Posts Tagged ‘revenue streams’

SPIL GAMES – world’s top casual games destination

Wednesday, March 11th, 2009

Casual, free-to-play games portal SPIL GAMES saw a 75% increase in traffic and revenue year-over-year in 2008

SPIL GAMESSPIL GAMES provides over 4,000 online casual games through over 50 localized game portals in almost 20 languages.  Through a series of smart segmentations, SPIL GAMES is able to target Families – gamesgames.com, Tweens – agame.com, and Girls – girlsgogames.com.
According to recent comScore data, SPIL GAMES’ worldwide traffic grew 75% in 2008, resulting in the company jumping from the number 5 spot in early 2008 to the number 1 spot by years end.  SPIL GAMES itself is reporting a 269% increase in traffic from the United States as well as a global revenue growth of 125% over 2008.

And it’s not just the US market that has taken notice.  The casual gaming giant saw increases in traffic from many other territories across its network.  After the US, the United Kingdom saw an increase of 113% year-over-year, 52% in France, and 19% in Germany.  These traffic increases are not just a coincidence, as SPIL GAMES’ greatest concentrations of advertising revenue streams occur in the United States, the United Kingdom, the Netherlands, Germany, and France.  The team works closely with advertising partners from around the globe to develop ad solutions and provide in-game advertising seeding that reaches targeted audience segments.  Ultimately, this makes SPIL GAMES not just an attractive destination for gamers, but for advertisers seeking the captivated attention of a highly valuable market.

“We are particularly proud of reaching the number one ranking in casual game portal networks worldwide. SPIL GAMES is a stand-alone, fully-dedicated and independent portal network, while competitors like Yahoo! Games and MSN Games are general portals with a channel for casual games. And, over the last year, we’ve been dedicated to growing our audience through a strategy focused on providing quality, fun-to-play, localized, and segmented portals,” said Peter Driessen, CEO of SPIL GAMES.

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China’s IGA market poised to pounce in 2009

Wednesday, January 14th, 2009

In game advertising started in the Chinese market back in 2007 with a few game operators casually slipping a bit of code into some of their games, with a modest $8.77M ROI.  While this might seem a pretty decent take on an ‘experiment’, according to iResearch, it accounted for only four percent of the market’s total revenues of approximately $2B.

Fast forward one year later, with Chinese IGA revenues topping out at $19M.  Still a relatively small number in the overall scheme of things, but other Chinese firms started to take notice, with several independent third-party IGA providers popping up like daisies.

Two of China’s largest IGA providers, In-Game Media and Bihu.com both believe that the solid foundations laid over the past few years, combined with the current global economic downturn have prepared the market for explosive growth.

Bihu.com

Established in 2004, Bihu previous provided in-game value added services, i.e. in-game messaging, etc.  In 2008 they decided to regroup and refocus, turning the torchlight on in game advertising.  Back in April, Bihu announced their own independent IGA system with allows game developers and operators to insert advertising code into a game without altering the core technology.  Apparently, this was a wise move on Bihu’s part, as their client list shot up from 2 to 10, with major players Dell, Samsung and Intel among the roster.

“With 10 game firms accounting for over 20 online games, we have formed an online-game advertising network, which is a basic step toward attracting advertisers,” says Li Liujun, founder and CEO of Bihu.

Li says that the IGA market in China has been partially held back by the success of virtual item sales, and convincing gaming companies to form IGA relationships to diversify revenue streams.  “China’s game firms mainly earned money through the sale of virtual products, which has been very profitable. This means they were lacking in motivation to find new revenue models,”.  He also points out that a number of developers were a bit skeptical, as inserting IGA’s would require an alteration of the core code of the game, potentially having a negative impact on the game itself.  “Our independent system that can insert adverts without changing a game’s code helps drives our business,” says Li.

Li views the global financial downturn as a time ripe to harvest the benefits of IGA, as many companies will seek to lower costs, and invest more of their advertising budgets in the emerging online media.

In-Game Media

Echoing Li’s statements, strategy director at In-Game Media, Johan Wong says, “People will likely cut down on consumption and stay at home this year, which could lead to an increase in the number of game players,”

Given the global tightening of the collective belt, Wong predicts the Chinese market will see a notable increase in the overall average age of those playing online games.  This ‘raising of the bar’ will open a number of IGA opportunities for Chinese firms ranging from high(er) priced consumer goods and real estate.

