Why mobile social games need a platform now morethan ever - Eros Resmini - Openfeint
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Many mobile social games are freemium but lack strong social effects. Only with the help of SNS platforms do mobile social games truly become social and achieve cost-effective acquisition, retention, and monetization rates.
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Why mobile social games need a platform now morethan ever - Eros Resmini - Openfeint
- 1. Why Mobile Social Games Need a Platform Now More than Ever Eros Resmini SVP of Marketing & Developer Relations Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 2. GREE Overview Japan’s Leading Mobile Social Gaming Platform Tokyo Founded December 2004 Founder & CEO Yoshikazu Tanaka International San Francisco Founded January 2011 CEO Naoki Aoyagi Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 3. OpenFeint Overview Leading Mobile Social Gaming Ecosystem • Mobile social gaming standard with millions of users globally • Cross platform ecosystem: iOS + Android • Open source & customizable UI • Founded in April 2009 in Burlingame, California • Acquired by GREE in April 2011 Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 4. GREE Financial Overview Net Sales & Operating Profit USD 2007 2008 2009 2010 2011 • $5 Billion market cap Net Sales 3.8M 34.6M 164.1M 414.5M 750M O. Profit △1.2M 12.3M 98.4M 230.3M 370M • Fastest Growing Tech Company in Japan USD (Millions) • 2,636% revenue growth over 3 years • Q2 FY2012 record high revenue ($536M) * Fiscal year-end, June 30 Source: Deloitte Technology Fast 50 Japan 2010 Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 5. GREE’s Global Reach Amsterdam London Seoul Beijing San Francisco Tokyo Dubai Singapore São Paulo Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 6. Growing User and Game Network Live Games Players (Millions) 190+ MM 7500+ Unique User Accounts Live Games 2010 2011 2012 2010 2011 2012 Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 7. A Platform Symbiosis mobile social design Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 8. Growth in Free-to-Play Games Business Model Shifting to Freemium with IAP Premium games User Revenue monetize users once Free-to-play with IAP $ Paid Longer play = more $$$$ F2P games monetize users many times Premium Game Virtual goods market was $7.3B in 2010; will Time game played double by 2014 Download App Source: Zynga SEC filing, via In-Stat market intelligence firm. Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 9. Free-to-Play Games Monetize US App Store: 20 of Top 25 Grossing Games are Free to Download Source: iTunes store February 18, 2012 Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 10. IAP Increasingly Generates Revenue % of 2011 US Apple App Store Revenue from Free Apps Source: Distimo Report, 2011 (* Top 200 grossing iPhone apps in the US per month) Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 11. Goal of Freemium Games Increase Player Lifetime Value (LTV) Player Lifetime Revenue Engagement Value = Per User X (LTV) Cost Per Acquisition (CPA) Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 12. Goal of Freemium Games LTV Greater than Cost Per Acquisition (CPA) Lifetime Cost Per Value Acquisition (LTV) (CPA) Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 13. Social Games are Special Social is a unique variant of “freemium” that uses social network effects to increase LTV and lower CPI/A SNS or social platform Game Economics Player Lifetime Engagement Value = Revenue X (LTV) Per User from friends Cost Per Requests Acquisition (CPA) Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 14. Social Gaming Ecosystem True Social Platforms don’t exist on Mobile yet Facebook: Users Start with Social Netowrk, then Discover and Play Games Mobile: Users Start with Games/App Store, then Discover the Social Network Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 15. Benefits of Social Games Ecosystem Optimizes Acquisition, Retention, Monetization • App portal optimizes distribution Acquisition • Cross promotion builds user base • Social & communication tools engage users SNS Social Platform Retention • Games and platform engage users • Viral effect cross games Monetization • Standard virtual currency across all games on platform increases ARPU Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 16. Why Fragmentation is Inefficient Inhibits Acquisition, Retention, Monetization Acquisition Multiple High cost & Through campaigns poor results Multiple Ad Networks Retention “Loose coupling” of users Low retention Channels are Email, SMS, notifications Weak Limited Monetization Dependent on retention Difficult to Due to Univ. currency, VG tools increase ARPU Economic Scale Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 17. Case Study: Game Evolution on PC & Mobile Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 18. PC: Casual Game Portals Early Portals Lacked Strong Social Effects Most portals lacked social features, inhibiting player- to-player interaction. SNS Some portals emerged offering weak social features, badges, and micro-transactions. Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 19. PC: Facebook Social Games Emerged on Facebook in 2007 Facebook won social and dominates the online social gaming market. SNS Developers leverage Facebook’s high DAU and social effects to retain and monetize users. Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 20. 2012: A Pivotal Moment Smartphone Sales Outpace PC Sales Global Smartphone vs PC Sales 出所： MorganStanley 「 Mobile Internet Trend 」より当社作成 Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 21. Mobile: Fragmented Network Games on Mobile are Currently in a Fragmented Player Ecosystem Users currently discover social network within each game. SNS Fragmentation makes acquisition, retention and monetization challenging for developers. Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 22. Mobile Game Type Evolution Mobile Game Type Becomes Increasingly Social Free-to-Play Free-to-Play Free-to-Play Social Games Social Games Arcade Games Games with In- (fragmented (within social App Purchases & ecosystem) network) Virtual Economics Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 23. Mobile: Social Gaming Platforms Platforms are Emerging to Solve Fragmentation Acquisition Similar to the shift we saw on PC, mobile games are Mobile moving to social platforms. Social SNS Platform Retention These platforms provide efficient channels and Monetization features for developers. Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 24. Emerging Mobile Social Platforms Current global market Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 25. Global Mobile Market Challenges … but several platforms are emerging Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 26. Potential Platform Landscape SNS Focus Social Platforms Meta-Platforms Game Focus OS Platforms Studio Platforms Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 27. GREE Platform: Addressing Global Mobile Audience GREE global platform Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 28. GREE + OpenFeint A New Global Platform for Developers and Gamers Social Games 7,000+ Games Current Current New Global GREE Japan OpenFeint GREE Platform Platform Platform High-ARPU 150MM+ users users, plus social 12,000+ developers know-how Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 29. GREE Platform Strategy Offer developers the most robust toolset to take advantage of the global mobile gaming market Global Social Open Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 30. Comprehensive Offering 190 MM Users Unified global platform Cross promotions through developer announcements Key regional distribution partners Promotional programs Distribution Acquisition Localization services Wall posting Friend invites Gifting Incentivized invites Social sharing Social sharing Engagement Push Notifications Virality Gifting Dashboard access to game Universal billing analytics International currency Game, player, and management monetization data Monetization Analytics Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
- 31. Thanks! Questions? @ErosResmini Confidential Copyright © 2004-2012 GREE,Inc. All Rights Reserved.
