MBA Mondays: Revenue Models – Gaming // thnxz to @fredwilson – avc.com


 

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.

Full article

 

5 Types Of Facebook Updates To Avoid | Written by Jeff Bullas


jeffbullas.com

As you might have noticed I am a firm believer in the power of social media, maybe even verging on evangelical. It’s existence has been brief  in the universal timeframe, so there have been no instructions handed down from ‘on high’ on 5 Types Of Facebook Updates To Avoidhow to best interact and play with this shiny new toy.

Governments have banned Facebook and Twitter, and some sovereign powers and groups even want to censor the ‘Net”.

We certainly didn’t receive instruction from our parents on the ‘Do’s and Dont’s’ of Facebook and that we should not be Facebooking while driving or after a relationship breakup.. you might find that engaging the brain before opening that status update box and emotionally typing could be the worst thing you have done in a long time.

We are still just working out that texting while drunk is not a healthy activity and sending  messages of ‘heartfelt honesty’ to your boss while inebriated during moments of  ‘Beer Goggle’ clarity at 2am on a Saturday night  is very likely to find you with a very clean desk on Monday morning.

There is no formal curriculum in high school on the moral issues of Facebook updates or what you should post on Twitter.

I have heard that the commandments on how often you should tweet are hidden in some secret vault in Siberia that only will be revealed when the time is right. In fact I and many others, I am sure, have been told  that we tweet to much. By the way, I have not yet told anyone that they don’t tweet enough.

So what are some of the types of updates and situations where we should be refraining rather than participating.

1. Incidental Happenings

This has to be one of the 7 wonders of  world that we as a species are prone to shout out and pronounce on Twitter or Facebook …  ‘just clipped my nails’ or ‘found a grey hair where it shouldn’t be’.

We don’t walk into the office and shout  out ‘I can’t believe it… I left a tissue in the washing last night’ unless you are looking for a demotion or some extended unexpected leave, maybe evolution is reversing and we are about to become extinct if we keep up this random behaviour. Charles Darwin would most probably roll over in his grave at Westminster Abbey if he heard about this latest update to the ‘Origin of the Species

2. Inspirational Wisdom… Leer más “5 Types Of Facebook Updates To Avoid | Written by Jeff Bullas”

Zynga en números – infografía

Zynga responsable de juegos sociales tan famosos comoFarmville, CityVille o Mafia Wars, es responsable del 12% de los ingresos que obtuvo Facebook en 2011, según informó la propia red social en suformulario S-1. Y es que la compañía tuvo unos ingresos de 1.140 millones de dólares a lo largo del año pasado.

Esto lo consiguió gracias al aumento en los ingresos por usuario, que pasaron de 0,51 dólares en el último trimestre de 2009 a 1,76 en el mismo período de 2010 y 2,03 dólares el año pasado.

Además, la compañía consiguió sumar 153 millones de usuarios únicos al mes(240 millones de usuarios activos) y 54 millones de usuarios activos al día, según muestra esta infografía realizada por Statista.


Farmville Zynga Facebook infografía

Zynga responsable de juegos sociales tan famosos comoFarmvilleCityVille o Mafia Wars, es responsable del 12% de los ingresos que obtuvo Facebook en 2011, según informó la propia red social en suformulario S-1. Y es que la compañía tuvo unos ingresos de 1.140 millones de dólares a lo largo del año pasado.

Esto lo consiguió gracias al aumento en los ingresos por usuario, que pasaron de 0,51 dólares en el último trimestre de 2009 a 1,76 en el mismo período de 2010 y 2,03 dólares el año pasado.

Además, la compañía consiguió sumar 153 millones de usuarios únicos al mes(240 millones de usuarios activos) y 54 millones de usuarios activos al día, según muestra esta infografíaLeer más “Zynga en números – infografía”

Don’t Be First to Market, Be First to Scale

Often when people have an idea for a great new product or service, they rush to be first to market with it. We keep hearing about first-mover advantage and how you need it.

The only problem with first-move advantage is that it doesn’t seem to exist. The academic research on the topic shows that there is no such thing.

The first definitive work on this was done by David Teece in 1986 (pdf version of the paper here). He found that innovators capture about 20% of the profits generated by their new ideas. Followers and imitators capture slightly more. Suppliers get some of the benefit, but the big winners are customers, who get about 40% of the benefit of new ideas.

The study was done 25 years ago, but subsequent work has consistently found similar results.

Part of this is because innovations diffuse across an S-Curve – and this usually takes longer than we expect it to.


http://timkastelle.org/blog/

-.-

Often when people have an idea for a great new product or service, they rush to be first to market with it. We keep hearing about first-mover advantage and how you need it.

