gaming the social: community, measurement & monetization
DESCRIPTION
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.TRANSCRIPT
Gaming the SocialCommunity, Measurement & Monetization
February 9, 2011
Confidential & Proprietary Copyright © 2011 SuperData Research
Hellooverview
Confidential & Proprietary Copyright © 2011 SuperData Research
Joost
Introductionswhat we do
Confidential & Proprietary Copyright © 2011 SuperData Research
SuperData Researchindependent research providerspecialized in digital goods measurementmulti-year seed funding in 2010syndicated reportingconsulting servicesclient base: brand owners, developers, retailers, publishers, VCs, and payment providers
Methodologyhow we do it
Confidential & Proprietary Copyright © 2011 SuperData Research
Community
Confidential & Proprietary Copyright © 2011 SuperData Research
Online Dynamics different online communities show similar behaviors
Confidential & Proprietary Copyright © 2011 SuperData Research
User-Generated Content
maps created by unique user
Online Discussion
share of posts by unique user (%) avg. $ spent per transaction
Virtual Goods Spending
Three different studies,...
...same community dynamics
EVE Onlineapprox. 360,000 users20K have been a subscriber for 8 years (!)Estimated annual revenue: $25-$35MM
Skype560 MM users124 MM monthly actives (6.5%)8.1 MM paying (1.45%)$100 MM IPO filing (Aug 2010)
Successful Examplescommence emulation!
Confidential & Proprietary Copyright © 2011 SuperData Research
Similarities help people help you
Confidential & Proprietary Copyright © 2011 SuperData Research
Reward “Viral Whales”• Community leaders • Product evangelist• Noob trainer• Largest share of audience passive, reactive
Household fundamentals• Prepaid --> gifting
Measurement
Confidential & Proprietary Copyright © 2011 SuperData Research
Measure Why?identify key audience segment asap
Overview
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• Revenue drivers, KPI
External: Transparency• Funding• Age of licensing
Confidential & Proprietary Copyright © 2011 SuperData Research
Measure What?both industry-wide and game-specific metrics
Overview
Traffic: Daily, Monthly UsersChannelsViralityMonetizationDemographicsAudience SegmentationEngagementROIA/B Testing
Lifetime Value ARPPUARPUPrice PointsSeasonalityTime of DayFrequencyNumber of Invites SentReceived...
Confidential & Proprietary Copyright © 2011 SuperData Research
Measure What?, cont’didentify valuable differences in user behavior
Confidential & Proprietary Copyright © 2011 SuperData Research
Geography Lifetime (days)
Avg. Expenditure per Purchase
Frequency (Avg. Number of Purchases)
Germany
Western Europe total
99.81 $12.51 41.18
122.38 $14.25 20.3
0%
3%
5%
8%
10%
12:00
AM
1:00 A
M
2:00 A
M
3:00 A
M
4:00 A
M
5:00 A
M
6:00 A
M
7:00 A
M
8:00 A
M
9:00 A
M
10:00
AM
11:00
AM
12:00
PM
1:00 P
M
2:00 P
M
3:00 P
M
4:00 P
M
5:00 P
M
6:00 P
M
7:00 P
M
8:00 P
M
9:00 P
M
10:00
PM
11:00
PM
By number of transactions By $ sales
Virtual Item Sales by Time of Day (hourly)
Measure How?ghost in the shell
Overview
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• Need to invest in, and train monetization directors & analysts• Integrate into production process, communicate with
community manager
Confidential & Proprietary Copyright © 2011 SuperData Research
Monetization
Confidential & Proprietary Copyright © 2011 SuperData Research
Monetizationconvincing people to pay
Tailor service to your customer• Segmentation: upgrades for
newbies, vanity for the elite• Value offering: premium
services for high rollers• Engagement: bundled
specials, seasonality • Preferences: monitor
behavior and needs
Confidential & Proprietary Copyright © 2011 SuperData Research
0%
25%
50%
Bonus
Poin
ts
Multipl
ier
Extra T
ime
Combo
Pac
ksOthe
r
Share by Unit SalesShare by Revenue (FB credits)
No68.6%
Yes31.4%
“Have you ever received a prepaid game card as a gift?”
“My mom would rather buy them in the store than online with a credit card.”
Payment Mixallow customers to pay the way they want
Overview
Confidential & Proprietary Copyright © 2011 SuperData Research
Almost $1 billion of virtual good sales transacted via alternative payment methods
Couleur Locale (mobile)• Europe ~10%• North America: 1%
Outlook
Confidential & Proprietary Copyright © 2011 SuperData Research
Outlookwhat we think 2011 will bring
Overview
Arms race
Age of Licensing
Beyond FB
Confidential & Proprietary Copyright © 2011 SuperData Research
Thanks!
Confidential & Proprietary Copyright © 2011 SuperData Research
@_SuperData