Sulake made $74 Million from you last year...

[hamheyelliot]

Convincing people to pay for nothing, or rather for things with zero marginal cost to produce, is a great business model—in theory. In practice, there are so few examples to point to, and most of them are overseas, such as Helsinki-based teen virtual world Habbohttp://i.ixnp.com/images/v3.74/t.gif (http://www.habbo.com/). The virtual world’s parent company, Sulake, today reported some selective financial and user data for Habbo. In 2008, Habbo’s revenues rose 20 percent to $74 million (50 million Euros), and posted positive operating cash flow (EBITDA) of $7 million (4.8 million Euros). It was even slightly profitable on a net income basis as well, however the company chose not to disclose that exact amount.
Perhaps the bulk of revenues are being plowed back into global expansion or to pay the salaries of Habbo’s 300 employees (yes, 300). But its sub-10% margins so far are underwhelming. And Habbo is supposed to be one of the shining examples of a real business based on a virtual economy. It also makes money from advertising, but a substantial portion of its revenues comes from in-world gifting and virtual vanity items.





Source; TechCrunch

http://www.techcrunch.com/2009/03/30/habbo-pulled-in-74-million-in-real-revenues-last-year-from-virtual-goods-and-advertising/

[iChaz]

interesting.... fortune

[Jordan:A]

They probz get £6 a year from me buying creds

[Eight.]

I feel sorry for the people that probably buy a lot of furni and when they get older, they realize how much money spent.

[dbgtz]

ye money WELL spent

[Titch]

greedy gits!

[Immenseman]

half of that is me.

[Soy]

The advertising alone would pay off the employees

[Laggings]

Omg, Runescape makes over $700 million a year though :P
$70 Per Person Per Year Of Members x
10 Million Members = $700M
It was a quote from CEO on the forums. This was like, a year ago.

[Zak]

glad they didnt make any money out of me this year!

[Myth]

Well I dont really buy credits.

[Blinger1]

What do you mean from 'us'? Don't you think that companies pay Sulake for them to advertise? :rolleyes:

[:-Mystical.Dave-]

Convincing people to pay for nothing, or rather for things with zero marginal cost to produce, is a great business model—in theory. In practice, there are so few examples to point to, and most of them are overseas, such as Helsinki-based teen virtual world Habbohttp://i.ixnp.com/images/v3.74/t.gif (http://www.habbo.com/). The virtual world’s parent company, Sulake, today reported some selective financial and user data for Habbo. In 2008, Habbo’s revenues rose 20 percent to $74 million (50 million Euros), and posted positive operating cash flow (EBITDA) of $7 million (4.8 million Euros). It was even slightly profitable on a net income basis as well, however the company chose not to disclose that exact amount.
Perhaps the bulk of revenues are being plowed back into global expansion or to pay the salaries of Habbo’s 300 employees (yes, 300). But its sub-10% margins so far are underwhelming. And Habbo is supposed to be one of the shining examples of a real business based on a virtual economy. It also makes money from advertising, but a substantial portion of its revenues comes from in-world gifting and virtual vanity items.





Source; TechCrunch

http://www.techcrunch.com/2009/03/30/habbo-pulled-in-74-million-in-real-revenues-last-year-from-virtual-goods-and-advertising/

None of that is impressive. EBITDA is Earnings before Interest, Taxes (these are gonna greatly affect the net income), and Depreciation of Assets (which provides some benefit to the balance sheet and net income). Seeing as they have $74M in Revenues, and posting "a slightly positive net income" is not that good seeing as Costs are in the tens of millions. I would hope they post higher earnings, but the tech business is expensive even with Marginal costs of zero seeing as their product (furni) costs nothing to make. We learned analysis of all this in Intro Accounting @ Uni so once you take that stuff, you'll realize how these figures aren't too impressive.

[Vitara]

well I don't buy credits so its not come from me! :P

[Coldplay]

Was about the say a simpler version of the above.

Revenue isn't profit. ;)

[tm]

Any other business with only a 'slightly positive net income' would more than likely be considered failing.

[Laggings]

Anyone want to make a new habbo with me? I'll split the 74M a year :P

I've never bought credits, and it's funny that people spend over 70M a year on them.

[AgnesIO]

Anyone want to make a new habbo with me? I'll split the 74M a year :P

I've never bought credits, and it's funny that people spend over 70M a year on them.


I'll take 10 mil if you like - that would settle me LOL :D

--

As others have sadly said, revenue isn't profit :(

[RareFish]

half of that is me.

I'd say only abput ten million from me.

Im suprised Habbo isnt super with all the money there making.

[Laggings]

I'll take 10 mil if you like - that would settle me LOL :D

--

As others have sadly said, revenue isn't profit :(

Yeah, but how much really would it take to run a 17 country hotel online business? It's free to do all the furni, just have to pay for domains and servers, plus the staff. I'd say they're making about 40-50M a year off us.

[AgnesIO]

Yeah, but how much really would it take to run a 17 country hotel online business? It's free to do all the furni, just have to pay for domains and servers, plus the staff. I'd say they're making about 40-50M a year off us.


