Zynga Doubled ARPU From Last Year Even as Facebook Platform Changes Slowed Growth

With Zynga’s IPO filing on Friday, we finally got some numbers to bear out what had been common, but unproven, industry knowledge: that Zynga had been able to overcome handing 30 percent of its revenue to Facebook and weakening virality on the platform by monetizing its existing user base better.

The company appears to have more than doubled average revenue per user across a number of metrics from the first quarter a year ago. So caveat to these figures first: they aren’t perfect estimates since Zynga broke out revenue on a quarterly basis, but showed uniques and actives on a monthly or daily basis. Nor do we have any ARPU figures for individual games, because Zynga did not break out revenue per title in its filing.

But it looks like Zynga boosted monthly ARPU (or average revenue per user) to $0.33 in the first quarter of this year from $0.14 in the same time period a year earlier. We get this figure by dividing reported revenues for that quarter by the number of monthly actives, then dividing again by three for individual months in the quarter.

If we take average revenue per monthly unique user (MUU), which won’t double-count users who play more than one Zynga game on Facebook, it also doubled to $0.54 from $0.27 in the first quarter from the same time period a year earlier. However, Zynga’s “monthly unique users” metric doesn’t de-duplicate people who play Zynga titles on both Facebook and mobile devices.

A more closely watched metric, ARPDAU (or average revenue per daily active user), also more than doubled from $0.01674 to $0.04219 in the first quarter of this year from a year earlier.

The reason this is important to note is that last year, Zynga’s growth in terms of acquiring new users slowed dramatically as Facebook phased out notifications, which made it easy for people to invite their friends to games. Zynga also started phasing in Credits, for which it had to give a 30 percent revenue share to Facebook.

The nagging question at that point in time was whether Facebook would effectively kill its golden goose by making its platform less profitable and attractive to developers. These numbers suggest no — at least for the very biggest companies that secured first-mover advantage.

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4 Responses to “Zynga Doubled ARPU From Last Year Even as Facebook Platform Changes Slowed Growth”

  1. Vale says:

    ARPDAU is the daily average revenue per daily active user?

  2. Eric von Coelln says:

    I think the more interesting stat is showing the ARPDU has actually been flat in Q4 2010 and Q1 2011. That plus the ARPDAU is due for another decline in Q2 just completed. I broke down the number a bit more here: http://www.voncoelln.com/eric/2011/07/06/zynga-making-4-4-cents-per-dau/

    Further, ARPDU has been flat for the last year, unable to sustain above the 50 million mark very long since Facebook Notifications disappeared. This suggests that most new games are cannibalizing their older ones – and with more focus on consumables, they are replacing poor monetizing games with better performing ones.

  3. How You Make Money on Social Games | China2Valley says:

    [...] curve & social curve that comes before the dollars start pouring in. Social gaming giant Zynga’s ARPUs doubled between 2009 and 2011 as users became increasingly hooked on Zynga’s [...]

  4. Inside Social Games · YetiZen’s Accelerator Program Shows Off Revamped Games, Services says:

    [...] per daily active users of 5 cents — which is on par with what Zynga makes, according to some calculations made based on the FarmVille developer’s S-1 filing. Viroxoty wants to scale the [...]

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