Still a relative newcomer, opening in January of 2008, In-Game Media, a subsidiary of Chinese online giant Shanda Interactive Entertainment Inc. had only been delivering IGA to Shanda’s own titles.  But in December 2008 the company opened it’s doors to further expansion, signing contracts with 20 games companies across China.

Over the course of 2008, In-Game Media developed a number of IGAs for Shanda, their most successful involving the Puma brand in Shanda’s Crazy Kart racing game.  In-Game Media was responsible for the Puma branding of virtual characters clothing, which offered users the opportunity to enter and participate in specialized promotional races via the Puma website.

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SOE’s The Agency now looking at microtransactions and IGA

Friday, November 28th, 2008

Sony’s upcoming title ‘The Agency’ will not be looking at a subscription based model, but rather in-game advertising and microtransactions as steady revenue streams.

The Agency presents a unique quandary for SOE – how do you build on-going revenue streams into a title that spans the gap between MMO’s and FPS’s?  The first group is used to monthly subscriptions and a rich virtual world.  The second group has no experience with subscriptions, and expects plenty of shoot ‘em up, and is less concerned with playing with others, or simply just shooting them.

While SOE is carefully studying the market reaction to it’s free-to-play title Free Realms, which earlier this week released a line a Topps collectible cards as an additional income stream, and noting what does and what does not work for the community as a whole, all the while making a title enjoyable by all.
Edwin Evans-Thirlwell from Kikizo.com gets the ‘Scoop of the Week’ award, with his outstanding interview with SOE’s Senior World Designer Kevin O’Hara.  Some highlighted quotes include:

“The Agency is our online persistent shooter,” he says. “We’re not generally using the term MMO, although we do put a lot of MMO abilities that we’ve learned from our other projects into it. We really want to first and foremost be an action shooter as a game, which means first person or third person view, which really brings in the crowd who like that type of visual experience where when you aim and shoot your skill is important.”

“We’re acutely aware that shooter players are not used to playing monthly fees, so I doubt we’ll go for an outright $15 a month, which works on some of our other projects. So we’re checking out Free Realms to see how they’re going to do with their micro-transactions, and we might incorporate some of that. We’ll definitely have some ad revenue models.”

Having a look at various screenshots and trailer for The Agency, all I can say is, I can haz now plz?  I personally I’m not a big player of FPS’s, but this one might just drive me over to the dark side.  It looks like this super slick spy shooter would be a perfect place to drop the occasional $20, to pick up a silencer, a sniper scope, and oh, just for kicks, let’s toss a bazooka in there.  The rich textures and landscapes, including urban environments lend themselves well to un-obtrusive IGA’s.

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Red Bull and Headshot: one opinion about micro-transactions

Sunday, September 7th, 2008

While free-to-play, micro-transaction based titles continue to be released into the market, gamers continue to argue and voice concerns of the ‘unfair’ game balance that these systems have the potential to present.
Obviously micro-transaction revenue streams offer small and growing publishers and developers huge potential (and a relatively low time-to-market process when using fatfoogoo’s software), these publishers still must listen to the customer while producing a product that is in a sense, for sale, just not in the ‘traditional’ sense.

The pitfall and issue that gamers raise is the unfair ‘pay to compete’ or my personal favorite ‘pay to pwn’ method.  One of the surefire ways to skirt the issue altogether is to offer micro-transactions as only a system for in-game socialization and customization.  EA’s Battlefield Heroes is doing exactly this.  All micro-transactions within the game are for character customization only.  And who can fault them?  This is EA’s first major foray (and testing ground) into the micro-transaction field, and it’s probably a wise move to try to please the largest amount of people.  With that said, on the other hand, I think we can all admit that the option to purchase the Sword of a Thousand Truths does seem a bit more appetizing than a new leather trench coat.

Enter stage left the marketing and copywriting department.  The trick here is to find the right nomenclature to get the point across without generating a huge backlash.  It’s not that publishers are trying to hide anything, but the North American market has already developed a predisposition to the term, and immediately jumps to the ‘pay to pwn’ supposition.  Granted, I’m generalizing here, but the haters are often the most vocal in their opposition.

