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<ul><li>Lessons from the Inside: Building and Optimizing a Virtual Goods Business </li></ul><ul><li>Lee Clancy </li></ul><...
Agenda <ul><li>About IMVU </li></ul><ul><li>Lessons from IMVU on Virtual Goods </li></ul><ul><li>Q & A </li></ul>
What’s IMVU? An online community where members use 3D avatars to meet new people, chat, create and play
Company Overview <ul><li>Founded in April, 2004 </li></ul><ul><li>Based in Palo Alto, CA </li></ul><ul><li>70 employees </...
<ul><li>3D avatars  </li></ul><ul><li>Virtual goods </li></ul><ul><li>45M registered users </li></ul><ul><li>10M uniques/m...
Attractive Demographics Cumulative Registrations <ul><ul><ul><li>70% Female </li></ul></ul></ul><ul><ul><ul><li>60% 18+ yr...
User-Generated Content 3+ Million Virtual Items
Celebrating with Mohawks
Shameless Promotional Plug We’re Hiring! www.imvu.com/jobs
Lessons from IMVU on Virtual Goods
IMVU > Life? <ul><li>Virtual yes, but no less real… </li></ul>… with complex social dynamics… … and its own evolved economy
IMVU on Virtual Goods Success Currency Controls Creative Community
Creative Decision Considerations Which virtual goods are valuable to users? <ul><li>Are  you  going to pick the hits? </li...
Currency Decision Considerations What is your currency strategy? <ul><li>Purchased currency vs. earned currency? </li></ul...
Community Decision Considerations Which segments can you serve? <ul><li>Do your goods appeal to multiple segments? </li></...
Controls Decision Considerations How much customer support is necessary? <ul><li>How to protect against virtual identity t...
IMVU on Virtual Goods Success Currency Controls Creative Community
Q & A
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GDC: Imvu Lessons From The Inside

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Presented at the Game Developers Conference 2010, San Francisco, CA 3/9/2010

Virtual goods are all the rage at the moment, but what does it take to actually build a successful, growing business around them? In this difficult economy, many businesses are looking into virtual goods sales as a new and lucrative revenue stream, but what challenges and pitfalls should these companies consider when launching or growing such efforts? A leading 3D virtual world and social network, IMVU’s 40 million registered users purchase a wide range of user-generated virtual goods, from clothing for their avatars to furniture for their virtual rooms. These products are made by over 100,000 registered developers, all outside the company, but they drive 85% of IMVU’s growing revenue. Via real-world examples and data-driven learnings, this session will share practical insights from IMVU's years of experience successfully building and monetizing the world's largest catalog of user-generated virtual goods.

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GDC: Imvu Lessons From The Inside

  1. 1. <ul><li>Lessons from the Inside: Building and Optimizing a Virtual Goods Business </li></ul><ul><li>Lee Clancy </li></ul><ul><li>SVP Product Management & GM Direct Revenue </li></ul><ul><li>IMVU Inc. </li></ul>
  2. 2. Agenda <ul><li>About IMVU </li></ul><ul><li>Lessons from IMVU on Virtual Goods </li></ul><ul><li>Q & A </li></ul>
  3. 3. What’s IMVU? An online community where members use 3D avatars to meet new people, chat, create and play
  4. 4. Company Overview <ul><li>Founded in April, 2004 </li></ul><ul><li>Based in Palo Alto, CA </li></ul><ul><li>70 employees </li></ul><ul><li>3 institutional rounds </li></ul><ul><li>$30M raised </li></ul>
  5. 5. <ul><li>3D avatars </li></ul><ul><li>Virtual goods </li></ul><ul><li>45M registered users </li></ul><ul><li>10M uniques/month </li></ul><ul><li>$30M+ revenue run rate </li></ul><ul><li>Profitable </li></ul>Business Snapshot Cumulative Registrations <ul><ul><ul><li>Registered Users </li></ul></ul></ul>
  6. 6. Attractive Demographics Cumulative Registrations <ul><ul><ul><li>70% Female </li></ul></ul></ul><ul><ul><ul><li>60% 18+ yrs old </li></ul></ul></ul><ul><ul><ul><li>60% USA </li></ul></ul></ul>
  7. 7. User-Generated Content 3+ Million Virtual Items
  8. 8. Celebrating with Mohawks
  9. 9. Shameless Promotional Plug We’re Hiring! www.imvu.com/jobs
  10. 10. Lessons from IMVU on Virtual Goods
  11. 11. IMVU > Life? <ul><li>Virtual yes, but no less real… </li></ul>… with complex social dynamics… … and its own evolved economy
  12. 12. IMVU on Virtual Goods Success Currency Controls Creative Community
  13. 13. Creative Decision Considerations Which virtual goods are valuable to users? <ul><li>Are you going to pick the hits? </li></ul><ul><li>What role do brands play? </li></ul><ul><li>How should they be priced & promoted? </li></ul>How should they be built? <ul><li>In-house vs. outsourced vs. user-generated? </li></ul><ul><li>How often do you need new content? </li></ul><ul><li>If UGC, what creation tools do you support? </li></ul>What properties do they have? <ul><li>Are they scarce or plentiful? </li></ul><ul><li>Do they last forever or expire? </li></ul><ul><li>Can they be traded, sold, stolen, or copied? </li></ul>
  14. 14. Currency Decision Considerations What is your currency strategy? <ul><li>Purchased currency vs. earned currency? </li></ul><ul><li>Do you need more than one currency? </li></ul><ul><li>Can users transfer or gift currency? </li></ul>How should the economy be structured? <ul><li>Can you measure supply & demand? </li></ul><ul><li>If users cash out currency they earn? </li></ul><ul><li>Can third-parties sell your currency? </li></ul>How can users pay for the currency? <ul><li>International & “unbanked” solutions? </li></ul><ul><li>How many payment methods are enough? </li></ul><ul><li>Do you have a one-click billing relationship? </li></ul>
  15. 15. Community Decision Considerations Which segments can you serve? <ul><li>Do your goods appeal to multiple segments? </li></ul><ul><li>Are there venues for self-expression? </li></ul><ul><li>How well does each segment monetize? </li></ul>How do virtual goods drive stratification? <ul><li>What benefits do premium members get? </li></ul><ul><li>Value of goods for new vs. tenured users? </li></ul>How can you facilitate connection? <ul><li>What venues exist for users to self-organize? </li></ul><ul><li>Can you foster a gifting etiquette/culture? </li></ul>
  16. 16. Controls Decision Considerations How much customer support is necessary? <ul><li>How to protect against virtual identity theft? </li></ul><ul><li>How much support for free vs. paid users? </li></ul><ul><li>When to moderate user-to-user issues? </li></ul>What policies and policing are necessary? <ul><li>If UGC, what goods are appropriate or not? </li></ul><ul><li>If UGC, what if a good is reclassified? </li></ul><ul><li>Legitimate flagging vs. griefer flagging? </li></ul>How will fraud be managed? <ul><li>In-house vs. outsourced? </li></ul><ul><li>What percentage of orders require review? </li></ul><ul><li>How should secondary markets be managed? </li></ul>
  17. 17. IMVU on Virtual Goods Success Currency Controls Creative Community
  18. 18. Q & A

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