Interesting Differences • Bootstrapped •
Subscription Based • Spread virally without a social network • Deeper Content • Popular with kids • VC funded • Microcurrency based • Spread virally via a social network • Shallow Content • Nobody wants to play them outside a social network • Excludes kids
What is the “Pixie Dust”,
which a social network brings to games nobody wants to play, that magically makes them popular? Zynga with Facebook “Pixie Dust” = 210MM players Zynga without Facebook “Pixie Dust” = 12.5MM players
Was it… • “Social” –
Are “social games” really social? • Real identities – Do you really want all your friends, family and co-workers to know how you waste your time? – Do you really want total strangers to know all of your personal information just so you can play a game with them? • Something about the social wall – Every leading gaming destination has an “achievement” wall
Virality thrives on extremely low
distribution friction • Instant email list • Very simple mechanism for enabling and rewarding users for “infecting” and/or engaging • No registration barriers inside the SN bubble • No downloads • No payment barriers
How do you calculate the
value of viral currency? Each user during the viral growth phase is worth (roughly) the compound monetizable value of all future users they may invite minus the cost of serving them.
The Social Network Value Equation
On average an individual social network user’s monetary value can be described as: Potential Commerce Value + Potential Ad Value = Potential Virality Value + Potential Engagement Value You must learn to solve this equation for the user in order to decide whether you are asking for a credit card or giving free currency for attracting & entertaining others.
Viral Economics A + B
= The fact that content virality and engagement has some complex recursive relationship to the monetizable value of an individual has exciting business model ramifications because this relationship suggests that it is possible to transform virality and engagement into $$$
What is the monetary value
of MajiNoir to a social network? Romanian hi5 Member • Commerce value: $0 • Ad value: $.0001 • 34,199 friends…
Romanian hi5 Member • Commerce
value: $0 • Ad value: $.0001 • 34,199 friends… Answer? • $238/mo in advertising • $162/mo in commerce What is the monetary value of MajiNoir to a social network?
Viral Economics Continued… User with
monetizable value ZERO engages a user with monetizable value $Y doubling the high value users engagement and therefore monetizable value to $2Y • Thus un-monetizable user’s value becomes = $2Y/2? • Can the effective CPM value of low CPM advertising can be increased many fold by converting low value users engagement into high value content for richer markets?
hi5 is opening up access
to all of the technology infrastructure that enables Facebook to be highly viral and engaging, but puts the application at the center of the user experience instead of the social network portal. SocioPath: The Anti-Social Networking Platform for Social Games