Europe is a key market for game developers. However, due to the difficulties in reaching the many individual markets, European customers have been largely underserved. One major challenge is understanding the diverse payment options for digital content and how these options vary by country. The content providers that understand and tackle payment issues country-by-country are the ones likely to be most successful in Europe.
Live Gamer GDC Session: Beyond Credit: Localized payment strategies for a global business
During this session, key findings will be shared that highlight which payment methods drive the most revenue in Europe for online game publishers. Best practices, success and failures and how to best set up a global-local payments strategy will be discussed.
When: Thursday March 3rd
Where: Moscone Center 1:30pm PT (RM 309)
Presented by David Cole, DFC Intelligence, Analyst
Moderator: Jeremy Miller, DFC Intelligence, Analyst
Panelists: Nima Pourshasb, Live Gamer, VP Corporate Development
Carsten van Husen, Gameforge 4D, CEO
Ralf Wenzel, Skrill Holdings, COO
Linus Menden, Big Point, Head of Finance
Rika Nakazawa To Kick Off 2011 PCGA Speaker Series With “State of the Virtual Goods Industry” Lecture
We are very pleased to announce that Live Gamer’s VP of Business Development and Account Management, Rika Nakazawa will kick off the 2011 PC Gamng Alliance Speaker Series.
State of the Virtual Goods Industry
Rika Nakazawa, VP Business Development and Account Management, Live Gamer
March 1, 2011 4:00 – 5:30 PM
Capcom 800 Concar Drive, Suite 300, San Mateo, CA 94402
Abstract: Presentation on an overview of the virtual goods industry, the latest statistics and projections, monetization models, case studies of successes and failures and the blurring of lines between games, digital entertainment and education.
Are you attending Engage! Expo Santa Clara? if so check out Live Gamer’s CTO, Bill Grosso at the Turning Players Into Profits panel. This discussion will touch on successful business models and marketing tactics to raise ARPU, user acquisition, key reporting metrics, freemium vs paid models and using promotions and content to enhance retention.
September 23, 2010 from 9:00 AM – 10:00 AM
Live Gamer speaker: Bill Grosso
Rob Goldberg, CEO, GMG Entertainment
Chris Carvalho, COO, Kabam
Albert Lai, CEO, Kontagent
Check out Bill Grosso’s lecture on “Taking Virtual Economies to the Next Level” at Casual Connect 2010.
Lecture Description: Virtual goods are one of the most important monetization strategies for game developers today. In this presentation, Bill goes in depth on the metrics, measurements, and merchandising secrets that developers and executives alike need to understand and master in order to run a successful virtual economy. An author on economics and a well-known software engineer, Bill melds a rare combination of economic know-how and cutting-edge technology, resulting in monetizaton strategies deeply seeded in market-proven wisdom yet creatively adapted for next-generation gaming.
To watch the video and download presentation materials click here
The online gaming industry sells $2 billion a year in virtual goods through micro-transactions. What if they sold newspapers?
Today, CNN’s Fortune Magazine published an article titled, How Mafia Wars Will Fix Media By John Patrick Pullen which focused on the booming business of the free-2-play and micro-transaction based business model and how that model could be applied to traditional media like the New York Times.
Live Gamer provides the leading enterprise-grade monetization platform for games, social networks, toys, and digital entertainment properties. Although this type of model has yet to be applied to the publishing industry – it is in fact a viable model that could revolutionize the way traditional newspapers and magazines do business if they offer exclusive content that is compelling to their viewer base.
Live Gamer sees average revenue per paying user across all its titles is $28 per month across 85+ million users worldwide. Comparatively speaking an average of 15.7 million users per month visit the New York Times‘, where they have free access to content. Only fewer than 1 million readers choose to subscribe at $20 a month. Pullen suggests (and we couldn’t agree more) that publishers need to tap into this competitive nature and other game-like experiences that are driving the gaming industry today in order to encourage free-model readers to pay for content they find vital.
Read the entire article here
Contact us to learn how you can apply micro-transactions and the free-to-play business model to your IP
The ability to identify user segments with the highest monetization potential is very valuable to the P&L manager of any new social game. If survey data suggests that, say, German gamers have the highest ARPPUs, one might be tempted to focus resources on acquiring German users and converting them to paying ones. One may even use these data points as guiding benchmarks for monetization initiatives. These geographic comparison studies are becoming more commonplace but can be very misleading.
They seem to convey information about a country’s gamers’ willingness to pay for virtual items, but are instead reflecting the nature of the composition of the survey set within a country. Specifically, the broad grouping into country categories ignores the following:
Nature of titles in survey set
ARPPUs can significantly vary depending on:
- Game genre (e.g. social, casual, MMO, virtual world): Users in social games value the social utility of their virtual item collection while an MMO gamer is willing to economically invest primarily to improve its characters’ ability to progress in the game.
- Business model (e.g. free-to-play, subscription, freemium): The same user can be paying $15/month to play World of Warcraft (subscription) and only purchase $3 worth of diamonds in Runes of Magic (free-to-play) every month.
- Platform (Facebook, web, mobile, console): Once Apple allows a virtual currency in its iPhone and iPad platforms, ARPPUs will spike.
- Drivers of purchase (e.g. gifting, self-expression, game leveling, content consumption): Typically, gamers spend more on gifting than on self-consumption of the same virtual good, as they are willing to pay a premium for communication enhancement.
Chart 1 illustrates how significantly ARPPUs can vary across game genres (and sub-genres) for several Live Gamer clients in the same country (Note: Game genres have not been specified to avoid identification of publishers).
