http://www.gamasutra.com/view/feature/6 ... part_2.php
Joe made a comment about social games on facebook in one of the white-on-white hate threads here, so I thought I should post this extremely detailed analysis of cityville. Here's a blurb that comes towards the end that might make you willing to read some of it.
Nobody knows exactly how much profit Zynga makes from their games. There is only guesswork, analysis of second hand information, anecdotal stories, correlations from other companies and data points around the web. The general consensus seems to be that the answer is: A Lot.
The most common executive-summary pieces of knowledge or social games go something like this:
The average game makes $0.25 per MAU per month in revenue
Another way of saying that is that the average game makes $0.03 per DAU per day
Somewhere between 1% and 3% of users pay in any given month
Somewhere around 20% of users of a game will pay once over the course of their lifetime of play
A small (0.1% or less) percentage of users will become heavy users (the unfortunately named whales)
Whales will spend a lot (> $100)
Players will spend as much on intangibles (gifts, objects of status, virtual Christmas trees) as on tangibles (gameplay benefits).
ARPU is low (lots of players never pay at all) but sustainable over the long term, unlike retail