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Future of Monetizing Social Games

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The future of social game monetization and the revolutionary change to observe and look out for.

The future of social game monetization and the revolutionary change to observe and look out for.


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  • Elvin’s slide
  • Elvin’s slide (What we do)
  • Overall, users under 25 make up 72.5% of all Facebook users in that country, with more women in the younger categories than men.But, men make up most of Facebook’s Indonesian users. What age group are do most of them fall into? A large percentage of men fall in to the 26 – 34 age group, with a sharp dropoff after that.Notably, older demographics barely register a blip, with users over 35 making up just 8.9% of the total userbase.http://www.insidesocialgames.com/2010/06/09/whos-using-facebook-around-the-world-the-demographics-of-facebooks-top-15-country-markets/
  • Listed above, you can see the top five individual spenders within Social Gold’s network. According to the company, most whales are “pretty single-minded” — meaning that you can assume most of them spent their money in a single, beloved game. And to give perspective, we’ve included the average for all spenders.The amount these leading whales are paying out looks pretty shocking, but whales are not strictly a new phenomenon. Before social gaming took off, there were casual game players spending profligately on their favorite titles; for instance, several years ago Andrew Busey of Duels.com (now part of Challenge Games, which just got bought by Zynga) told me that his game had attracted a set of hedge fund employees who competed to out-spend each other, paying over a thousand dollars each for armor and weapons.
  • But social gaming on Facebook has rocketed the casual market into the stratosphere, not only in terms of how many people are playing, but also in spending levels. What’s really surprising about the above figures is not just that someone would pay as much for virtual goods as they might spend on a new car, but that Social Gold tracked these five spenders over a period of just six months, since last November.
  • Multiple media,exchangable currencies
  • Transcript

