Entertainment Costs per Hour

by Jon on June 18, 2010

One of the reasons games are on an upward trend is that the consumer cost per hour is such a high value–games, particularly subscription and virtual-goods social games–are a lot less expensive than many other types of entertainment. Here’s a breakdown:

  • Borrowing a book from library: free (taxpayer supported)
  • Playing a freemium/social game: free to pennies/hour
  • Cable Television ($71/mo, 153 hours/person/mo., 2.54 people/household):   $0.18/hour
  • Playing World of Warcraft 10 hours per week: $0.35/hour
  • Playing Call of Duty for 30 hours ($60 retail): $2/hour
  • Seeing a 2-hour movie for $7.95: $3.98/hour per person
  • Upper Bleachers Red Sox ticket ($12) for a 3-hour game: $4.00/hour per person
  • Average US Family Vacation (AAA data: $250 per day): $10.41/hour
  • 2-hour Broadway show: $50-$150 per hour

It’s hard to beat the cost per hour of games, which is one of the reasons games are growing in popularity: they’re cost-competitive with television while being far more immersive, social and engaging.  And yes, the 153 hours/month is the average number of hours watched per month for people in the United States — gamers, as a group, probably spend far less time in front of the television.

One thing the above chart excludes is the cost of hardware, but you’d need to amortize that across all of your uses.  For most people, this will come down to pennies per hour for computer usage (likewise, the television usage doesn’t include the cost of the TV or home theater).  Similarly, I didn’t include energy and transportation costs.  For a computer game, the energy costs are going to be minimal (pennies per hour).  For some of the types of entertainment, the energy costs could be rather substantial–driving to a movie could easily drive up the cost of seeing the movie by double (or more!), if we use the IRS’s rate of $0.50 per mile for fully-loaded automobile transportation costs.

Sources for Data Used Above

{ 11 comments }

I’ve put together an Excel spreadsheet to help model growth curves within social games and social applications.  I thought I’d put it into the wild and let it benefit from the “wisdom of the crowds” to make it even better.

Because social games and applications on social networks like Facebook fluctuate daily (if not more often!) the model breaks every individual day into its own cohort.  This is because each individual cohort will experience its own growth (due to the new users within the cohort introducing the application to their friends) and decay (as individuals in the cohort stop playing).  These growth and decay curves happen along a normal distribution.  Because of the complexity of this model, it means that the spreadsheet is 365 columns wide and over a thousand rows–so on some computers, it will load a bit slowly.

Here are the main input variables you can manipulate:

  • k-Factor, which is the rate of growth for a social application based on how man people, on average, a product will spread to from one other person (the concept is drawn from infection rates within epidemiology).
  • The rate of spread that the k-Factor reveals isn’t enough on its own; you also need to know how fast it is occurring, so the model also allows you to manipulate the mean time to spread to another person.
  • Likewise, you can manipulate the mean time to remain a customer, which is also central to measuring how many total active customers you have.
  • There are other variables you can play with, such as revenue/user, reinvestment of revenue in customer acquisition costs (i.e., advertising),

What this doesn’t attempt to do is establish a ratio between daily active users (DAU) and monthly active users (MAU).  Clearly, that’s an important set of information for determining the engagement level of an application or game’s customers, but it’s probably dealt with better in a separate model.  For purposes of this, you can think of the DAU/MAU ratio as a determinant of the assumptions used for revenue and mean time to remain a customer as used in this model.

Comments are welcome and appreciated.  If anyone has helpful criticism, feedback–or even if you want to modify it and share your evolved version with me, I would be happy to post updates here.

Download the spreadsheet:

(Other helpful spreadsheets, for those interested: The Excel Nexus)

{ 9 comments }

Our Evolving Minds: Stravinsky and Nine Inch Nails

May 28, 2010

Our minds can change over time–because our brains are literally being rewired throughout our lives.  Time, space, external media and internal memory are interconnected through our neural circuitry.  Understanding this is important for anyone who deals with art, media, technology or society.
To explain this, I’d like you travel with me to 1907.  This is the [...]

Read the full article →

The Attack on Imagination

May 27, 2010
Thumbnail image for The Attack on Imagination

For as long as humans could speak, there have been a surplus of people who remind us to plant our feet firmly on the ground, to prevent our minds from piercing the clouds and to keep our dreams small.  Amongst the most pronounced in our modern age are certain cultural critics dismayed with their perceived [...]

Read the full article →

History of Social Games

May 24, 2010
Thumbnail image for History of Social Games

Social games aren’t new–they’re just games you play with other people.  Social games began about 5000 years ago.  With some help from the team at Disruptor Beam, we’ve put together a little chart that traces the history of social games from its origins in Ancient Egypt all the way to the present.  I’m using the [...]

Read the full article →

Games as Shared Dilemmas

May 20, 2010

It has been said that the unique aspect of games–that makes them unique as cultural artifacts– is their interactivity.  I’d like to question that a bit, and present a slightly different idea.
It’s true that for as long as there has been a popular culture, it has been mostly one-directional.  You hear a story or music; [...]

Read the full article →

Social Role in the Ultimatum Game

May 18, 2010

There is a famous experiment called the Ultimatum Game where one player (the “proposer”) is given an amount of money, and asked to divide it amongst himself and the second player (the “responder”).  If the responder rejects the offer, neither player gets anything.  Thus, from a cold, rational standpoint–the responder “should” accept any offer made, [...]

Read the full article →

Refactoring Game Communities

May 17, 2010

Most people hunger for human connections with each other.  I believe that’s what is at the center of the “social” phenomena: social networking, social gaming, social everything.  When future historians look back at the early 3rd millenia, I think we’ll be noted more for the massive social changes that happened as a consequence of our [...]

Read the full article →

Facebook Currency Crossroads

May 12, 2010

There’s been a lot of buzz around the Zynga vs. Facebook “battle” over the Facebook credits system, and the potential for it to become a requirement of doing business on Facebook.
I like to remind myself that I’m building a social games enterprise first–meaning games that people play with their friends.  We’re not a “Facebook games [...]

Read the full article →

Social Games–in 1992?

May 10, 2010

Someone dug up an old copy of Computer Gaming World that featured an advertisement for Legends of Future Past, a game I published back in 1992.  The ad itself dates to 1994.  Even I had lost this issue!

I think Aaron did a good job of identifying some of the things which would later become important [...]

Read the full article →