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

 

Mobile Games: The Economics of Freemium [Infographic]


by  | http://www.getelastic.com

Who creates a game only to give it away for free? Where’s the $$ in that?

The freemium business model is taking over — an estimated 65% of revenue generated by the 100 top grossing apps in the App Store, and an estimated 72% of total App Store revenue comes from freemium mobile games. In-game purchases like extra lives, special powers, virtual goods and personalizations are driving the revenue.

This week’s Infographic Friday is homegrown, featuring snippets of findings from our latest research report Cashing in on the Smartphone Gaming Boom that examine avid and causal mobile gamers’ in-app spending habits.

Click image to enlarge

Thank you for tweeting and sharing! And don’t forget to check out the report, with more juicy facts on avid and casual gamers.

LinkedIn Revenue Surges Over Analyst Expectations; Stock Jumps

The non-GAAP net income for the quarter was $13.3 million which represents an increase in profitability. For the fourth quarter of 2010 the net income was $5.2 million. LinkedIn earns it’s revenue from a variety of products. They have Hiring Solutions, Marketing Solutions and Premium Subscriptions. Looking at the fiscal report, we can see that revenue increased in all three areas. A promising factor here is also that they are a diversified company: they are increasing revenue on all fronts.

Hiring solutions, which are their tools which help recruiters find solid candidates using the network, increased over Q42010 by 136% to $84.9 million. Marketing solutions increased 77% to $49.5 million. Revenue from Premium subscriptions increased 87% to $33.3 million.


http://socialtimes.com

LinkedIn has announced that revenue has more than doubled in the last quarter and they’ve increased their 2012 revenues, and the stock has jumped accordingly.  The social network reported $167.7 million in revenue for the fourth quarter, beating the average analyst estimate of $159.8 million in the quarter.  The good news also comes at a time where people are piling into social media stocks, with Zynga hovering around 30% higher than it’s IPO price and LinkedIn now almost 200% over it’s $45 IPO price, placing it’s market cap at $8.67 billion.

The non-GAAP net income for the quarter was $13.3 million which represents an increase in profitability.  For the fourth quarter of 2010 the net income was $5.2 million.  LinkedIn earns it’s revenue from a variety of products.  They have Hiring Solutions, Marketing Solutions and Premium Subscriptions.  Looking at the fiscal report, we can see that revenue increased in all three areas.  A promising factor here is also that they are a diversified company: they are increasing revenue on all fronts. Leer más “LinkedIn Revenue Surges Over Analyst Expectations; Stock Jumps”

How to Get Your Executives to Pay Attention to Metrics (Part 2 of 2)

Maximizing Visibility

* Imbed metrics in standard business reports — this is the most important action among the 25 listed here. HR metrics are traditionally presented in independent HR reports, which are rarely widely distributed or read. Reports emanating from the CEO, COO, CFO, and business unit leaders are more likely to be widely read and therefore the best place to embed a few powerful HR metrics. Many business leaders inherently accept that things like vacant positions, quality of hire, turnover, and absenteeism negatively impact their business, but are used to discussions about each being silo’d as HR issues, not business issues. Partnering with business leaders to identify workforce-related risks and embedding information about each in relevant business communications will make the connection more clear.
* Alerts and forecasting — the vast majority of HR metrics being reported today reveal little change from period to period, making paying attention to them akin to staring at a rock and waiting for it to dance. If you want managers to pay attention, stop reporting nothing and start alerting managers to things that are changing or that will likely impact their business.
* Include an executive summary — if you must push out a lot of information, keep in mind that like you, busy executives don’t have the time to read an entire report, so be sure to include an executive summary highlighting the problems or opportunities that your metrics point out.
* Continue the story — in addition to reporting your successes through metrics, use other communications to further spread your message. One approach is to write up your HR “success stories” in a narrative format and then integrate them into regular communication mechanisms like newsletters, web sites, blogs, videos, and internal presentations.
* Get some metrics in the annual report – the most widely distributed business report is the annual report. Getting a few of your critical metrics in it increases both your visibility and status and may result in external analysts commenting on your successes.


Metrics have become and will continue to be an indispensable tool when it comes to managing any corporate function strategically. Unfortunately, like many things in life, not all metrics deliver the same value. In part one of this series, I discussed five differentiators that set exceptional metrics initiatives apart from average ones and offered up a number of ways that you could improve your efforts with formal planning and a compelling presentation format. In this part, my attention turns to improving the visibility, relevance, and emphasis of your efforts.