The only problem with first-move advantage is that it doesn’t seem to exist. The academic research on the topic shows that there is no such thing.

The first definitive work on this was done by David Teece in 1986 (pdf version of the paper here). He found that innovators capture about 20% of the profits generated by their new ideas. Followers and imitators capture slightly more. Suppliers get some of the benefit, but the big winners are customers, who get about 40% of the benefit of new ideas.

The study was done 25 years ago, but subsequent work has consistently found similar results.

Part of this is because innovations diffuse across an S-Curve – and this usually takes longer than we expect it to.

How can innovators try to capture more of the profits generated by their great ideas? It’s not by being first to market. In his excellent new book Sidestep & Twist: How to create hit products and services that people will queue up to buy,James Gardner suggests that one way to address this problem is use network effects to accelerate the S-Curve – to be the first to scale. Leer más “Don’t Be First to Market, Be First to Scale”

Trends in in-game advertising

Social gaming is huge at the moment. Zynga are firmly owning this space and are consistently proving the business-case for social gaming, with the majority of their revenue coming from users purchasing virtual-goods that enhance their experience. As much as social gaming is a revenue-generator for many tech companies, it’s also providing a whole new advertising opportunity for brands. We saw the first high-profile example of this when Microsoft sponsored Farmville earlier this year. Since then, how is it progressing and is it really providing value to advertisers?

The answer to the second question, seems to be a big fat yes. Though it is still new and it is arguably only the more tech/social savvy companies that are really eyeing this up, the revenue potential is clear. According to a recent survey issued by Nielsen and Electronic Arts, when Gatorade invested in in-game advertising by placing branded goods in different online points, the real-life spend on Gatorade increased by 24%. Clearly this is an exciting, lucrative area and the ad dollars are following. The ad spend on game advertising in the U.S. was at $370 million in 2006 and this is expected to expand to $2 billion by 2012. And it’s casual/PC/mobile in-game advertising that will reap this revenue. In 2006 this accounted for 27% of the game advertising market, and by 2012 it will account for more than 80%. This is big money and big business and represents another stage in social advertising that can potentially transform advertising as we know it.
Case study – McDonalds

Earlier this month McDonalds experimented with one of the first advertising examples of its kind, by teaming up with Zynga to create a branded farm for just one day, that offered users the chance to grow mustard seed and tomato crops. They were then rewarded with branded products that would help them improve the growth of the their own farms. Though it only lasted 24 hours, it was available to every single Farmville user, being shown as a neighbour farm.That’s instant, deep ingrained (excuse the pun) exposure to nearly 70 million Farmville players worldwide.


Screen shot 2010 10 17 at 17.24.28 200x148 Trends in in game advertisingSocial gaming is huge at the moment. Zynga are firmly owning this space and are consistently proving the business-case for social gaming, with the majority of their revenue coming from users purchasing virtual-goods that enhance their experience. As much as social gaming is a revenue-generator for many tech companies, it’s also providing a whole new advertising opportunity for brands. We saw the first high-profile example of this when Microsoft sponsored Farmville earlier this year. Since then, how is it progressing and is it really providing value to advertisers?

The answer to the second question, seems to be a big fat yes. Though it is still new and it is arguably only the more tech/social savvy companies that are really eyeing this up, the revenue potential is clear. According to a recent survey issued by Nielsen and Electronic Arts, when Gatorade invested in in-game advertising by placing branded goods in different online points, the real-life spend on Gatorade increased by 24%. Clearly this is an exciting, lucrative area and the ad dollars are following. The ad spend on game advertising in the U.S.  was at $370 million in 2006 and this is expected to expand to $2 billion by 2012. And it’s casual/PC/mobile  in-game advertising that will reap this revenue. In 2006 this accounted for 27% of the game advertising market, and by 2012 it will account for more than 80%. This is big money and big business and represents another stage in social advertising that can potentially transform advertising as we know it.

Case study – McDonalds

Earlier this month McDonalds experimented with one of the first advertising examples of its kind, by teaming up with Zynga to create a branded farm for just one day, that offered users the chance to grow mustard seed and tomato crops. They were then rewarded with branded products that would help them improve the growth of the their own farms. Though it only lasted 24 hours, it was available to every single Farmville user, being shown as a neighbour farm.That’s instant, deep ingrained (excuse the pun) exposure to nearly 70 million Farmville players worldwide. Leer más “Trends in in-game advertising”

How Fun is Your Website?

The secret to success for a website these days is really no secret at all. Websites that really bring home the bacon are the ones driven by loyal visitors who frequent the site on a regular basis. Building a community like this often takes a lot of time and loads of great content.

