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hi5 IGDA Leadership Forum 2010: The “Socialization” of Games

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hi5 presentation from the IGDA Leadership Forum 2010 on trends and challenges in the social gaming industry. Presentation led by hi5 President & CTO Alex St. John.

hi5 presentation from the IGDA Leadership Forum 2010 on trends and challenges in the social gaming industry. Presentation led by hi5 President & CTO Alex St. John.

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hi5 IGDA Leadership Forum 2010: The “Socialization” of Games Presentation Transcript

  • 1. The “Socialization” of Games IGDA Leadership Forum 2010 Presented by Alex St. John
  • 2. What’s the difference? VS.
  • 3. Commonalities Multiplayer Browser based Low production value Spread virally
  • 4. Interesting Differences
    • Bootstrapped
    • Subscription Based
    • Spread virally without a social network
    • Deeper Content
    • Popular with kids
    • VC funded
    • Microcurrency based
    • Spread virally via a social network
    • Shallow Content
    • Nobody wants to play them outside a social network
    • Excludes kids
  • 5. What is the “Pixie Dust”, which a social network brings to games nobody wants to play, that magically makes them popular? Zynga with Facebook “Pixie Dust” = 210MM players Zynga without Facebook “Pixie Dust” = 12.5MM players
  • 6. Something new and fundamental to all gaming was discovered by Social Media
  • 7. Was it…
    • “ Social”
      • Are “social games” really social?
    • Real identities
      • Do you really want all your friends, family and co-workers to know how you waste your time?
      • Do you really want total strangers to know all of your personal information just so you can play a game with them?
    • Something about the social wall
      • Every leading gaming destination has an “achievement” wall
  • 8. The Answer Lies HERE Zynga on Facebook Zynga.com
  • 9. Virality vs Engagement Virality without engagement produces reach but no compounding audience growth Zombie Prank Gift on hi5
  • 10. Greater engagement = greater audience compounding over time Club Penguin over 5 years Farmville over 2 years Farmville shows greater virality, but lower engagement
  • 11. The Lasting Discoveries in Social Media Gaming
  • 12. Virality!
  • 13. Virality thrives on extremely low distribution friction
    • Instant email list
    • Very simple mechanism for enabling and rewarding users for “infecting” and/or engaging
    • No registration barriers inside the SN bubble
    • No downloads
    • No payment barriers
  • 14. Engagement
  • 15. New Economics of Virality
    • 4 Ways to Monetize Audience
    • Cash
    • Advertising
    • ?
    • ?
  • 16. New Economics of Virality
    • 4 Ways to Monetize Audience
    • Cash
    • Advertising
    • Virality (referral value)
    • Engagement (content value)
  • 17. How do you calculate the value of viral currency?
    • Each user during the viral growth phase is worth (roughly) the compound monetizable value of all future users they may invite minus the cost of serving them.
  • 18. Which is? During an applications viral growth phase the viral value of a user can be 5x-10x the users retained value
  • 19. The Social Network Value Equation
    • On average an individual social network user’s monetary value can be described as:
    • Potential Commerce Value + Potential Ad Value
    • =
    • Potential Virality Value + Potential Engagement Value
    • You must learn to solve this equation for the user in order to decide whether you are asking for a credit card or giving free currency for attracting & entertaining others.
  • 20. Viral Economics
    • A + B =
    The fact that content virality and engagement has some complex recursive relationship to the monetizable value of an individual has exciting business model ramifications because this relationship suggests that it is possible to transform virality and engagement into $$$
  • 21. What is the monetary value of MajiNoir to a social network?
    • Romanian hi5 Member
    • Commerce value: $0
    • Ad value: $.0001
    • 34,199 friends…
  • 22. What is the monetary value of MajiNoir to a social network?
    • Romanian hi5 Member
    • Commerce value: $0
    • Ad value: $.0001
    • 34,199 friends…
    • Answer?
    • $238/mo in advertising
    • $162/mo in commerce
  • 23. Viral Economics Continued… User with monetizable value ZERO engages a user with monetizable value $Y doubling the high value users engagement and therefore monetizable value to $2Y
    • Thus un-monetizable user’s value becomes = $2Y/2?
    • Can the effective CPM value of low CPM advertising can be increased many fold by converting low value users engagement into high value content for richer markets?
  • 24. Viral Tenant Reward those you can’t monetize for engaging those you can!
  • 25. The Poke A primal expression of affection that demands reciprocation
  • 26.
    • Heretical Idea:
    • What if social games are successful in spite of Facebook?
  • 27. The Answer Lies HERE Zynga on Facebook Zynga.com
  • 28. How All Games Become “Social”
  • 29.
    • hi5 is opening up access to all of the technology infrastructure that enables Facebook to be highly viral and engaging, but puts the application at the center of the user experience instead of the social network portal.
    SocioPath: The Anti-Social Networking Platform for Social Games
  • 30. Preview of SocioPath
  • 31. Questions?