Mobile gaming, for example, has bad Unit Economics. Games like Candy Crush Saga and Game of War spend absurd amounts of money in acquisition.
...which is Facebook and Twitter's primary revenue stream.
There is a possibility of a domino effect.
Yes, because they know on average every person that starts using the app makes them $1.50. So they spend a lot of money acquiring users at $1 each. That's not a failure of unit economics.
But cost to obtain the average user is $3, nearly double from what it was last year. http://venturebeat.com/2015/04/30/it-costs-more-than-3-to-ac...
I strongly doubt the average user spends $3, given that the current freemium environment is hedging by offering freemium perks for free periodically to get user retention. Which makes them less likely to actually spend money.
That's from an arbitrary index. You can hardly conclude the cost of install for a specific app from those numbers.
[0] http://bgr.com/2014/02/18/how-much-money-does-candy-crush-ma...
[1] http://www.gamespot.com/articles/93-million-people-play-cand...
In that case, the numbers make more sense.
I don't think the original essay means "hey, your gross unit margin is only 10%, but your market size is 500,000 units at $5 per month." I think it means, "Hey, your gross unit margin is -20% and with a lot of luck you might increase it to -5%."
I think this is wrong. These games have strong invite-friend mechanisms and have high retention. That's why they are popular in the first place. No source at hand though.
Whales only play one game at a time.
"A service launching this week will tell you that Machine Zone is currently spending somewhere around $12 per user with AdColony, InMobi, and Unity Ads, up to $20 per user with Vungle, and between $2 and $30 per user with Chartboost."
http://venturebeat.com/2015/08/12/this-service-tells-you-wha...
GoW has very low retention. Users who stick around in GoW are the kind of people who like to spend a lot of money to feel empowered. But, finding and keeping those people is very expensive because it involves churning through a whole lot of users who aren't like that.