One direction develpers can take is the phrase ‘pay-to-win’.  Players of any MMO (myself included) will always seek out better gear and methods of beating a particularly difficult challenge.  Whether it’s running back to the Auction House to pick up a few more potions, or farming a bit of buff providing food to eat before the battle, players will do it.  The downside to providing a ‘pay-to-win’ micro-transaction is that it then DOES provide an unfair game advantage.  By providing this unfair game advantage, publishers have just cut off their nose to spite their face.  In other words, by providing this advantage, the player thereby removes the ‘challenge’ of the game…the thing that keeps them interested in the first place.

The opposite side of the coin is to reduce to advantages of said micro-transaction.  While this preserves a bit more of the game balance and overall perception of fairness, the micro-transaction item has thereby been so watered down that players are bound to be disappointed by the value of their purchase.  This disappointment leads to even less transactions, and eventually stoppage of play.

Hang on one second while I down a Red Bull and munch on a Headshot bar.  Right…Ok.  Back.  Fired up.  Ready to Go!

While that might be a bit of an extreme example, you get my point.  If you want to think about micro-transactions as temporary boosts in blood sugar levels and heightened senses of awareness, you might just be on the right path to providing overall customer satisfaction.  By providing minor, brief enhancements that might perhaps unfair advantages, you’ve satisfied the customers desire to obtain über status, if only temporarily.  On the other side of the coin, by providing this advantage to be used against a difficult challenge, it only provides an advantage for a limited time, thereby maintaining overall game ‘fairness’.  This also follows the average lifecycle for an MMO player: constantly moving in and out of tough challenges and short-lived situations.

By providing micro-transactions via simple ‘click to use: lasts 2 minutes’ items, publishers are providing players with relative ‘instant gratification’ with satisfying, yet reoccurring micro-transactions that will continue to deliver a steady stream of revenue.

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Consoles expected to generate $8 billion by 2013

Friday, September 5th, 2008

Our friends over at Parks Associates have recently released some more outstanding research and predictions regarding the gaming industry.  Their most recent report: Connected Consoles: Gaming, Media, and Beyond predicts that gaming console revenues will reach a staggering $8 billion by the year 2013.

Parks Associates predicts that revenue streams from digital video distribution (think Xbox/Netflix), downloadable games and content, virtual worlds and avatar-based microtransactions, multiplayer gaming services, and dynamic in-game advertising will account for these numbers.

“Broadband connectivity, now a common feature for game consoles, is a key enabler for new business models,” said Yuanzhe (Michael) Cai, Director of Broadband and Gaming, Parks Associates. “Among the different online revenue opportunities, digital video distribution and downloadable games and content are the most promising.”

The reports goes a step further to reveal that among the “big three” console leaders (Xbox, PS3, and Wii), Microsoft currently dominates the online content and service market, but Sony and Nintendo are making strong headway into the field as they ramp up their base of connected customers and diversify monetization models.

“Led by Microsoft’s success in Xbox Live, all three console makers are dreaming up many innovative offerings to entice console households to get connected and spend more money,” Cai said.
In addition to top findings on the current state of console play, Parks Associates study even goes a step further and analyzes new console related capabilities, services, and business models.  These new models include: online multiplayer gaming, virtual worlds, dynamic in-game advertising, and digital delivery.  The study outlines the impact of game consoles on other industries and forecasts revenue growth and market share.

To hear more from Yuanzhe ‘Michael’ Cai, be sure to attend his session “Games of Tomorrow and the Future of MMOGs”  at the Digital Media Wire’s NY Games Conference on September 26th.

 

fatfoogoo at the Games Convention and Developers Conference

Monday, August 18th, 2008

The Games Convention which kicks off in Leipzig, Germany this Wednesday and continues through Sunday in will see two equal sides of fatfoogoo. CEO Martin Herdina will be speaking at the GCDC (Games Convention Developers Conference) about in-game economies and item trading, while Loki and DT will be scouting the floor, reporting on and talking to gamers about the newest trends in various multiplayer games.

