Transcript The Future of Monetization

The Future of Monetization
Daniel James
CEO Three Rings
[email protected]
http://djames.org/gdc/
Premises
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Ye olde crystal ball
+10 Axe of Grinding
Time in the Future
Arrows in Back
The Ten Year Thesis
• Virtual Currency FTW
• Mix of virtual goods, subscriptions,
trading and advertising or incentives
• Social multi-player component
• Often massively single-player
• ‘Casual Games’ == ‘Core’ == ‘Industry’
• Bye bye Television
Market Today
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'Casual' means 'Not Hardcore’
Hardcore business is scuppered
100M+ 'Casual Gamers'
Online game plays, DS, Wii dominate
the attention landscape
Dead Ends
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Casual Games =/ $20 Downloadbles
$20 Download is Scuppered - Flat Sales
The competition is for attention
Downloadable channel an accident
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Collapsing advertising market of 2001
Popcap accidently rediscovered shareware
Billing channel was available via trymedia etc.
Did not present user registration issues
• Most portals are not execution-oriented
What will we sell?
• Attention
– If we don’t get their time, we’ve booched it
• Enhanced experiences
– items, levels, enhancements
• Luxury goods, status
• Creativity and services of other players
Revenue Models
• Advertising: selling attention to corporations
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Sales force
Non-standard ad units -> biz dev custom deals
Highly cyclical
Games poor for measurable CPA/CPC sales
• Other methods of selling your players
– Behavioural data, privacy invasion, spyware
– Surveys for in-game rewards
– Lead generation: sign up for Netflix etc.
Revenue Models (2)
• Once-off sales
– Converting 1% must only be a part of the answer
• Subscriptions
– Presents a cliff to the casual adopter
– Under monetizes the enthusiast
• Microtransactions / Virtual Currency
• Secondary markets:
– selling player attention and luxuries
• Player-created content
– selling player creativity to other players
Virtual Currency is the enabler
• Ties into the context of your game
• Naturally supports all the revenue models
– Reward structure for advertising and incentive
schemes
– Required for secondary markets and player
created stuffs
• Lacks a cliff
– Facilitates ongoing free experience
– Efficiently monetizes at every level of usage
Payment Mechanisms
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Credit Card / Paypal
SMS / Phone billing
Prepaid Card
Bank transfers
International remittances
Wallet platforms e.g. Google, Facebook
Challenges
• Infrastructure is lacking
– *Still* not available as a service
– Portals *still* cannot support user
registrations or billing
– Building is painful
• Increases complexity
– Gameplay accommodates currency
– Trends towards complex, rich worlds
Answers!
• Most Portals disintermediated
– Will not dominate the landscape in five years
• 'New portals' being built around these trends
• Billing services and platforms mature:
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Mochiads
Peanut labs
Clickandbuy, Aria
Facebook wallet, Google, Paypal, etc.
Whirled, Metaplace, Kongregate
Even the console platforms!
• A flood of innovation will change the
landscape
QnA