Posts Tagged ‘monetize’

Freemium model tops Social Networks monetization list

Monday, February 23rd, 2009

During Social Media Week held in New York City, Abrams Research polled over 200+ social media founders, bloggers, journalists, entrepreneurs and high profile Twitterati members from across the US and Canada asking a simple question, ‘How should social networks be monetized?’  Other topics surveyed ranged from which social networks were the most important to them, to where they see facebook, twitter, linkedin, and other social networks headed, and more.

According to the survey, just under one third (thirty-two percent) said that they would most likely pay to used facebook, with linkedin taking a very close second with thirty percent, and twitter rounding out the top three with twenty two percent.

As far as monetizing social networks, the survey revealed that a “freemium” business model was most acceptable to the audience.  A freemium business model is a monetization model that allows users to use a ‘basic’ version of a service for free, and then seeks to add revenue via purchased upgrades.  A prime example would be Playfish’s ‘Who Has the Biggest Brain’ application that allows users to access core functionality for free, but offers a ‘Go-Pro!’ option; a one time fee paid by users to access premium content including more games, time trials, etc.  An overwhelming forty-six percent of respondents said that freemium was the way to go.  Other than twenty percent of those surveyed responding with ‘contextual/targeted ads’, other interesting monetization models paled in comparison.  Nine percent stated that social networks should monetize by charging for research, only 6.9 percent liked a subscription model, and traditional banner ads scored the lowest with only three percent liking the idea.

What exactly are social networking users looking for from the experience?

Twenty-four percent of respondents stated that the most critical feature to them is the status update, closely followed by twenty-one percent ranking the newsfeeds as must-haves.  Rounding out the top four are comments coming in at seventeen percent, and personal messaging taking home fifteen percent of the pie.  Not quite as impressive, yet still noteworthy are those ranking in at less than ten percent: uploading and sharing photos and videos, mass-messaging, and tagging and untagging.

And while facebook tops the list of social networks that users would be willing to pay for, twitter takes the top spot as ‘must haves’ for businesses.  Forty-five percent of those surveyed advised businesses to have a twitter account (and presumably interact with clients/customers).  LinkedIn nabbed second place with twenty-one percent, YouTube with nineteen percent, and oddly enough facebook took the number four spot with fifteen percent.

All’s good, so where’s the problem?

Of the top movers and shakers surveyed, twenty-nine percent said that the biggest problems facing social networks is the “inevitable slide into uncoolness” (myspace, what?).  15.3 percent stated that lack of advertiser interest would be their demise, and 13.4 percent found the ‘inevitable spam problem’ to be the final nail in the coffin.

Download and read the full survey available from Arbrams Research (pdf download).

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Stevie Case (aka Kill Creek) featured on Avault.com podcast

Friday, February 20th, 2009

fatfoogoo’s own Stevie Case has recently been interviewed by the Avault.com podcast team.  Speaking with Chris Micieli, Bill Bolton, and Mark Turcotte, Stevie joins the crew to talk about everything ranging from Stevie’s career as a pro gamer to micro-transaction powered games are how they are the future of gaming.

Speaking first to her role as Vice President of Business Development and Sales with fatfoogoo, Stevie lays out our technologies and how and why game development studios should be talking to fatfoogoo when they are ready to monetize their product.  Noting that microtransactions are a relatively new way to monetize gaming, Stevie goes on to explain that with the current state of the economy, combined with falling advertising rates, microtransactions are a great place to be.

“It’s a good way to get users to not only spend small amounts of money, which isn’t as intimidating, but it also makes games sticker and doesn’t really break game play,” explains Stevie.

Stevie also highlights a quintessential point of microtransactions: user generated content, “I think it’s really cool to see users be able to create their own content and then actually sell that; have it become a part of the game, and become a part of the world.”

When asked about how microtransactions and user generated content could effect the overall balance of a game (i.e. the ‘pay to pwn’ theory) Stevie comments, “It’s a valid concern; I think that the key is you’ve got to have great game design upfront, and you’ve got to take all that stuff into account.  A lot of people have tacked on this notion of a virtual economy later because it sounds like a good way to make money, but if you don’t design it in upfront, it can be challenging for those reasons.”

Coincidentally almost mirroring David Perry’s remarks at DICE 2009, Stevie says that when you create a virtual economy based game, you’re putting a large amount of power in the hands of your users, thus game design should be held to even higher standards.

Speaking briefly to microtransactions in the mobile space, specifically the iPhone, Stevie points out, “Microtransactions are prohibited within iPhone applications.”  She continues on to discuss what iMafia is doing with their unique “if you go buy our other app we will give you points in this app” approach, but “as of today microtransactions are not officially supported.”

When asked about fatfoogoo’s list of clients, Stevie talks about our European clients, our involvement with Sun Microsystems via project darkstar, and hints at our upcoming release with a major US partner, and our involvement with a European based FPS/MMO.  But more on that later….

