This lecture will show how the dynamics of online audiences can be harnessed and discuss essential components of a sustainable online entertainment business. Perhaps more so than traditional media and entertainment firms, a direct interaction with their customer base allows online game companies to cultivate loyalty and long-term profitability. To do this effectively, however, requires an ongoing effort to understand audience preferences and behaviors that go beyond the usual surface-level market research. Here, I will present several key insights into online communities and how these may fit into a larger strategic approach.

1. Gaming the Social
Community, Measurement & Monetization
February 9, 2011
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2. Hello
overview
Joost
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3. Introductions
what we do
SuperData Research
independent research provider
specialized in digital goods measurement
multi-year seed funding in 2010
syndicated reporting
consulting services
client base: brand owners, developers, retailers, publishers, VCs, and
payment providers
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4. Methodology
how we do it
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5. Community
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6. Online Dynamics
different online communities show similar behaviors
Three different studies,...
User-Generated Content Online Discussion Virtual Goods Spending
maps created by unique user share of posts by unique user (%) avg. $ spent per transaction
...same community dynamics
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7. Successful Examples
commence emulation!
EVE Online
approx. 360,000 users
20K have been a subscriber for 8 years (!)
Estimated annual revenue: $25-$35MM
Skype
560 MM users
124 MM monthly actives (6.5%)
8.1 MM paying (1.45%)
$100 MM IPO filing (Aug 2010)
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8. Similarities
help people help you
Reward “Viral Whales”
• Community leaders
• Product evangelist
• Noob trainer
• Largest share of audience passive, reactive
Household fundamentals
• Prepaid --> gifting
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9. Measurement
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10. Measure Why?
identify key audience segment asap
Go beyond “game development vs analytics” discussion
• Not mutually exclusive
General insights are generally unhelpful
• Understanding your own customer is key
Virality constantly under pressure
• “rocket-ship growth is gone” (Playdom)
Internal: Optimization
• Audience segmentation
Overview
• Revenue drivers, KPI
External: Transparency
• Funding
• Age of licensing
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11. Measure What?
both industry-wide and game-specific metrics
Traffic: Daily, Monthly Lifetime Value
Users ARPPU
Channels ARPU
Virality Price Points
Monetization Seasonality
Demographics Overview Time of Day
Audience Segmentation Frequency
Engagement Number of Invites Sent
ROI Received
A/B Testing ...
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12. Measure What?, cont’d
identify valuable differences in user behavior
Geography Lifetime Avg. Expenditure Frequency (Avg.
(days) per Purchase Number of Purchases)
Germany 99.81 $12.51 41.18
Western Europe total 122.38 $14.25 20.3
Virtual Item Sales by Time of Day (hourly)
10%
8%
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0%
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By number of transactions By $ sales
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13. Measure How?
ghost in the shell
Availability of tools
• Google Analytics, Kontagent, Live Gamer, MixPanel, Omniture
• Custom: e.g. Toga (Large Animal Games)
Knowledge gap: need for designated driver
• Top programming talent generally assigned on front-end,
product-focused Overview
• Need to invest in, and train monetization directors & analysts
• Integrate into production process, communicate with
community manager
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14. Monetization
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15. Monetization
convincing people to pay
50%
Tailor service to your customer Share by Unit Sales
Share by Revenue (FB credits)
• Segmentation: upgrades for
25%
newbies, vanity for the elite
• Value offering: premium
0%
services for high rollers
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• Engagement: bundled
bo
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Bo
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specials, seasonality “Have you ever received a prepaid game card as
a gift?”
• Preferences: monitor
behavior and needs Yes
“My mom would
rather buy them
31.4% in the store than
online with a
No credit card.”
68.6%
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16. Payment Mix
allow customers to pay the way they want
Almost $1 billion of virtual
good sales transacted via
alternative payment
methods
Overview
Couleur Locale (mobile)
• Europe ~10%
• North America: 1%
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17. Outlook
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18. Outlook
what we think 2011 will bring
Arms race
Age of Licensing
Beyond FB
Overview
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19. Thanks!
joost@SuperDataResearch.com
@_SuperData
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