MBA Mondays: Revenue Models - Gaming
Like last week's post on mobile revenue models, gaming isn't a revenue model itself, but it does offer a number of interesting revenue models and is worth discussing in a post in this series. This is the last post in the revenue model series, which is based on the peer produced revenue model hackpad we created at the start of the series.
Gaming is interesting because there are a number of revenue options that game developers can choose from when thinking about how to make money from their game. The hackpad lists the following:
There is still a sizeable business in selling a version of the game to the game player. That's how the console game (xbox, etc) market works. It is also how downloadable games market works. And there is a vibrant market in mobile games that you have to pay for to play.
But the games market has been moving to newer models in recent years. In app upgrades is certainly one of the more important revenue models. Many of the most popular mobile games are free to play but offer in app upgrades to get more game elements or simply to eliminate the ads. This is an example of the freemium business model in action.
Advertising is another important revenue model. For many web based games, advertising is the dominant form of revenue. On mobile, advertising supports the free offer and the elimination of advertising is often the value proposition for the in app upgrade.
The revenue model that is mostly (but not totally) unique to gaming is virtual goods. Virtual goods (like a tractor in Farmville) allow the player to have more capability in the game and they can be earned over time but are often purchased to enhance game play. This revenue model was inititally created in the asian gaming market but has been adopted by game developers all over the world.
I have been waiting for non gaming web and mobile services to adopt the virtual goods model but have yet to see anything that feels like it is working really well. Virtual goods is another excellent implementation of the freemium approach to business model.
There are game developers who use all of these models at the same time. They might sell their game on certain platforms, they might offer a free ad supported version on mobile with in app upgrades and virtual goods. In many ways, I think the gaming market is the most sophisticated about revenue models of all the sectors in web and mobile. That may stem from the fact that most games have a finite life and so the developer has to extract real revenue quickly to get a return on the investment they have made in developing the game. I think there is a lot that the rest of the web and mobile services world can learn from the gaming market.
.Happy Birthday, George Washington. Thanks for whipping the British. It has really worked out well for a lot of us. Thank you.BTW. you would have a tough time recognizing the United States these days but you built a very successful startup.We are struggling just a bit with the numbers just now but we will get it straightened out soon.Happy Birthday, Abraham Lincoln. Thanks for preserving our Union. It has really worked out well for a lot of us. Thank you.BTW, everybody has forgotten you were a Republican. The freeing of the slaves has worked out very well. We have a black President.Hey, George & Abraham, we now get a day off from work because of ya’ll. Well played.JLM.
Happy President’s Day, JLM and all.In Ontario, it’s also a holiday,- Family Day (it’s a new one that appeared a few years ago). Hey, we have to stay in sync with the US 🙂
.Hell, let’s just merge and get it done with already.JLM.
I know you keep suggesting that!
He also frequently hints at secession so be careful where you hitch your wagon. Although he’s promised to sneak me over the border if need be.
Isn’t every day National Cupcake Day? On Oak St. in Chicago a cupcake store has a vending machine for them when they are closed, just in case someone needs a fix!
Wow. That’s a badass street.
Cupcake Day is new to me. And now that I am wheat/gluten free the idea of cupcake day just makes me sad. But hey don’t let me ruin your fun!
We do have a lot of holidays in common, but I just found out that Canada’s first National Cupcake Day is scheduled for Feb 25, whereas it’s Dec. 15 for the US.Did you even know the US had a National Cupcake Day?
.I must admit just a bit of ignorance as it relates to National Cupcake Day. I have never really observed it though I think I could probably feel my way through it.JLM.
What happened to National anti-junk food day? Or National history day? National read a book day? National shake a bad habit off day.
Crappy lobbying by those groups.
;)It’s all about awareness.You can have a Day or a month, without being a holiday, eg Alzheimer’s Awareness month.
we do? when, I always need excuses for baked goods 🙂
Jonathan Winters at the Just For Laughs Festival (in Montreal): ‘Ah Canada, great beer, great women, great hockey, great escargot…..One day I hope we just take you, quietly……”It loses a little without his genius delivery, but I have always laughed at the semtiment.
We had our inaugural Family Day in BC last Monday. The startup guy in me hates that we have a new statutory holiday, but equally I’m happy for all the people I know that actually value the extra day off.
