kongregate · kongregate we really depend on the 0.1% spenders by spender category • $1-$10 •...
TRANSCRIPT
KONGREGATE
CEO & Co-Founder of Kongregate
_._- • • • • •i • .. • i
I . ~T"otll UO I.....d-•
~- _. -- -- -- -- - .~ -- -- - - - - - - '-- - - - - -
, _.- . _ .. .....-...-... . ... ... I U •
I _. '0' ,OG u ,
.....n .. OOWVI ...... • ...._ .~
KONGREGATE
Kongregate depends on the 2%
2.1% of players buyvirtua l goods onKongregate.com
• ••••••••••",,,"n,• •••••••••....""".iiiiiiiiiiiiiiiiiiiiiiiiiiiiii• •••••••••"n,,,"n.• •••••••••...."",,.• ••••••••••n,,,",,.iiiiiiiiiiiiiiiii"ii
75% of O Uf revenuecomes fro m virtualgoods
. . , ~ . . . . .
KONGREGATE
We really depend on the 0.1%Spenders by Spender Cat egory
• $1-$10 • $10-$SO • $50-$100 $l ClO-$SOO $500+
4%
Revenue by Spender Cat egory
• $1-$10 • $10-$50 • $50-$100 • $100-$500 $500+
1%
72%
Kongregille .com platform stem, 2008·2015
. ~-- _.
KONGREGATE
Same story for individual games.11 ...
.... r " ·
,•• -.
••.." .- •• .11 ... --
,-
-
." .......... ,........••
••
••
••
••
...••
~--
.,.••••
••
2014 lop grO$sing Kongregale games, lifetime reve nue by spender c.ategory
. . . .. . -
KONGREGATE
Our mobile games look similar...'..
....
...
0 ·10
~.
."
11-'11:\ _
••
'''' ''''--
50-l Oll
- 10-SO
... ..,'"
Percentage Of Total Revenue ByPlayer Spend Deciles, January 2014
KONGREGATE
This is normal for the industry
&NftJe50.8%
''"'
''"'""'' '"' 0.7% 1.4% 2.2% 2.8% 4.0% ~ ~os
16.3%
_ II
KONGREGATE
So who is buying?lifetime ARPU bV Age
$10.00
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00 +$3.00
$2.00
$UIO
$_ ~ " i " i if Ii 'i' Ii i ii'" Ii i ' " I ii ,1
13 15 1719212325 27293133353739 41 43 45 47 495153555759616365676971
KONGREGATE
And yet very uncomfortable" Polygon ... ..A ...... ...._
WHALE HUNTING
,•
$ In •
D
Do Social Games Exploit the Mentally III?
.... ._-- ---...._.... -": : ::----- ...._..._--_. ,.....-
_ ""'.. ntriquo low pi..- """""' _ Itw<_'" ...·h oW ........""""" of....,..,. _ _ .r-! o>dl'Pd.... ,t..-.. ," do" _
rirnuoI_~" _ ~,u. "" pIao, "'_ (", ,,,,,,Thio•• pl__ ,hal "'~k .....1.1 _", 11, ....,..J """" ...m.." ' aI _ _ _~ f"opd pa-.. h.tt_
... ,.......... 'hio< i "-I .._ - ......,.., p-.. ....., n"""-l po~Ilolottl<.1,""""""'" _ _ ....J _, _ ....,hanln , hlO <Wn'< pLo,... ......--""- ......IF 4> ~f........,._......,.....,...... , .. oIly..._
Chasing the Whale: Examining the ethics or free-ta-play gamesFree-to-play developers toss around the term ......hales" - - but what are [hey? What are their lives like? And
~uld (leslgnen stop targetlng them? This In-depth pIeCe examInes the ethIcS .n)l,Jnd all 8"91" on the~nue.
07.08.13 I ' ••lur. I Mike R_ I 119 l;:l
KONGREGATE
So who is buying?
0."'"'
1."'"'
,."'"'2.SO"J'
' '''"'1._
$-
$700
$600
$500
$400
$300 +-1------;( - --=--------:;-:r......
