Business models trends - Game Connection America 2012

Biz models trendsDiane Lagrange - ICO Partners

About me• Ubisoft• Ncsoft• ICO Partners

PAY UPFRONT

Pay to accessService Product

Licensing/Merchandising/Transmedia

Physical

Experience

SUBSCRIPTIONS

Subscription gamesDungeon and Dragons Online juin-09 World of WarcraftLord of the Rings Online sept-10 Star Wars : Old RepublicChampions Online janv-11 EVE OnlineAge of Conan juil-11Aerrevan août-11 RiftCity of Heroes sept-11 Final Fantasy XIFallen Earth oct-11 Final Fantasy XIVLineage 2 nov-11 Dark Age of CamelotDC Universe Online nov-11 Mortal OnlineEverquest 2 déc-11 DarkfallStar Trek Online janv-12Gods & Heroes janv-12 PerpetuumAion févr-12 WAREverquest mars-12 TERAEarthrise TBA

Removing cap & ceiling

MICRO-TRANSACTIONS

State of microtrans• Granularity, no ceiling, flexibility for the design• Millions of sizes fits everybody > 1 size fits “all”• Very different philosophies and revenue models

Variety of micropayments models Zynga Pay rate 5.3% ARPPU $31 ARPU $1.64 Nexon Pay rate 9.9% ARPPU $16.5 ARPU $1.63 Aeria Games ARPPU $90 Est ARPU $15-20

Increasing conversion

Consumables/durables

From consumable to subscription

Increasing number of transactions

Types of items bought - Wooga

« Razor and blades »

Whale baits/anchors

Collectible/random items

Strategy: buy revenge

LoL : buy control, customization, time

RPG : advancement & time

Engagement vs monetization

ADVERTISING

Advertising : Mobile• Should grow, but slowly• Rovio Q1 2011 : 30% advertising• Evolution of formats• Loss of offerwall revenue

Social games advertising

PLATFORMS & BIZ MODELS

Mobile/tablet• F2P = 65% + revenue iOS& Android• Payment infrastructure took a while, not there yet on Android• Subscription : – Order & Chaos – Big Fish Games, Onlive iOS?• Advertising : minoritary, loss of offerwall revenue

Facebook• Mostly micropayments• Subscriptions: – Order & Chaos closed – Playdom games – Kabam working on hybrid model• Advertising – Mostly very low monetization games – Product placement

Console 2009 : $15M 2010: $30M 2012 : $39M first 3 months

Impact on development process• Analytics feedback loop• More frequent updates• Evolutionary design• Consumers are shaping the game • Vocal minority less important : Battlefield Heroes

Other models• Paid to play (Poker) – Acquisition tool , can it become a business model? – Mechanical Turk game? (protein fold) – Twitch.tv, Youtube• Cut on player transactions – Diablo 3 – IMVU, Second Life, Everquest did it before• More uncertain models – Non-profit microfinance game – Processing power

Conclusion• Future = many hybrid business models aggregated• Question = which are core, which are ancillary?• Direct in-game monetization always first step

Thank you!diane@icopartners.comwww.slideshare.net/ICOPartnerswww.icopartners.com/blog@icodianewww.facebook.com/icopartners

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Business models trends - Game Connection America 2012

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