How to Drive Engagement & Revenue with Virtual Goods

How to Drive Engagement & Revenue with Virtual Goods Vikas Gupta | CEO | Social Gold vikas@jambool.com Game Developers Conference 25 March 09

Who am I? • Co-founder and CEO, Social Gold • Developer: Send Good Karma and a host of other social applications/ games • Lead Inventor: Amazon’s Flexible Payment Service

So what? I understand game development, payments and how those two converge in virtual economies

Who are you? A developer who has focused on game experience until now, and is ready to . . . • implement a virtual economy • optimize an existing economy

Who do you want to be?

Who do you need to be?

Who are your users? 59% of US online population: 144M Source: Entertainment Software Association and IGN

More Social than Non Gamers 40% more likely to go out to movies 50% more likely to play team sports 20% more likely to go out with friends Source: ESA & IGN

More Yuppie than Dorm Rat Majority are . . . 30+ married with kids HHI > $100K Source: ESA & IGN

New Focus: Connectivity/ Community Source: ESA Image: Jerome Sudan

Monetizing the Social Gamer • Subscriptions: appeal more to hard-core gamers, and even they can’t manage too many • Advertising: low ROI and disrupts game play • Virtual Goods: enhance game play and capitalize on social nature of today’s gamer

Building an Economy . Game: World War II Active Users: 125K Description: Use authentic WW2 weapons to combat with and against others

Deﬁning your Sources . Users earn currency by • Logging in • Staying longer • Recruiting friends • Completing missions Or . . .

Deﬁning your Sources Users earn currency by completing 3d party offers Or . . .

Deﬁning your Sources Users purchase currency without ever leaving game

Deﬁning your Sinks . Users can redeem currency for functional goods • Weapons • Armor • Vehicles • Expediting missions **Games also can include decorative goods or gifts

Driving Engagement . Virtual goods drive engagement by • Integrating closely into game mechanics (v. ads) • Enhancing game play (ﬁghter plane v. bayonet) • Drawing user deeper into game more quickly (time v. money)

Managing your Economy • Launching your economy is the easy part • Managing is key: • Merchandise existing virtual goods catalog • Introduce new virtual goods regularly • Make currency as conspicuous and easy to earn/ buy/ redeem as possible • Optimizing is where you start to see real $$

What matters to you? • Your Economy • Transactions • Users • Goods • Your Proﬁts

You can only improve what you measure

Transactions Number of transactions is a direct measure of the health of your economy Sinks Sources

Transactions Balance your sources and sinks

Transactions Know your Economy: How is currency created?

Economy Know your Economy: How is currency depleted?

Remember:You need enough data to create statistical signiﬁcance

Users Who’s paying, and who is not?

Users How does spending behavior change with time or level in game? 40000 35000 Less than 1 year 30000 Less than 6 months Less than 3 months 25000 Less than 2 months Less than 1 month Less than 2 Weeks 20000 Less than 1 Week New Users 15000 10000 5000 0 1 10 19 28 37 46 55 64 73 82 91 100 109 118

Goods • How should you price your goods? • What do you want to optimize for? • Engagement (or usage)? • Revenue?

Goods Change prices, measure popularity

Goods Change prices, measure revenue

Analytics give you actionable data. What you do with them is your choice. e.g., pricing of goods? engagement? currency demand?

Revenue Virtual Currency is great Real Money is better

Revenue channels Compare different channels: Conversion

Goods and Revenue What goods drive people to spend real money?

Summary • Economics is all about measurements • You can create experiments and tune • What else would you measure? • Top Users • Game levels and user behavior

Case Study: (Lil) Green Patch . Developer: David King Active Users: 6.7M (Facebook Top 15) Description: Build a Green Patch with your friends to ﬁght Global Warming Beneﬁt: Completion of certain tasks saves 1 sq ft of Rain Forest

Why I use Social Gold . • Quick and easy API • Seamless, in-app payments • No acct creation (uses Facebook/ MySpace login) • Fraud controls • Customer Service

Testimonial “Social Good has assembled a stellar team of payments experience. We're super impressed with their understanding of the space and their attentiveness to developer needs. Their payments product is simple for developers to integrate and makes payments easier for users. Easier payments means lower friction for users and higher revenue for developers. We're looking forward to a continued and deeper relationship over time.” -David King (Lil) Green Patch

Questions? vikas@jambool.com mike@jambool.com

http://www.slideshare.net	20
http://pennymo.com	17
http://web.archive.org	6
http://vcchronicle.blogspot.com	1
http://www.sinksource.net	1
http://www.e-presentations.us	1
http://www.linkedin.com	1
http://oaishare.com	1

How to Drive Engagement & Revenue with Virtual Goods

by Social Gold

Accessibility

Categories

Upload Details

Usage Rights

8 Embeds 48

Statistics

How to Drive Engagement & Revenue with Virtual Goods Presentation Transcript