Metrics for a Brave New Whirled

Metrics for a Brave New Whirled Daniel James | CEO | Three Rings www.threerings.net [email_address]

What is Whirled? Player-created Flash virtual world Rooms, avatars, toys, games, music, etc. Social network ‘geography’ (home rooms == profiles, etc.) Flash single and multi-player games to accrue ‘Coins’ (‘play money’) Shop for player creations, comments, ratings, etc. ‘ Bars’, hard currency bought for $$$ Third ‘cash-out’ currency ‘Bling’ earned by creators on Bar sales Small, engaged beta community ~20,000 weekly registered active

Whirled Simultaneous Players

Hourly Simultaneous Players

What is Puzzle Pirates? Casual MMO Broad demographics: Ages 7-70, ‘Double Bump’, 50/50 Male/Female Signed Java Applet, ~60mb, installs from web Subscriptions since launch Oct 2003 Virtual currency business model since Feb 2005 2007 Revenues $4M, ~$3M virtual currency ‘Doubloons’

Puzzle Pirates Metrics Conversion (from landing to registration): ~5% Retention (returning after one month): ~35%,~25% into month 2 Paid Customer Conversion (registration to revenue): ~3.5% Average Customer Lifetime Value : ~$120 Average Registrant ‘Value’: $4.20 Registered Players since 2004: 4,200,312 Customers since 2004: 90,197 ‘Doubloons’, 68,807 Subscription Current active players: ~110,000 Active paying players: ~30,000 Average Hours played per player per month: 21

Moar Reading
Andrew Chen
www.andrewchenblog.com
Eric Ries
startuplessonslearned.blogspot.com
Slides for this Talk and moar links
thefloggingwillcontinue.com

(mo)AARRR!
Dave McClure’s awesomeness:
http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html
Updated:
http://500hats.typepad.com/500blogs/2008/07/oct-2nd-starton.html

The Funnel that goes AARRR
Acquisition
Activation
Retention
Referral
Revenue

Acquisition Paths
Ads (Networks, Google SEM)
Search (SEO) - a problem for rich apps
Referral Emails (‘Virality’)
Facebook, Myspace etc. Notifications
Affiliate Links and Revshare Deals
Game ‘Sponsorship’ Clicks
Organic ‘Shows up’ Traffic

Cost of Acquisition Dashboard
Not all these numbers are real, but they are representative
CPM/CPC/CPA washes out to a CPA
Whilst optimising and changing flow, CPC or CPM may make sense.
Once optimised, CPA is lower risk for buyer!
$1.14 $1,265 11,126 6.8% 163,871 0.33% 50,205,778 $0.08 Adsense Source CPM CPC CPA Ad imps CTR Clicks Signup % Users Cost CPA Ad Network 1 $0.50 ? ? 700,000 5% 35,000 $17,500 $0.50 Ad Network 2 $0.30 20,000,000 0.10% 20,000 20% 4,000 $6,000 $1.50

Viral Coefficient
For every new player acquired, how many new players arrive via Referral channels
If > 1 then exponential growth. Ye win!
Many ‘viral’ mechanics are ‘crafty’ e.g. email scrapers in registration process, FB games with invite incentives
Facebook still highly viral, but most apps supplement viral channels with paid ads
Myspace reportedly relies more on paid acquisition
FB invites work well for ‘frivolous’ Apps, but is there a conflict with ‘alternate persona’ games with depth? Do ‘fantasy’ players want to invite their real friends?

Activation Metrics
Site Visitors -> Playing Experience (~25%)
Different Landing Pages, Straight into Game etc.
Forced Registration is efficient
But, Retention works out similar to ‘play first’
Registration Conversion (~6% of visitors)
Active Players - logged in during the period
Simultaneous Players
Session Time (~20 minutes PP / Whirled)

The Whirled Funnel

Puzzle Pirates Registrations
(Different colours are different sources)

Retention Metrics
Retention - % of new visitors who return to the site within some period
Churn - % of total players who leave (usually monthly)
Whirled:
~2% Retention, 1st Visit -> Return after one Week
~23% of Registered Players return after one week

Retention Cohorts
A new Cohort shows up each week
Table shows % retained week-after-week
These numbers are not ideal!