Payment options offered by titles in survey set
According to Global Collect, the number of payment methods can lead to an increase of 22% of conversion for e-commerce. The payment methods offered in a game are typically a function of:
- Publisher preferences, driven by difficulty to integrate, perceived ability to increase conversion and reduce drop out during check out, processing costs and fraud
- Consumer preferences, driven by availability, convenience, cost and perceived security
The choice of payment method has a direct impact on ARPPU. For example, SMS payments typically have fixed price points, lower maximum prices and can include a premium of up to 40% (due to carrier charges) for the convenience of paying with your cellphone. At the same time, completion of surveys from offer providers does not require the user to open their wallet.
Chart 2 highlights how different the payment type distribution (based on transaction volume) can look between two Live Gamer clients: a European and a US publisher.
ARPPUs of titles are constantly changing
In the current trend towards Gaming as a Service, the game experience is constantly “tweeked” to revisit the balance between the “free” experience versus the value-add through purchasing virtual items. New features (e.g. user-initiated actions, expiration of virtual items, etc) are continually incorporated and even game design is altered to encourage users to micro-transact. Hence, games at different stages of their lifetime and with varying virtual goods commerce tactics will display different ARPPUs.
Chart 3 presents an ARPPU time series for one our client’s titles.
Recently a global developer asked Live Gamer for a country comparison analyses for their genre across four specific countries, hoping that we would offer them averages based on our unique database that contains ARPPU data since 2001 and covers 23 countries. Because of the reasons discussed in this blog post, we intentionally kept away from any form of aggregation, and instead presented them with Chart 4 based on the single title that we believe to be most comparable to theirs.
In conclusion, we strongly recommend game and other online social entertainment developers to dig into the survey sets of geographic comparison studies. In the cases where a characterization of the underlying data is not provided, the data points should be taken cum grano salis.
More importantly, it will ultimately be the ability to drill into user game and purchasing behavior that will provide the reliable insights to maximize ARPPU across the board, regardless of the country.
Join Live Gamer’s Chief Technology Officer and Senior Vice President of Product, Bill Grosso for two exciting sessions at this year’s Login Conference.
Optimizing Micro-Transactions (Panel)
This panel will discuss the major elements of pricing, promoting, and integrating micro transactions with the gameplay flow. Speakers include researchers, and execs on the front lines implementing and managing micro transactions.
Moderator: Hugh Bowen, Bowen Research
Panelist: David S. Lee, Sleepy Giant Entertainment, Inc.
Panelist: Bill Grosso, Live Gamer
Panelist: Stephen Kutner, Market Innovations Inc.
Date/Time: Wednesday, May 12, 10:30 AM
Managing a Virtual Economy
Lecturer: Bill Grosso
Virtual goods are one of the most important monetization tools for many developers today. But before you turn on the virtual machine, you need to understand what makes it tick and how your management tactics can affect your success in the marketplace. In this presentation, Bill goes in depth on the metrics, measurements and levers that developers and executives alike need to understand and master in order to run a successful virtual economy.
Date/Time: Thursday, May 13, 3:30 PM
Room: Salon AB
Morning Session Spotlight
10:30am-11:15am –Nanu Nanu! How to bring social functionality into traditional game design…and actually make it work
How can traditional game design utilize social functionality…and actually do it well?
Moderated by David Cole (President | DFC Intelligence)
Amy Jo Kim (CEO | Shufflebrain)
Kai Huang (Founder | Guitar Hero )
Dennis Fong (CEO | Raptr ),
Dan Fiden (GM, San Francisco Studio | Playfish)
Mike Verdu (SVP, Games | Zynga )
Afternoon Session Spotlight
3:40pm-4:25pm – It’s not fair!” said the T-Rex: How monetizing games-as-a-service will save you from extinction
How will games-as-a-service, virtual goods, and micro-transactions will save game companies from extinction AND increase their bottom-line?
Atul Bagga ( VP Equity Research | ThinkEquity)
Brandon Beck ( CEO | Riot Games)
Howard Marks (CEO | Acclaim)
Susan Wu (CEO | Ohai)
John Cahill (CEO | Meez)
Join Bill Grosso, Live Gamer’s CTO as he discusses practical ways to optimize your virtual economy using common merchandising techniques, including many found at your local Safeway!
12-12:30 – North Hall Room 123
Visit the official VCON website
The event is free with your GDC admission, Register Now!
To schedule a meeting with Live Gamer at GDC, Contact Us
Live Gamer is thrilled to have the following line up of industry CEO’s, founders, visionaries, and executives at this year’s VCON 2010!
Other Speakers Include:
Atul Bagga | VP Equity Research | ThinkEquity
Brandon Beck | CEO | Riot Games
John Cahill | CEO | Meez
Ed Castronova | Associate Professor of Telecommunications | Indiana University Bloomington
Tim Chang | Principal | Norwest Venture Partners Patrick Chung | Managing Director | SK Telecom Ventures
M. Lee Clancy Jr. | SVP Product Management & GM of Direct Revenue | IMVU
David Cole | President | DFC Intelligence
Mitch Davis | CEO | Live Gamer
Dan Fiden | GM, San Francisco Studio | Playfish
Dennis Fong | CEO | Raptr
Eric Goldberg | Managing Director | Crossover Technologies
William Grosso | CTO & SVP Product | Live Gamer
Eyjolfur Guomundsson | Economist | CCP
Kai Huang | Founder | Guitar Hero
Daniel James | CEO | Three Rings
Amy Jo Kim | CEO | Shufflebrain
Daniel Kim | CEO | Nexon
Vili Lehdonvirta | Researcher | Helsinki Institute for Information Technology
Howard Marks | CEO | Acclaim
Niranjan Nagar | Chief of Game Operations | Outspark
Mike Verdu | SVP, Games | Zynga
Jordan Weissman | Chairman & Chief Product Officer | Smith & Tinker
Susan Wu | CEO | Ohai
To see the complete list of speakers and agenda please visit the VCON 2010 website