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How Digital Distribution Changes Everything.<br />Maybe.<br />By: David Edery, Fuzbi<br />Insert Session Title<br />Insert...
Digital distribution today<br />
Console Digital Downloads<br />NPD estimates: <br />18% of LIVE Gold users DL content regularly<br />10% of PSN users DL c...
Appdata.com,  July 10.2009<br />
132m registered users worldwide<br />11.8m unique monthly users<br />
F2P users are  generating  $1m per month<br />In China, FIFA Online attracted 1m users and generated $254k in just four da...
	GameStop says “no addressable market”<br />	for digital distribution until 2014<br />	(1up, 6.19.2009)<br />
What makes digital distribution so great?<br />
What’s easier: a moon launch or driving a car?<br />
AB Testing<br />
Perpetual Cross Promotion<br />
	Targeting Niche Audiences on Web<br />
PDLC sustains unique users (MSFT)<br />Unique User Trend for TITLES WITH PDLC<br />
PDLC Helps Sustain Higher Retail Prices (MSFT)<br />$60<br />$59<br />$56<br />$54<br />$49<br />$40<br />$39<br />$34<br ...
  At least 15 months of sales history
  Average retail prices only from North America
  Genres: Racing, RPG, Shooters (IGN)</li></li></ul><li>What’s the downside? (Or: swapping middlemen)<br />
Gatekeepers and their Agendas<br />Early PSN: must “look next-gen”<br />Early XBLA: bite-sized, especially casual/retro<br...
Platforms and their King-making<br />Twitterers on the “suggested user” list can gain 500k+ followers <br />Same with iTun...
But the sad fact is, ecosystems without gatekeepers are just as unattractive, for different reasons.<br />
	“Barriers exist. The market should reward insiders (like you) but make it really difficult for copycats to come in and st...
Well, what about the “Long Tail?”<br />
Hits are still what drives the business<br />Image taken:  July 11.2009<br />
Even at Amazon?<br />	In 2006, Amazon.com derived 75% of its book sales from just 2.7% of its titles. <br />
Anita Elberse, HBS  (“Should You Invest in the Long Tail”)<br />Success is now more concentrated in top titles<br />Exampl...
Quality is king?...<br />
Question: so this Long Tail thing isn’t indie paradise. But it’s still better than the old retail world, right?Answer: wel...
Consoles missing Long Tail enablers<br />Amazon-like recommendation engines<br />User ratings (in some cases)<br />Ease of...
Long Tail and Real-Time Multiplayer:<br /># of Players in Ecosystem <br />divided by <br /> # of “active” multiplayer game...
Top iPhone Games: 6.16.2009<br />*Traditionally multiplayer games<br />
Multiplayer Solutions: Viral Invites / Guest Passes<br />
Multiplayer Solutions: Better Matchmaking<br />
Multiplayer Solutions: Scheduled Game Time<br />
Multiplayer Solutions: Asynchronous Multiplayer<br />
Things I’m currently interested in, for whatever it’s worth:<br />
Microtransaction-based Games<br />“A very large percentage of loyal customers—often more than 50%—are not profitable for m...
Future of Digital?<br />
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Develop Evolve Keynote

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My Develop Evolve keynote presentation.

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  • http://www.gamasutra.com/php-bin/news_index.php?story=23879
  • Screenshot taken on 7.10.2009 from Appdata.com, re: Facebook
  • http://www.virtualworldsnews.com/2009/06/heavyweights-habbo-and-seventeen-in-online-fling.html
  • http://paidcontent.org/article/419-can-eas-new-digital-strategy-bring-back-its-glory-days/
  • http://www.1up.com/do/newsStory?cId=3174876
  • http://www.nytimes.com/2009/06/14/weekinreview/14cohen.html?partner=rss&emc=rss
  • http://sethgodin.typepad.com/seths_blog/2009/06/harvesting.htmlOpen game ecosystems are brutally competitive.
  • Image taken: 7.11.2009http://www.roughtype.com/archives/2006/07/lee_gomes_respo.phpLee Gomes, Wall Street Journal: wherever he looked, hits remained vitally important to a given ecosystem (or in his words, “iTunes looks like Billboard, not some paradise of niches.”)
  • http://www.roughtype.com/archives/2006/07/lee_gomes_respo.phpCaveat: 2.7% of 3.7 million books is nearly 100 thousand books – a great deal more than the total offered by any brick and mortar store. Of course, that leaves 3.6 million books in Amazon’s remainder…)
  • “Should You Invest in the Long Tail”, Anita Elberse, Harvard Business School (published in Harvard Business Review)StudiedNielsen VideoScan and Nielsen SoundScan, Quickflix (Australian Netflix) and Rhapsody
  • http://www.nytimes.com/2007/04/15/magazine/15wwlnidealab.t.html?ex=1334203200&en=79be2f770fc76c6d&ei=5124Professors Duncan Watts, Matthew Salganikand and Peter Dodds recently demonstrated that, in a digital music ecosystem devoid of traditional marketing signals and recognizable IP (but possessing a public rating system), not only did “the hits get bigger,” but popularity was essentially random. This is not to say that quality doesn’t matter. Far from it. But quality without a sound marketing, PR, and community strategy is generally not going to cut it for you.
  • Long Tail theory, taken to its extreme, would suggest carrying many, many variants of a given multiplayer game. The idea would be that different niches might prefer different variants, and you’ll make more money (overall) by satisfying all combinations and degrees of interest. But if offering many variants of a multiplayer game results in a serious fracturing of the multiplayer community, have you done the community any favors?
  • Competitive and cooperativeChess by mail; Ghost competition mode in Topple 2Non-interactive (i.e., your avatar appears in your friend’s game)Leaderboard centricVirtual gift-centricEtc…
  • http://sloanreview.mit.edu/business-insight/articles/2009/2/5124/loyal-customers/Wall Street Journal / MIT SloanNote: the interesting thing about this quote is that it isn’t specific to the game industry – it is supposedly true of most industries.
  • ESRB doesn’t get enough credit for the difficult job it does in the retail world. But in the digital world, one has to wonder if community-driven (and/or data-driven) standards can’t supplement if not even replace the ESRB?...
  • To be clear: both of these services may fail. I don’t know enough about them to make claims about their reliability and potential. But I believe theidea they represent is sound, and odds are that sometime in the next ten years, you’ll see something like this work.
  • Games in every part of life.
  • Transcript of "Develop Evolve Keynote"

