Hours to invent formulas won't be necessary.

The method of obtaining these numbers (80/10/1, whatever) is not accurate. The numbers used themselves are not accurate. Thus, the result is even further from accurate. The premise of saying that most people won't pay and only a tiny % will is at best "probably accurate". However, trying to predict anything beyond that is a gross misrepresentation of even a "guesstimate".

Proof?

I'm one of those 3 million accounts and I haven't played since the first week. As ethereal.wolf said, you have to use the active users, not the total users, for this to make any sort of sense. This is like Turbine saying they had "800,000 characters playing LOTRO". Can you spot the half-truth there?

I think the best we can do is say "Free Realms is growing in registered users, I saw four commercials this morning while watching Ninja Turtles, the servers are still up, and Massively does a great job at giving them exposure. They must be doing okay."