"Brave New Virtual World: Making Free-to-Play Games Work for You"

www.playmatics.com
Margaret Wallace, CEO
margaret@playmatics.com
Twitter: @MargaretWallace

Involved in Games Since 1996
Copyright 2009. Margaret Wallace. Please Attribute Proper Credit if You Use These Slides

Playmatics Founders: Lots of Experience
in Creation of Original & Innovative IP

Playmatics Founders: Experience Working with
Large Media Companies & Licensed Brands

What a long, strange trip it’s been!

Brave New Virtual World?
Making Free-to-Play Games Work for You

• Global Market:
The global online games market is expected to reach
$13 Billion in revenues by 2011
For 2009, $5.5 billion globally spent on virtual goods
Market Overview

• North America:
North American virtual goods activity could exceed
$15 billion by 2014
In 2009, an estimated $400 million to $600 million will
be spent on virtual goods in the United States
Market Overview

• Increasingly Competitive:
The market is very crowded. For example, in January
2009, there were a reported 200 virtual worlds in
development targeting younger people alone.
A popular game on Facebook can be cloned in as little as
1 month
Lots of money pouring into space
Market Overview

• Rise of Social Networks:
Facebook grows 600k+ month.
Time spent on social networking sites tripled in August 09
Playfish network currently hosts around 9M active users at
any one time – this number was ~3M less than a year ago.
Playfish Installed 100M Games In 18 Months
Packrat – estimated $15k -- $25k/month
Market Overview

Types of Free-to-Play Games
(There are pro’s and con’s for each.)

Social
Single-Player
CasualCore / Hard-Core

Hardcore / Core MMO
Earth Eternal

Casual MMO
Puzzle Pirates

Virtual Worlds / Social Worlds
Habbo Hotel
Virtual Goods Make Up 85%
Of Habbo Revenue -- $70M
in 2008

Social Games (Casual)
Farmville
Zynga gets two-thirds of its projected $100 -- $200
million-plus annual revenue selling virtual goods
ranging from digital farm buildings to poker chips.

Social Games (Core)
City of Eternals

Funware
Example: Gift-Giving as a Game

$

Powered by

Focus on Real-Time Co-Op Games
12+ Million Subscribers
$1 Billion+ in North America
Mario Party 8
6M+ Sold

CampFu Was Packed With Features

Games, Virtual Goods & Virtual
Economies Work Together to
Create an Ecosystem
Copyright 2009. Margaret Wallace. Please
Attribute Credit if You Use These Slides

Functional Items
Decorative
Items
Social Items
Successful Use of Virtual Goods
Touches on Core Experiences

Types of Virtual Goods
Examples

In-Game / Functional

Social Status

Integrating Virtual
Goods Into Free-to-Play
Game Experiences

Gifting Playfish titles are
typically released
with just 20% of
their final
features
developed and
implemented.
The rest is
introduced over
time in response
to the demands
of the community
and based on the
overall success
of the title.
Source: “Building
Social Games At
Scale” Panel
Social Gaming
Summit, June 23,
2009

Decorative
Playfish sells around 20M items in
Restaurant City every day – through
either spending money- or through time
spent in game.
Source: “Building Social Games At Scale” Panel
Social Gaming Summit, June 23, 2009

Collectibles & Rare Items

Setting Goals

Trading / Exchange

Contests & “Prizes”

Rewarding Behavior

Rewarding Consumption

Important lessons
learned along the way….

Free-to-Play Games are a
Lifestyle….
Require full-time commitment….
Must have good metrics….
Launching the product is just the beginning…

Constant Attention to User
Acquisition
 What’s The Bounce Rate?
 How Much Churn?
 What Are Conversions? LVP?

Customer Acquisition Funnel
How many people who
come to your website
actually stay and register?
If 100,000 come to your site, you’ll be lucky
if 5% to 15% take the step to register.
Of that 2% to 15% -- anywhere from 1% to
15% will become purchasing players!
Buying Your Users:
The major
players in social
games are
spending
millions of
dollars on user
acquisition.
Example Source:
http://www.insidesocialgames.com/2009/11/17/zy
nga-raises-15-2-million-at-a-625-million-
valuation-or-is-this-old-news/

Predictions

Continued Consolidation

More “Stupid Money” Pouring In

Legal Issues Everywhere!

In-App Purchases for iPhone

Resources
VentureBeat – www.venturebeat.com
TechCrunch – www.techcrunch.com
Inside Social Games – www.insidesocialgames.com
Virtual Goods News -- http://www.virtualgoodsnews.com/
Virtual Economy Research Network -- http://virtual-economy.org/
Games & Innovation -- http://gamesandinnovation.com
Margaret Wallace on Twitter:
www.twitter.com/MargaretWallace

Questions?
Contact: Margaret Wallace, CEO
margaret@playmatics.com
Twitter: @MargaretWallace
Disclaimer: All images here, if not the explicit property of the author, are used for educational
purposes only. They belong to their rightful owners and I wouldn’t want it any other way.

"Brave New Virtual World: Making Free-to-Play Games Work for You"

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