Interesting Metrics From Flash Gaming Summit

This is a guest post by Sachin Rekhi, currently an Entrepreneur in Residence at Trinity Ventures. Previously, Sachin co-founded Anywhere.FM, an innovative web music player that was acquired by imeem. At imeem, Sachin led emerging monetization strategies, including introducing imeem’s virtual currency. You can read more from Sachin on his blog or follow him on twitter.

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Winners from the Mochis Award Show @ Flash Gaming Summit

Last weekend I had the opportunity to attend Flash Gaming Summit, the first annual conference dedicated to flash game development organized by my fiancee Ada Chen from Mochi Media.

What’s often most exciting for me about events like these is hearing different metrics tidbits from the speakers who are knee deep in the space. This conference was no exception, with a variety of different stats shared throughout the day. I’ve summarized some of the highlights below.

Flash Game Distribution & Advertising Market Size

Mochi Media is by far the largest flash games distribution and monetization network. They reported that they are now seeing over 100 million unique users who play games across their network each month, as well as over 1 billion monthly game plays. In addition, Mochi offers MochiAds, an advertising product allowing flash game developers to embed ads into their flash games. In 2008, MochiAds paid out over $1 million to flash game developers. While Mochi is definitely not the only distribution and monetization player in the flash gaming space, it definitely commands a healthy share of the market and thus these numbers can give you a rough sense of magnitude in the space. While the game play stats are impressive, the advertising revenue generated for developers is still modest and definitely suggests the need for alternative revenue sources like micro-transactions and virtual goods.

Ad Revenue From Portal Versus In Game

John Cooney from Armor Games provided some rough stats on the ad revenue difference from in-game ads versus ads around the game on a game portal page. John stated that the ad revenue from portal ads was at least 4x greater than the revenue from in-game ads. John attributed this large difference to a variety of drivers, including the ability to have higher quality multimedia ad units on a portal page, having 3-4 ads per page, as well as simply getting the user to play more games on your portal.

The message was heard loud and clear by flash game developers that it is going to be very difficult for them to make serious money from their games without building their own portal or partnering with existing portals (through revenue share or sponsorship agreements).

Conversion Rate of Active to Paid Players

Both Paul Preece from Casual Collective and Daniel James from Three Rings shared some interesting stats from their own games on conversion rates associated with paid players (players who purchase levels, virtual goods, etc through micro-transactions). Paul said that for their single player games, they see that 2% of their active players have converted to paid players. Keep in mind this stat is for “active players” who come back to the site regularly, not overall unique visitors. What was interesting was that for his multi-player games, 3% of active players converted to paid players, suggesting their may be some additional conversion lift from multi-player games. Daniel James echoed Paul Preece’s numbers, suggesting 3-4% of Three Rings users pay as well.

The key thing they stressed was that only a very small percentage of your users end up converting, because first they need to become active users that come back and are retained by your game as well as be eager enough to pay through one of a variety of ways.