Yup, I noticed BC had it last week. It’s weird to have a Canadian holiday when the US isn’t having one or vice-versa.
why did you start family day? what is the background of this holiday
It started in Alberta so that the premier could have a long weekend in Palm Springs, playing golf.No lie – Don Getty was the Premier in question.
What James said is true. It replaced Heritage Day. http://en.m.wikipedia.org/w…
Seems that most of the celebrants are on the slopes this weekend. Thankfully I know the lifts that the crowds don’t seem to use
.Enjoy, Fred, do NOT break a leg.High of 80F today in the ATX.JLM.
i will be careful
My rule is to keep going ‘up’ till steep and windy clears the crowds. Or far as in back bowls does it sometimes.
i wonder what they would say if they made an unannounced visit today?
.Organizing the Second American Revolution?JLM.
Party on dudes and be excellent to each other. (Or at least in the Bill and Ted version.)
PROBABLY “MMMM… BRAAAAAAAAINS….”
you know, there is a comic book that basic premises the presidents rise from the dead, and then…
What about other presidents? (yes I know about the birthday thing, but still)
Always been fascinated that advertising runs the world.No one likes it. Big brands pay content makers to subject us to it against our will. Then consumers pay content makers to shield them from it.This is the most dysfunctional, long-term, carrot-and-stick, and financially successful relationship I can imagine!
I remember reading a fascinating book in undergrad marketing titled *The Mirror Makers* on the history of advertising (as I recall limited to the U.S.) Out of curiosity just checked Amazon (fangirl) to see if it is still on the market and pleasantly surprised to see that it is.As I recall it revealed how much advertising is part of the culture, maybe even in a chicken and egg sort of way. Seems like it is part of internet culture too for better or worse. The disdain for advertising puzzles me sometimes.
Advertising is media, like Disney is media and makes little boys and girls around the world think they need to be Prince Charming and Princess (or Belle).I think advertising is disliked as it is by nature manipulative, puts pressure on people to make a decision which causes them to look inside and view themself- where they are currently at or compared to what’s being looked at.
Advertising is the bane of the insecure. I see it as a source of information. (Don’t get me wrong I have my insecurities! But when you understand the psychology of something and the underlying mechanics it is easier not to be controlled by it…especially if this is combined with critical thinking and self-awareness.)Picked up the Belle reference — ha! Sweet of you.
Indeed – I still don’t need to be reminded I’m single with pictures of big breasted teenage girls wearing revealing clothing and mocking me with “you’re still single?” on Facebook, all because I set relationship status to single..
There is no way around the fact that some of it is just stupid and wrong.How something is done makes all the difference.
Indeed – so the problem is stupid advertising and engagement.
Matt I responded to you and when I refreshed the comment seems to have disappeared. We’ll see if it returns.
why did you like it?
Why do I like… the book or advertising?
It was so long ago that the reasons are vague. Keep in mind, too, that it was being used as a textbook and the fact that it was anecdotal and related to culture probably made it more interesting compared to some of my other required reading. But mainly because advertising has a fascinating history and cast of characters and this book did a great job of telling the story. Also, reading the book it became apparent how intertwined advertising is with culture. I remember seeing so many relationships between the two and thinking “ahhh.”
I wonder if it can ever just be with a carrot.
Does it really run the world? I mean, I would put banking, or commodities/food supply, as the thing that runs the world.
In some ways yes.It supports let’s see Google, Facebook, Twitter and and infinite number of web services, sports networks.Sure there is other stuff but the fact that it is a model that has a product that basically no one wants is the point I’m trying to make. And we will pay NOT to have it!
true but google doesn’t matter much if we can’t eat 🙂
Luckily those food systems were figures out already, for the 1st world anyway; For-profit industry has lead it a bit off though so there’s some fixing of it to be done.
I know nothing about gaming, the gaming market, or online games….well, close to nothing. So, I’m going to sit back and enjoy the rest of your comments!
that’s more than i know, except that from the outside looking in it seems like a complete waste of time and potentially harmful in the extreme. i’ve learned not to judge too harshly from that viewpoint, but i’m waiting to be corrected on gaming.it may be profitable, but then so is drug dealing.
Nothing is more valuable than entertainment ;)And more community driven on both the user and the developer side.And more fickle as a market.And more profitable if you can crack the code.Back in the day, we sold 80+M sound cards at a profit each of (can’t say) over four years to gamers. And tens of millions of lite to full games online.There’s money in personal joy and excitement!