Give the podcast a listen in it’s entirety at Avault.com (episode #20).

 

PlayMesh introduces virtual goods monetization to the iPhone via iMafia

Monday, January 26th, 2009

Over the past year, we’ve seen a dramatic increase in social games, those that are played over social networks like facebook, myspace, Friendster, etc., but if San Francisco based PlayMesh have their way, 2009 could be the year of social games making the leap to mobile platforms. What’s more, PlayMesh’s iMafia has found an innovative solution to offering virtual goods on mobile platforms, traditionally a challenge for most iPhone applications.

If you’re on Facebook, there’s a pretty good chance that one of your friends has at one point or another tried to recruit you to join their ‘Mob’ via Mob Wars.  Building on the popularity of this game play format, PlayMesh co-founder Charles Ju says that the time is ripe to bring the concept from social networks to the iPhone.  iMafia, which was released on Friday, has been on a juggernaut course over the weekend and already ranks at number 55 (as of Monday morning, 26 January 09) on the Apple iPhone AppStore.

Capitalizing on the iPhone’s unique UI, iMafia players use screen gestures to navigate through the game world map.  Actions such as entering a building are accomplished via a simple tap function.  Similar to Mob Wars and other ‘domination’ type games, iMafia’s concept is simple, yet highly addictive: climb the ranks of a crime family, each ‘job’ requiring more and more skills/abilities.  Billed as (technically) an MMORPG, players can play against each other (and as it’s turn based, players do not need to be online at the same time), and may purchase virtual goods along the way to help them with quests.

So far, so good.  Not really much we’ve not already heard.  But here’s where things become interesting.  Ju says that iMafia is a mold breaker, as it successfully relies on virtual goods sales to monetize a social network in a free-to-play game context.

But hold on a second…Apple doesn’t allow developers to present free-to-play’s that rely solely on virtual goods sales to monetize, right?  I mean, call me crazy, but if this is the case, wouldn’t developers be giving away their apps as free-to-plays and seeking alternative payment options for monetizing their virtual goods?  Remember, the BigMac keeps a healthy 30 percent of all revenue generated from paid game sales, while others’ fees can be dramatically lower.  What gives?

What gives is that PlayMesh has put itself in a win-win situation, by circumventing Apple’s rules in so much as purchases of the companies’ other titles, Chess Puzzles, iType and Speed Shapes for example, count as ‘payments’ for virtual goods within iMafia.  Purchasing ‘Chess Puzzles ‘for example would grant the player premium points that can be used to increase your health, purchase bigger and better guns, or recruit more mafia members to your clan within the game.  However, what’s interesting to note is that the free versions of these applications have been removed, and are being replaced by paid versions, pending Apple’s approval.  This should be an interesting one to watch development, as it seems as though there’s more than just an App approval process going on here.  If Apple approves these paid applications, and PlayMesh uses them to fund virtual goods within another of it’s applications, the precedent is set, and I wouldn’t be surprised to see a deluge of other developers falling in line ASAP.

http://www.vimeo.com/2913153
 

Perfect World to bring free-to-play Pocketpet Journey West to North America as Ether Saga Online

Monday, January 19th, 2009

Having successfully launched ‘Pocketpet Journey West’ in the Chinese market in October 2008, popular free-to-play, microtransaction based game developer and operator, Perfect World is now bringing the new title to North American shores.

Perfect World has officially announced that closed beta testing for the North American version of ‘Pocketpet Journety West’ will begin on Febraury 10, 2009.  Repackaged as ‘Ether Saga Online’, ‘Pocketpet Journey West’ will be owned and operated by Perfect World’s U.S subsidiary, Perfect World Entertainment Inc.  The title has been modified to cater specifically to North American audiences.

‘Ether Saga Onlne’ is centered around ‘Journey to the West’; one of the four classical novels of Chinese literature.  The game features and incorporates unique and unmistakable references to the novel, and play involves an innovative pet raising system.  Perfect World says that ‘Ether Sage Online’ contains a number of unique features that help it stand out from other online pet raising games.  Perfect World will offer ‘Ether Saga Online’ as a free-to-play title, and monetize the game with microtransactions via their zen in-game currency form.

“I am pleased with our progress on the introduction of ‘Ether Saga Online’ to the North American market. I believe the closed beta launch will generate broad interest in our online game given its appealing design and unique in-game experience. Our further expansion into the North American market will accelerate our evolution into a comprehensive international online game developer and operator,” says Perfect World CEO Michael Chi.

‘Ether Saga Online’ is Perfect World’s sixth MMORPG, with other titles including ‘Perfect World,’ ‘Legend of Martial Arts,’ ‘Perfect World II,’ ‘Zhu Xian,’ ‘Chi Bi’ and ‘Pocketpet Journey West;” and a 3D online casual game: ‘Hot Dance Party.’

