Pareto optimality has recently become the holy grail of contemporary businesses as companies rush to search for the 20% of their customers who contribute to 80% of their online sales. However, following the Pareto principal, the social gaming may be one of the most lucrative industries today, as the 90% of revenue comes from only 3% of gamers.
Today, the online space is filled with forecasts on where social gaming is going. A lot of proponents of social media state that social games have a lot of marketing potential and in the near future will be filled with advertising dollars. However, currently the revenue model of big social game creators such as Zynga, is based on virtual good sales. According to AdWeek, only 3% of the gamers of the most popular Facebook game Farmville are purchasing the virtual merchandise for the their farms, but these sales represent the lion’s share of social gaming revenues (somewhere between $340- $664 million).
Not only Facebook and Zynga enjoy the profits of virtual farming. The Russian equivalent game ‘Happy Farmer’(on leading Russian social network Vkontakte.ru) has reported that it has acquired 6 million users and is garnering revenues at $200 million dollars per month. Chinese are also extremely hands on in the agricultural development of Internet: Chinese hit ‘Happy Farm” now reaches 27m daily active users in China and is close to matching FarmVille’s 29m daily active users on Facebook. But Chinese versions are more competitive than their Western counterparts: they allow users to steal and add worms and weeds to friends’ farms.
While there are almost no changes in the globe’s real agricultural supply, the online agricultural spectrum seems to be at the height of its growth. Despite the fact that social media gurus speculate on the marketing potential of social games, the revenue numbers show that virtual farming is quite profitable on its own, thanks to big contributions from minority of virtual farmers.