Future of Monetizing Social Games

The Future of Monetization?
Driving Game & Content Development
Elvin Li
Founder & CEO
Ryan Lou
Biz Dev Partner
Fiona Poh
Marketing Mgr

About ZelRealm
Commerce Tools for Social Game Developers
Analysis
Monetization
Virtual Goods Management

Is this a cheat sheet?

Breakdown

Maturity of gaming niches
Over expectations
Social Games
Steady growth
MMOGs
Mobile games
PC, Consoles games
Consolidation

What’s Hot: Freemium
Micro-Transactions:
Virtual Goods
Virtual Currency

Did you know? Monetization
Virtual Items
Virtual Currency
Brand sponsorships
Premium features
Virtual Gifting
Integration with real world transactions
Tradable currency
Subscription
Pay for time
Peripheral Enticement
Selling Branded Items from your site
Retail (bricks & mortar)
Digital Distribution
In-Game Advertising
Around-Game Advertising
Advertgames
Try Before you Buy
Episodic Entertainment
Skill-Based Progressive Jackpots
Velvet Rope or Member's Club
Foreign distribution deals
User Generated Content
Pay for Storage Space
http://news.cnet.com/8301-13846_3-9983073-62.html

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)

My Background
Monetization

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

x scale = Profit
Facebook killed virality
Typically Ads (US$1.50 per user)
Multiple Platforms
Cross promotion

x scale = Profit
Same problems as Web 2.0

x scale = Profit
Is about managing trade-offs

Reducing leakages
Make it simple to learn

Reducing leakages

Reducing leakages
Yes, You need to make money
Use Analytics
ARPU
Virality
Entry/Exit
Revisit rates
Conversions

Getting ‘em addicted
4 stages of addiction
Experimental stage
Recreational stage
Early dependency
Full Dependency

Getting ‘em addicted

The social gaming industry
Predictions
Growing industry (like blogging before)
Where’s the innovation?
Every game will be social

Why Free To Play?
Symptom of worldwide recession
Users as a KPI (Funding / Acquisition)
Bigger upside
Doesn’t require big spike

Excuse me, are you a gamer?

Who plays social games

Demographics (ASIA)
Who Uses Facebook? The Asian Context
CASE: INDONESIA

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

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

Gifting

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

TOP SPENDER : SAUDI ARABIA

Facebook phenomenon
Increased number of people using social media
Increased number of people playing social games too

Future of Social Game
Spending on social games is open –ended
Assumption: even LARGER whales
Larger spenders
No extreme spending foreseen

The future?

Future of monetization
Consolidation
Socializing

Remember this?

Selling IP
Selling Users

Lessons: Relevance

Lessons: Relevance
Ask more questions to understand your audience

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

Future of Monetizing Social Games

by eltf on Jul 06, 2010

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Future of Monetizing Social Games — Presentation Transcript