Visit ‘Ether Saga Online’ at http://eso.perfectworld.com/

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Google makes good with AdScape promise

Friday, October 10th, 2008

The day has finally arrived: Google is now going gaming.  A recent post at the AdSense blog made the official announcement of the new “AdSense for Games”, the new Google advertising platform in development for over a year that takes aim at monetizing the vast amount of currently under-utilized browser based Flash game market.  However, Christian Oestlien, senior product manager for the AdSense for Games beta project said that Google has not ruled out testing with some larger titles.  For the larger testing ground, the big G has already signed deals to work with PlayFish, Mochi Media, Demand Media and Konami.

Advertisements will collect revenues through the number of cost-per-impression and cost-per-clicks divided between Google and the developer.

According to ComScore, Flash games garner an estimated 25% (or roughly 200+M worldwide) of all internet users attention.  This group plays at least one game per week, and has show a 17% growth rate year after year.  Last year, the Yankee Group reported that the overall video game advertising market reached a staggering $77.7M mass, and projects almost $1B by the end of 2011.

Google’s been making waves in the in-game advertising market ever since acquiring AdScape over a year ago.  But they’re not alone in the quest to successfully monetize games via in-game advertising.  Microsoft has also been quite active, purchasing Massive in early 2006, perhaps setting the stage for Google to get in the game.  Literally.  Google snatched up AdScape Media for a cool $23M shortly after Microsoft’s Massive buy.

Based on the video below, it looks like developers will have full flexibility as to exactly where, when, and how their ads are displayed in-game.  In other words, integrating Google’s AdSense for games looks as simple as inserting a line of code into flash content to deliver targeted ads.  Some of the advertisers already included in the program include eSurance, Sprint, and Sony Pictures Entertainment.

YouTube Preview Image

Google is NOT however making this a wild west, free for all.  Developers have some strict requirements to me including a minimum 500,000 plays per day, an 80% US or UK based traffic composition, and can SDK integrate, amongst others.

Double Fusion, a prominent in-game advertising network, CEO Jonathan Epstein spoke with Daniel Terdiman of CNET explaining,

It confirms for all parties [...] that this space is of interest to one of the largest media companies in the world. Google does not enter into markets that don’t have billion dollar-plus potential for them [...] The battleground here is not between ourselves and Massive and Google [...] it’s getting games their rightful share of the ad dollars, as opposed to TV, print, and [traditional] online ads.”

 

David Perry’s 33 ways to monetize games

Sunday, August 17th, 2008

David Perry recently laid out an impressive slideshow over at Business Week with 33 examples of how to monetize games.  Perry a 27 year industry veteran has over $1 Bn of retail game sales receipts to his credit, and co-founder and chief creative officer of Acclaim games.

Perry fully admits in the article that the rapid and expansive growth of the gaming industry will and should probably make his 33 ways list obsolete rather quickly.  Perry sees games that fall into the ‘social’ catagory as those with the most explosive growth and potential.  Siting an NPD Group study, Perry notes that 15% of retail game sales go to the adult ‘mature’ audience, and 85% to everyone else.  Social games are asynchonus (meaning, busy players take turns going back and forth at each other, and do not necessarily need to be ‘playing’ at the same time) and fall nicely into the mid-zone between these adult ‘mature’ gamers and all others.  In other words, covering the most amount of the market with the widest net.

Distribution methods are also covered by Perry.  Nintendo, Microsoft, and Sony, former kings of brick and mortar distribution methods, have changed their tune and opened online distribution channels.  As soon as ISP penetration reaches the tipping point, Perry sees physical media such as cartridges and DVD’s going the way of the dodo bird.  The players to watch in the digital distribution battleground?  Facebook, MySpace, Google, and Apple.

While Perry’s list covers a wide range of money making gaming ideas, his microtransaction side is of particualr significance, pointing out even staunch anti microtransaction publisher Blizzard’s recent dipping of toes into the ‘let’s measure their reaction’ pool:

Micro-Transactions

These are small, impulse-driven purchases bought for reasons of vanity, saving time, better communications, or even moving up a level more quickly. (Levels are a player’s ranking within a virtual society.) They’re generally paid for using virtual points, either earned in the game (by playing), or bought for real money (which is a massive time-saver). A new trend is offering virtual items in exchange for access to a player’s real-world friends. So for example: “You can have this magic sword, if you invite a friend to play.” Getting that balance right can mean stunning revenue growth, which makes it even more important for you come up with offers the gamers really want. This technique works well on social networks like Facebook as friends are just a click away. If you can get more than a 1 to 1 ratio, the game goes viral, which results in exponential growth. That’s the goal here.

The image that Perry chose?

Pointing out Blizzard’s new ‘recruit a friend’ campaign whereby new comers and those that recruited them can now gain ‘triple xp’ and summon each other to each other, thereby saving a great deal of time.  The recruiter also has the opportunity to receive an exclusive in game mount if the recruitee follows through on certain terms and conditions.  See it any way you want…but it looks like a crack in Blizzard’s armor.

View Perry’s article at Business Week.

View Perry’s slideshow at Business Week.

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