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Virtual Goods Pricing Strategies, presented at Casual Connect 2010
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Virtual Goods Pricing Strategies, presented at Casual Connect 2010

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  • 1. Pricing Strategies for Virtual Goods Eric Gonzalez CEO, Doubloon Casual Connect 2010 Copyright Doubloon Inc. 2010 Virtual Goods Priced Right
  • 2. Background
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    • Eric Gonzalez, CEO,Doubloon (virtualdoubloon.com)
    • Everything You Need Run an In-Game Virtual Goods
    • Economy: Currency, Catalog, Pay Methods, Gifting.
    • Focused on Market Intelligence, benchmarking to
    • help you make smarter pricing decisions
    • Talking about Pricing Strategies Today
  • 3. Why Optimal Pricing?
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    You Can Make Lots of Money but it Requires Informed Decision Making 1. More Customers 2. More Retention 3. More Revenue from Each User
  • 4. Context: The Big May Squeeze
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    http://mthink.com/revenue/blog/chris-trayhorn/facebook-takes-profit-out-cpm-buys (May 2010) CPM to CPC http://www.bbc.co.uk/news/10472844 http://techcrunch.com/2010/05/11/f acebook-darth-vader-zynga/ (May 2010) 40% New Referrals Gone
  • 5. Key Concepts
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    • 3rd Degree Price Discrimination
    • Price Elasticity
    • Player Lifecycle and the “Long Tail”
    • Arbitrage (for Segmentation and Profit)
    • Dynamic Pricing
  • 6. Top 5 Tips for Virtual Goods Pricing
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    (Simple Strategies You Can Use Right Away)
  • 7. #5 Relative Pricing
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    http://wordpress.tv/2010/06/07/dan-ariely-predictably-irrational-behavior/
    • Behavioral Economics
    • We’re Good at Assessing
    • Relative Value
    • But We Suck at Assessing
    • Absolute Value
    • Introduce Subpar Items at
    • Par Prices to Boost Sales ?
    • A/B Testing
  • 8. #4 “Stealthy” Price Changes
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    http://www.usatoday.com/money/industries/food/2008-06-11-shrinking-sizes_N.htm
    • Real World - Smaller Tub of Ice cream
    • Virtual World - Subtle Sinks, like better arrows
    • contain less in the quiver
    • Currency buys = currency sinks
  • 9. #3 Be A Good Samaritan
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    • Get First Time
    • Buyers Comfortable
    • With Buying
    • Establish Relative
    • Baselines, Hold the
    • Line on Prices
    • 7 to 12 USD
  • 10.
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    • Use the Crafter Lifecycle
    • Profitable at First
    • Then Dip Into the Red Just Before Max Level
    • Price in vCurrency
    • (Casino Psychology)
    #2 Arbitrage Segmentation
  • 11. #1 Dynamic (Airline) Pricing
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    • Visible to Users
    • Price May Rise as
    • Quantity Nears Zero
    • Demand based
    • Auto-price (within
    • limits you set)
  • 12. Final Thoughts
    • 800.522.1948 | virtualdoubloon.com | @virtualdoubloon
    • Measure Obsessively
    • Use a Few Simple Strategies Sell
    • Use Market Data
  • 13. Thanks! Slides will be posted at www.virtualdoubloon.com Copyright Doubloon Inc. 2010 Virtual Goods Priced Right