“Nothing is more valuable than entertainment ;)”And nothing is adopted more quickly than an entertaining product or piece of content.
i would say that play is the most valuable.
I have a hard time seeing how someone can make that argument without it also applying to practically every other form of entertainment.However, to be fair, I consider the consumption of most mainstream television shows to be “harmful in the extreme,” so I can sympathize with the perspective (and embrace my own hypocrisy). 😉
“that’s more than i know”Which is more than I know.”it seems like a complete waste of time”Plenty of things fall into that category. Take attendance at church or synagogue (in this day and age). For some people a complete waste of time. For others beneficial.
The part that interst me is when gamification techniques are used to increase the retention of non game based products or services. But I know that this is a different topic 🙂
But it’s a good topic- Gamification in business is growing.
I agree.Gamification is an attempt to create the same kind of engagement that games promote and a key aspect of this experience is the switch into a more compulsive mode of being.
It’s the compulsive part and hence the addictive aspects that concern me. Anything that takes away from being *present* and in touch.
In the case of games I don’t have a problem with it at all. That is, after all, the experience you expect from a game. Gamification – not so much. I respect the fact that some game dynamics can ‘work’ but it so often feels like a manipulative bolt on.
Fascinating topic. In the end the topic is *human behavior* and motivation. Just in a more 2.0 world. (Or 3.0 etc.)
I don’t think it should be called gamifacation. It should be “applied human factors” or something. The way we react to games are factors independent of the game themselves.
“The way we react to games are factors independent of the game themselves.” That’s a profound statement. Can you explain more?
Games are really just controlling our behavior based on knowledge of behavior. If anything behavior is the independent variable with the game itself being dependent. So gamification is just a style of human factors around behavior.
Not independent, though not entirely dependent either. Behavioral economics has shown us that we’re influenced by a whole set of inputs that are often outside of our conscious awareness, but it isn’t quite so simple as mechanic x = result y. The context of the game and the implementation details and quality matter.
I would say the game is an artificial universe reliant on behavioral economics rather than the reverse. Behavior is independent, the game is dependent on the behavior. The more we learn about behavior, the better games will get (but so wil other thing we interact with. And that other stuff shouldn’t be called gamification)
The game industry is super interesting. I’ve been working in it for about a year on the monetization side, and one of the upcoming trends is going to be user segmentation where each user has a different experience. Is the person a whale that spends $1,000 a month? Give them extra special features. Is it someone who doesn’t pay? Show them ads and reward them with virtual currency as an enticement to purchase. Is it a male between age of 18-24 that lives in Italy? Target them specifically with a unique in app character. This is just starting to be implemented in gaming with large mobile studios, and I hope it trickles over to apps as well over time.There are certain game studios who see the f2p game as a service that will go on for years in developing and adding features (Kiloo – Subway Surfers, Spryfox – Tiny Town, Nimble Bit games) and other developers who will churn out a model and then reproduce it (Imangi Studios – Temple Run).I recommend reading F2P Design Rules by the guys at gamesbrief just to get a glimpse into the things that are taken into consideration when developing a game. Really opens your eyes.
great comment. this is exactly what i was talking about
Just looked it up. I love these rules:http://evil27games.wordpres…
Awesome. He has some videos and articles here: http://www.gamesbrief.com/c…The book really delves into each with examples and what not.
Yeah, just evernoted.
that is good stuff!
This is amazing especially considering the implications for other types of online products. Further reinforces Fred’s point about the sophistication of gaming revenue models and what other businesses can learn.Over the years I have gone from thinking that gaming was quasi evil to thinking that it is brilliant. Although I guess the two are not mutually exclusive.
I would point out that there’s a huge difference from ‘evil’ games and from other f2p games. I would call evil a game which tries to milk money and would categorize Farmville types of games as it (though not all simulations are). There are tons of f2p games that truly try to drive a ton of value to users through the model and charge a reasonable amount for it. Nimble Bit, Kiloo, Backflip are some of the big studios doing this very well – and it’s showing in their profits and user feedback. Simon Moeller from Kiloo had some great tweets on it a couple weeks ago:http://storify.com/kunaalar…. “We try to give ppl 1-2 dollars worth of “currency” for each hour spent in game.”…”design time systems that work without monetizing. Think “how much time is the sword worth” – THEN monetize after :)”
BRILLIANT EVIL IS ME, GRIMLOCK, FAVORITE KIND OF EVIL.IT TASTE LIKE STRAWBERRIES.
you eat evil people?
nope. Evil often shows in brilliance. So does goodness
Great comment. Finding those specific users who want certain features is my homework.
