Valérie-Anne Bleyen, Heritiana Ranavoison, Marlen Komorowski, Olivier Braet iMinds - VUB - SMIT

1. Business
Modelling
research
Valérie-Anne Bleyen,
Heritiana Ranavoison,
Marlen Komorowski,
Olivier Braet
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2. Business modelling research results
1. Best Business Practices
2. Business Model Case
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3. 1. Best
Business
Practices
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4. Market research analysis
 Global market view
 Small, scattered retail market for educational games
 Few publicly available information on online platforms
 US game-based learning market reached USD 231.6 million in 2010.
The growth rate is 12.3% and revenues are predicted to reach USD
413.2 million by 2015
 Mobile might be the new frontier with education apps as the 4th
most represented category in Apple's App Store, with 24,727
programs (in 2010)
 In Flanders, main competitors are online platforms providing free
access to simple (mainly flash) games
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5. Industry sample
 20 games analysed & 5 “best” practices identified
 English language; Language and maths most common
 Analysed features
 Main characteristics, incl. popularity
 Organisation, Technical, Financial and Service design
characteristics
 Focus on the revenue model




Pay-as-you-go
Freemium
Ad-based
(Cross-)subsidies
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6. Level of centralisation and revenue
model
Games that score high on
centralised control: direct
revenue model
Games that score low on
centralised control: indirect
revenue model
2 outliers: BBC Bitesize
Funbrain
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7. Mobile games sample
 Sample of educational apps available
 On iOS Phone: Top 10 Paid + Top 10 Free + Top 10 Grossing
(Nov 2012) => 15 apps
 2 main revenue forms
 Pay-per-download
 Low pricing: $0.99 for Stack the States to $3.99 for Bubble Guppies
 Freemium model
 Free download, paying access to certain features (e.g. the seller
„Kids Games Club‟)
 Subscriptions and advertising are more rare
 Hybrid models interesting for mobile game
 A few games belong to both the top 10 Grossing and the top 10
Free (e.g. Lumosity Brain Trainer, Paint Sparkles Draw)
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8. Insights from other cultural industries
 Music industry
 Download-to-own; Freemium streaming (e.g. Spotify);
Advertising-based free streaming services (e.g. YouTube)
 Link between centralisation and revenue model
 Lower centralisation <-> advertising (e.g. YouTube)
 Higher centralisation <-> direct revenue models (e.g. iTunes,
Deezer)
 Newspaper industry
 Ad-funded free (Daily Mail); 100% pay wall (The Times);
Freemium (WSJ); Metered (FT & NYT); Pay-per-use
(Kenosha); National pay wall (Piano media)
 Crowdfunding
 Occupying a niche is important to stand out internationally
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9. 2. Business
model case
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10. Challenge
 Taking into account the different market opportunities
that exist for the different industrial parties
 Construct a number of business model cases from the
point of view of the different industries, with a stress on
for-profit business cases for the private partners, and
non-profit 'organisational cases' for the public partners
involved.
 SIMBU (SIMulate your BUsiness)
 Method that allows stakeholders/business partners to discuss,
simulate and agree upon a business model
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11. Key steps in SIMBU
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12. Business model simulations
 Best scenario: Pay-for-Access model
 Not „Pay-for-Game‟ or „Public-Funding‟ model
 B2C customers‟ willingness to spend highest
 A) subscription fee of EUR 5 / month / child
 B) Average microtransaction of EUR 2 / m / child
 = €84/Y/child in retail market
 B2B willingness to spend: €2/Y/child
 Payment service provider processing fee of 2%
 360.000 Flemish lower grade schoolchildren =>
low (12,5%), middle (25%) and best case (50%)
scenario
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13. Optimistic scenario: 180k students
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14. Pessimistic: 45k students
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15. Realistic: 90k students
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16. Pessimistic B2C + Optimistic B2B
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17. Optimistic B2C + Pessimistic B2B
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18. Conclusions
 Pay-for-access model most financially attractive
 „Pay-for-Game‟ or „Public-Funding‟ model each have
own drawbacks
 Games that can be updated in a modular
fashion most technically logical (browser-based
& mini-games)
 B2C customers‟ willingness to spend offers
much better scenario‟s than B2B scenario
 Local market for educational games too small if
one wants high quality local content
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