Monetization and Business Models for Social Games - Lisa Marino, CRO of RockYou presentation from GDC 2010.
"Social games are addictive, so addictive that developers are making millions of dollars from them. There are multiple models emerging in the industry for monetizing social games. Whether it's sponsorships, virtual currencies, CPM or CPE, the opportunities to make money in this space continues to grow. The question is: How do you do it? In order to be successful, developers must choose which business models to pursue and where to focus their efforts."
2. Agenda
1) Making A Good Game
2) Network Effect
3) Engagement
4) Arbitrage
5) The Future of Monetization
6) Questions
3. Why Social Gaming is Succeeding
Fast Paced Environment Cutting Edge Ideas
Tools and information lead to better
understanding.
Under-monetized International Reach
Convert Non-Gamers to Casual Gamers
– Nintendo Wii
4. The Secret Sauce: DAUs are Everything!
• Reach/Virality
• User acquisition
Key Threshold: • Re-engagement
.2 DAU/MAU strategies
Network
Effect
• Feature
• ARPU Releases
Arbitrage Engagement • Competition
• K factor
• Friends help
users advance
5. Network Effect: DAU Growth and
Rengagement
With Notifications going away, expect K Factor <.7
User
Acquisition/Reengagement Key Thresholds
Channel
Feed Posts • 3 FB users should click on every
feed post created
Requests • Focus request on friends already
in game
• Expect a 70% CTR on requests if
friend already in game
Book Marks • Expect 20% of DAUs to enter
through bookmarks
6. Engagement: What Have You Done for Me
Lately?
5 weekly releases:
3 content, 1 viral event, 1 game play feature
7. Engagement: Competition Rules
• Create competition
among friends using
visible metrics
• Friend Walls
• Customization
• Player vs. Player
engagments
8. Engagement: Get Friends To Help
• Increase Re-
engagement rates by
sending requests
calling friends for
help
Castle Age
• All Users helping get
the prize
9. Engagement: How To Engage Your Users
6 Basic Strategies of Keeping Your Users
– Collecting
– Decorating
– Friendship/Collaboration
– Exploring
– Caring
– Competition
11. Arbitrage: Is Your Game Monetizing Well?
Measure on Revenue/1,000 DAU’s
Best Monetizing Apps $100+/1,000 DAU’s
On Average, Apps Monetize $10-30/1,000 DAU’s
$30+/1,000 DAU’s On the right track
12. Arbitrage: Keys To Monetization
Drama
Individuality Friendship/Love
Keys to
Monetization
Gambling Competition
Collections
13. Arbitrage: Understand Your Economy
Keep economies fluid
Make currencies
valuable
Let users decide how
to acquire currency
and advancement
Sources and Sinks
14. Arbitrage: Know Your Key Demographic
Focus Tools on Your Primary Users
– Geography
– Age
– Gender
– Time Of Week
– Time Of Day
15. Arbitrage: Direct Payments
1-3% of DAU’s Are Paying Customers
Payment Methods Biased to Default Method.
– Usually Defaulted to Best Converting Method.
Offers
15%
Credit PayPal
Card 60%
25%
16. Arbitrage: Capitalize On Your Existing
Consumers
Entice Users to Re-Purchase Premium Currency
Conversion Rates for Repeat Consumers are
Higher.
>50% of Total Revenue Should be Repeat
Consumers
1st 2nd 30-40%of
Purchases
18. Future of Monetization: Expand the Digital
Goods Pie
Increase a game’s digital
goods monetization rate
from 3% to 25%
19. Future of Monetization: Advertising
Why Advertising will be Successful
Games have huge user bases so brand need to
be there
Users want to level up and not pay for it
Expands Monetization rates of user base
Safe and Clean Advertising Environment
20. Future of Monetization: In Game Case
Study
• Customized and controlled
Brand Experience
• Cost Per Engagement
Model
• In Game converts as high
as 50% of opt in users
• Highest CPMs of all
monetization tools
