Free Realms: Guesstimating monthly revenue using the 89/10/1 Rule
by Brooke Pilley 
Jun 13th 2009 at 8:00PM
Filed under: MMO industry, Making money, Free-to-play, Free Realms
In case you haven't heard, Free Realms just broke the 3M user mark and is averaging 500,000 new users per week. With SOE's aggressive Saturday morning cartoon advertising strategy targeting kids, it may actually continue to grow at this pace. Any subscription MMO would be happy as a pig in slop at these numbers because of the guaranteed revenue stream, but what about a F2P/RMT MMO?We recently discovered an interesting tool to guesstimate F2P/RMT MMO earnings called the "89/10/1 Rule." This rule says that 89% of your players won't spend anything, 10% will spend the bare minimum, and the remaining 1% will spend extravagantly.
After chatting with Massively staff who play FR, we came up with some numbers to play around with. The bare minimum in FR is $5 per month for a basic subscription. We also think the average heavy spender could easily drop $30 in a month. Let's apply the rule, shall we?
- 2,670,000 spend nothing ($0 total)
- 300,000 spend $5/month ($1,500,000 total)
- 30,000 spend $30/month ($900,000 total)
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Reader Comments (Page 1 of 2)
Mr Angry said on 8:22PM 6-13-2009
These figures are very compelling and nicely put together, obviously it would help to know the demographic of players to see what number of them had access to funds to pay to play, but I don't think you are too far off the mark, and as the game progresses, this figure is bound to rise rapidly.
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wolfsterne said on 9:02PM 6-13-2009
Oh my god this should send teh SOE haters and SWG vets into full on Rage mode...just think of all the hours they will put in inventing formulas that disprove this.
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UltimateQ said on 9:13PM 6-13-2009
Indeed. I think this entire article is an attempt to troll the haterz. Any publicity is good publicity, huh?
ethereal.wolf said on 9:02PM 6-13-2009
i think you should only be counting active users in the formula, so 500k active is 50k paying $5, and 5k paying $30. $400k a month.
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Keen said on 9:18PM 6-13-2009
Hours to invent formulas won't be necessary.
The method of obtaining these numbers (80/10/1, whatever) is not accurate. The numbers used themselves are not accurate. Thus, the result is even further from accurate. The premise of saying that most people won't pay and only a tiny % will is at best "probably accurate". However, trying to predict anything beyond that is a gross misrepresentation of even a "guesstimate".
Proof?
I'm one of those 3 million accounts and I haven't played since the first week. As ethereal.wolf said, you have to use the active users, not the total users, for this to make any sort of sense. This is like Turbine saying they had "800,000 characters playing LOTRO". Can you spot the half-truth there?
I think the best we can do is say "Free Realms is growing in registered users, I saw four commercials this morning while watching Ninja Turtles, the servers are still up, and Massively does a great job at giving them exposure. They must be doing okay."
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Holgar said on 9:43AM 6-14-2009
I'm with Keen I MOCK YOU IN CAPITAL LETTERS if you think they are actually retaining that many subcribers.
Now I have nothing personal against Free Realms, I dislike the company, HATE microtransaction systems, but I don't have a hate on for the game itself.
It COULD become a "Mini-WoW" for all I know the BIG mmo in the Tweens dept. But untill we know actual subscriber numbers I think trying to guesstimate revenue off the fact that 3 million people have tried it is a little lame.
cabal said on 9:44PM 6-13-2009
good numbers. assuming the playerbase isnt imaginary.
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Ada said on 10:05PM 6-13-2009
I would like to see numbers on playing customers before I guesstimated anything. I'm registered for about 3,000,000 things on the internet, one of which is FreeRealms, and like FR, I've not logged into them in a long enough time to have forgetten my password.
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Andrew said on 10:07PM 6-13-2009
What Keen said. The 3m "users" sounds excellent until you realize they're spinning the stats to make them sound as rosy as possible
3m players have created an account to TRY Free Realms.... no one has any idea how many players are actually active.
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whocares said on 10:18PM 6-13-2009
I'm not an SOE hater, but I do have to wonder why the folks at Massively seem so interested in this game's (projected) success.
Yeah, the gaming community is small, and I'm sure journalists get freebies and perks and whatever and so its in their best interest to kiss a little ass, but honestly every other day I see a post about how Free Realms is racking up subscribers.
Does anyone really care? I mean, great, some company is tapping the kid's/ultra-casual market. Is that the target audience of this website? Am I the only one who rolls my eyes at another Free Realms (slow news day) article when I'd rather be reading about the progress on Fallen Earth, Earthrise, The Secret World, TOR, etc?
