gdc: imvu lessons from the inside
DESCRIPTION
Presented at the Game Developers Conference 2010, San Francisco, CA 3/9/2010 Virtual goods are all the rage at the moment, but what does it take to actually build a successful, growing business around them? In this difficult economy, many businesses are looking into virtual goods sales as a new and lucrative revenue stream, but what challenges and pitfalls should these companies consider when launching or growing such efforts? A leading 3D virtual world and social network, IMVU’s 40 million registered users purchase a wide range of user-generated virtual goods, from clothing for their avatars to furniture for their virtual rooms. These products are made by over 100,000 registered developers, all outside the company, but they drive 85% of IMVU’s growing revenue. Via real-world examples and data-driven learnings, this session will share practical insights from IMVU's years of experience successfully building and monetizing the world's largest catalog of user-generated virtual goods.TRANSCRIPT
Lessons from the Inside: Building and Optimizing a Virtual Goods Business
Lee ClancySVP Product Management & GM Direct RevenueIMVU Inc.
Agenda
• About IMVU
• Lessons from IMVU on Virtual Goods
• Q & A
An online community where members use 3D avatars to meet new people, chat, create and play
What’s IMVU?
Company Overview
• Founded in April, 2004
• Based in Palo Alto, CA
• 70 employees
• 3 institutional rounds
• $30M raised
0
10
20
30
40
45M• 3D avatars
• Virtual goods
• 45M registered users
• 10M uniques/month
• $30M+ revenue run rate
• Profitable
Cumulative Registrations
Business Snapshot
Registered Users
Cumulative Registrations
Attractive Demographics
70% Female
60% 18+ yrs old
60% USA
User-Generated Content
0.0
0.5
1.0
1.5
2.0
2.5
3.0M
06/04
12/04
06/05
12/05
06/06
12/06
06/07
12/07
06/08
12/08
06/09
3+ Million Virtual Items
Celebrating with Mohawks
Shameless Promotional Plug
We’re Hiring!www.imvu.com/jobs
Lessons from IMVU on Virtual Goods
IMVU > Life?
Virtual yes, but no less real…
…with complex social dynamics…
…and its own evolved economy
IMVU on Virtual Goods SuccessCurrency
Controls
Creative
Community
Creative
Decision Considerations
Which virtual goods are valuable to
users?
•Are you going to pick the hits?•What role do brands play?•How should they be priced & promoted?
How should they be built?
• In-house vs. outsourced vs. user-generated?•How often do you need new content?• If UGC, what creation tools do you support?
What properties do they have?
•Are they scarce or plentiful?•Do they last forever or expire?•Can they be traded, sold, stolen, or copied?
Currency
Decision Considerations
What is your currency strategy?
•Purchased currency vs. earned currency?•Do you need more than one currency?•Can users transfer or gift currency?
How should the economy be structured?
•Can you measure supply & demand?• If users cash out currency they earn?•Can third-parties sell your currency?
How can users pay for the currency?
• International & “unbanked” solutions?•How many payment methods are enough?•Do you have a one-click billing relationship?
Community
Decision Considerations
Which segments can
you serve?
•Do your goods appeal to multiple segments?•Are there venues for self-expression?•How well does each segment monetize?
How do virtual goods drive
stratification?
•What benefits do premium members get?•Value of goods for new vs. tenured users?
How can you facilitate
connection?
•What venues exist for users to self-organize?•Can you foster a gifting etiquette/culture?
Controls
Decision Considerations
How much customer support is
necessary?
•How to protect against virtual identity theft?•How much support for free vs. paid users?•When to moderate user-to-user issues?
What policies and policing
are necessary?
• If UGC, what goods are appropriate or not?• If UGC, what if a good is reclassified?•Legitimate flagging vs. griefer flagging?
How will fraud be managed?
• In-house vs. outsourced?•What percentage of orders require review?•How should secondary markets be managed?
IMVU on Virtual Goods SuccessCurrency
Controls
Creative
Community
Q & A