iPhone games developer Backflip Studios making hay from its freemium strategy

Paper Toss dev makes $500k per month

Independent mobile games developer Backflip Studios is making half a million dollars a month from in-game ads alone, and expects this to rise sharply in the next few months.

"We are seeing revenues of about $500,000 a month just on mobile ads," CEO Julian Farrior tells ME. "This excludes revenues associated with premium App Store sales or in-app purchases."

It’s a startling figure, but Farrior breaks down the figures behind it.

Backflip has notched up more than 47.5 million installs on iOS devices to date, and 5.5 million on Android.

These are downloads of games including Paper Toss, Ragdoll Blaster, Harbor Havoc 3D, NinJump and Buganoids.

"We are currently averaging between 1.7 million and 2.25 million daily active users, and 15 million monthly active users," says Farrior. "This is about to grow significantly with two more free products launching in Q4, and NinJump coming to Android in a month."

These figures are crucial: Backflip isn’t just racking up tens of millions of downloads of free games – those people are then playing them. Lots.

Farrior explains that Backflip is generating between 600 million and 800 million ad impressions a month across its free games. Hence the $500,000 of revenues.

"This is using only about 60% of those impressions for third-party mobile ads," he says. "The rest are used for house ads to sell premium product and further extend the free impression network."

Backflip’s advertising revenues have ramped up sharply. In March this year, the company said it had made $1 million from in-game advertising in the previous six months.

Meanwhile, in May, its advertising partner AdMob said that the studio was making $100,000 a month from in-game ads.

However, Farrior expects a big boost in the final two months of 2010. "Based on 2009 trend data, these mobile ad revenue numbers will double in November and quadruple in December."

$2 million of ad revenues in a single month? If it happens, it will be a merry Christmas indeed for the developer. Much more of this freemium success, and Zynga or DeNA may come calling…

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