Keynote presentation "Creating a Bull Market: How to Manage a Successful Virtual Economy" given by Vikas Gupta, Social Gold CEO, at Casual Connect 2010 in Seattle.

1. Creating a Bull Market: How to Manage a Successful Virtual Economy Vikas Gupta, CEO SocialGold July 22, 2010

2. In this talk… About Social Gold Basics: What, Why Elements of a Virtual Economy Monetization Growing your Virtual Economy

3. Who is Social Gold? The leading virtual goods monetization platform Launched in Sept 2008 Grew 2000% in revenue in 2009 Founded by ex-Amazon veterans In-game payments, Secure in-Flash payments Introduction

5. Customer Service

8. What Exactly is a Virtual Economy?Why do people buy Virtual Goods?

9. Consumer Behaviors & Habits How Much do People Spend on Virtual Goods?

10. Some Examples of High Spenders $14,794 $11,635 $25,540 $13,960 $19,054

12. Virtual Goods enable much higher spending behavior in loyal users

13. The evolving internet business model

14. We are moving from a world of “Free” to a universe of “Paid” Beauty of a Good Virtual Economy: You can “buy” without “paying”

15. Elements in an Economy Labor People Goods Currency

16. “Labour is the real measure of exchangeable value. Wealth is power of purchasing labour.” Value in your economy is in your goods. Currency is a means, not the end.

17. Virtual Currency: Means to an Experience

18. Why Virtual Currency? Separate “Value” from “Cost” Virtual currency is “cheaper” than “money” Train User Behavior Economy around user generated content and time

19. Building It: Who Are You? What you build will vary based on who you are i.e., game, social network, publisher platform, etc Platforms: Are you building a currency or a prepaid stored value system?

20. Robust analytics are key to managing a successful virtual economy

21. Number of transactions is a good measure of the health of your economy

22. Measure Sources vs Sinks

23. Tools for monetizing yourVirtual Economy

24. User Experience Weave payments into your user experience! Example: Playfirst’sChocolatier powered by Social Gold’s In-Flash Payments

25. User Experience Example: Playdom’s Poker Palace powered by Social Gold’s In-Flash Payments

26. Payment Methods Credit cards drive majority of the revenue Mobile phones (teens/international) Pre-paid cards (cash paying users) Offers (incentivized leads) Alternate local methods

27. Subscriptions to complement Currency Demonstrate Economic Value Asks for more commitment from users When done well, Subscriptions can complement virtual currency e.g., Tagged.com, Playdom Mobsters 2

28. More… Inventory Management Risk, Fraud control Localization Come by Social Gold’s deeper dive into these tools and more at 4pm today…

29. Growing your Virtual Economy

30. Make it a Standalone Economy Go beyond “stored value” e.g., Linden Dollar vsFacebook Credits User generated content Prices determine by users (market) Trade against “real” currency “Virtual” Labour creates “real” wealth Both paying and non-paying users can play

31. How Do You Grow Your Virtual Economy? Get more users (peasants) Convert more users to spenders (commoners) Get spenders to spend more money (knights) Serve and retain your high spenders well (kings and lords)

32. Functional Goods drive more users to pay Experiment with price points Understand your user demographics and customize for them Keep them engaged for longer

33. “Sales” and “Specials” drive people to spend more money

34. Make repeat purchase experience extremely seamless “Encourage” higher price points Make sure the game is still engaging

36. How many? Average: 50% of all spenders  9% Best Farming Game: 30%  15% Worst Farming Game: 63%  4% Best Social Game: 36%  51%

37. Summarizing… Virtual Goods power an “experience” economy Engaged users can drive significant monetization through virtual goods Experiment, Measure, Repeat Virtual Economy has both paying and non-paying users – cater to both

38. www.socialgold.net Powering Virtual Economies Worldwide vikas@jambool.com