How an Older Social Game Keeps Making Money

Almost two years after Zynga launched FarmVille, it continues to attract nearly 15 million users a day and is the second-most trafficked social game on Facebook.

That’s one extreme, but what happens to those lesser-known titles that don’t even break the Top 10 anymore?

We asked Meteor Games this question, and the answer is surprising.

Its nearly two-year-old game, Island Paradise, is a cash cow (and we aren’t talking the virtual kind).

The Beverly Hills, Calif., company launched Island Paradise in September 2009 when FarmVille was all the rage. The themes were similar, with players tasked with planting and harvesting crops, including coconut trees. Players were offered the opportunity to pay for items to speed up the pace of the game.

Meteor’s CEO Zac Brandenberg said the game’s popularity peaked three months after it launched, and it sustained a fairly respectable number of monthly average users until February 2010.

But that’s now a year ago.

So, is Meteor close to shutting the game down?

“Absolutely not,” Brandenberg says. “For where Island Paradise is–and how late in its life cycle–we are very happy, particularly with the level and attention of resources we put into it. A majority of the company is now working on other games.”

Meanwhile, it continues to rake in the cash.

Island Paradise attracts about 400,000 daily users, or roughly 1.5 million a month, according to AppData. That means roughly that Meteor can expect 24 percent of its monthly users to come back every day, a very healthy return rate. (Contrast that to FarmVille, which has only a three percent daily return rate).

While the number of players today has dropped from the peak, their average spend is up tremendously, as is the percentage of players overall who are pulling out their wallets to participate.

“The percentage of spending players will change based on the point in the life cycle,” Brandenberg theorizes. “Early in the game’s evolution, you’ll see fewer players spending because there are more people playing overall, and they are still experimenting and not investing. But after a year and half-plus, a game has a core group of players who have invested a longer period of time into it and therefore are much more likely to spend.”

How social games will evolve over time is yet to be determined. Today, many of the games on Facebook are only hitting the one- or two-year mark as it is, so it’s still up in the air as to whether they will age gracefully or die on the vine as companies neglect to update them.

Here’s some attributes of Meteor’s most dedicated players:

• The average person playing Island Paradise, who pays anything at all, spends $5-$10 a month. Correction: That’s the average from overall users, who have ever spent money in the history of the game. Whereas, the average active user, who pays anything at all, spends $35 to $70 a month.
• Still, a large majority, close to 97 percent, don’t pay anything.
• Among the three percent who do, players participate in offers, such as sweepstakes, to earn coins, or pay hard cash.
• The high spenders typically always pay cash vs. earning coins through promotions.
• The big rollers, who spend more than $1,000, are called “whales” in the industry. Meteor has “hundreds and hundreds” of whales over a 12-month period.
• Meteor’s biggest spenders are those in the $6,000-plus range. Most are female between their mid-30s to 55 years old and live in Western Europe or the U.S. There are about a “couple of handfuls” of players who spend this much.

Brandenberg attributes Island Paradise’s happy ending to two developments.

He said in 2010, Meteor doubled the size of its staff, hired several key executives and started investing heavily into the company. The company says it encouraged players to keep coming back because of continual updates and enhancements they made.

Having said that, Brandenberg notes that the game is largely on autopilot and doesn’t take much staff to keep it going, leaving his team free to focus on the next wave of games.

Therefore, the majority of staff is focused on Meteor’s next game, called Serf Wars, which is currently in beta. The game play takes place in a kingdom, and will allow players to engage in quests and even combat in a very fantasy land-type setting. Serf Wars will launch in early March.

Meteor Games, now with 65 employees, was founded in 2007 by the creators of Neopets, the popular virtual pet community for kids. It hasn’t raised any venture capital and is profitable.