Inner Workings of Virtual Goods Economies

Margaret Wallace, CEO
margaret@playmatics.com
Twitter: @MargaretWallace

Making Free-to-Play Games Work for You

Successful Use of Virtual Goods Touch on Core Experiences
Decorative
Items
Consumables
Social
Accelerators

Know What Motivates Your Audience
Values & Belief Systems
Are they loyal to any brands?
How much disposable income do they have?
What motivates them to come to your game?
Socializing?
Being Creative?
Zoning Out?
Killing Time?
Competition?

Type of Free-to-Play Game  Users Virtual Goods

Gear
Weapons
Functional Items
Clothing
Earth Eternal

50% Functional
50% Decorative
Puzzle Pirates

Virtual Goods Make Up 85% Of Habbo Revenue -- $70M in 2008
Social, Decorative Items
Consumables
Habbo Hotel

60% -- 90% of revenues selling virtual goods ranging from digital farm buildings to poker chips.
Predominantly Items
that Allow You to
Tend to Farm
Farmville

Enhance Game Play
Access New Levels
Customize characters

Gifting & Flirting!

Integrating Virtual Goods Into Free-to-Play Game Experiences

In-Game / Functional

Social Status

Decorative
Playfish sells around 20M items in Restaurant City every day - in either money- or time-based currencies.
Source: “Building Social Games at Scale” Panel, Social Gaming Summit, June 23, 2009

Gifting
Playfish titles are typically released with just 20% of their final features developed and implemented.
The rest is introduced over time in response to the demands of the community and success of the title.
Source: “Building Social Games at Scale” Panel, Social Gaming Summit, June 23, 2009

Collectibles & Rare Items
Limited number, niche appeal, unique appeal.

Setting Goals

Trading / Exchange

Rewarding Behavior

Conferring Status

Metrics
Must have metrics in place!

Metrics & Reporting
Sample metrics needed to track and have at your finger-tips anytime:

Measuring Active Users
What percentage are returning players who do something significant in your game?
For MMOs = Once every 30 days
For Social Games = Measured Daily

Average Revenue Per User (ARPU)
Measuring Average Revenue Per User Allows You to Gauge the Success of Your Service.
Total Monthly Revenue / Active Users = ARPU
€ 2 Million / 150,000 = € 13 ARPU
€ 2,000 / 150 = € 13 ARPU
Gaming the System!

Lifetime Value of User
How Much a User is Valued Over Time
ARPU x #/Months on Site = Lifetime Value
€ 13 x 6 months = € 78
Facebook game churn is around 8 weeks.

Average Revenue Per Paying User (ARPPU)
How Much Paying Users Spend
Monthly Revenue / Paying Users = ARPPU
€ 2 Million / 20,000 = € 100 ARPPU
NOTE: Factor in Cost Per Acquisition, which can cost up to .70 to 1.50 Euros Per User

What Does This Mean?
Social Games ARPU =
.30 – 3 Euros
ARPU for MMOs sometimes reported as higher,
but they may have far fewer players.

Common Mistakes

Common Mistakes
Retrofitting virtual goods into an already-existing design – and making stupid design decisions to compensate for that.
Not preparing your community for changes.
Not responding to community.
Not having a content plan once first set of goods released.

Common Mistakes
Having a set price for purchasing virtual currency, independent of the payment method.
Not designing enough “sinks” in the economy – i.e., selling back items @ 50%, having enough consumables.
Having bad metrics in place.

Questions?
Contact: Margaret Wallace, CEO
margaret@playmatics.com
Twitter: @MargaretWallace

http://www.slideshare.net	55
http://www.kimpallister.com	29
http://www.lmodules.com	2
http://translate.googleusercontent.com	1

Inner Workings of Virtual Goods Economies

by Margaret Wallace on Feb 12, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

4 Embeds 87

Statistics

Inner Workings of Virtual Goods Economies — Presentation Transcript