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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
• 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!
www.icopartners.com/blog
@icodiane
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