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Hardy said on 10:58PM 6-13-2009
Being in any business, you wonder how it works. I.E. how things become profitable, and considering MMOs are extremely hush hush for anything that involves money, you wonder.
Free Realms is just a good example of trying to figure that out, since it's a high profile MMOs and it's a F2P one.
It's not that Massively wants to give FR free publicity, it's that they want to know how MMOs like this in general make a profit. At least that's what I get out of this article. I too am also interested how MMOs in any form make money, and specifically what kind of promotion they use and what works.
Not every MMO article is about enraging the idiots who just want to say they hate the game for no apparent reasons.
So yes. Some people do care.
Sam said on 11:05PM 6-13-2009
Well for one thing, you can only posts news about MMOs when there is news to post. while there's nothing, you write opinion and interest pieces like this one.
and secondly, the massively.com journalists aren't allowed freebies (with the exception of beta invites) as far as I'm aware.
The Claw said on 3:21AM 6-14-2009
"I do have to wonder why the folks at Massively seem so interested in this game's (projected) success"
Because while free-to-play + microtransactions is a model that has succeeded in Asia but not previously had any impact in the west. A news site dedicated to "daily news about MMOs" must be on top of the "next big thing" before it happens; therefore, it must be on top of all _potential_ "next big things". This is 2009's potential next big thing.
Hence all the coverage.
whocares said on 11:15PM 6-13-2009
Well if they want to know how it works, how about doing some investigative journalism and finding out, rather than pulling some numbers out of the air and calling it an article.
This piece is pure speculation, and really no different than any of the uninformed posts you see on most mmo forums where fans make up bullshit numbers to 'prove' their points.
If they've got some actual information, great, write an article, publish an interview or whatever. But that's not what this is; its just pure exposure for the game with absolutely no substance, otherwise known as marketing.
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Hardy said on 11:26PM 6-13-2009
Pure speculation!? What gave it away!?
Oh wait wait. Was it the lack of proof on the numbers, or the fact they said "guestimate" a few times.
It's their site, they can do whatever the hell they want. You want to tell someone what content to provide, make your own site and hire some people..
bebinn said on 11:16PM 6-13-2009
I started playing FR with the intention of just checking it out as a free game. I've never dropped money on any free-to-play games just for the premium content.
After playing in the beta, I was having so much fun that I went out and got a few Station cash cards so I could buy pets and premium membership. Now, I'm up to $32 on trading cards and at least $25 on SC cards. This is way more than I used to spend on Everquest every month. I think Sony has a cash cow here, if they can get some stuff fixed before people start looking for something that isn't broke.
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whocares said on 11:39PM 6-13-2009
Lol Hardy, did your wife write the article? You're pretty defensive, but to each his own.
If I want to question the integrity of a site that styles itself as a place for serious journalism, I will.
Ultimately I'm sure Massively will continue pimping Free Realms like its their first born, which is their prerogative. I just find it amusing, and you even more so.
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Myria said on 12:58AM 6-14-2009
It's interesting to note that a Google search of ""89/10/1 Rule" points back to Free Realms and/or the MSNBC article.
Before engraving this "rule" in stone it might be wise to check and see if there's any actual evidence to support it beyond someone spouting marketing BS in a puff piece.
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FrostPaw said on 1:11AM 6-14-2009
While I agree we have no way of determining how many of those 3million accounts are active, it is still an intresting article. Since active subscriptions and subscribers are closely guarded secrets (unless you happen to have 12million people and call yourself WoW) we are unlikely to ever get such figures without paying for them.
What this article does is provide some insight into the kind of money SOE "Could" be making. Considering a large portion of the game is available for free, that the game is browser based and aimed at children although fun for adults too and that it appears to have little or no realy background story are all factors in making its potential success worth watching. If SOE can make such a venture profitable while proviidng a free game to most of its players it has to be a buisness model that could become far more popular among future mmo producers, more free games for us is worth hoping for and if by trying more free games you happen to enjoy one of them enough to subscribe or purchase something digitaly then their model has worked for you.
As always making some reasonable assumptions to provide as an example isn't misleading information especialy when the article highlights these are made up numbers. It just gives readers a better understandting of just how such a business model might work.
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Halldorr said on 1:14AM 6-14-2009
The internet has really gone downhill after hitting the mainstream. So much hate and ignorance out there. People attacking Massively for a Free Realms article, people attacking the mention of a "89/10/1" rule, people attacking SOE. People get a grip already. If you don't care t read MMO news (which is what Massively writes about) then don't look at it. If there is nothing else to write about then I am more than happy to read about other games even if it's these F2P games.
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