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Future of Monetizing Social Games
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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

Future of Monetizing Social Games Future of Monetizing Social Games Presentation Transcript

  • 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
  • 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
  • Understanding Monetization
    (Lifetime Value – User Acquisition Costs)
    x scale = Profit
    Credit: Siqi Chen (Serious business)
    Same problems as Web 2.0
  • Understanding Monetization
    (Lifetime Value – User Acquisition Costs)
    x scale = Profit
    Credit: Siqi Chen (Serious business)
    Is about managing trade-offs
  • Understanding Monetization
    (Lifetime Value – User Acquisition Costs)
    x scale = Profit
    Credit: Siqi Chen (Serious business)
    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
  • VS
  • 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
  • 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
  • Future of monetization
    Remember this?
  • Future of monetization
  • Future of monetization
    Selling IP
    Selling Users
  • Future of monetization
  • Future of monetization
  • Future of monetization
  • Future of monetization
  • 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