Flippa Case Study- Mac Games Acquisition

October 9, 2019 0 Comments

In October of 2018 I was checking out flippa.com, a marketplace where people sell apps and websites, and I ran across a listing selling 13 mac games. I was immediately interested in the games because I already owned about 50 Mac applications at that time. The 50 mac apps I owned were already making a nice chunk of change without much work or effort. I knew adding these games would allow me to make a little more money each month without having to do any extra work.

When buying a website or app from flippa the most important thing is making sure the sales numbers that are provided are accurate. If the numbers are not accurate you could end up paying too much for something that is making less than you were told it was making.

Anyone can steal screenshots or use photoshop to doctor images so I always ask for video proof or access to the sellers accounts to confirm they are providing accurate data . To me if a person won’t provide video proof or give me access to their accounts they are hiding something and I won’t do business with them.

Luckily this seller was fine with providing video showing how much the app was making every month, so I was able to confirm the earnings were accurate. The games were averaging about $37.33 in income each month in the six months before I bought them. 

On other online business buy and sell marketplaces like empireflippers.com ,where they vet the website being sold, people sell their assets for 30 to 36x earnings. On flippa most of the websites and apps most sell for 10-15x monthly earnings because you have to do most of the work vetting the site and making sure everything the seller says is true.

I ended up paying 20x earnings. The 13 games cost me $740.88 including transaction fees. Some might think I overpayed, personally I think I paid a fair price. Even though these app don’t charge a recurring income, they make money every month with me having to do anything. I would gladly pay 20x earning for a passive income stream, especially one I am familiar with.

Another reason I didn’t mind the price was because I thought the apps would get more exposure being listed next too my existing mac apps. More exposure usually means more sales.

After I acquired the games I immediately started to see the payoff. You can see from the chart below I made $70.40 the first full month I owned the apps. From that point income has went up and down but I have already made back $463.63 of the $740.88 I spent.

MonthIncome
Total$463.63
Oct 2018$49.41
Nov 2018$70.40
Dec 2018$64.33
Jan 2019$53.25
Feb 2019$27.67
Mar 2019$35.25
Apr 2019$28.86
May 2019$34.84
Jun 2019$41.00
Jul 2019$21.13
Aug 2019$6.43
Sep 2019$26.06

Other

-When I purchased these games they were priced at $9.99. I thought about experimenting with other price points, but so far I have not done so.

-Apple released Mac App bundles around the same time I acquired these games. I bundled together 6 of the sports games. I only sell one bundle every other month. They don’t sell that well, but I’ll take what I can get.

-Several of these apps have been pulled of the Mac app store. Apple wants me to update them before I can sell them again. Currently only 4 of the 13 games I purchased are for sale at this moment.

-Even though some of the individual apps have been removed, I can still sell the bundle as is, which is weird.

Summary

Overall I think it was a good investment. The only thing that stopped me from making more was the apps being pulled from the store. Even being down to just 4 games I have had recent sales months in the $20 to $40 range.

I will likely wait until 2020 to get the 9 removed mac games fixed and reuploaded to the Mac app store. Once I do that I will play with the pricing and add a new game bundle so I can get these games making a at least $60 a month consistently.

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