$'00
$100
13 IS 17 19 21 23 2S 27 29 31 33 3S 37 39 41 43 4S 47 49 51 53 5S 57 S9 61 63 65 67 69 71
- ARPPU
KONGREGATE
Disposable Income$90,000$80,000$70,000$60,000$50,000sre.ooo$30,000$10,000$10,000
$- +----~-~-~--~
I Coll ege
• H5
10 30 50
AI·
60 70 80
KONGREGATE
So who is buying?Top 20 Spend ers. Kongregate.com
I cm
=: - D
-==
=~ - -
24 27 29 31 32 32 34 35 36 38 42 42 44 45 46 48 49 49 53 68
-g-• ToP Game - 2nd Game 3rd Game - 4 th Game 5th eame 6th Game Other Games
KONGREGATE
Sessions per DAU by Age and Eventual Spend Category
What drives purchasing?
----------\ 'li.L"L~VUN,- e .tlS He O
r25.00
5.00
20.00
30.00
15.00
10.00
030 ~~ 120 15018021D240 270 m330 3~390 420 450 480 510~
- Non-Spender -<$500 Spender - $s ()(}t spender
.. .. • • .. . . , . , . .
KONGREGATE
Most long-term players spend" Spenders of Daily Active Players
100.0%
9<l."" +-80.0%
70.0% i-,--
60."" ~=====::~~:=::===:::=======~SO.""
40.0%
30,0%
20.0%
10.0% •0."" l.... _
o 30~ ~1201S0 180210240270~0 3~3ro3~420 4S0480
•
KONGREGATE
How quickly do people spend?Days to First Purchase
'" '" ".""""., , , '''OI'''''''''''''''''' i
30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180, i , , ' ''''''''''''''''''' , '
~J_UNLe.aSHCO
,~---------------
100.0%
900%
80.0%
70.0%
60,0%
50.0%
40.0%
30.0%
20.0%
10.0% ti ,0.0% i
0 10 20
~ . . . , .. .. - . , . . .. . .. . ~ .
KONGREGATE
Spending over timeSpend Deciles by Day
ID ~ ~ 120 ISO 1M 210 240 270 300 330 3W 3~ 420 450 480
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1.000
$-0
-. . - .. " . .. . , . . . .. . ,
$800
$600
$400
$'00
$.
KONGREGATE
Spending over timeSpend Deciles by Age
o 30 W ~ 120 ISO l~ 210 240 270 300 3H 3W 3~ 420 4W ~O
- spend decile 7- - spend decile 9 - spend decile 10- - --
KONGREGATE
So how do you spend $5k+ in a game?Big Spender #1: 40-year-old Californian
Primary game is an Action ·RPG• Single-p layer in a social environment• Skill -based level ing, multiple class paths• Guilds & co-op multiplayer• PvP & tourna ments with lot s of modes• Plays 4-6 days a week, 1000+ lifetime p lays
Plays & spends in other games but 90% of m oney/ti me spent in main game.
KONGREGATE
So how do you spend $5k+ in a game?
