Game Design & Business Models

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Presented by Neil Harris, President & COO of HeroEngine, part of Idea Fabrik at Casual Connect Hamburg Feb 9, 2012.

Published in: Entertainment & Humor, Design
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Game Design & Business Models

  1. 1. Game Design & Business Models Neil Harris [email_address]
  2. 2. HEROENGINE 3D ONLINE GAMES
  3. 3. MY LIFE IN ONLINE GAMES
  4. 4. LESSON I WISHED MY FATHER HAD TAUGHT ME <ul><li>NEVER FALL IN LOVE WITH YOUR BUSINESS MODEL! </li></ul><ul><li>THEY ARE FICKLE AND WILL LEAVE YOU BROKE AND BROKEN HEARTED. </li></ul>
  5. 5. BUSINESS MODELS I HAVE LOVED <ul><li>Pay-by-the-minute </li></ul><ul><li>Monthly subscriptions </li></ul><ul><li>Buy the box, pay no more </li></ul><ul><li>Microtransactions </li></ul>
  6. 6. BUSINESS MODEL IMPACTS <ul><li>GAME DESIGN </li></ul><ul><li>AUDIENCE SIZE </li></ul><ul><li>DEMOGRAPHICS </li></ul>
  7. 7. ISSUES FOR GAME DESIGNERS <ul><li>TIME VS MONEY </li></ul><ul><li>REVENUE VS FAIRNESS </li></ul><ul><li>ADVANCEMENT SPEED VS CONTENT PRODUCTION </li></ul>
  8. 8. BUY THE BOX AND PLAY FOR FREE
  9. 9. ONE-TIME PURCHASE ADVANTAGES <ul><li>LOWEST SERVER COST </li></ul><ul><li>FITS STRENGTHS OF PUBLISHERS </li></ul>
  10. 10. ONE-TIME PURCHASE DRAWBACKS <ul><li>No Recurring Revenue: </li></ul><ul><li>Frequent Expansions & DLC </li></ul><ul><li>Heavy Focus on PvP = VERY Hard Core </li></ul><ul><li>P2P = Instanced = Hacking/Cheating </li></ul>
  11. 11. WHY I LOVED PAY-BY-THE-MINUTE <ul><li>More Fun = More Time </li></ul><ul><li>More Time= More Money </li></ul>
  12. 12. PAY BY THE MINUTE $60 ARPU!
  13. 13. BAD GAME MECHANICS TO MAKE MONEY <ul><ul><li>Increase Travel Distances </li></ul></ul><ul><ul><li>Slow Healing </li></ul></ul><ul><ul><li>Training Separate from Combat </li></ul></ul><ul><ul><li>Punish Players </li></ul></ul>
  14. 14. #1 DESIGN CHEAT IN ONLINE GAMES <ul><li>BY SLOWING PLAYER PROGRESS </li></ul><ul><li>DESIGNERS WORK LESS HARD </li></ul><ul><li>TIME BECOMES LESS FUN </li></ul>
  15. 15. DISADVANTAGE OF BY-THE-MINUTE <ul><li>HIGHEST ARPU BUT </li></ul><ul><li>SMALLEST AUDIENCE </li></ul>
  16. 16. THE FORMULA <ul><li>REVENUE = PRICE * QUANTITY </li></ul>
  17. 17. ANNUAL REVENUE POTENTIAL <ul><li>BY THE MINUTE </li></ul><ul><ul><li>High ARPU, Audience 1,000-50,000 </li></ul></ul><ul><li>SUBSCRIPTION </li></ul><ul><ul><li>~$15 ARPU, Audience 50,000-millions </li></ul></ul><ul><li>FREE-TO-PLAY MICROTRANS </li></ul><ul><ul><li><$1 ARPU, Audience potential tens of millions </li></ul></ul>
  18. 18. BUSINESS MODEL IMPACT: SUBSCRIPTIONS <ul><li>ARPU HAS A FLOOR AND A CEILING </li></ul><ul><ul><ul><li>No chance to benefit from “whales” </li></ul></ul></ul><ul><ul><ul><li>Low value for light users </li></ul></ul></ul><ul><li>HAPPIEST USERS = LOTS OF TIME </li></ul>
  19. 19. PREMIUM SUBSCRIPTIONS <ul><li>GEMSTONE INCREASED ARPU TO $27 </li></ul><ul><ul><li>PREMIUM SUBSCRIPTION AT $40/MONTH (35% of audience) </li></ul></ul><ul><ul><li>SPECIAL EVENT TICKETS (up to $100 each) </li></ul></ul>
  20. 20. SUBSCRIPTION GAME DESIGN <ul><ul><li>SLOW DOWN PLAYERS = GRIND </li></ul></ul><ul><ul><li>HUGE WORLD = HUGE EXPANSIONS = HUGE COST </li></ul></ul><ul><ul><li>PvP END-GAME (LESS CONTENT REQUIRED) </li></ul></ul><ul><ul><li>WoW IS SPEEDING UP ADVANCEMENT TO BROADEN AUDIENCE </li></ul></ul>
  21. 21. FREE TO PLAY + MICRO TRANSACTIONS <ul><li>Huge Audience! </li></ul><ul><ul><li>More Casual </li></ul></ul><ul><ul><li>Needs Low Hurdle </li></ul></ul><ul><li>Balance Paid Goods with Fairness </li></ul><ul><ul><li>Annoyances + Cures </li></ul></ul><ul><ul><li>Speed or Convenience </li></ul></ul><ul><ul><li>Vanity Items </li></ul></ul><ul><ul><li>New Areas / Content </li></ul></ul>
  22. 22. MAXIMIZE REVENUE & FUN IN FREE-TO-PLAY A MODEST PROPOSAL <ul><li>WHAT IF…? </li></ul><ul><ul><li>YOU COULD DIVIDE YOUR PLAYERS INTO SEGMENTS </li></ul></ul><ul><ul><li>AND OFFER EACH GROUP ONLY THOSE ITEMS THAT THEY VALUE MOST HIGHLY? </li></ul></ul><ul><li>CONJOINT ANALYSIS </li></ul>
  23. 23. CONJOINT SURVEY EXAMPLE
  24. 24. CONJOINT METHODOLOGY <ul><li>CHOOSE ATTRIBUTES </li></ul><ul><ul><li>Damage, XP, Specials, Speed… </li></ul></ul><ul><li>DEFINE ITEMS AS COMBINATION OF ATTRIBUTES </li></ul><ul><ul><li>Sword, 5 DPS, Fire Spell, etc </li></ul></ul><ul><ul><li>Attributes can include appearance </li></ul></ul>
  25. 25. SEGMENT PLAYER AUDIENCE <ul><li>PER BARTLE: </li></ul><ul><ul><li>ACHIEVERS </li></ul></ul><ul><ul><li>EXPLORERS </li></ul></ul><ul><ul><li>SOCIALIZERS </li></ul></ul><ul><ul><li>KILLERS </li></ul></ul>
  26. 26. MATCH ATTRIBUTE VALUES TO SEGMENTS BEAUTY DAMAGE SPEED TOTAL VALUE ACHIEVERS $4 $3 $2 $9 EXPLORERS $2 $4 $5 $11 SOCIALIZERS $5 $2 $1 $8 KILLERS $1 $5 $4 $10
  27. 27. HEROENGINE 3D ONLINE GAMES [email_address]
  28. 28. Game Design & Business Models Neil Harris [email_address]
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