I can’t say this is a bad idea. There is the problem that in more massive games, it makes it harder to build game culture.The other issue is that this screams of the problems with gambling. Get them hooked, and keep them coming?
Almost every F2P developer does this fairly extensively — segmentation dovetails with paid user acquisition, which is only profitable when combined with at least a basic form of predictive analytics.
Definitely. I’m seeing it more on a near per user basis.
While in the game industry one thing I explored with my friends and colleagues was exactly this. My inspiration came from Dr. Bartle in an essay written a few years a go. You can find it here: http://www.mud.co.uk/richar…The thought being that there are different user segments with unique goals but the system (game) is designed to connect these user segments but also tailor the experience to them. As you tailor these complementary experiences you start to provide users with rewards and validation not from the system itself but from the network of players which is invaluable.Once you get that sense of validation or need from other players you’re hooked and you want to be “the cool kid” and you will gladly pay. As @facebook-72602980:disqus pointed out it’s the F2P user segmentation model which to this day has not been explored very much.CCP Games does a great job with this and is looking to expand this experience with their new title Dust 514. User segmentation is definitely something that doesn’t have to be limited to the gaming industry.
I am not super well versed in the gaming revenue model, so this may be an ignorant quesiton, but: How do you truly differentiate between the virtual goods model and the in app purchases model? Them seem one in the same. Does it just depend on what you are buying (virtual good is something that mimics a tangible good?)I am super interested in your comment around apply virtual goods to the non-game world, but really trying to wrap my head around it.
i wasn’t as crisp around that in the post as i could have been and should have beenin app can be virtual goods or just “eliminate ads”
Would enhanced features fall into this category or is that something else?
yes, but the most elegant way to do that in gaming is via virtual goods
Isn’t real world charitable giving like virtual goods? Feed a child, buy a heifer, send a kid to class etc.
sort of. but i prefer the karma that comes from the real world charity
Actually, I mean in real life charity as a virtual good of in app purchase. I am looking in to that on my app to benefit nature conservation.Is that the good karma you prefer, in this context?
IN-APP: ADD SIGNIFICANT NEW CAPABILITY TO APPVIRTUAL GOOD: APP STILL WORKS LIKE NORMAL, GOOD IS SOMETHING HARD TO GET OR DECORATIVEEXAMPLE: IN EMAIL, CAPABILITY TO ADD ATTACHMENTS IS IN-APP PURCHASENEW THEME THAT MAKE INTERFACE PRETTIER IS VIRTUAL GOOD.
I am a lifelong gamer. I know everything about Video Games. I am an expert. One problem in the startup world is that not everyone plays or can even comprehend Video Games and the culture that it represents. Especially most investors.One aspect that Fred didn’t touch on is the new hardware climate that will soon be upon us. Xbox 360 and Playstation 3 are obsolete in comparison with high-end gaming PC’s. Consoles are closed, while computers are open. Steam is now available on Linux. Valve’s next move is to release standardized hardware to compete directly with mainstream consoles.New Android consoles will refine what is “mobile” and what isn’t. Anything designed to be played on a TV screen in the living room is not mobile. But one thing that we forget is that Gameboys were the original mobile gaming devices. They’ve since evolved into the PS Vita and Nintendo DS (actually the Wii U is the latest model). Traditionally, those have been classified as “portable”. The new terminology should indicate whether the game is played on a touchscreen smartphone, a portable gaming device with buttons, a stationary console with a custom controller, or a mouse and keyboard.Which came first, Doom or Facebook? The iPhone or Counter-Strike? Final Fantasy VII or broadband internet? Gaming predates Social Media and Mobile. Think before Gmail, blogs, and George W. Bush. Think about how deep, broad, and segmented the gaming world really is.
Gaming taps into our survival and reward systems with no real world impact.
