business models trends - game connection america 2012

Biz models trends

Diane Lagrange - ICO Partners

About me

• Ubisoft• Ncsoft• ICO Partners

PAY UPFRONT

Pay to access

Service Product

Licensing/Merchandising/Transmedia

Physical

Experience

SUBSCRIPTIONS

Subscription games

Dungeon and Dragons Online juin-09Lord of the Rings Online sept-10Champions Online janv-11Age of Conan juil-11Aerrevan août-11City of Heroes sept-11Fallen Earth oct-11Lineage 2 nov-11DC Universe Online nov-11Everquest 2 déc-11Star Trek Online janv-12Gods & Heroes janv-12Aion févr-12Everquest mars-12Earthrise TBA

World of WarcraftStar Wars : Old RepublicEVE OnlineRiftFinal Fantasy XIFinal Fantasy XIVDark Age of CamelotMortal OnlineDarkfallPerpetuumWARTERA

Removing cap & ceiling

MICRO-TRANSACTIONS

State of microtrans

• Granularity, no ceiling, flexibility for the design• Millions of sizes fits everybody > 1 size fits

“all”• Very different philosophies and revenue

models

Variety of micropayments models

NexonPay rate 9.9%ARPPU $16.5ARPU $1.63

ZyngaPay rate 5.3%ARPPU $31ARPU $1.64

Aeria GamesARPPU $90Est ARPU $15-20

Increasing conversion

Consumables/durables

From consumable to subscription

Increasing number of transactions

Types of items bought - Wooga

« Razor and blades »

Whale baits/anchors

Collectible/random items

Strategy: buy revenge

LoL : buy control, customization, time

RPG : advancement & time

Engagement vs monetization

ADVERTISING

Advertising : Mobile• Should grow, but slowly• Rovio Q1 2011 : 30% advertising• Evolution of formats• Loss of offerwall revenue

Social games advertising

PLATFORMS & BIZ MODELS

Mobile/tablet

• F2P = 65% + revenue iOS& Android

• Payment infrastructure took a while, not there yet on Android

• Subscription : – Order & Chaos – Big Fish Games, Onlive iOS?

• Advertising : minoritary, loss of offerwall revenue

Facebook

• Mostly micropayments • Subscriptions:

– Order & Chaos closed– Playdom games – Kabam working on hybrid

model• Advertising

– Mostly very low monetization games

– Product placement

Console

2009 : $15M2010: $30M2012 : $39M first 3 months

Impact on development process

• Analytics feedback loop• More frequent updates• Evolutionary design• Consumers are shaping the game

• Vocal minority less important : Battlefield Heroes

Other models

• Paid to play (Poker)– Acquisition tool , can it become a business model?– Mechanical Turk game? (protein fold)– Twitch.tv, Youtube

• Cut on player transactions– Diablo 3– IMVU, Second Life, Everquest did it before

• More uncertain models– Non-profit microfinance game– Processing power

Conclusion

• Future = many hybrid business models aggregated

• Question = which are core, which are ancillary?

• Direct in-game monetization always first step

Q&A

Thank you!

diane@icopartners.com

www.icopartners.com/blog

@icodiane

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