Habbo Reports $74 Million in Revenues.

by Alphaville Herald on 31/03/09 at 6:00 pm

By Urizenus Sklar, still trying to get his money back from uncle Bernie…

TechCrunch is reporting that Habbo hotel is claiming a slight profit of on $74 million US in revenues, principally from the sale of virtual items. However, TechCrunch author Erick Schonfeld snarkily calls it the sale of "nothing" because the virtual goods are "things that have zero marginal cost to produce", which makes me think someone should acquaint him with the concept of intellectual property (does he think there is a marginal cost to producing more copies of software? music? eBooks? soft tools? movies?). But enough about Mr. Schonfeld and the Bronze Age or whatever epoch he is writing from. Here is a 'graph from his article.

In 2008, Habbo’s revenues rose 20 percent to $74 million (50 millionEuros), and posted positive operating cash flow (EBITDA) of $7 million(4.8 million Euros). It was even slightly profitable on a net incomebasis as well, however the company chose not to disclose that exactamount.

Perhaps the bulk of revenues are being plowed back into globalexpansion or to pay the salaries of Habbo’s 300 employees (yes, 300).But its sub-10% margins so far are underwhelming. And Habbo is supposedto be one of the shining examples of a real business based on a virtualeconomy. It also makes money from advertising, but the vast majority ofits revenues comes from in-world gifting and virtual vanity items.

Virtual vanity items?

2 Responses to “Habbo Reports $74 Million in Revenues.”

  1. IntLibber Brautigan

    Mar 31st, 2009

    Slight error with your story here. Habbo is claiming $74 million in revenues, not profits. Gross profit is apparently $7 million, and evidently net profit is so small as to not be worth mentioning. Your first sentence says $74 million in profits.

  2. Urizenus Sklar

    Apr 1st, 2009

    Thanks, interlib, that was supposed to be a slight profit *on* (not of) 74 mil in rev. Obviously a profit of 74 mil would not be slight. post changed accordingly.

    My understanding is that SL is doing about 70 mil in revenues too.

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