Develop Evolve Keynote

How Digital Distribution Changes Everything.
Maybe.
By: David Edery, Fuzbi
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Digital distribution today

Console Digital Downloads
NPD estimates:
18% of LIVE Gold users DL content regularly
10% of PSN users DL content regularly
… and that includes free content downloads
… and don’t forget many console owners never even go online to begin with

Appdata.com, July 10.2009

132m registered users worldwide
11.8m unique monthly users

F2P users are generating $1m per month
In China, FIFA Online attracted 1m users and generated $254k in just four days.

GameStop says “no addressable market”
for digital distribution until 2014
(1up, 6.19.2009)

What makes digital distribution so great?

What’s easier: a moon launch or driving a car?

AB Testing

Perpetual Cross Promotion

Targeting Niche Audiences on Web

PDLC sustains unique users (MSFT)
Unique User Trend for TITLES WITH PDLC

PDLC Helps Sustain Higher Retail Prices (MSFT)
$60
$59
$56
$54
$49
$40
$39
$34
$28
Metacritic rating > 7.0
At least 15 months of sales history
Average retail prices only from North America
Genres: Racing, RPG, Shooters (IGN)

What’s the downside? (Or: swapping middlemen)

Gatekeepers and their Agendas
Early PSN: must “look next-gen”
Early XBLA: bite-sized, especially casual/retro
Early Wiiware: make novel use of the Wiimote
iPhone: free and 99-cent content?

Platforms and their King-making
Twitterers on the “suggested user” list can gain 500k+ followers
Same with iTunes, Amazon, and game portals
Bottom line: befriend the platform-holders!

But the sad fact is, ecosystems without gatekeepers are just as unattractive, for different reasons.

“Barriers exist. The market should reward insiders (like you) but make it really difficult for copycats to come in and steal share and lower prices …I think 90% of all markets don't meet these standards, and given the choice, I'd avoid them.”
-- Seth Godin

Well, what about the “Long Tail?”

Hits are still what drives the business
Image taken: July 11.2009

Even at Amazon?
In 2006, Amazon.com derived 75% of its book sales from just 2.7% of its titles.

Anita Elberse, HBS (“Should You Invest in the Long Tail”)
Success is now more concentrated in top titles
Example: Worms XBLA
Indies are losing share to major labels

Quality is king?...

Question: so this Long Tail thing isn’t indie paradise. But it’s still better than the old retail world, right?Answer: well, it could be…

Consoles missing Long Tail enablers
Amazon-like recommendation engines
User ratings (in some cases)
Ease of search (in some cases)
More dynamic pricing functionality
Selective discounts
Bundling

Long Tail and Real-Time Multiplayer:
# of Players in Ecosystem
divided by
# of “active” multiplayer games
often equals
screwed developers and customers

Top iPhone Games: 6.16.2009
*Traditionally multiplayer games

Multiplayer Solutions: Viral Invites / Guest Passes

Multiplayer Solutions: Better Matchmaking

Multiplayer Solutions: Scheduled Game Time

Multiplayer Solutions: Asynchronous Multiplayer

Things I’m currently interested in, for whatever it’s worth:

Microtransaction-based Games
“A very large percentage of loyal customers—often more than 50%—are not profitable for most companies, because their loyalty is driven largely by expectations of great deals. …Profitable customers tend to make up only around 20% of a company’s customers.”
-- Wall Street Journal & MIT Sloan Management Review
Sound familiar?
F2P turns a weakness into a strength!

Future of Digital?

Thank You!PS. If you liked this, check out my blog:http://www.edery.org

http://www.feedingedge.co.uk	105
http://www.lai.as	10

Develop Evolve Keynote

by gueste76e9a on Jul 14, 2009

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Develop Evolve Keynote — Presentation Transcript