wraggster
December 12th, 2012, 22:58
The Game Monetization Summit offered some crucial advice from key players and discussed the secrets of whales
The Digital Game Monetization Summit in San Francisco had a number of speakers and panels that not only presented opinions and analysis, but also refreshingly presented us with some specific numbers and examples. Since digital distribution is generally opaque (http://www.gamesindustry.biz/articles/2012-11-28-a-dearth-of-digital-disclosure), getting some insight into the amount of money being made, and how, is vitally important. The following overview hits some of the high points of the varied array of presentations.
http://images.eurogamer.net/2012/articles/1/5/3/5/2/9/7/135529391917.jpg/EG11/thumbnail/330x220 (http://images.eurogamer.net/2012/articles/1/5/3/5/2/9/7/135529391917.jpg)
Paul Thelen, CEO of Big Fish, offered a look at the lessons Big Fish has learned from the business of casual games. Big Fish has been profitable all through its 11-year life span, and continues to grow at “healthy” double-digits. Thelen noted that while the PC is not considered a growth platform, Big Fish is still adding audience for its PC games - so it's a growth platform for them. According to Thelen, Big Fish is making money with a variety of business models, from premium casual games sold for $19.99 to free-to-play games. Thelen's key advice is to try and continually reinvent yourself. “Just because we made money doing this last year doesn't mean we will make money doing this again next year,” he noted.
“You need to match the game mechanic to the business model, and the monetization needs to match the business model of the game,” Thelen said. “If you have a game that has 6 to 8 hours of linear gameplay and when you finish it, you're done, there are very limited ways you can monetize that game. What we've done is a simple transaction; you buy it, just like you would buy a book. It's very hard to monetize a book with free-to-play.” Big Fish provides a variety of price points for its games, ranging from a $19.95 'collector's edition' to a standard edition at $6.99 or $9.99, as well as subscriptions and free-to-play.
http://images.eurogamer.net/2012/articles/1/5/3/5/2/9/7/135529110161.png/EG11/thumbnail/330x220 (http://images.eurogamer.net/2012/articles/1/5/3/5/2/9/7/135529110161.png)Kongregate's big spenders
Big Fish is planning to launch some 250 games in 2013, and Thelen said that almost all will have a positive return on the PC. Big Fish now is in the process of bringing many games to mobile; Thelen points out that a high production value game for Big Fish, which would cost about $500,000 to produce, can be ported to the iPad for about $20,000. “Now you have a half-million dollar game on a hyper growth platform, and that game has already returned a profit to the developer,” Thelen said.
Thelen provided some eye-opening numbers about the state of the business. “Free-to-play is a huge market, and there are people making crazy amounts of money,” Thelen said. “Supercell came from nowhere after a lot of mistakes, and they are now making $300 million on two games on iOS alone.” Thelen also noted that free-to-play games reach 1.2 billion PC users, and that 14 million gamers are visiting Big Fish each month, so there's plenty of room for growth.
"Just because we made money doing this last year doesn't mean we will make money doing this again next year"
Paul Thelen, Big Fish
The next session featured panelists talking about the business of games, and they noted some astonishing statistics. For example, mobile hit Temple Run quintupled its revenue when it switched to a freemium model. While many have focused on creating casual games for the greatly expanded demographics available through social, online, and mobile platforms, some of the panelists felt the opportunity lies elsewhere.
“If you look at what people successfully did on Facebook or the early days of mobile, a lot of it was about cheap user acquisition through the spammy virality that Facebook allowed for a while, or manipulations of the terms of service from Apple or Google on the mobile side. That's gone away,” said Greg Richardson, CEO of Rumble Entertainment. “Of the $50 billion that was spent worldwide last year on games, less than 10 percent was spent on casual content. These companies were really smart around analytics and monetization and very light in terms of product and content creation. I'm not sure any of those things are particularly sustainable. The future lies in going into the larger part of the market which is people that self-identify as gamers, and where the user acquisition and long-term value creation comes from making great games.”