But is there a way to shortcut the tried and true methods of great material and great marketing?

What if a website were fun to play?

Games and gaming are two terms that are quickly finding themselves a new meaning on the web. What used to be associated with an acne-prone teenager alone in a windowless basement is being transformed into a socially hip hobby. The age range for gaming is expanding, and the activities that include gaming features are shifting as well.

Games in general are nothing new. For centuries, we have been enjoying sports, card games, and board games. In the past few decades, the evolution of video games has spawned the modern “casual game.” On the web, these games include online Flash games, mobile apps, and most recently, social networking and community-oriented websites.

Gaming, most recently, has entered the social media space, in incarnations such as Foursquare and Gowalla, as well as Facebook applications such as FarmVille, with great success. While the likes of location-aware social networking services like Foursquare and Gowalla may not seem like much of a game at first — don’t be fooled. Checking into your favorite locations in order to earn rewards such as points or badges is a solid game element.


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How Fun is Your Website?

The secret to success for a website these days is really no secret at all. Websites that really bring home the bacon are the ones driven by loyal visitors who frequent the site on a regular basis. Building a community like this often takes a lot of time and loads of great content.

But is there a way to shortcut the tried and true methods of great material and great marketing?

What if a website were fun to play?

Games and gaming are two terms that are quickly finding themselves a new meaning on the web. What used to be associated with an acne-prone teenager alone in a windowless basement is being transformed into a socially hip hobby. The age range for gaming is expanding, and the activities that include gaming features are shifting as well.

Games in general are nothing new. For centuries, we have been enjoying sports, card games, and board games. In the past few decades, the evolution of video games has spawned the modern “casual game.” On the web, these games include online Flash games, mobile apps, and most recently, social networking and community-oriented websites.

Gaming, most recently, has entered the social media space, in incarnations such as Foursquare and Gowalla, as well as Facebook applications such as FarmVille, with great success. While the likes of location-aware social networking services like Foursquare and Gowalla may not seem like much of a game at first — don’t be fooled. Checking into your favorite locations in order to earn rewards such as points or badges is a solid game element.

Gowalla

Is gaming something that can be incorporated into a website in order to draw in a wider audience? And more importantly, can game mechanics keep our users coming back? Leer más “How Fun is Your Website?”

56 Million Americans Are Playing Social Games [STATS]

It’s no secret that social games are one of the hottest (and potentially most lucrative) aspects of social networks today.

But it’s a mistake to think that casual, social network-based games are just for web geeks. A new study from market research firm NPD Group shows that one out of every five Americans over the age of six has played an online social game at least once. Altogether, that’s nearly 60 million Americans, adults and kids alike.

For a relatively new entrant to the gaming market, social gaming has made a huge debut.

These figures are good news for social networks, which have traditionally relied on advertising dollars to flesh out post-VC budgets. Social games can help create a new revenue stream, one that solely relies on end users opening their wallets to third-party applications. Virtual goods and currencies are a huge part of the social gaming market, and they turn a casual user experience into big business for the startups, developers and platforms that offer them.

NPD’s study shows that 10% of respondents had spent money playing social games and 11% said they planned to do so in the future.

In 2009, Internet (Internet) users bought around $2.2 billion worth of virtual goods; experts forecast that number will increase to $6 billion by 2013. And the best-performing social games can inspire repeat purchases in around 41% of users. Some stats peg North American gamers’ average expenditure per user of $74 over just four months.


It’s no secret that social games are one of the hottest (and potentially most lucrative) aspects of social networks today.

But it’s a mistake to think that casual, social network-based games are just for web geeks. A new study from market research firm NPD Group shows that one out of every five Americans over the age of six has played an online social game at least once. Altogether, that’s nearly 60 million Americans, adults and kids alike.

For a relatively new entrant to the gaming market, social gaming has made a huge debut.

These figures are good news for social networks, which have traditionally relied on advertising dollars to flesh out post-VC budgets. Social games can help create a new revenue stream, one that solely relies on end users opening their wallets to third-party applications. Virtual goods and currencies are a huge part of the social gaming market, and they turn a casual user experience into big business for the startups, developers and platforms that offer them.

NPD’s study shows that 10% of respondents had spent money playing social games and 11% said they planned to do so in the future.

In 2009, Internet (Internet) users bought around $2.2 billion worth of virtual goods; experts forecast that number will increase to $6 billion by 2013. And the best-performing social games can inspire repeat purchases in around 41% of users. Some stats peg North American gamers’ average expenditure per user of $74 over just four months. Leer más “56 Million Americans Are Playing Social Games [STATS]”