Nicholas Lovell

20% sound ridiculous high, and I would ask where in the world of sanity that people got that number.

If we look at freemium to paid conversion rates, 20% seems out-of-this world large. Almost no one has that high. Looking around, 1% or 2.5% is said to be the average for games[1][2][3].

Why would a pirate be 10 times more likely to be incited to buy a game, rather than those who play a game designed from the ground up to encourage high conversion rates? It sound to me that logic demand that games with features designed for high conversion rates will do better than games that don't.

Ie, to sum up, the conversation rate for pirate->paying should be far less than 2.5% in average, and nowhere near 20%.

[1]: http://blog.scoutapp.com/articles/2009/11/04/running-a-freemium-web-app-heres-a-big-reason-were-growing

[2]: http://www.gamesbrief.com/2011/11/conversion-rate/

[3]: http://www.gamesbrief.com/2013/03/arpdaus-conversion-rates-and-other-new-datapoints/

This reminds me more of Fallen London (formerly known as Echo Bazaar) [1] than SimCity. Fallen London was the first and only free-to-play game to get me hooked enough to pay the developers for some extras. I'd suggest anyone with an interest in either free-to-play games and/or the role of writing in video games to take a look at it.

Here's a review [2] and an analysis of the game's monetization [3].

The developers' blog has insights into their process and what they call "narrative engineering" [4]. It's best to read it oldest-to-newest.

[1] http://fallenlondon.storynexus.com/

[2] http://www.rockpapershotgun.com/2012/03/30/impressions-fallen-london/

[3] http://www.gamesbrief.com/2012/09/my-f2p-journey-fallen-london/

[4] The post at http://about.failbettergames.com/2010/02/27/echo-bazaar-narrative-structures-part-one/ provides a starting point for learning about the latter.

Absolutely, but that is what makes the speculating fun. You have to ask, what possible story could you spin around what they have that justifies $41M pre-revenue. Even assuming a healthy multiple of 20, and investor exit of $250M you're talking about projected earning of $12.5M with a gross margin of say 60% that's like $21M/yr in revenue. And I'm assuming an ABC round (which is to say the would expect to not do another round prior to some liquidity 'event').

But they clearly have a good story and their investors are happy. So silly or not, its the path they've chosen. It reminded me of this blog posting I ran across:

http://www.gamesbrief.com/2011/02/50-questions-why-too-much-money-will-kill-your-company/

Do some reading to figure out what kinds of returns you can expect. I've seen 1 and 2 person teams basically able to replicate a medium income job. That's great if you can make it sustainable, but I don't think anyone's getting rich outside of the glamorous world of a few big indie titles.

http://thegamebakers.com/money-and-the-app-store-a-few-figures-that-might-help-an-indie-developer.html

http://www.gamesbrief.com/2011/08/selling-an-iphone-game-the-sales-figures-in-detail/

Or really, just use this link:

http://www.pixelprospector.com/the-big-list-of-game-revenue-sales/