Download - Gaia - Managing Dual Currencies
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Managing Dual CurrenciesDavid Jesse, Gaia Online
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Gaia’s economist
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Quick Tour of Gaia
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Gaia overview
Shopping
Friends/
ProfilesGames
Forums/
Chat
Avatar
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14.4 million shopping transactions per month / 9 B gold spent
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4.8 million monthly marketplace transactions / 88 B gold traded
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25 million posts per month / 1.8 B cumulative
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6 hours spent in “hang outs” per active user per month
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2 ¾ hours per active user per month in casual games
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Managing Dual Currencies
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The challengeGetting value from different users
Pro
pen
sit
y t
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pe
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Site activity level
Low
High
Low High
Different segments different needs and opportunities
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Engagement vs. cash currencies
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* Also known as reward, attention, action currency or points.
Overview
Engagement Currency* Cash Currency
Target • All, but particularly non-paying
customers
• Paying customers
Purpose • Reward majority who
can’t/won’t buy
• Incentive for all users to be
more active
• Offer additional benefit for
those able/willing to pay
• Pay to run, grow business
Sources • Regular site login
• Specific feature usage
• Direct funding
• Completion of ad offers
Sinks • Basic site interactions • Gameplay advantage
• Higher status
• Premium access
Dual currency system addresses needs for multiple segments
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Influencing user behavior
Pro
pen
sit
y t
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nd
Site activity level
Low
High
Low High
Dual currencies can help make users more valuable
Engagement currency
Cash
cu
rren
cy
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Example: Gaia’s dual currency system
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Gaia Gold Gaia Cash
Type • Engagement currency • Cash currency
Sources • Daily one-time activities
• Posting to Forums and other
site usage
• Participating in sponsorships
• Sale of items won
• Direct funding
• Third party offers
Sinks • Buying basic virtual goods from
Gaia
• User trades
• Entering contests
• Creating private forums
• Buying most coveted virtual
goods
• Attain wealth faster
• Level up faster in MMO
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Monetizing non-buyers
Pro
pen
sit
y t
o s
pe
nd
Site activity level
Low
High
Low High
Cash poor
BUT
points rich
Cash rich
BUT
points poor
Opportunity to make both groups better off through trade
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Example: Gaia’s marketplaceUser to user trading
Cash buyer
purchases
premium item
Non-buyer
earns gold via
activity
Item traded via
marketplace
Trade provides gold to buyers, exclusive items to non-buyers
Both are happier
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Monetizing non-buyers
Trade has to serve both parties
Clear need for non-buyers to trade for exclusive items
Need for buyers to trade stronger without direct sale
Encouraging user trades has other positive effects
Some buyers become distributors, contributing to sales
Additional supply of items to ecosystem
Higher perceived value of engagement currency
Likely to be perceived as unfair
Devalues investment of time by non-buyers, who may feel second class
Transparent advantage might be considered cheating
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Should you sell engagement currency directly?
Consider carefully before selling engagement currency directly
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Maintaining control over currencies
Implied value of currencies likely to attract fraud attempts
Botting of site (“gold farming”) to earn engagement currency
Payment fraud to gain cash currency
Allowing conversion/trading increases costs to manage
Trades increase difficulty of tracing source and reversing transactions
Direct conversion raises consequences of any exploits/bugs/errors
Accounting difficulties for cash and revenue
Legal questions if attention currency is convertible to cash
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Set systems to prevent and manage fraud/botting
Consider restrictions to granting/trading if necessary
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Controlling abuse on Gaia
Controlling cash currency
Set limits on conversion for new purchasers
Amount minimizes exposure
Trade delays allow for review of transactions
Log trade activity, with ability to reverse
Managing engagement currency
Select use of Captcha to limit automation
Mass registrations tracked and banned
Extreme usage blocked or reviewed
Negligible fraud, limited black market availability of Gaia Gold
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Managing inflation
Importance of a budget
Consistent rewards and standards for progression
Currency loses perceived value if granted too freely
Set desired level of inflation: investment versus accessibility
Elements to balance in economy
Amount granted (including rewards converted to currency)
Sinks that will counteract inflation and add to perceived currency value
Supply of goods available for purchase and trade
Other things to consider
Approximate proportions by type of activity
Relative “wage” of rewards (e.g. amount per activity, time or value)
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Maintaining value of engagement currency
Manage budget to maintain value of engagement currency
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Gaia’s gold budget
Budget set based on expected usage
Scale with site usage
Adjusted to achieve controlled inflation
Amounts set to direct site usage
Decreasing “gold curve” to have diminishing returns to grinding
Encourage trial of diverse site features
Premium on community/social activities
Gold grants across multiple categories
Once a day rewards
Engagement activities
Revenue generating sources
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Getting the most out of engagement currency granted
Revenue
Engagement
Once a
day
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Other suggestions
Balance uses/sinks of each type
Cash currency uses pay the bills
Engagement currency uses keep your site active
Maintains perceived value of each and increases benefits of trading
Engage users before pushing monetization too aggressively
Could be turnoff if they aren’t yet committed users
More experienced users become easier upsell
Set expectations and manage commitments carefully
Manage exchange rates
Set fixed official exchange rate for consistency, implied fairness
Monitor implied market exchange rates for signs of over-inflation
Watch offsite trading as sign of exploits and fraud
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Pros and cons of dual currencies
Pros Cons
• Flexibility to engage different
user segments
• Added complexity of user
experience
• Separate virtual economy from
real money
• Investment to manage and
balance interactions
• Can indirectly monetize active
but non-buying segment via
trade
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Thank you!
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