How to Drive Engagement & Revenue with Virtual Goods

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Social Gold CEO Vikas Gupta explains how to introduce virtual goods into your social game or application in a way that drives engagement and increased monetization. David King from (Lil) Green Patch provides a testimonial.

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  • nicely presented concepts...very informative

    can you please share the presentation
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  • I realize that this is a WWII game, but is there any option for generating revenue through product placement
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  • good!
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How to Drive Engagement & Revenue with Virtual Goods

  1. 1. How to Drive Engagement & Revenue with Virtual Goods Vikas Gupta | CEO | Social Gold vikas@jambool.com Game Developers Conference 25 March 09
  2. 2. Who am I? • Co-founder and CEO, Social Gold • Developer: Send Good Karma and a host of other social applications/ games • Lead Inventor: Amazon’s Flexible Payment Service
  3. 3. So what? I understand game development, payments and how those two converge in virtual economies
  4. 4. Who are you? A developer who has focused on game experience until now, and is ready to . . . • implement a virtual economy • optimize an existing economy
  5. 5. Who do you want to be?
  6. 6. Who do you need to be?
  7. 7. Who are your users? 59% of US online population: 144M Source: Entertainment Software Association and IGN
  8. 8. More Social than Non Gamers 40% more likely to go out to movies 50% more likely to play team sports 20% more likely to go out with friends Source: ESA & IGN
  9. 9. More Yuppie than Dorm Rat Majority are . . . 30+ married with kids HHI > $100K Source: ESA & IGN
  10. 10. New Focus: Connectivity/ Community Source: ESA Image: Jerome Sudan
  11. 11. Monetizing the Social Gamer • Subscriptions: appeal more to hard-core gamers, and even they can’t manage too many • Advertising: low ROI and disrupts game play • Virtual Goods: enhance game play and capitalize on social nature of today’s gamer
  12. 12. Building an Economy . Game: World War II Active Users: 125K Description: Use authentic WW2 weapons to combat with and against others
  13. 13. Defining your Sources . Users earn currency by • Logging in • Staying longer • Recruiting friends • Completing missions Or . . .
  14. 14. Defining your Sources Users earn currency by completing 3d party offers Or . . .
  15. 15. Defining your Sources Users purchase currency without ever leaving game
  16. 16. Defining your Sinks . Users can redeem currency for functional goods • Weapons • Armor • Vehicles • Expediting missions **Games also can include decorative goods or gifts
  17. 17. Driving Engagement . Virtual goods drive engagement by • Integrating closely into game mechanics (v. ads) • Enhancing game play (fighter plane v. bayonet) • Drawing user deeper into game more quickly (time v. money)
  18. 18. Managing your Economy • Launching your economy is the easy part • Managing is key: • Merchandise existing virtual goods catalog • Introduce new virtual goods regularly • Make currency as conspicuous and easy to earn/ buy/ redeem as possible • Optimizing is where you start to see real $$
  19. 19. What matters to you? • Your Economy • Transactions • Users • Goods • Your Profits
  20. 20. You can only improve what you measure
  21. 21. Transactions Number of transactions is a direct measure of the health of your economy Sinks Sources
  22. 22. Transactions Balance your sources and sinks
  23. 23. Transactions Know your Economy: How is currency created?
  24. 24. Economy Know your Economy: How is currency depleted?
  25. 25. Remember:You need enough data to create statistical significance
  26. 26. Users Who’s paying, and who is not?
  27. 27. Users How does spending behavior change with time or level in game? 40000 35000 Less than 1 year 30000 Less than 6 months Less than 3 months 25000 Less than 2 months Less than 1 month Less than 2 Weeks 20000 Less than 1 Week New Users 15000 10000 5000 0 1 10 19 28 37 46 55 64 73 82 91 100 109 118
  28. 28. Goods • How should you price your goods? • What do you want to optimize for? • Engagement (or usage)? • Revenue?
  29. 29. Goods Change prices, measure popularity
  30. 30. Goods Change prices, measure revenue
  31. 31. Analytics give you actionable data. What you do with them is your choice. e.g., pricing of goods? engagement? currency demand?
  32. 32. Revenue Virtual Currency is great Real Money is better
  33. 33. Revenue channels Compare different channels: Conversion
  34. 34. Goods and Revenue What goods drive people to spend real money?
  35. 35. Summary • Economics is all about measurements • You can create experiments and tune • What else would you measure? • Top Users • Game levels and user behavior
  36. 36. Case Study: (Lil) Green Patch . Developer: David King Active Users: 6.7M (Facebook Top 15) Description: Build a Green Patch with your friends to fight Global Warming Benefit: Completion of certain tasks saves 1 sq ft of Rain Forest
  37. 37. Why I use Social Gold . • Quick and easy API • Seamless, in-app payments • No acct creation (uses Facebook/ MySpace login) • Fraud controls • Customer Service
  38. 38. Testimonial “Social Good has assembled a stellar team of payments experience. We're super impressed with their understanding of the space and their attentiveness to developer needs. Their payments product is simple for developers to integrate and makes payments easier for users. Easier payments means lower friction for users and higher revenue for developers. We're looking forward to a continued and deeper relationship over time.” -David King (Lil) Green Patch
  39. 39. Questions? vikas@jambool.com mike@jambool.com

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