November 24, 2009

Zynga passes 100 million unique users, poker chips the main revenue driver

Just shy of three months ago I wrote that Zynga didn't have 100 million unique users. Now it's time to change that statement as Zynga has announced that it has 100 million unique users of its games.

Zynga also announced that more than one million users pay real money for virtual goods each month, indicating a conversion rate in the 1.0-2.0 % range. If the rumors of Zynga attaining more than $200 million in revenue in 2009 are correct, monthly average revenue per paying user would have to be $10-20. That is a high number for games like Farmville, Fishville and Café World. Given that those three games were launched in the second half of the year, they didn't generate any revenue in the first half essentially doubling the monthly ARPU needed to reach the annual revenue number.

The only way a $200 million revenue number make sense to me is if Zynga Poker/Texas HoldEm Poker is the main revenue driver. Zynga Poker has been around the entire year, it currently has almost 20 million monthly players (it's the seventh largest Facebook application, i.e. BIG) and selling poker chips is a business that works pretty well online and can drive exceptional ARPU.

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