Monetizing Social Games - RockYou at GDC

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Monetization and Business Models for Social Games - Lisa Marino, CRO of RockYou presentation from GDC 2010. …

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."

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  • 1. Monetizing Social Games Lisa Marino, Chief Revenue Officer lisa@rockyou.com
  • 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
  • 10. Arbitrage: Where Monetization is Coming From Users User-Initiated Actions User- Participation
  • 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
  • 17. Arbitrage: Difference Makers in Offers Walls Surveys Local Strategy
  • 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
  • 21. Conclusion Questions?
  • 22. Lisa Marino Chief Revenue Officer lisa@rockyou.com