Improving Retention
Sticky Fun!
Daily Return incentives (gift box)
Email: Notifications, Feeds, Newsletters
Validate your emails, check your spam

Referral Channels
Word of Mouth: Organic ‘Shows Up’
Registration ‘Find Friends’ Email
Game Invites: Email, FB Connect, IM
URL cut n paste
Trophy Notifications via FB
Share Games via URLs, FB, Myspace etc.
Share and Embed Rooms

Revenue Metrics
Conversion to Pay - usually % of registered players who pay
Average Revenue per Active Player (ARPU) - total revenue / active players, monthly
Paying Players / Customers - those who Purchase in that month, OR Active Users that have ever Purchased? Currency purchases are often bursty. Let’s call Paying Players those who bought in the month, and Ever Paid Players those who have ever paid
Percentage of Paying Players - Paying Players / Active Players
Percentage of Ever Paid Players - Paid Players / Active Players
Average Revenue per Paying Player per Month (ARPPU) - purchase amount for those who bought in the month. This is around $50 for many microtransaction games, inc. Puzzle Pirates
Average Revenue per Ever Paid Player per Month (AREPPU) - this is usually less, around $10 for Puzzle Pirates, as many active paid players do not necessarily purchase in that month

Mo’ Revenue Metrics: Lifetime Value
Customer Lifetime - average life of a paying customer in months. For PP ~14 months
Average Paying Player Lifetime Value (often called LTV) - total earned from a customer over lifetime
= AREPPU x Lifetime (for PP this is ~$125)
Average Registrant Value - this is the critical value to compare to your CPA
= AREPPU x Lifetime x Conversion to Pay
For PP = $125 x 3.5% = 4.37%

Whirled Economy Overview
Currency and value:
Free / Time Currency, rewards for gameplay (Coins)
Hard / Cash Currency, $$$ (Bars, Doubloons)
Creator earn-out Currency for Whirled (Bling)
Pricing
Player-controlled with some guidelines based on creator rating
Modest listing fees in Coins
Price in Coins to earn Coins, or Bars to earn Bling
Listed Items to Date
21,000 Avatars, 31,000 Furniture items, 20,000 Backdrops, 700 Toys, 3,600 Pets, 270 Games, 25,000 Tunes, 28,000 Images

Good Economic Management
Balance your soft currency faucets / drains
Optimize Pricing
Refresh and Merchandise Items
Limited Edition and Rare Goods
Consumable Items / Mini-Subscriptions

Economy: Soft Currency

Economy: Hard Currency

Economy: What Sells (Coins)?

Exchange of Coins and Bars

Players / Purchasers by Age

Spending per Purchaser

Spending by Age

Item Sales Distribution (PP) Products mix of Vanity (clothes, furniture) and Utility (ships, swords) Coin shop, Mostly personal utility, some gifting, all recurring (mini-subscriptions) Portraits, vanity, often groups Rooms / Houses, sometimes group

Customer Development
Develop Customers whilst developing Product
Ship early, track player behavior
Iterate against player behavior and rapidly revise product to meet customer expectations
Be prepared to completely re-tool product if customers don’t want it!
IMVU is the case study
Reading: ‘Four Steps to the Epiphany’ by Steve Blank http://www.steveblank.com/

Billing Bits
Payment Breakdown:
Credit card (70%, ~2% costs)
Paypal (15%, ~2% costs)
SMS (~5%, mobillcash, ~10% cost, ~50% carrier markups)
Pre-paid Card (~5%, Target via GMG, >20% costs)
Others via PaybyCash etc. (~5%, costs vary)
New: Offers via Peanutlabs (too early to say)
Fraud, Spending Limits
Don’t build, but use a provider
Twofish, Gambit, Fatfoogoo, Social Gold, Peanutlabs, Offerpal, Super Rewards, Zong, Vindicia, Aria, etc.

That’s all Folks!
Slides going up on the blog later today:
http://www.theflogginwillcontinue.com/
Please to RSS!
[email_address]

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Metrics for a Brave New Whirled

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