One interesting point is that the technical obsolescence of the consoles doesn’t make them functionally obsolete because of their huge market power. No matter how much of a lead PC’s get, the major releases are built to work on consoles because that’s where the consumer dollars are spent (with the obvious exception of MMOish games).That may be very likely to change by the end of the next console life cycle though. It’s a bit hard to envision what the gaming landscape will be like then. The only reason consoles are really needed now is because PC’s still aren’t user friendly (compared to a console) and because people aren’t used to having a PC in the living room, tied to their tv. That could change quickly though as tiny computers become cheap and as it becomes trivial for mass market users to stream from devices to external screens wirelessly.Despite consoles currently focusing on very different games than mobile platforms, mobiles are chipping away at the time people spend on consoles out of sheer convenience. There will always be a experience/convenience curve, but how long will it be before you can get an experience better than a console+tv without a console+tv? Consider the potential immersiveness of a Rift headset + a nice set of headphones along with whatever gadget you want to hook it to.I also think the Ouya (or a similar mini-console) has some serious disruptive power in the console world. Compare $400ish plus $60 per game to $100 and practically unlimited free games. Sure, the current games are very different, but how much longer will the games be different enough to matter? or at least different enough to make up for the price difference. Sure, there will always gamers that are willing to spend whatever it takes, but consider how many of those gamers it takes to fund the next Modern Warfare. Once that number starts to dwindle, so it’s not going to be so lucrative to make games with 9 figure development budgets (not to mention the additional 9 figure marketing budgets).
I was impressed by how well you know your stuff so took a quick look at your company Wufasta. Looks interesting and explains your knowledge base. 😉
Great comment.I published Doom and knew the Id guys well so I think I know which came first!
I vaguely remember doom!
Ruled the planet for a few years. From Texas!When I created the multimedia game segment for CREAF, I hired a bunch of brilliant, young, inexperienced techie musicians from guitar shops and bands and video studios and sent them out to build a worldwide community of game, educational and app developers around the Sound Blaster standard. They invented the ‘lite’ game concept and just kicked the world into a frenzy of sound!Four years later we had 2800 developers everywhere, 98% of the market and I spent 200 days a year on the road.What a great time.
“I think there is a lot that the rest of the web and mobile services world can learn from the gaming market.”I completely agree.”I have been waiting for non gaming web and mobile services to adopt the virtual goods model but have yet to see anything that feels like it is working really well. Virtual goods is another excellent implementation of the freemium approach to business model.”This is a really interesting point. There are certainly people who have tried it. ‘Paper’ for example provides in app sales of additional tools for you to draw with. I strongly suspect that the reason it has been less successful outside of games is related to a fundamental difference in the nature of the experience. Games are profoundly immersive. They promote compulsive behavior and this mode is ideal for such purchasing behavior. The phenomenology of most other apps is very different and I suspect promotes a more ‘rational’ approach to the purchasing decision. With games the benefit is obvious immediate and visceral. Buying another pen for a graphics app just doesn’t have the same compulsive quality.
paper is doing well with it and drawquest, which launched last week, is seeing early signs of success too
I think paper pitched their pricing brilliantly and the buy is extremely well ‘set up’
I was expecting to see at least a mention of the classical gaming revenue model – as in, games of chance with a margin favouring you. This predates computers, and tends to be addictive and lucrative.Of course, online gambling and betting is quite restricted in USA, but that still leaves open (a) overseas markets; (b) non-traditional ‘bets’ such as prediction markets and (c) games of chance where players pay real money but can get only non-money winnings. These three groups add important extra options for this revenue model.
that’s gaming of a different sorti am not an expert or even really knowledgeable at all about that business
In online subscription businesses outside gaming, my sense from my time as an operational exec is that these models start to work when customer LTV is around $90 on average customer acquisition cost of about $40, with a path to push LTV up to around $120 and acquisition cost down below $30. To be investible, you also need some scale, probably 15-25k paying subscribers, to prove you’re chasing something real. (Would *love* to hear an investor’s perspective on these benchmarks, by the way.)The economics of real-money gaming are dramatically different — at least, from the bad old days of the big offshore poker sites, LTVs were well above $1,000. Looks like these domestic markets will continue to open up (so far NJ, NV, and DE are moving to legalize online gaming). Of course, these markets will be regulated, which creates both risks and opportunities — for example, while it may not be clear what’s going to be permitted and when, the licensing regimes likely will create some natural barriers to entry that can help mitigate some risks for companies willing to make the investment in the space.
