Margaret Wallace, CEO<br />margaret@playmatics.com<br />Twitter: @MargaretWallace<br />
1996<br />
Making Free-to-Play Games Work for You<br />
Successful Use of Virtual Goods Touch on Core Experiences<br />Decorative <br />Items<br />Consumables<br />Social <br />A...
Know What Motivates Your Audience<br />Values & Belief Systems<br />Are they loyal to any brands?<br />How much disposable...
Type of Free-to-Play Game  Users Virtual Goods<br />
Gear<br />Weapons<br />Functional Items<br />Clothing<br />Earth Eternal<br />
50% Functional <br />50% Decorative<br />Puzzle Pirates<br />
Virtual Goods Make Up 85% Of Habbo Revenue -- $70M in 2008<br />Social, Decorative Items<br />Consumables<br />Habbo Hotel...
60% -- 90% of revenues selling virtual goods ranging from digital farm buildings to poker chips.<br />Predominantly Items ...
Enhance Game Play<br />Access New Levels<br />Customize characters<br />
Gifting & Flirting!<br />
Integrating Virtual Goods Into Free-to-Play Game Experiences<br />
In-Game / Functional<br />
Social Status<br />
Decorative<br />Playfish sells around 20M items in Restaurant City every day - in either money- or time-based currencies.<...
Gifting<br />Playfish titles are typically released with just 20% of their final features developed and implemented. <br /...
Collectibles & Rare Items<br />Limited number, niche appeal, unique appeal.<br />
Setting Goals<br />
Trading / Exchange<br />
Rewarding Behavior<br />
Conferring Status<br />
Metrics<br />Must have metrics in place!<br />
Metrics & Reporting<br />Sample metrics needed to track and have at your finger-tips anytime:<br />
Measuring Active Users<br />What percentage are returning players who do something significant in your game?<br />For MMOs...
Average Revenue Per User (ARPU)<br />Measuring Average Revenue Per User Allows You to Gauge the Success of Your Service. <...
Lifetime Value of User<br />How Much a User is Valued Over Time<br />ARPU x #/Months on Site = Lifetime Value<br />€ 13 x ...
Average Revenue Per Paying User (ARPPU)<br />How Much Paying Users Spend<br />Monthly Revenue / Paying Users = ARPPU<br />...
What Does This Mean?<br />Social Games ARPU = <br />.30 – 3 Euros<br />ARPU for MMOs sometimes reported as higher, <br />b...
Common Mistakes<br />
Common Mistakes<br />Retrofitting virtual goods into an already-existing design – and making stupid design decisions to co...
Common Mistakes<br />Having a set price for purchasing virtual currency, independent of the payment method.<br />Not desig...
Questions?<br />Contact: Margaret Wallace, CEO<br />margaret@playmatics.com<br />Twitter: @MargaretWallace<br />
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Inner Workings of Virtual Goods Economies

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A talk I gave on 12.February.2010 at the Casual Connect Conference in Hamburg on virtual goods economies.

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Inner Workings of Virtual Goods Economies

  1. 1. Margaret Wallace, CEO<br />margaret@playmatics.com<br />Twitter: @MargaretWallace<br />
  2. 2. 1996<br />
  3. 3. Making Free-to-Play Games Work for You<br />
  4. 4. Successful Use of Virtual Goods Touch on Core Experiences<br />Decorative <br />Items<br />Consumables<br />Social <br />Accelerators<br />
  5. 5. Know What Motivates Your Audience<br />Values & Belief Systems<br />Are they loyal to any brands?<br />How much disposable income do they have?<br />What motivates them to come to your game? <br />Socializing?<br />Being Creative?<br />Zoning Out?<br />Killing Time?<br />Competition?<br />
  6. 6. Type of Free-to-Play Game  Users Virtual Goods<br />
  7. 7. Gear<br />Weapons<br />Functional Items<br />Clothing<br />Earth Eternal<br />
  8. 8. 50% Functional <br />50% Decorative<br />Puzzle Pirates<br />
  9. 9. Virtual Goods Make Up 85% Of Habbo Revenue -- $70M in 2008<br />Social, Decorative Items<br />Consumables<br />Habbo Hotel<br />
  10. 10. 60% -- 90% of revenues selling virtual goods ranging from digital farm buildings to poker chips.<br />Predominantly Items <br />that Allow You to <br />Tend to Farm<br />Farmville<br />
  11. 11. Enhance Game Play<br />Access New Levels<br />Customize characters<br />
  12. 12. Gifting & Flirting!<br />
  13. 13. Integrating Virtual Goods Into Free-to-Play Game Experiences<br />
  14. 14. In-Game / Functional<br />
  15. 15. Social Status<br />
  16. 16. Decorative<br />Playfish sells around 20M items in Restaurant City every day - in either money- or time-based currencies.<br />Source: “Building Social Games at Scale” Panel, Social Gaming Summit, June 23, 2009<br />
  17. 17. Gifting<br />Playfish titles are typically released with just 20% of their final features developed and implemented. <br />The rest is introduced over time in response to the demands of the community and success of the title.<br />Source: “Building Social Games at Scale” Panel, Social Gaming Summit, June 23, 2009<br />
  18. 18. Collectibles & Rare Items<br />Limited number, niche appeal, unique appeal.<br />
  19. 19. Setting Goals<br />
  20. 20. Trading / Exchange<br />
  21. 21. Rewarding Behavior<br />
  22. 22. Conferring Status<br />
  23. 23. Metrics<br />Must have metrics in place!<br />
  24. 24. Metrics & Reporting<br />Sample metrics needed to track and have at your finger-tips anytime:<br />
  25. 25. Measuring Active Users<br />What percentage are returning players who do something significant in your game?<br />For MMOs = Once every 30 days<br /> For Social Games = Measured Daily<br />
  26. 26. Average Revenue Per User (ARPU)<br />Measuring Average Revenue Per User Allows You to Gauge the Success of Your Service. <br />Total Monthly Revenue / Active Users = ARPU<br />€ 2 Million / 150,000 = € 13 ARPU <br />€ 2,000 / 150 = € 13 ARPU <br />Gaming the System!<br />
  27. 27. Lifetime Value of User<br />How Much a User is Valued Over Time<br />ARPU x #/Months on Site = Lifetime Value<br />€ 13 x 6 months = € 78<br />Facebook game churn is around 8 weeks. <br />
  28. 28. Average Revenue Per Paying User (ARPPU)<br />How Much Paying Users Spend<br />Monthly Revenue / Paying Users = ARPPU<br />€ 2 Million / 20,000 = € 100 ARPPU <br />NOTE: Factor in Cost Per Acquisition, which can cost up to .70 to 1.50 Euros Per User<br />
  29. 29. What Does This Mean?<br />Social Games ARPU = <br />.30 – 3 Euros<br />ARPU for MMOs sometimes reported as higher, <br />but they may have far fewer players. <br />
  30. 30. Common Mistakes<br />
  31. 31. Common Mistakes<br />Retrofitting virtual goods into an already-existing design – and making stupid design decisions to compensate for that. <br />Not preparing your community for changes.<br />Not responding to community. <br />Not having a content plan once first set of goods released. <br />
  32. 32. Common Mistakes<br />Having a set price for purchasing virtual currency, independent of the payment method.<br />Not designing enough “sinks” in the economy – i.e., selling back items @ 50%, having enough consumables. <br />Having bad metrics in place.<br />
  33. 33. Questions?<br />Contact: Margaret Wallace, CEO<br />margaret@playmatics.com<br />Twitter: @MargaretWallace<br />

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