $200 million this year, Playdom is proving itself to be a serious rival in the still-young world of social gaming.

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12 Responses to “Playdom: “Upwards of $50 Million” in Annual Revenue, and Growing”

  1. Eric von Coelln says:

    These numbers just don’t hold water with me for the following reasons:
    1) The numbers you present infer that Playdom is making more money per MAU than Zynga:

    Playdom $50 million annual from 28 mil MAU = $0.149 per user per month

    Zynga $200 million annual from 129 mil MAU = $0.129 per user per month

    2) I would argue that to generate revenue from users, a game has to be sticky. As a proxy of stickiness, I would use the Daily Active User divided by Monthly Active User metric — if its stickier, a larger percentage of your monthly users are going to be on it every day. Based on that measure (looking only at Facebook that has this data available), Zynga is nearly 2x sticky as Playdom:

    Playdom on FB: 1.78m DAU/28.0 m MAU = 14.8%
    Zynga on FB: 36.4m DAU/127.7 m MAU = 28.5%

    3) I realize that Playdom has a large base from MySpace, but the number of users are not that much larger:

    From the top 25 applications on MySpace (the other post from you today), Playdom has 51.9 million users vs. Zynga’s 39.2 million.

    You may suggest that MySpace users offer a bigger propensity to pay, but demographically the average income (from Quantcast) on MySpace is between 0-30K where on Facebook it is $60K plus

    I have to believe that either the $50K is over-stated. Interested in your thoughts.

  2. EVCin » Claim That Playdom is Making $50 Million Seems Overstated says:

    [...] reported Playdom was making upwards of $50 million, but taking look at the numbers, they just don’t seem to make [...]

  3. Calcuating How Playdom is Making $50M from 28M Users says:

    [...] note: Earlier today, we reported that social gaming company Playdom is making $50 million in annualized revenue through virtual goods. Marketing and gaming veteran Eric von Coelln responded, wondering how the [...]

  4. Finance Geek » Time Inc. Pitches A "Hulu For Magazines" says:

    [...] Social games maker Playdom revenues “upwards of $50 million” [ISG] [...]

  5. Givity Patel says:

    @Eric – the numbers for Playdom absolutely make sense. Myspace is primarily US traffic, while FB is only 20% US traffic. Quantcast only reports income levels for *US users*. Overall, across all users, an average MS user has a lot higher income than an gamblaverage FB user.

    The other thing to note is that in-game spending (just like many other categories of soft-entertainment – e.g. gambling ) may well be inversely correlated with income-level.

  6. Playdom fueling up to take on social gaming market | nextATOM says:

    [...] the company is expected to generate more than $50 million in revenue this year, according to Inside Social Games.  Playdom generates its revenue through virtual goods, like selling weapons on Mobsters [...]

  7. App Developers Repeat After Me: The Platform is Not Your Friend « @ the intersection says:

    [...] is left for the remaining 350,000 applications once you get past the success of Zynga, Playfish and Playdom, the leading developers on Facebook and OpenSocial platforms. A similarly distorted distribution of [...]

  8. Social Games: How The Big Three Make Millions says:

    [...] Estimated $60M [...]

  9. 巨大化するソーシャル・ゲーム―ただしダークサイドにご注意 says:

    [...] 推定 $60M [...]

  10. Social Games are making it really Big!!! /  Foetron : My Journey is My Destination says:

    [...] Estimated $60M [...]

  11. Why social games attract serious money « Insight analysis says:

    [...] Playdom, another social game developers, raised $43 million last November on the strength of annualised revenues of $50 million, the majority of it from sale of virtual [...]

  12. Disney buys Playdom, but will its IPs work in social games? | Games Brief says:

    [...] Playdom expected to make “upwards of $50 million” in revenue in 2009, says Inside Social Games.Given the trajectory of virtual goods across the market, that seems like [...]

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