In your portfolio, Zynga poker might be an example of (c) – where losers buy chips just as in ‘real’ online poker, but winners can’t cash out cleanly. With the same principle other ‘casino’ games, sports or horse betting, etc can be interesting for users and profitable for the vendor as the casual users don’t really expect to win much anyway.
I was getting ready to add a comment about more traditional types of gaming or gambling. I was at a networking event last week and met a guy from Empire City ( I think they run a slots type casino at the racetrack in Yonkers NY).He did say they were watching developments in this space, especially in the State of NJ were the governor has recently indicated his preference for looking into forms of online gambling.
prediction markets aren’t bets per say. I would say they are information commodity systems
Sure, the business is very different. But from the platform provider’s viewpoint there are big similarities, and if it is forbidden to bet on which horse comes first, you can try to entice bets on which politician or company does X – and if a startup can bring it to the mass consumer in an attractive way, there is a lot of money to be made.
sort of. I think prediction markets, to go big, would have to deal with FINRA type regulation And that means working with the brokerage world, which right now average joe investor doesn’t like
Is that a distinction without a difference? The CFTC recently shut down InTrade with some pretty sweeping language. I could see them arguing that gambling falls within their purview as well. The agency is known for wielding significant power with massive incoherence, unfortunately…See http://www.cftc.gov/PressRoom/Pres...
i can’t say without revealing some of my personally held cards at the moment.
Ah, but the lady is plainly willing to play the “coy” card!
Not sure if everyone saw this, but the numbers for cash games is going to dwarf all other revenue sources combined. I *hate* that it will be so easy to take so much money from people by tapping into self-destructive behavior, but man there are a lot zeroes in those numbers. And while it’s morally outrageous, I do like the Betable business model!http://www.nytimes.com/2013…
that’s probably what has propelled Zynga stock from almost $2/share to almost $3.50/share in the past month
Certainly part of the bump… although they’re likely going to get lost in the frenzied investment from traditional casino operators as they see their $150 billion of annual revenue whittled away by online gambling which is going to, unfortunately, find its way into everything. Imagine texting your friend on Kik and they challenge you a game of snorkblump for $1. Click on the the snorkblump card and off you go.
the consumer surplus being created by the internet and technology has to go somewhere!
What makes the Betable model so insanely powerful is, if they get away with it, they could obtain one set of licenses worldwide and allow thousands upon thousands of games/apps to plug into their licensing infrastructure with a simple API. GaaS!
they still have space to grow
Shouldn’t women be the best game designers? They have been playing games with men for years, and leading them along ; )
I could use a tractor. Real one…big season coming up 😉
I think I just giggled.
Some games primary reason d’être is to sell something other than the game itself. Movies and/or TV shows like the Walking Dead will have a video game or even just an app whose sole purpose is to promote the original media property, the game itself is not expected to earn any revenue. The game downloads and registrations have value in and of themselves.The other business model missing is the toy tie in. Skylanders is probably the most famous but the business model of collectable toys or cards has been around in gaming since the early 90s with Magic the Gathering and Heroclix being the biggest successes. Non-computer gaming is still going strong or at least has diehard fans and business models, intellectual property, and game designs are shared among board games, pen and paper RPGs, miniature wargames, and even CCGs. Many successful iPhone games early on were ports of board games.I’ve seen how the Skylanders section has grown in size in big box stores over the years, someone is making a pile of money off that game and others vendors have noticed, their business model really should be added.
I have been waiting for this post for weeks!All the different models are ones I am considering for my iPad which launches in the next weeks. Multiple layers of many features is part of what makes gaming “sophisticated’, partially I sense because there are so many ways to skin a cat.The landscape is shifting in different types of games, especially in my category of learning apps, and so listening to what customers value, or find annoying, versus finding what they will happily pay for and will support my business is an art. Identifying the different customer segments within my customer base is a big part of this – ie the age of the user and the buyer who with kids is sometimes the parent and sometimes the kid. Advertising with very young kids is something I’d like to avoid, whereas if I white label the app I can see my buyer wanting to use ads. We’ll have to listen to them on that.So great to have the collective wisdom on this in the comments!
Does something educational rely as much on advertising? I am more inclined to pay a premium for educational apps for my kids.
