Monetization and Business Models for Social Games - Lisa Marino, CRO of RockYou presentation from GDC 2010. "Social games are addictive, so addictive that developers are making millions of dollars from them. There are multiple models emerging in the industry for monetizing social games. Whether it's sponsorships, virtual currencies, CPM or CPE, the opportunities to make money in this space continues to grow. The question is: How do you do it? In order to be successful, developers must choose which business models to pursue and where to focus their efforts."

1. Monetizing Social Games
Lisa Marino, Chief Revenue Officer
lisa@rockyou.com

2. Agenda
1) Making A Good Game
2) Network Effect
3) Engagement
4) Arbitrage
5) The Future of Monetization
6) Questions

3. Why Social Gaming is Succeeding
 Fast Paced Environment Cutting Edge Ideas
 Tools and information lead to better
understanding.
 Under-monetized International Reach
 Convert Non-Gamers to Casual Gamers
– Nintendo Wii

4. The Secret Sauce: DAUs are Everything!
• Reach/Virality
• User acquisition
Key Threshold: • Re-engagement
.2 DAU/MAU strategies
Network
Effect
• Feature
• ARPU Releases
Arbitrage Engagement • Competition
• K factor
• Friends help
users advance

5. Network Effect: DAU Growth and
Rengagement
With Notifications going away, expect K Factor <.7
User
Acquisition/Reengagement Key Thresholds
Channel
Feed Posts • 3 FB users should click on every
feed post created
Requests • Focus request on friends already
in game
• Expect a 70% CTR on requests if
friend already in game
Book Marks • Expect 20% of DAUs to enter
through bookmarks

6. Engagement: What Have You Done for Me
Lately?
5 weekly releases:
3 content, 1 viral event, 1 game play feature

7. Engagement: Competition Rules
• Create competition
among friends using
visible metrics
• Friend Walls
• Customization
• Player vs. Player
engagments

8. Engagement: Get Friends To Help
• Increase Re-
engagement rates by
sending requests
calling friends for
help
Castle Age
• All Users helping get
the prize

9. Engagement: How To Engage Your Users
 6 Basic Strategies of Keeping Your Users
– Collecting
– Decorating
– Friendship/Collaboration
– Exploring
– Caring
– Competition

10. Arbitrage: Where Monetization is Coming
From
Users
User-Initiated
Actions
User-
Participation

11. Arbitrage: Is Your Game Monetizing Well?
 Measure on Revenue/1,000 DAU’s
 Best Monetizing Apps $100+/1,000 DAU’s
 On Average, Apps Monetize $10-30/1,000 DAU’s
 $30+/1,000 DAU’s  On the right track

12. Arbitrage: Keys To Monetization
Drama
Individuality Friendship/Love
Keys to
Monetization
Gambling Competition
Collections

13. Arbitrage: Understand Your Economy
 Keep economies fluid
 Make currencies
valuable
 Let users decide how
to acquire currency
and advancement
 Sources and Sinks

14. Arbitrage: Know Your Key Demographic
 Focus Tools on Your Primary Users
– Geography
– Age
– Gender
– Time Of Week
– Time Of Day

15. Arbitrage: Direct Payments
 1-3% of DAU’s Are Paying Customers
 Payment Methods Biased to Default Method.
– Usually Defaulted to Best Converting Method.
Offers
15%
Credit PayPal
Card 60%
25%

16. Arbitrage: Capitalize On Your Existing
Consumers
 Entice Users to Re-Purchase Premium Currency
 Conversion Rates for Repeat Consumers are
Higher.
 >50% of Total Revenue Should be Repeat
Consumers
1st 2nd 30-40%of
Purchases

17. Arbitrage: Difference Makers in Offers Walls
Surveys
Local Strategy

18. Future of Monetization: Expand the Digital
Goods Pie
Increase a game’s digital
goods monetization rate
from 3% to 25%

19. Future of Monetization: Advertising
Why Advertising will be Successful
 Games have huge user bases so brand need to
be there
 Users want to level up and not pay for it
 Expands Monetization rates of user base
 Safe and Clean Advertising Environment

20. Future of Monetization: In Game Case
Study
• Customized and controlled
Brand Experience
• Cost Per Engagement
Model
• In Game converts as high
as 50% of opt in users
• Highest CPMs of all
monetization tools

21. Conclusion
Questions?

22. Lisa Marino
Chief Revenue Officer
lisa@rockyou.com