Business models trends - Game Connection America 2012

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ICO Partners talk at Game Connection America 2012 - current review and trends of video games business models

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  • 40% of revenue of RovioMind Candy : $100 M revenue merchandising 2011Ankama : big publishing and animation activities
  • Skylanders = 200 million sales last quarter, 20 million figures sold
  • 1st time spender promotion or discountFree currency to train users using cash shop
  • Koreanlegislation : probability must begiven.
  • Dream world : learning points = 60% revenue
  • Wild ones: focus on monetizingweapons, not maps, life, characters, clothingRevenue X4
  • Flurry : US ad spending : 1% on mobile vs 23% time share (more than web 22%)Offerwall = 30% Glu revenue before
  • Zoo World 40%Zynga 7%Alsoevolving
  • Business models trends - Game Connection America 2012

    1. 1. Biz models trendsDiane Lagrange - ICO Partners
    2. 2. About me• Ubisoft• Ncsoft• ICO Partners
    3. 3. PAY UPFRONT
    4. 4. Pay to accessService Product
    5. 5. Licensing/Merchandising/Transmedia
    6. 6. Physical
    7. 7. Experience
    8. 8. SUBSCRIPTIONS
    9. 9. Subscription gamesDungeon and Dragons Online juin-09 World of WarcraftLord of the Rings Online sept-10 Star Wars : Old RepublicChampions Online janv-11 EVE OnlineAge of Conan juil-11Aerrevan août-11 RiftCity of Heroes sept-11 Final Fantasy XIFallen Earth oct-11 Final Fantasy XIVLineage 2 nov-11 Dark Age of CamelotDC Universe Online nov-11 Mortal OnlineEverquest 2 déc-11 DarkfallStar Trek Online janv-12Gods & Heroes janv-12 PerpetuumAion févr-12 WAREverquest mars-12 TERAEarthrise TBA
    10. 10. Removing cap & ceiling
    11. 11. MICRO-TRANSACTIONS
    12. 12. State of microtrans• Granularity, no ceiling, flexibility for the design• Millions of sizes fits everybody > 1 size fits “all”• Very different philosophies and revenue models
    13. 13. Variety of micropayments models Zynga Pay rate 5.3% ARPPU $31 ARPU $1.64 Nexon Pay rate 9.9% ARPPU $16.5 ARPU $1.63 Aeria Games ARPPU $90 Est ARPU $15-20
    14. 14. Increasing conversion
    15. 15. Consumables/durables
    16. 16. From consumable to subscription
    17. 17. Increasing number of transactions
    18. 18. Types of items bought - Wooga
    19. 19. « Razor and blades »
    20. 20. Whale baits/anchors
    21. 21. Collectible/random items
    22. 22. Strategy: buy revenge
    23. 23. LoL : buy control, customization, time
    24. 24. RPG : advancement & time
    25. 25. Engagement vs monetization
    26. 26. ADVERTISING
    27. 27. Advertising : Mobile• Should grow, but slowly• Rovio Q1 2011 : 30% advertising• Evolution of formats• Loss of offerwall revenue
    28. 28. Social games advertising
    29. 29. PLATFORMS & BIZ MODELS
    30. 30. Mobile/tablet• F2P = 65% + revenue iOS& Android• Payment infrastructure took a while, not there yet on Android• Subscription : – Order & Chaos – Big Fish Games, Onlive iOS?• Advertising : minoritary, loss of offerwall revenue
    31. 31. Facebook• Mostly micropayments• Subscriptions: – Order & Chaos closed – Playdom games – Kabam working on hybrid model• Advertising – Mostly very low monetization games – Product placement
    32. 32. Console 2009 : $15M 2010: $30M 2012 : $39M first 3 months
    33. 33. Impact on development process• Analytics feedback loop• More frequent updates• Evolutionary design• Consumers are shaping the game • Vocal minority less important : Battlefield Heroes
    34. 34. Other models• Paid to play (Poker) – Acquisition tool , can it become a business model? – Mechanical Turk game? (protein fold) – Twitch.tv, Youtube• Cut on player transactions – Diablo 3 – IMVU, Second Life, Everquest did it before• More uncertain models – Non-profit microfinance game – Processing power
    35. 35. Conclusion• Future = many hybrid business models aggregated• Question = which are core, which are ancillary?• Direct in-game monetization always first step
    36. 36. Q&A
    37. 37. Thank you!diane@icopartners.comwww.slideshare.net/ICOPartnerswww.icopartners.com/blog@icodianewww.facebook.com/icopartners

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