    1. 1. How Digital Distribution Changes Everything.<br />Maybe.<br />By: David Edery, Fuzbi<br />Insert Session Title<br />Insert Speaker Name<br />
    2. 2. Digital distribution today<br />
    3. 3. Console Digital Downloads<br />NPD estimates: <br />18% of LIVE Gold users DL content regularly<br />10% of PSN users DL content regularly<br />… and that includes free content downloads<br />… and don’t forget many console owners never even go online to begin with<br />
    4. 4. Appdata.com, July 10.2009<br />
    5. 5. 132m registered users worldwide<br />11.8m unique monthly users<br />
    6. 6. F2P users are generating $1m per month<br />In China, FIFA Online attracted 1m users and generated $254k in just four days. <br />
    7. 7. GameStop says “no addressable market”<br /> for digital distribution until 2014<br /> (1up, 6.19.2009)<br />
    8. 8. What makes digital distribution so great?<br />
    9. 9. What’s easier: a moon launch or driving a car?<br />
    10. 10. AB Testing<br />
    11. 11. Perpetual Cross Promotion<br />
    12. 12. Targeting Niche Audiences on Web<br />
    13. 13. PDLC sustains unique users (MSFT)<br />Unique User Trend for TITLES WITH PDLC<br />
    14. 14. PDLC Helps Sustain Higher Retail Prices (MSFT)<br />$60<br />$59<br />$56<br />$54<br />$49<br />$40<br />$39<br />$34<br />$28<br /><ul><li> Metacritic rating > 7.0
    15. 15. At least 15 months of sales history
    16. 16. Average retail prices only from North America
    17. 17. Genres: Racing, RPG, Shooters (IGN)</li></li></ul><li>What’s the downside? (Or: swapping middlemen)<br />
    18. 18. Gatekeepers and their Agendas<br />Early PSN: must “look next-gen”<br />Early XBLA: bite-sized, especially casual/retro<br />Early Wiiware: make novel use of the Wiimote<br />iPhone: free and 99-cent content?<br />
    19. 19. Platforms and their King-making<br />Twitterers on the “suggested user” list can gain 500k+ followers <br />Same with iTunes, Amazon, and game portals<br />Bottom line: befriend the platform-holders!<br />
    20. 20. But the sad fact is, ecosystems without gatekeepers are just as unattractive, for different reasons.<br />
    21. 21. “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&apos;t meet these standards, and given the choice, I&apos;d avoid them.”<br /> -- Seth Godin<br />
    22. 22. Well, what about the “Long Tail?”<br />
    23. 23. Hits are still what drives the business<br />Image taken: July 11.2009<br />
    24. 24. Even at Amazon?<br /> In 2006, Amazon.com derived 75% of its book sales from just 2.7% of its titles. <br />
    25. 25. Anita Elberse, HBS (“Should You Invest in the Long Tail”)<br />Success is now more concentrated in top titles<br />Example: Worms XBLA<br />Indies are losing share to major labels <br />
    26. 26. Quality is king?...<br />
    27. 27. 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…<br />
    28. 28. Consoles missing Long Tail enablers<br />Amazon-like recommendation engines<br />User ratings (in some cases)<br />Ease of search (in some cases)<br />More dynamic pricing functionality <br />Selective discounts<br />Bundling<br />
    29. 29. Long Tail and Real-Time Multiplayer:<br /># of Players in Ecosystem <br />divided by <br /> # of “active” multiplayer games <br />often equals<br />screwed developers and customers<br />
    30. 30. Top iPhone Games: 6.16.2009<br />*Traditionally multiplayer games<br />
    31. 31. Multiplayer Solutions: Viral Invites / Guest Passes<br />
    32. 32. Multiplayer Solutions: Better Matchmaking<br />
    33. 33. Multiplayer Solutions: Scheduled Game Time<br />
    34. 34. Multiplayer Solutions: Asynchronous Multiplayer<br />
    35. 35. Things I’m currently interested in, for whatever it’s worth:<br />
    36. 36.
    37. 37.
    38. 38. Microtransaction-based Games<br />“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.”<br />-- Wall Street Journal & MIT Sloan Management Review<br />Sound familiar? <br />F2P turns a weakness into a strength!<br />
    39. 39. Future of Digital?<br />
    40. 40.
    41. 41.
    42. 42.
    43. 43. Thank You!PS. If you liked this, check out my blog:http://www.edery.org<br />

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