http://www.gamesindustry.biz/articles/2012-12-12-monetizing-games-crucial-advice-from-key-players
The Digital Game Monetization Summit in San Francisco had a number of speakers and panels that not only presented opinions and analysis, but also refreshingly presented us with some specific numbers and examples. Since digital distribution is generally opaque (http://www.gamesindustry.biz/articles/2012-11-28-a-dearth-of-digital-disclosure), getting some insight into the amount of money being made, and how, is vitally important. The following overview hits some of the high points of the varied array of presentations.
http://images.eurogamer.net/2012/articles/1/5/3/5/2/9/7/135529391917.jpg/EG11/thumbnail/330x220 (http://images.eurogamer.net/2012/articles/1/5/3/5/2/9/7/135529391917.jpg)
Paul Thelen, CEO of Big Fish, offered a look at the lessons Big Fish has learned from the business of casual games. Big Fish has been profitable all through its 11-year life span, and continues to grow at “healthy” double-digits. Thelen noted that while the PC is not considered a growth platform, Big Fish is still adding audience for its PC games - so it's a growth platform for them. According to Thelen, Big Fish is making money with a variety of business models, from premium casual games sold for $19.99 to free-to-play games. Thelen's key advice is to try and continually reinvent yourself. “Just because we made money doing this last year doesn't mean we will make money doing this again next year,” he noted.
“You need to match the game mechanic to the business model, and the monetization needs to match the business model of the game,” Thelen said. “If you have a game that has 6 to 8 hours of linear gameplay and when you finish it, you're done, there are very limited ways you can monetize that game. What we've done is a simple transaction; you buy it, just like you would buy a book. It's very hard to monetize a book with free-to-play.” Big Fish provides a variety of price points for its games, ranging from a $19.95 'collector's edition' to a standard edition at $6.99 or $9.99, as well as subscriptions and free-to-play.
http://images.eurogamer.net/2012/articles/1/5/3/5/2/9/7/135529110161.png/EG11/thumbnail/330x220 (http://images.eurogamer.net/2012/articles/1/5/3/5/2/9/7/135529110161.png)Kongregate's big spenders
Big Fish is planning to launch some 250 games in 2013, and Thelen said that almost all will have a positive return on the PC. Big Fish now is in the process of bringing many games to mobile; Thelen points out that a high production value game for Big Fish, which would cost about $500,000 to produce, can be ported to the iPad for about $20,000. “Now you have a half-million dollar game on a hyper growth platform, and that game has already returned a profit to the developer,” Thelen said.
Thelen provided some eye-opening numbers about the state of the business. “Free-to-play is a huge market, and there are people making crazy amounts of money,” Thelen said. “Supercell came from nowhere after a lot of mistakes, and they are now making $300 million on two games on iOS alone.” Thelen also noted that free-to-play games reach 1.2 billion PC users, and that 14 million gamers are visiting Big Fish each month, so there's plenty of room for growth.
"Just because we made money doing this last year doesn't mean we will make money doing this again next year"
Paul Thelen, Big Fish
The next session featured panelists talking about the business of games, and they noted some astonishing statistics. For example, mobile hit Temple Run quintupled its revenue when it switched to a freemium model. While many have focused on creating casual games for the greatly expanded demographics available through social, online, and mobile platforms, some of the panelists felt the opportunity lies elsewhere.
“If you look at what people successfully did on Facebook or the early days of mobile, a lot of it was about cheap user acquisition through the spammy virality that Facebook allowed for a while, or manipulations of the terms of service from Apple or Google on the mobile side. That's gone away,” said Greg Richardson, CEO of Rumble Entertainment. “Of the $50 billion that was spent worldwide last year on games, less than 10 percent was spent on casual content. These companies were really smart around analytics and monetization and very light in terms of product and content creation. I'm not sure any of those things are particularly sustainable. The future lies in going into the larger part of the market which is people that self-identify as gamers, and where the user acquisition and long-term value creation comes from making great games.”
http://www.gamesindustry.biz/articles/2012-12-12-monetizing-games-crucial-advice-from-key-players