Facebook games have become immensely popular over the past decade, with millions of users playing casual games like FarmVille, Candy Crush Saga, and Slotomania on a daily basis. But how exactly do these games generate revenue for their developers? There are a few key monetization models that Facebook game developers use.
In-Game Purchases
The most common way Facebook games make money is through in-game purchases. Many games offer premium content or virtual goods that players can optionally buy within the game. For example, in FarmVille players can use real money to purchase decorative items like fences, trees, and buildings to customize their farms. Candy Crush Saga sells extra lives, boosters, and other power-ups players can use to get ahead in the game faster.
These in-game purchases are usually inexpensive, often starting at just $0.99. However, they can quickly add up especially for players who want to progress faster. The small amounts make it easy for players to justify frequent purchases. Most Facebook games are carefully designed to encourage users to keep spending money regularly within the game to enhance gameplay.
Game developers partner with Facebook to process in-game transactions. When a player buys something, the money goes to the developer, minus a 30% cut that Facebook takes as a platform fee. This revenue model has proven extremely profitable. In 2014, Candy Crush Saga was earning an estimated $1.1 million in in-app purchases every day. In 2021, Slotomania generated $285 million in player purchases. As long as developers can keep players engaged and spending, in-game purchases provide a steady revenue stream.
Top-Grossing In-Game Purchase Games
| Game | Estimated Monthly Revenue from Purchases |
|---|---|
| Slotomania | $23.75 million |
| Candy Crush Saga | $13 million |
| FarmVille 2 | $5 million |
In-Game Advertising
Another way Facebook games generate money is through in-game ads. Developers can incorporate ads that players see during gameplay, such as banner ads and video ads. Audio ads that play between game levels or sessions are also common. Brands pay game creators to place their ads, and the developers earn money every time an ad is displayed or clicked.
Ads built seamlessly into the game environment tend to perform better since they appear more natural and less disruptive to players. For example, a banner ad on a billboard within a city-building game is more effective than a pop-up ad over the game screen. Game developers use metrics like the clickthrough rate to fine-tune their in-game ads over time and maximize revenues.
Types of In-Game Ads
| Ad Type | Description |
|---|---|
| Banner Ads | Rectangular image or text ads displayed on the screen during gameplay. |
| Interstitial Ads | Full-screen ads that cover the interface, displayed at natural breaks during gameplay. |
| Rewarded Video Ads | Short video ads that players can optionally view in exchange for virtual currency, lives, etc. |
Sponsorships and Licensing Deals
Facebook game developers can also earn money by partnering with brands through sponsorships and licensing deals. A company may pay to have their products prominently featured within a game as branded content. For example, a restaurant chain could sponsor a diner within a city-building game that players decorate with the brand’s logos and themes. Players earn rewards for engaging with the branded content, while developers earn fees from the brand.
Developers can also create branded editions of their games featuring intellectual property (IP) from movies, TV shows, musicians, sports teams, or celebrities. Candy Crush Saga has partnered with brands like Kellogg’s for a Frosted Flakes edition of their game. Players’ interest in the IP helps drive traffic, engagement, and monetization for the special branded version.
These sponsorships and licensing deals allow developers to significantly supplement revenue from players with upfront fees and/or ongoing shares of ad and in-game purchase revenue from the branded content.
Subscriptions
Some Facebook games make money through monthly subscriptions that give players access to exclusive features. For example, Zynga Poker offers a VIP subscription for $9.99 per month that provides access to premium tournaments and game modes. Big Fish Games titles let players purchase a $9.99 monthly subscription to remove advertisements in the games.
Subscriptions provide a more predictable and stable revenue stream for developers than relying solely on in-game purchases. However, the monthly costs can also deter some players, so the enhanced features must be compelling enough to justify the ongoing spend for the target audience.
Selling User Data
Facebook game developers can also generate indirect revenue by collecting and selling data about their players. Games can gather a wealth of demographics, behaviors, and preferences through tracking. Developers may sell this data to third parties like market researchers and advertisers interested in targeted marketing.
However, selling user data carries risks. Players may consider it an invasion of privacy, especially if they are not aware of the data practices. Facebook restricts how developers can collect and share data to protect users. Still, monetizing player data provides an added income stream.
Real Money Gambling
Some games generate revenue by allowing users to gamble, compete, and wager real money within the game. However, Facebook has policies prohibiting real money gambling in apps on their platform. So developers have to find workarounds like using virtual currencies that players can convert into and out of real cash externally. Zynga Poker uses this model, allowing users to purchase virtual poker chips but not wager directly with their money in the game.
While potentially lucrative, real money gambling attracts controversy and complex regulations vary across jurisdictions. Most large social game companies have avoided real stakes gambling mechanics.
Cross-Promotion
Developers can cross-promote different games within their portfolio to maximize revenue across titles. A splash screen ad or pop-up message in one game that drives installs of another game benefits both games. Popular franchises like Zynga’s FarmVille and FarmVille 2 can leverage their shared brand and audience. Cross-promotion works best when games appeal to similar audiences.
Game companies with multiple successful titles on Facebook can significantly boost revenue by strategically cross-promoting games to each other’s players.
Merchandise
A few highly popular Facebook games like FarmVille have earned money by selling licensed merchandise to fans. However, most smaller developers do not have enough demand for branded merchandise to justify the costs of manufacturing and distribution. Selling merchandise like t-shirts, toys, and posters generally provides minimal revenue compared to in-game monetization.
Conclusion
While casual gaming on Facebook started largely as a free leisure activity, successful developers have crafted various monetization strategies over the years to turn it into a massive moneymaker. The vast scale of the Facebook audience allows games to profit with small payments from a large number of players. In-game purchases now dominate revenue, but in-game ads, sponsorships, subscriptions, and other models further enhance income potential. As Facebook gaming continues to grow, developers will likely find even more innovative ways to monetize players.