SlideShare a Scribd company logo
1 of 37
Social Game Success,[object Object],Overview of the business cases, costs, challenges, and rewards in the social game space,[object Object],By Michael Turner, Managing Partner at Bitfold Online Games,[object Object]
Part 1: Market Analysis,[object Object]
Before We Start - Who is Bitfold?,[object Object],Who are We: ,[object Object],Bitfold is an online game development company dedicated to developing fun & original social & MMO games.,[object Object],Focus Areas: ,[object Object],[object Object]
Original social game IP development
Social game operation & monetization
MMO & social game technology developmentTeam: ,[object Object],30+ game developers, artists, designers, and QA professionals focused on social games & MMOs,[object Object],Location: ,[object Object],[object Object],Social Games Portfolio: ,[object Object],[object Object]
2 currently in development
Games Live on many different social networks,[object Object]
What’s Unique about Social Games,[object Object],Game progress is tied to the player’s personal profile,[object Object],Players get personal ownership over their achievements and progress,[object Object],Players interact with their “real world” social network,[object Object],Players interact with family & friends instead of only other gamers.,[object Object],Asynchronous interaction,[object Object],Users are rarely on at the same time, therefore most player to player interaction is played asynchronously.,[object Object],Progress Limits,[object Object],Most games limit the amount of advancement that can be had in a session.  This incentivizes users to return frequently & to pay real money when they want to speed progress.,[object Object]
The social game market at a glance,[object Object],[object Object]
Player Base: 53 million US internet users played social games in 2010, 62 million are expected to play in 2011[1]
Opportunity for New Developers: The userbase of the top 5 social game developers shrunk significantly in 2010, while that of small & medium developers rose. [2]
International Markets: International social game markets are growing, with markets like Japan earning $1.2 billion USD in virtual goods revenue in 2010[3]
Multiple Social Networks: Many gamers exist in social networks outside Facebook (Myspace alone boasts 30 million gamers[4]) making extra monetization outside of Facebook possibleFig. 1 Social game market revenue projections. Source: emarketer.com ,[object Object],Fig. 2 Demographics of social gamers 2009-2010.  Source gamesindustry.com ,[object Object]
How does a social game make money?,[object Object],Revenue Sources,[object Object],1. Virtual goods purchases (direct purchases & offers),[object Object],2. Advertising,[object Object],Virtual Goods Revenue Model,[object Object],A game’s virtual goods revenue potential depends maximizing the following metrics:,[object Object],1. Number of Active Users,[object Object],2. Percentage of paying users,[object Object],3. Return per paying user,[object Object],Multiplying the above metrics gives a rough estimate of revenue:,[object Object],(Number of users)*(Percentage of paying users)*(return per paying user) = game revenue,[object Object],Fig. 3 Breakdown of social games revenue.  Source emarketer.com,[object Object],Fig 4. Comparison of a successful & unsuccesful game monthly & daily active user counts.  Source: appdata.com,[object Object]
Key social game performance metrics,[object Object],Game Performance Metrics,[object Object],The following metrics are key to measuring a game’s performance,[object Object],MAU (Monthly Active Users): Number of users active at least once in the last month,[object Object],DAU (Daily Active Users): Number of users active in a game on a given day,[object Object],DAU/MAU: Ratio of DAU to MAU in a game,[object Object],ARPU: Average monetary return per user,[object Object],Percentage Paying Users: Percentage of users who have paid,[object Object],Retention: Percentage  of users that revisit an app within 1-6 weeks,[object Object],Engagement: How involved a user is. Measured by metrics like session length & number of sessions/day,[object Object],LTV (Lifetime Value): Lifetime amount of money a user pays in a game,[object Object],(CAC) %Customer Acquisition Cost: Cost required to acquire a paying customer,[object Object],Fig. 5 Cityville’s DAU, MAU, & DAU/MAU ratio.  Source: Appdata.com,[object Object],Fig. 6 A sample app’s Percentage Paying Users.  Source: Kontagent.com,[object Object]
Nuances of key metrics,[object Object],Daily vs. Monthly Active Users: ,[object Object],DAU is often considered a more important success metric than MAU because it measures how regularly users are playing a game.,[object Object],Engagement: ,[object Object],Measured by metrics such sessions/day, session length, etc.  It is considered highly important to monetization because users who are returning regularly & spending  lots of time in game are more likely to make a buying decision.,[object Object],DAU/MAU:,[object Object],Roughly measures how often monthly users are returning daily to play.  A high DAU/MAU signals the is game engaging & well engaged users generally monetize better.,[object Object],Customer Acquisition Cost vs Lifetime Value,[object Object],It is a key goal of social games key to minimize CAC while maximizing LTV of users.  Engagement is key to maximizing LTV.,[object Object],Fig. 5 Cityville’s DAU, MAU, & DAU/MAU ratio.  Source: Appdata.com,[object Object],Fig. 6 A sample app’s Percentage Paying Users.  Source: Kontagent.com,[object Object]
Social Game Revenue Potential,[object Object],Calculating Revenue,[object Object],Most public social game metrics are limited to historical DAU & MAU data. Using methods provided by social game developer RockYou[5], revenue estimates for several games can be created with DAU & MAU data  from appdata.com.,[object Object],Method Details:,[object Object],1. According to RockYou, return ranges from $10-$30 per 1000 DAUs on average[5],[object Object],2. A sum of DAUs from 1/17/11 to 2/18/11 was sampled from appdata.com,[object Object],3. The following equation was then used (Average return per 1000 DAUs) x(Summed DAU from 1/17-2/18/11),[object Object],Cases for both $10/1k & $30/1k DAU are used to establish revenue bounds,[object Object],Results,[object Object],[object Object],Table 1: Revenue estimates of 7 popular games using RockYou’s estimates of revenue per 1000 DAU ,[object Object]
Cost of Acquiring Users (CAC),[object Object],Balancing Advertising Costs & Revenue,[object Object],[object Object]
Acquiring users through advertising is expensive
Developers must get the lifetime value of paying users higher than the cost of user acquisition to make moneyMethods & Costs of Acquiring Customers,[object Object],[object Object]
$0.50-$3 per install (dependent on many factors)[6]
Cost per 100k installs can  range from $50k-$300k
Targets users based on interest which leads to high quality leads (i.e. players who return)[7]
Banner & Offers
Banners & offers via other Facebook apps
Cost: $0.10-$.60 per user[7]
Low quality leads (i.e. leads don’t often return)[7]
Viral Acquisition (Viral wall posts, Notifications)
Free! Reduces reliance on ads (and therefore cost)
Requires a large number of users to be effective
Virality is limitedon Facebook, so it is only a cost reduction measure, ad purchases are a mustFig. 7 Optimal balance between LTV & CAC.  Source: Forentrepreneurs.com ,[object Object],Fig. 8 Cost of user acquisition vs. quality of different ad types.  Source: Adparlor.com ,[object Object]
How Developers get Lifetime Value > CAC,[object Object],Good Design,[object Object],[object Object]
Targeting a Niche: Targeting a niche is a good way to get dedicated players who pay.Reduce CAC (Advertisting Costs),[object Object],[object Object]
Monitor Metrics to gauge performance
Optimize creative appeal of ads
Optimize demographic targeted

