There has been a lot of speculation about Zynga’s revenue. Last week Business
insider
said:

Zynga, the social gamesmaker behind Farmville, has a
revenue run-rate around $600 million, a source close to the company
tells us. Another source confirms that Zynga is doing well over $1
million in revenue a day.

Businessweek
says:

More than 120 million people play Zynga’s online games.
Employee headcount has almost quadrupled in the past year, to 775.
Revenue for the three-year-old company should surpass $450 million in
2010, according to two people who have been briefed on its financials.

We thought that we would estimate Zynga’s revenue ourselves by
looking at publicly available info. Here is what Linus Chung and I did:

  • Focused on only top games on Facebook
  • For each game, pulled DAU numbers on first of every month since
    1/1/09 from Developer
    Analytics
    .
  • To get the average DAU for each month, took the average of the first
    of the month and the first of the following month. So for March, the
    average DAU for the month is the average of DAU on 3/1 and DAU on 4/1.
  • Inside Virtual Goods
    published a monthly ARPU range (low and high end) for each game genre.
    In general, we used the average of low and high, with some exceptions:

    • For virtual gifts, we used the high end: $0.50. This only affects
      Friends for Sale.
    • For simulation games (e.g., CafeWorld, PetVille), we used the low
      end: $1.00. These games have been wildy popular in terms of users. We
      assumed that the recent increase in users results in lower monetizing
      users being added.
    • For poker, we used the low end: $2.00
    • For FarmVille, we estimated ARPU at $0.50 due to its scale
  • Mapped each game to its game genre, and multiplied average DAU each
    month with the ARPU.

This estimate is likely to be inaccurate for many reasons, notably
(i) the coarse estimates of revenue/DAU (rounding to the nearest 50c),
(ii) the low end of range estimates for many of Zynga’s most popular
games, and (ii) the fact that we ignore revenue from MySpace, Zynga’s
websites, and mobile. None the less, it shows some interesting results:

Again, note that these are all estimates. However, our estimates show
that revenue ramped fast over calendar 2009. The H1 ramp was driven by
Poker and Mafia Wars, and the H2 ramp driven by Farmville, Cafeworld and
Fishville. Our estimates show that revenues have been flatish since the
beginning of 2010, with a decline in older games compensated for by the
launch of Treasure Isle.

Feel free to see the details and play with the assumptions yourself –
the spreadsheet is here.
It is a read only Google Doc so that your changes won’t affect others
who are later to check it out, but you can download the spreadsheet to
change assumptions. Note that there are four tabs to the spreadsheet (at
the very bottom of the page). To download, click File–> Download as
–> Excel.

Play with the assumptions, and let
us know what you think
.

(For more from Jeremy, visit his blog)

(Image source: blogs.ft.com)

Support VatorNews by Donating

Read more from related categories