Editor's Notes
- Fiscal year 2012 in Japan ends June 30, 2012. Q1 (FY 2012): Net Sales (30,432 million Yen) and Operating Profit (16,646 million Yen) Q2 (FY 2012): Net Sales (41,529 million Yen) and Operating Profit (22,535 million Yen)
- See attachment I emailed regarding GREE plans in APAC, Middle East, and Latin America.
- This shows how free apps with IAP are generating more and more revenue for Apple. Couldn ’t find stats on what is from IAP vs. microtransaction and coinbased economy.
- Building games on a social platform provides specific techniques and channels to very efficiently tune the various aspects of the LTV calculation. Engages players, lowers the cost of acquiring new users, to increase margins.
- Social network and platform provide everything you need to increase LTV and decrease CPI/CPA, at a seemingly low cost. Without social network and platform, devs have to seek these methods on external channels which adds friction, and management and overhead costs. You could argue that on mobile there is a ceiling on growth for existing social freemium games without any type of predominate platform to provide this efficiency. Social network: users are aggregated and discover game through happenstance or because they ’re pinged by friends within social network. On mobile, these platforms are built within an SDK that developer implements within game. User discovers social network within game.
- Acquisition: App portal and requests speed acquisition and lower cost of acquisition (otherwise would have to get through ad networks). Retention: Ability to constantly ping the network, reawaken users and bring them back, publish content, run sales, etc. Also if platform is doing its job well, it ’s easy for players to get back into the game. (On mobile there is a lot of fragmentation: messages may be sent through SNS or email; context is lost. You may be able to send user into game but not to a specific point within a game.) Monetization: highly engaged user base monetizes better, can better promote monetization opportunities and universal currencies (On Facebook, universal currency has worked well and provides liquidity).
- Everything is more costly without the platform. Acquisition: ad networks are spotty for coverage and vary in terms of conversion accuracy. Their targeting systems don ’t have refined targeting criteria on metrics (i.e. who spends, who likes this game genre). Some specialty install networks are developing this targeting technology but it’s limited. Have to manage campaigns across multiple channels=dealing with varying CPI rates and requiring people to sit and watch these campaigns. If you consolidate this in a common platform it simplifies things and should reduce costs. CPI may increase over time within a given platform (this has occurred on Facebook) but it is still cheaper than managing multiple campaigns without a platform. Retention: use channels like push notification, SNS, and marketing promotions but the return and full conversion to get players back into your game is more difficult. Tracking installs on iOS is very difficult. When all this activity is contained within a given platform, these types of metrics are readily available and overall conversion rate should be higher. Monetization: Monetization is dependent upon retention which leads to difficulty increasing ARPU. Also don ’t have a common currency. (However, monetization can be well tuned in games that are not on platforms. In this situation, games are hyper sensitive to monetization and ARPU maintenance when user acquisition and retention are not easy because these costs are high and developers need to earn a margin. So, they adopt strategies to have games that cater to high engagement audiences.)
- Case study of JP and US platforms
- Casual gamers began playing games online through various casual game portals. In 2007, many casual game portals ignored players who wanted to connect to each other in-game. However a few did not: Pogo.com ’s focus was online games with community features and aspects. MSN and Playfirst also ventured into the more social realm of online games, introducing things like badges (MSN) and microtransactions (Playfirst’s DinerDash). Facebook began in 2004 and by 2007, already had 25 million users and was growing fast… http://www.gamasutra.com/php-bin/news_index.php?story=15955
- Facebook owns the online social game market because they mastered social first, drawing in the huge user base and retaining and monetizing them. Zynga ’s DAU (62M currently) grew as a function of Facebook’s DAU (483M currently).
- We will see the same transition that we saw with PC games, on mobile games. And, for the first time in history that smartphone sales are outpacing PC sales.
- Users and Games Facebook: 483M DAU Google+: 90MM users (60% use a Google product daily) and 35 games http://www.forbes.com/sites/jeffbercovici/2012/01/19/whoa-google-plus-has-54m-daily-users-not-quite/ https://plus.google.com/games/directory?hl=en GREE: 190MM users and 7,500 games Mobage: 35MM users and 1,800 games http://techcrunch.com/2012/01/11/ngmoco-partners-with-glu-mobile-to-bring-gun-bros-to-mobage/ Zynga: 62M DAU Game Center: iOS 5 will offer turn-based game support http://developer.apple.com/technologies/ios5/ http://www.pcworld.com/article/241921/up_close_with_ios_5_game_center.html