Chatting with Justin Smith of Inside Virtual Goods and AppData about Game Revenue is without a doubt the leading site for tracking Facebook game user activity. (And I’m confident that’s the case, even though I have to disclose having recently written for it and the parent site, Inside Social Games.) Co-founded in 2008 by Justin Smith, who also co-authors a quarterly Inside Virtual Goods report, AppData was conceived at a time when many Facebook games were beginning to gain rapid growth, although it still wasn’t clear which apps were truly popular. Drawing on publicly accessible data, AppData’s aim is to be a tool for analyzing the Facebook gaming ecosystem.

With that background, it’s no surprise that Smith has a lot of secrets to share with developers—on the kind of money they can expect to make from well-made Facebook games, the design elements that help boost revenue, and future changes to the social network that developers should be aware of.

Typical Facebook Game Monetization Rates

Most Facebook games attract a very small number of paying customers—1–3 percent is typical, with rates approaching 5–9 percent considered extremely good. Among these paying players, 10 percent are generally defined as whales, as described earlier. For most Facebook games, it’s these players who’ll contribute the bulk of a developer’s revenue. (As you’ll see with web and iOS games, this is typical of most free-to-play games, regardless of platform.)

Facebook Genres That Monetize Well: ...

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