More Related Content

Featured

AI Trends in Creative Operations 2024 by Artwork Flow.pdf
AI Trends in Creative Operations 2024 by Artwork Flow.pdfAI Trends in Creative Operations 2024 by Artwork Flow.pdf
AI Trends in Creative Operations 2024 by Artwork Flow.pdfmarketingartwork
 
PEPSICO Presentation to CAGNY Conference Feb 2024
PEPSICO Presentation to CAGNY Conference Feb 2024PEPSICO Presentation to CAGNY Conference Feb 2024
PEPSICO Presentation to CAGNY Conference Feb 2024Neil Kimberley
 
Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)contently
 
How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024Albert Qian
 
Social Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie InsightsSocial Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie InsightsKurio // The Social Media Age(ncy)
 
Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Search Engine Journal
 
5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summarySpeakerHub
 
ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd Clark Boyd
 
Getting into the tech field. what next
Getting into the tech field. what next Getting into the tech field. what next
Getting into the tech field. what next Tessa Mero
 
Google's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentGoogle's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentLily Ray
 
Time Management & Productivity - Best Practices
Time Management & Productivity -  Best PracticesTime Management & Productivity -  Best Practices
Time Management & Productivity - Best PracticesVit Horky
 
The six step guide to practical project management
The six step guide to practical project managementThe six step guide to practical project management
The six step guide to practical project managementMindGenius
 
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...RachelPearson36
 
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Applitools
 
12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at WorkGetSmarter
 

Featured (20)

AI Trends in Creative Operations 2024 by Artwork Flow.pdf
AI Trends in Creative Operations 2024 by Artwork Flow.pdfAI Trends in Creative Operations 2024 by Artwork Flow.pdf
AI Trends in Creative Operations 2024 by Artwork Flow.pdf
 
Skeleton Culture Code
Skeleton Culture CodeSkeleton Culture Code
Skeleton Culture Code
 
PEPSICO Presentation to CAGNY Conference Feb 2024
PEPSICO Presentation to CAGNY Conference Feb 2024PEPSICO Presentation to CAGNY Conference Feb 2024
PEPSICO Presentation to CAGNY Conference Feb 2024
 
Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)
 
How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024
 
Social Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie InsightsSocial Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie Insights
 
Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024
 
5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary
 
ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd
 
Getting into the tech field. what next
Getting into the tech field. what next Getting into the tech field. what next
Getting into the tech field. what next
 
Google's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentGoogle's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search Intent
 
How to have difficult conversations
How to have difficult conversations How to have difficult conversations
How to have difficult conversations
 
Introduction to Data Science
Introduction to Data ScienceIntroduction to Data Science
Introduction to Data Science
 
Time Management & Productivity - Best Practices
Time Management & Productivity -  Best PracticesTime Management & Productivity -  Best Practices
Time Management & Productivity - Best Practices
 
The six step guide to practical project management
The six step guide to practical project managementThe six step guide to practical project management
The six step guide to practical project management
 
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
 
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
 
12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work
 
ChatGPT webinar slides
ChatGPT webinar slidesChatGPT webinar slides
ChatGPT webinar slides
 
More than Just Lines on a Map: Best Practices for U.S Bike Routes
More than Just Lines on a Map: Best Practices for U.S Bike RoutesMore than Just Lines on a Map: Best Practices for U.S Bike Routes
More than Just Lines on a Map: Best Practices for U.S Bike Routes
 

Social & Facebook game space at a glance

Editor's Notes

  1. a