    • 1. The Future of Monetization?
      Driving Game & Content Development
      Elvin Li
      Founder & CEO
      Ryan Lou
      Biz Dev Partner
      Fiona Poh
      Marketing Mgr
    • 2. About ZelRealm
      Commerce Tools for Social Game Developers
      Analysis
      Monetization
      Virtual Goods Management
    • 3. Is this a cheat sheet?
    • 4. Breakdown
    • 5. Maturity of gaming niches
      Over expectations
      Social Games
      Steady growth
      MMOGs
      Mobile games
      PC, Consoles games
      Consolidation
    • 6. What’s Hot: Freemium
      Micro-Transactions:
      • Virtual Goods
      • 7. Virtual Currency
    • Did you know? Monetization
      • Virtual Items
      • 8. Virtual Currency
      • 9. Brand sponsorships
      • 10. Premium features
      • 11. Virtual Gifting
      • 12. Integration with real world transactions
      • 13. Tradable currency
      • 14. Subscription
      • 15. Pay for time
      • 16. Peripheral Enticement
      • 17. Selling Branded Items from your site
      • 18. Retail (bricks & mortar)
      • 19. Digital Distribution
      • 20. In-Game Advertising
      • 21. Around-Game Advertising
      • 22. Advertgames
      • 23. Try Before you Buy
      • 24. Episodic Entertainment
      • 25. Skill-Based Progressive Jackpots
      • 26. Velvet Rope or Member's Club
      • 27. Foreign distribution deals
      • 28. User Generated Content
      • 29. Pay for Storage Space
      http://news.cnet.com/8301-13846_3-9983073-62.html
    • 30. What’s Hot: Hybrid Model
      Micro-Transaction
      + Subscription
      + Immersive Brand Advertising
      + Metered System
      + ….
      “Why get rid or alienate your current subscriber base?  Would you really cancel your current subscribers?” – LOGIN 2010, Fernando Paiz (DDO)
    • 31. My Background
      Monetization
    • 32.
    • 33. Understanding Monetization
      (Lifetime Value – User Acquisition Costs)
      x scale = Profit
      Credit: Siqi Chen (Serious business)
      How long people play
      Conversion rates
      Game dynamics
      Marketing effectiveness
      Flow of game
      Payments
    • 34. Understanding Monetization
      (Lifetime Value – User Acquisition Costs)
      x scale = Profit
      Credit: Siqi Chen (Serious business)
      Facebook killed virality
      Typically Ads (US$1.50 per user)
      Multiple Platforms
      Cross promotion
    • 35.
    • 36. Understanding Monetization
      (Lifetime Value – User Acquisition Costs)
      x scale = Profit
      Credit: Siqi Chen (Serious business)
      Same problems as Web 2.0
    • 37. Understanding Monetization
      (Lifetime Value – User Acquisition Costs)
      x scale = Profit
      Credit: Siqi Chen (Serious business)
      Is about managing trade-offs
    • 38. Understanding Monetization
      (Lifetime Value – User Acquisition Costs)
      x scale = Profit
      Credit: Siqi Chen (Serious business)
      Is about managing trade-offs
    • 39. Reducing leakages
      Make it simple to learn
    • 40. Reducing leakages
    • 41. Reducing leakages
      Yes, You need to make money
      Use Analytics
    • Getting ‘em addicted
      4 stages of addiction
      Experimental stage
      Recreational stage
      Early dependency
      Full Dependency
    • 46. Getting ‘em addicted
    • 47. The social gaming industry
      Predictions
      Growing industry (like blogging before)
      Where’s the innovation?
      Every game will be social
    • 48. Why Free To Play?
      Symptom of worldwide recession
      Users as a KPI (Funding / Acquisition)
      Bigger upside
      Doesn’t require big spike
    • 49. Excuse me, are you a gamer?
    • 50. Who plays social games
    • 51. Demographics (ASIA)
      Who Uses Facebook? The Asian Context
      CASE: INDONESIA
    • 52. Compared to US: More males use Facebook than females (18.4% overall)
      Male Age: 18-25 - 45.9%
      13-17 – 23.5%
      Overall: Users under 25 – 72.5%
      More women in younger ages play Facebook compared to men
    • 53. Demographic (US)
      average age is 48
      90% reported the same or increased game play over the past 3 months
      27% and 25% reported less time spent reading (mag, book, newspaper) and home TV/movie viewing respectively
      43% of the time, game players log into social networks specifically to play games
      friends’ recommendations are the #1 factor influencing social game selection
      35% have purchased a virtual gift while playing a social game
    • 54. Gifting
    • 55. VS
    • 56.
    • 57.
    • 58. Social Whales
      Players who spend massively on virtual goods and gifts
      Whale: > USD$1, 000Super Whale: > USD$10,000
      Mafia Wars, Happy Aquarium etc
      Small percentage (10%) of users in the category
      Single minded
    • 59. TOP SPENDER : SAUDI ARABIA
    • 60. Facebook phenomenon
      Increased number of people using social media
      Increased number of people playing social games too
    • 61. Facebook phenomenon
      Increased number of people using social media
      Increased number of people playing social games too
    • 62. Future of Social Game
      Spending on social games is open –ended
      Assumption: even LARGER whales
      Larger spenders
      No extreme spending foreseen
    • 63. The future?
    • 64. Future of monetization
      Consolidation
      Socializing
    • 65. Future of monetization
      Remember this?
    • 66. Future of monetization
    • 67. Future of monetization
      Selling IP
      Selling Users
    • 68. Future of monetization
    • 69. Future of monetization
    • 70. Future of monetization
    • 71. Future of monetization
    • 72. Lessons: Relevance
    • 73. Lessons: Relevance
      Ask more questions to understand your audience
    • 74. Lessons: Test TestTest
      Ad models
      Marketing methods
      Promotions
      Email methods
      PPA
      PPC
      Word of mouth
      PR
      Video marketing
      PPM
      Expect the unexpected
      Monetization models
      Brand engagement
      Freemium
      Inter-operability
      Virtual items
      New markets