If you insist Ill take it all!

[brandon]

I feel so silly now

[AgnesIO]

I feel so silly now

Why didnt we think of it before?!

[Jonster]

There's more than just 2-3 costs involved...

- Headquarters/Offices
- Heating/Lighting/Water bills
- Travel (meetings)
- Advertisement/Promotions
- Staff Wages
- Servers
- Domains
- Hosting
- Programs
- ...

I could go on...I can imagine that Sulake struggle to make profits. Each piece of furniture designed may seem free, but there are costs tagged along with it. Firstly, the software used would need to be payed off, then theres staff wages (per/hour) costs, etc etc, and so will require X Habbo's to purchase this piece of furniture.

[Laggings]

Ok, here's the list of costs:
- Headquarters/Offices (5M)
- Heating/Lighting/Water Bills (1M)
- Travel (meetings) (200,000)
- Advertisements/Promotions (10M)
- Staff (15M)
- Servers (2M)
- Domains (About 5,000)
- Hosting (500,000)
- Programs (Probably designed by their own IT people...?)

I'm sure they design their own furniture by being paid by the hour, normal wages, and don't require a new program for every new furni Lol.

Above is just an estimate from what I have seen.

[Invent]

Ok, here's the list of costs:
- Headquarters/Offices (5M)
- Heating/Lighting/Water Bills (1M)
- Travel (meetings) (200,000)
- Advertisements/Promotions (10M)
- Staff (15M)
- Servers (2M)
- Domains (About 5,000)
- Hosting (500,000)
- Programs (Probably designed by their own IT people...?)

I'm sure they design their own furniture by being paid by the hour, normal wages, and don't require a new program for every new furni Lol.

Above is just an estimate from what I have seen.

It's probably roughly like...
- Headquarters/Offices (5M)
- Heating/Lighting/Water Bills (10M)
- Travel (meetings) (200,000)
- Advertisements/Promotions (10M)
- Staff (50-100M)
- Servers/Maintenance/Licenses (5M?+),
- Domains (About 5,000)
- Programs (100,000+)
- Software development (10M)
- Equipment (5M)

[Laggings]

I'm guessing they HAVE their own programs, and don't need to continally buy some.

[Jonster]

I never said they continuously purchase them. When you buy something, you often make money to pay it off/back. You'd be surprised how little money they make per each sale of furni. You'd think they would make a vast amount of profit, but I can imagine it would be very little.

For designing furniture - I would very much doubt they designed their own program in order to do this - they probably use photoshop or some other advanced graphic software.

[Laggings]

You must be funny. Anyways, they don't get 1 red cent when they sell furni. They make money when you buy credits. :P

[Jonster]

:$ The company itself won't make much money from credit sales, though. Yes, a lot of its profit comes from credits, but remember, the $74 million in revenue isn't profit - infact, it's far from it.

For every credit purchase you make, if you purchased through an SMS - mobile operators take a sum of that money, if you purchased online via PayPal (if Habbo accept this) then they will also take a sum of that money - etc. There are then other costs involved with this, meaning that when you pay £10 or so for credits, they only make a little amount - remember, they pay for advertisement, staff wages, ...

Let me put it to you this way - if Sulake were making vast amounts of profit, why do you think they've made various moderators redundant recently and had to close I think 2 hotels? The article said so itself - "It was even slightly profitable on a net income basis as well."

[Laggings]

I never said all 74M was profit :P

[Jonster]

Anyone want to make a new habbo with me? I'll split the 74M a year :P

I've never bought credits, and it's funny that people spend over 70M a year on them.


I never said all 74M was profit :P

You said it, not me.

[Laurensh1]

They make furniture with Shockwave Director something. All Habbo stuff thats viewable in the Client is designed in the same program (Shockwave Director).
So stop talking about the program stuff... They design their own most of the time.

[Kipp]

Well done to them :)

[Jonster]

They make furniture with Shockwave Director something. All Habbo stuff thats viewable in the Client is designed in the same program (Shockwave Director).
So stop talking about the program stuff... They design their own most of the time.

OK then...but that only throws out a really small cost for graphics (which would total - for graphics - to only $800). They will still purchase other software, though.

[Laggings]

I doubt they say: OK MAKE ME 1 CHAIR ILL GIVE YOU $500.
I'm guessing they design the furniture on a per hour basis, working for weekly wages just like everyone else. It's their job.

[stickwitu]

i'm more worried to why you actually care and argue over this...

[Laggings]

It's not really an argument. It's constructive debates :D

[Invent]

I'm guessing they HAVE their own programs, and don't need to continally buy some.
I'm talking about licensing for programs/applications.

[Laggings]

I'm talking about licensing for programs/applications.

1 Time code? I doubt they buy license codes every month. Maybe every year.

[Laurensh1]

Don't talk about Sulake's costs until you see their incomes and expenses balance which I haven't seen, or their overal thingy balance.
Show plz? Or stop the stupid guessing with prices for software, hq, etc.