Many publishers have expressed interest in or are currently in search of additional revenue streams for their virtual worlds. Discounting the ‘traditional’ subscription fee, thousands of developers are either already in the game or standing at the starting line with free to play titles springing up almost everyday. The problem? How do we monetize it and recoup some of (read: ideally all of) the development costs? If the already established gold and item trading system (aka Blizzard) wasn’t already the Goliath these David’s are staring down, more and more suppliers are shying away from ‘Secondary Market’ third party suppliers. fatfoogoo has comprehensive experience with developing, managing, and providing ‘ready to go’ in game ecosystems, which makes it the ideal partner for a number of these publishers. fatfoogoo can function either as the Primary Trading platform or an Add-on marketplace. Combine this functionality with Comscore’s data: 32% of all Internet users play online games – and they’re prepared to spend money on it, along with the NPD Group’s recent study stating “…more than half of the Extreme Gamers and just over a third of Avid PC Gamers said that they would definitely download a feature to enhance a specific game that they own.”

Another interesting topic being covered in at the GC is the future of specialty trading. Not exactly new, but the genre is…eSports. Could we be seeing microtransactions being applied to “coach’s hours” whereby players receive special tips and tricks on how to command in-game mastery? Stay tuned as developments continue….

Martin Herdina is scheduled to speak on Wednesday morning, delivering his talk: A New Revenue Stream – Legitimizing the Trading within a Virtual Market. fatfoogoo is in good company, as Acclaim co-founder David Perry will deliver the Keynote speech with 125 other speakers and approximately 1000 industry participants discussing the future of the gaming industry.

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Fatfoogoo goes b2b with bbq flava

Wednesday, June 4th, 2008

Focusing not only on the needs of the player alone, after careful research and consideration, your favorite foogoos are now opening the doors to partnerships with individual game publishers. No worries, the current state of fatfoogoo isn’t going anywhere, and we’ve still got your back for all things trading. We’ve simply added another dish to the menu.

We took a long hard look at not only the technologies that we’ve developed in house, the experience and knowledge that we’ve gained, but also at what players and publishers across the world are looking for in a gaming experience. Combine that with the current state of the industry and the tremendous interest and revenue streams in the micro transaction field, adding the fatfoogoo partnership program was a no brainer.

In a recent interview fatfoogoo CEO Martin Herdina sites, “The trading and selling of virtual assets is truly the future of online gaming. It is an important alternative business model to the classical subscription fee-based programs that are currently dominating the industry. Fatfoogoo looks to fulfill a demand for this market. Our new Partnership program enables us to provide the best of both worlds: Primary Market trading, i.e. Publisher to Player and Secondary Market Trading, i.e. Player to Player trading. With the incredible growth of both primary and secondary trading markets, most major publishers understand that there is a need for an independently operated, fair and secure marketplace for virtual goods and services.”

And what a demand it is. The secondary trading market for virtual assets alone is currently growing at astonishing rates, going from revenues of approximately $1 billion in 2006 to an expected $7 billion in 2009, according to Nielsen.

This model has already been proven in Asia with Maple Story and Kartrider, both published by Nexon games. Research has shown that 8%-30% of all players purchase items via micro transactions. This in turn results in a higher revenue stream for publishers as opposed to the traditional subscription fee model. According to industry experts, on average, ‘Free to Play’ games generate anywhere between $15-$20/month. In the April edition of Fortune Magazine, senior writer Devin Leonard weighed in on the future of gaming:

(Game Publisher) Nexon pioneered this business – hooking players with a seductive free game while urging them at every turn to purchase extras using prepaid debit cards sold at retail outlets like Target. Nexon collects ad revenue in overseas markets, but in the United States the big money so far is in these microtransactions: $1.6 million a month. John Chi, CEO of Nexon America, says that the Nexon card is the second-best-selling prepaid card at Target – after the iTunes card. (Target will say only that Nexon cards are “doing really well.”)

Our experience in the virtual world micro transaction field is unparalleled. Not only have we created a multilingual platform, currency, taxation, and support system, but also gained real life experience and have weeded out a lot of headaches. As with anything in life, nothing is 100% certain, but here at the foogoo, we’ve already dealt with a whole number of things that could go wrong, have fixed them, and have learned from them. No other system in the world can match our level of multi national experience.

Back at the top-secret underground foogoo labs, our partnership engineers are already hard at work developing solutions for clients. Stay tuned, as we’ll be announcing some of our exciting partnerships soon!