Maximizing Visibility

  • Imbed metrics in standard business reports — this is the most important action among the 25 listed here. HR metrics are traditionally presented in independent HR reports, which are rarely widely distributed or read. Reports emanating from the CEO, COO, CFO, and business unit leaders are more likely to be widely read and therefore the best place to embed a few powerful HR metrics. Many business leaders inherently accept that things like vacant positions, quality of hire, turnover, and absenteeism negatively impact their business, but are used to discussions about each being silo’d as HR issues, not business issues. Partnering with business leaders to identify workforce-related risks and embedding information about each in relevant business communications will make the connection more clear.
  • Alerts and forecasting — the vast majority of HR metrics being reported today reveal little change from period to period, making paying attention to them akin to staring at a rock and waiting for it to dance. If you want managers to pay attention, stop reporting nothing and start alerting managers to things that are changing or that will likely impact their business.
  • Include an executive summary — if you must push out a lot of information, keep in mind that like you, busy executives don’t have the time to read an entire report, so be sure to include an executive summary highlighting the problems or opportunities that your metrics point out.
  • Continue the story — in addition to reporting your successes through metrics, use other communications to further spread your message. One approach is to write up your HR “success stories” in a narrative format and then integrate them into regular communication mechanisms like newsletters, web sites, blogs, videos, and internal presentations.
  • Get some metrics in the annual report – the most widely distributed business report is the annual report. Getting a few of your critical metrics in it increases both your visibility and status and may result in external analysts commenting on your successes.

Improving Relevance

  • Give them input in selecting metrics — the metrics you report on might seem irrelevant to your managers because they were not involved in selecting them. Ask your target audience “what people-management metrics would help them make better decisions?” If they select a weak metric, educate them about better metrics that may present a more accurate story.
  • Always include ROI — the return on the investment of budget dollars (or ROI) is the single most powerful metric. As a result, include the estimated ROI ratio of people-management, which compares all labor and HR costs to the revenue generated by your firm’s employees. If this ROI percentage (also known as workforce productivity) is high, you should directly compare it to other business functions.
  • Drop metrics that are ignored – if you deliver your metrics online, use web analytics to determine which metrics managers are paying attention to and drop those they are not. If you are not relying on electronic distribution, ask them.
  • Avoid tactical metrics – even if executives and managers request them, it’s often best to omit tactical or operational metrics that cover process efficiency. Focus on strategic metrics that directly relate to or directly impact primary business goals (i.e. revenue, profit, product development, customer service and sales). Leer más “How to Get Your Executives to Pay Attention to Metrics (Part 2 of 2)”

CEO Request: Bigger Products

One of my network groups for innovation leaders had an interesting Q&A session with the CEO of an 8,000 people strong company. The objective of the meeting was to get a better idea on how CEO’s view and approach innovation. We definitely met this objective.

One of the questions to the CEO was what he would like to see from the innovation people within his company. His reply came promptly: Bigger products, please.

By this, he means that he would like to cut-down on the number of products rather having a hand-full of products with big revenues than having a large portfolio of products with smaller revenues.


One of my network groups for innovation leaders had an interesting Q&A session with the CEO of an 8,000 people strong company. The objective of the meeting was to get a better idea on how CEO’s view and approach innovation. We definitely met this objective.

One of the questions to the CEO was what he would like to see from the innovation people within his company. His reply came promptly: Bigger products, please.

By this, he means that he would like to cut-down on the number of products rather having a hand-full of products with big revenues than having a large portfolio of products with smaller revenues. Leer más “CEO Request: Bigger Products”

Building Blocks for Open Innovation: Lessons from Colgate-Palmolive


by Stefan Lindegaard
March 4, 2010 Open Innovation
//
What does an open innovation strategy look like? I went through some of the presentations from the CoDev conference and I spent some time on the presentation given by Fabienne Jacquet, Director of External Innovation at Colgate-Palmolive. I was unable to attend her presentation, but she got great feedback : – )Her presentation gives a quite clear description of the open innovation strategy at Colgate-Palmolive. Their overall external innovation mission is to embed the external world into Colgate-Palmolive and their strategy for this builds on four elements:

• create environment for open dialog
• “translate” between marketers and scientists
• build a winning external ecosystem
• become a “partner of choice” Leer más “Building Blocks for Open Innovation: Lessons from Colgate-Palmolive”