[Laggings]

You can pretty much guess how much they pay, since you can get prices for software, the # of people they hire, etc online.
And since it's not breaking a forum rule, we can continue to guess how much they pay as long as we want.


http://www.habbox.com/index.php/habbox-guides/all-about-sulake

---
But, let's just end this now:
http://www.sulake.com/press/releases/2009-03-30-Sulake_reports_strong_growth_and_profits_for_2008. html

Helsinki, March 30, 2009 – Sulake Corporation, the parent company of Habbo, the world ‘s largest virtual world for teenagers, broke all previous records with sales 20% up in December 2008. As a result the company reached an annual revenue milestone of 50 million Euros (74 million USD) leading to profit; 4.8 million Euros (7 million USD) of EBITDA and a positive net result.

By year-end the Habbo community had also grown: 121 million Habbo characters had been created and the number of returning visitors increased by over 40%. Traffic to the virtual world also reached an all time high in December with over 11,5 million unique visitors.


There, now we can see how much they actually made. 7M out of 74M.

Sorry to ruin our little guessing game :(

[Jonster]

Don't talk about Sulake's costs until you see their incomes and expenses balance which I haven't seen, or their overal thingy balance.
Show plz? Or stop the stupid guessing with prices for software, hq, etc.

Anyone with general knowledge could make an educated guess as to what the prices of Sulake's assets and liabilties are.

(Whilst posting this I refreshed to see Laggings has posted on the same topic, but I'd like to reitterate the point made.)

Sulake made £50.3 million in revenue, and out of this returned £4.4 million in profit. This goes to show that around £46 million was spent in the financial year of 2008.

[Jordy]

I feel sorry for the people that probably buy a lot of furni and when they get older, they realize how much money spent.I spent more perhaps more than I should and I can see that I've over-spent, it's not the money I regret (However all that money would come in handy once in a while), it's the time I spent on it which I regret but anyways, the amount of fun and time I got out of it I think it was reasonably good value. Xbox 360 games have an RRP of £50 each, some of them get boring after a few weeks and they soon add-up (Please don't nitpick at my example as I'm just trying to make a point).

[Laggings]

Anyone with general knowledge could make an educated guess as to what the prices of Sulake's assets and liabilties are.

(Whilst posting this I refreshed to see Laggings has posted on the same topic, but I'd like to reitterate the point made.)

Sulake made £50.3 million in revenue, and out of this returned £4.4 million in profit. This goes to show that around £46 million was spent in the financial year of 2008.

Yeah, it really makes you wonder how they can stay in business when they're only making a few million dollars :P

[:-Mystical.Dave-]

EBITDA does not equal profit!!!111!!!1!!11
EBITDA = 4.4M pounds
(-) MINUS INTEREST PAYMENTS ON ANY DEBT THEY HAVE (which I'm sure they have since they have so little retained earnings from previous years and working capital)
(-) MINUS TAXES (paid to gov't and maybe others I am not sure of, since I'm not from the UK)
(+) PLUS DEPRECIATION of assets (depreciation tax shield benefit)
= NET INCOME (OR PROFIT)

[thorn]

I'd love 74 Million dollars!
Even though i am british lol.

[Unsuspected]

I feel sorry for the people that probably buy a lot of furni and when they get older, they realize how much money spent.

I feel sorry enough for myself, I don't need yours too! =P

http://i40.tinypic.com/2cm1pg.png

I REALLY regret all those. And I keep all of those damn prepaid cards and receipts to remind me not to make stupid financial decisions in the future.

[Hurtone]

I feel sorry enough for myself, I don't need yours too! =P

http://i40.tinypic.com/2cm1pg.png

I REALLY regret all those. And I keep all of those damn prepaid cards and receipts to remind me not to make stupid financial decisions in the future.

*REMOVED*

Edited by Garion (Forum Administrator): Please do not be rude toward other members.

[Sluing]

I feel sorry enough for myself, I don't need yours too! =P

http://i40.tinypic.com/2cm1pg.png

I REALLY regret all those. And I keep all of those damn prepaid cards and receipts to remind me not to make stupid financial decisions in the future.

Yea, that's definitely not attractive. Makes you look so pathetic.
Sozz

[Unsuspected]

lol, did anyone even read the post? Or did you just look at the picture? I KNOW it's stupid. That's why I keep them all. It reminds me not to make stupid decisions. As for taking a picture of it, well, whether you like it or not, you gotta admit it's an impressive collection.

Don't act like you've never made a silly financial choice and regretted it.

[Blinger1]

Holy ****!!!!!!
THATS ******* INSANE HOW MUCH YOU BOUGHT!!!

How many pounds did you waste?!

[syko2006]

I feel sorry enough for myself, I don't need yours too! =P

http://i40.tinypic.com/2cm1pg.png

I REALLY regret all those. And I keep all of those damn prepaid cards and receipts to remind me not to make stupid financial decisions in the future.

It takes alot of balls to post something like that up on the forum.
I respect you buddy. :)

EDIT: Nice one for coming to terms with your stupidness aswell I suppose. Haha. :D