Lately I’ve seen lots of deals on the infamous auction site flippa.com of people trying to sell arcade sites for a ton of money in hopes of ripping an unsuspecting buyer off. Numbers of $10,000 to $15,000 comes to mind for sites with little or no traffic and no actual revenue. The sellers are trying to dupe the buyers in buying on “potential”, which is more or less a worthless term. In this article, I will tell you the things to look for when actually buying an arcade site and a few things to watch out for. I’ve been in this industry for several years and and make a good living off of arcades so I’ve seen sales come and go. And before you ask, no, I am not interested in selling any of my sites.

First thing is, as mentioned above, do not buy on purely potential. Aspirations of what you “could” earn if conditions are perfect are worthless and should not be paid any heed to. Made up and hypothetical numbers drawn out from nothing are no good when it comes to making a sale. Someone who claims that a site that gets 500 unique visitors a day can make $3000 per month is obviously lying to lure in some poor sap who doesn’t know what he is doing. First of all, an average arcade(a small one) can expect perhaps 3-4 page views per visitor(and that is being generous) and perhaps earnings of $2eCPM($2 per 1,000 page views). If we calculate that based on 500 unique visitors a day on a 30-day month. That is roughly 2000 page views a day which equates to about $4 a day or $120 a month for a site with 500 unique visitors a day. Doesn’t seem like much? These numbers are from a very favorable scenario for a site with only 500 uniques a day. Most sites with that much traffic will earn less. If someone shows you stats that are 10 times to 100 times greater, he or she is probably photoshopping those stats.

The second major thing that people miss out on is that the only real measure you should place an arcade site when buying is its revenue or, more directly its profits. For people who have trouble differentiating between the two(and I’ve seen a lot of people who seem to think that the two are interchangeable) , revenue is how much you make overall in a month whereas profits is how much you actually net after you take out expenses such as server fees, sponsorship fees, cost of buying traffic, etc.

My view on it is the only sites that are really worth the asking price are ones with high Net Profit, which implies that they have a strong profit margin. In the arcade industry, 5% or 10% is not a strong margin, those are extremely weak margins and a slight dip in eCPM rates(which is very common) will erase that margin and put you into the red. For arcade sites you really have to look at sites that have at least a 50% profit margin in order for it to be what I consider a healthy operational model. The eCPM swings from season to season can be quite dramatic and you want to make, not lose, money all of the time and not only some of the time. Many seem to think that the rule of the thumb is maybe 12-16 months profit for the price of an arcade site. I disagree with this measure. For sites that have 100% profit or above(make more than twice what you put in), they are worth substantially more. A figure that is 3-5 years or net profit for those sites would not be overshooting it. On the other hand, sites that have a small profit margin(even if they have large revenues) are not worth much as a slight dip in eCPM or a slight mishap on your part can effectively erase profits or end up losing you money. If a site has only a small profit margin and its getting a decent amount of traffic, then it is probably not running a very healthy financial model.

The last point is that financial numbers and financial numbers alone should determine your purchasing price for a site. Design, features such as highscores or badges, or other things like that should really not factor into the equation or only have a minimal effect. Realistically, none of those things really matter too much to a site’s success or failure. Marketing and promotion skills easily outweigh all of those things put together by tenfold. I’ve seen too many sites spend thousands on flashy designs and fancy features only to flop. Their rate of success is not greater than your generic arcade script. After your site starts receiving a good number of visitors and decent profit, you can think about adding those things in. Those things add very little, if anything, to the value of a site at the point of sale.

If your still unsure about what to buy and not buy, I suggest you head over to www.talkarcades.com and chat about good prices to buy sites at.

That is all for this article.

So in the last piece about arcades and monetization, I wrote about the two kinds of arcades. While the first kind focuses on quality and is usually a long and drawn out process the 2nd type can be quick and does not require much investment.

Today we are going to focus on the 2nd type because well, its just more interesting to talk about than the traditional arcade which mostly relies on who has the most money to sponsor games.

In a debate at talkarcades.com, there was much discussion about the recent poor quality of traffic that trades produce. I almost laughed out loud when I saw this because the entire focus of traffic trading is not about maximizing user experience — its about maximizing the number of visitors to your site. The fact that you are bouncing visitors from site to site already makes user experience not so good. The reason this kind of arcade has such an advantage over the traditional arcade is because of its ability to multiply traffic. While the conversion rates on traffic do matter, these arcades should be so profitable that it doesn’t require meticulous tracking of how each trade partner converts. You just have to weed out the cheaters that are obviously sending you fake traffic. Now I traffic trade on some of my sites and in terms of money made to resources needed(servers and bandwidth) to keep the site running, the profit margin is 10:1 or even more. This should be the case with any traffic trading site. If you not at least garnering this much, your doing something wrong and need to re-examine your business model. This, however, does not include the costs of buying adwords that some sites in this category do.

I firmly believe that buying adwords is not the way to go in a traffic-trading site. You should focus most of your efforts on getting free search engine traffic by targetting specific keywords. You should target more than one keyword or phrase for site. For instance if your site is about ‘Car games’, you should target ‘car games’ but also create a section for ‘bike games’ and ‘truck games’ and target that specific sub-page to that term. A top 10 result in these terms will get you hundreds or thousands of free visitors per day. If you get good at SEO, its easy to make a 10:1 profit to costs ratio happen, regardless of what kind of traffic you are receiving on the other end of the trade, as long as its not fake.

Getting key link exchanges for your sub-pages is pretty critical to achieving large amounts of success as just focusing on 1 primary keyword or phrase will limit the room in which you grow.

You really don’t need a traffic trading script that costs thousands of dollars to be good in traffic trading. You just need a script that lets you keep track of how much you receive and how much you send out. The rest of the time should be spent on link exchanges, obtaining backlinks, and climbing up the SEO ladder.

Good luck.

Cell Warfare is a very nicely done arcade shooter where you are a blue cell and you must shoot different colored cells with a variety of fire and power-ups. Gameplay-wise, this game is pretty much the same as all other games of this genre. What really sets this game apart is the badges and achievements. There are dozens of badges and achievements you can get and that certainly adds to replay value for the game.

Its worth a good hour or two of play as there are 10 different types of enemies and nice eye-candy for particle effects. The main complaint about this game is that it does lag for some computers.