I’ve seen isolated incidents of virtual goods working in social networking/personals sectors – both situations in which personal branding is important. To this day, the best implementation of a personals site that I’ve seen was much more about defining oneself through UGC (answering open-ended questions, rearranging their profile layout, etc.) than through arbitrary, site-imposed questions. Without thinking more about it, feels like there’s a huge opportunity for an approach like that: make it free, keep it free, encourage growth and community, monetize through people’s natural tendency to define their own space.
do you think there is more that can be done with virtual goods outside of games Nik?
It’s not hard to imagine virtual goods in non-gaming entertainment and social platforms. The most obvious virtual goods are those where you spend money to “dress up” and present an avatar in some sort of virtual world. Best example to me is Turntable.fm — I love the music discovery that happens there but hate the limited & childish avatars they offer. I’m sure lots of people would pay limited amounts for virtual goods to customize their look.It’s easy to imagine a company like Match.com offering a virtual world experience, where virtual goods could be huge. Not sure whether any of the dating services are doing this but it seems a very natural idea.A little harder to see this taking root in enterprise software, but who knows, maybe Salesforce.com is working on a Virtual Trade Show app….
Only 767 points to go before I can become a brown faced astronaut. Decided to skip the monkeys and gorillas 😉
i wish turntable would do more with virtual goods
Indeed. Nevermind virtual goods, I wish there was a way to order a physical CD by the artist currently playing. I’ve done that at least half a dozen times, and every time looked in vain for a way to give TT a piece of the sale.
I do, actually. I feel like a lot of implementations of virtual goods end up being very cynical, in the same way that a lot of implementations of gamification are cynical because they are done solely to boost user engagement numbers and not to improve or enhance user experience. I think that if you align virtual goods with the same psychology of actual goods – status symbols, extensions of personal brand, representations of personal style and preferences, etc. – they have a great chance of being a two-side value-add: revenue for the business and engagement for the consumer. As such, the natural industries for this in my mind are social networking, personals, and anywhere where personal prestige and uniqueness are beneficial.
Nik, I agree with the last past 100%. People will pay to define their own space. In fact it’s where I’m placing my bet.
I agree. That level of personalization is in fact what made MySpace grow huge – you can’t ignore that, even if it was to the detriment of the company in the long run. In the same way that people will dress up in a certain way to attract attention at a club or at some kind of event, people will naturally want to personalize their profiles, get their digital representations to stand out.
1) I think Sony is about disrupt aspects of this on their console by moving to a netflix game model. It will definitely make some of the blockbuster aspects of games get complicated. Subscription ++ will become the norm, I think.2) Art games interest me in that they open up new fields of why we behave the way we do. There seem to be a number of games about the experience of being in the game. I do think there will be models that come out of these sorts of games that sell digital experiences, which is a totally undervalued/underdone model.
what do you think of drawquest?
ipads don’t give me enough give and tooth for me to draw on. it is the kind of game i would like, if I could do it on paper
though I should add, as long as they maintain a sense of the drawing process, they’ll do well with it.
Hackpad really needs to work on their pop-up dialogs. Today’s says I can lose up to thirty seconds of work if I close this window. What window? What work? I use Google docs in another tab- will I lose that? Think this through guys, this is a huge forum and you look dumb putting these things out there like this.
Except for retail, these models are a predictable response to market scale, and the gaming industry is more creative and sophisticated in their use of them due to its history as a hit-driven business. But the fundamental problem is ever-present: Quality doesn’t scale. The non-traditional market is massive and getting massive-er by the day. The game shelf is a mile long with a handful of endcaps. Funding a high-quality game is very risky since it cannot be done on the cheap. So quality is the first thing to go out the door – it’s intuitive (and may be a fallacy) to diversify instead. Rather than betting your budget on one high-fidelity game, the platforms ask that you create many low-fi games with minimally viable mechanics and art then invest in creative monetization and cross-promotion to keep re-leveraging your players across the catalogue. And it makes some sense until you realize it’s not quite sustainable because customer expectations scale, too – especially new users you’ve transformed into gamers.
Is this just a list of Revenue Models or are these actual documents? I’m new to Hackpad and I don’t know how it works.Thanks!
A block/ban needs to be forthcoming…
Well just keep on rolling…far far away…..