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Nima Pourshasb Presentation

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Nima Pourshasb Presentation

  1. 1. Digital Media PropertiesLessons from Social Games to Monetizetheir FanbasesNima PourshasbVP, Strategy & Corporate Development December 1st, 2010npourshasb@livegamer.com
  2. 2. Live Gamer Overview Micro‐transactions: Complete solution  for virtual goods and digital content e‐ commerce Billing & payments, virtual currency &  e‐wallet, storefront, merchandizing,  analytics, player‐to‐player trading Offices in NYC, Palo Alto and Seoul 90 publishers, 150 titles Focus on online games. Now moving to  l other digital entertainment 2
  3. 3. Digital Entertainment MT opportunity is stillnascent US Digital Media & Entertainment  g will be $134BN by 2014 (PWC) Music, Sports, TV/Cable, Print Music Sports TV/Cable Print Any IP with fan base community Now at inflection point with  respect to microtransactions and  virtual goods virtual goods 8 lessons digital media properties  have learned from observing social  gaming 3
  4. 4. 1. They like what they see… Economics ‐ Revenue run rate ‐ COGS of virtual goods ‐ Upfront investment: $120K  f $ to develop Farmville ‐ Derisking a content business Accretive revenue stream Existing revenue streams are  struggling Source: Barclays Capital 2010
  5. 5. …and they know they need to move in thatdirection Digital transition continues g
  6. 6. 2. Don’t need to make the “next Farmville” Don t next FarmvilleInitial wave of M&A activity targeted at purchasing game developers ‐ Disney buys Playdom ($763MM) ‐ Warner Brother buys Turbine ‐ MTV buys Social ExpressLight game mechanics and dynamics“Gamify it and they will come…and  Source: BunchBallthey will stay…and life will be betterbetter”  6
  7. 7. 3. Their fan communities already display behaviors that drive virtual goods commerce commerce…‐ Competition:  Who is the biggest  fan?‐ g/ Gifting / enhanced communication‐ Self‐expression‐ Insatiable demand for content 7
  8. 8. … and the social gaming framework fits directlyinto the online fan community experience EASY TO PAY COMMUNITY COMPETITION INSTANT CLEAR GRATIFICATION GOAL SUPER USER S S THE 1% THAT PAYS SOCIALIZE SELF-EXPRESSION 8
  9. 9. 4. They already have the whales & the superusers Already invested in: user acquisition, user retention,  engagement, transition from passive to active to paying j p g $ , Whale: Bonjovi VIP package: $1,750 Conversion to paying users > 1‐5% 9
  10. 10. 5. They have high quality content Archive libraries, cut scenes,  behind‐the‐scenes, interviews y g p Content is dynamic: e.g. sports  results, tours, new albums, new  editions, new season 10
  11. 11. 6. They get e-commerceMerchandizing & sales optimizationImportance of payment methodsFamiliar with reporting challenges (e.g. artist royalties) 11
  12. 12. 7. They really like earned virtual currencies Strong incentive rewards for fans Long list of desired behaviors 12
  13. 13. 8. They know that fans will follow them to theexperience Marketing channels: Email groups,  fan websites, PR, events g Interaction with the IP is significant  part of the experience 13
  14. 14. New wave in MTX: Monetization of fanbasesJust startingOpportunity for entire social gaming ecosystem: gamification, microtransactions, virtual goods, game design and development,  , g ,g g p ,advertisingImportant implications on market size and definition of social gamingImportant implications on market size and definition of social gaming 14
  15. 15. Thank you!Nima PourshasbVP,VP Strategy & Corporate Developmentnpourshasb@livegamer.com 15

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