2014 main game spend: ~$7.5k:
• Consumables & Energy -7 $2,200• Ski ll Upgrades -7 $1,800• Equipment/Items -7 $300• Cosmetic Items -7 $200• Gui lds/Guild Items -7 $250• PvP/Tournaments/Gui ld Wars -7 $2,700
Super Figure Skating RPGSingle-player in a social environment ~individual sport done in a shared session
Skill-based leveling. mu ltiple class paths ~5 classes with Blevels. level up after earning 5-6 skill"ochlevernents" at official test sessions
Guilds & Co-Op Multiplayer ~Skating Club of SF; Synchronized Skate Teams, Ice Dance, Pairs
PvP/Tournaments/G uild Wars 7Frequent competitions, organized by age, level, and mode (freestyle,artistic, light entertainment, etc.); points also tallied for clubs/rinks
Figure Skating MonetizationGame Cat egory Skati ng Equ ivalent My 2014 Spend
Consum.1bles & Energy Ice Time $2,200
Skill Upgrades l essons $LllOO
Eq uipment/ Ite ms Equipment/locker $300
Cosmetic Item s Cost umes $200
Guilds/Guild Items Club membership & $250testtng fees
PvP{Tournament s! Compenno n fees . $2,700Guild Wars t ravel
Total Spend $7,450
Games are HobbiesHobby
WeeklyGolfer
Amateur Guita rist
Restaurant Gourmet
Baseball Fan
Quilter
Serious Runner
Possible Spend
$3k-$lOk a year for green fees , d ubs, lessons, driving range
$2k·$Sk for guitar. lessons. strings. music, recording eq uipment
$2k-$Sk annua lly (eatlng out weekly, $40-$100 avg tab)
$lk - $3k lo r season rickets, $2k+ lo r a trip to sp ring tra ining
ssoo.su for materials. $SOO-$Sk for a high-end sewing machine
$SOO-$5k for shoes, dothing. race fees 1$50-$300 each). travel to races
Rational Spend
s.-r -..g._oI~~~-.... l go.- l bMW _."....., _ • ..- _.,. """'- 100. 1-.1_ ~.,..IO_...... lIlDH....,._ _,_1"""._~ job. But I.., IIbI TW.H!(F\Jll.'t~WId ,.,. a 011 .....""......'"
,"""'_.... ..- you, "'I' _ ~F~~
1'1_--. ...._
My Figure Skating Spend by Year
$14,000 DOfothy Hamrllcamp + 2.... coach
$12,000 <,
jFi l~t narional
$10,000 championshipsSt4lrt~d
\jcom~n& Equipment
$8,000Jcrned sVnchteam l e ssons
$6,000 Sold KM,",''', 1 J Ice TimebO\,l llht custom skat~
Suncd -, - e otter$4,000 i l(o n&ff'l 4Ite
June 2006
!No mant>yor nme -$2,000 j 1\- -$0 <- - ~
2004 200' 2006 2007 2008 2009 2010 2011 2012 20U 2014 20 1S·
Other Industries Have Similar Dynamics
Radio ••
• ••
• •
•
• •• •
• Mass Audience• Free + Ads
• Fractional S/User• $148 revenue
• Moderate/ SmallAudience
• $50-$ 100 per veer
• tapped• $1.78
• ModerateAudience
• Mod erate Price1$0·99 -$9.99 )
• Uncapped
• $48
• Small Audience• Prem ium Price
($15-$ 100)
• UnC1Ipped
• SO.S8
• Small Audience• Premium Price
($50-$500)
• Unca pped• $6 .28
• Tiny Audience• High Price
($1.000+)
• u nca pped
• ?
Other Industries Have Similar Dynamics
._---· -....... 1_
'lQ '<>I"'gf!'--"'-~~-.
lOUR Pltum
fir In PlCIIC!
' l,ummuC(· -.... 1_.....-- _--_._.• 112 ""' "" _...- ...__p,&>OI:._ ..--..• O'wo--ve->o ,
• __D _ O'O _
• cr._....co ;........ ,
----_..._""-------. ,- ..
•
,
i,-,
"00 ==============================-=s..,s..es..,s=,,~
"0051.SO
SUlCI
se.se~oo
Including Console GamesGameStop Customers
• Non-Members - PowerUp Rewards Members
GameStop Revenue
""
• Non-Membe~ - PowerUp Rewards Members
Powerup Rewards Tier
Basic (Free)
Pro ($1S, Gamelnformer + discounts )
Average # of Tran sactions
3
10
AVf'rage Annual Spend
$160
$570
Reason 1: Data!
•
_.
--• ••
. , .
•-•
••
-_..••
.~
-._....
-----_..-
.rv---•-_..•
...
....- ~
_._._.••
.. Jtlll · ~~ :~~
.a
••_._.•
-.... ....•
,
. --- ._-
_._-.......- .--..-_ ..••
-
••
••
-.._..._.-
Reason 3: We Don't Value Digital GamesPilid Mo bIle App Pa id PC G.ames Used Console Games New Console Games
lowest Price $0.99 $0.99 SO.99 $4.99
Hlgnest Pr ice $19.99 $59.99 $56.99 5249.99
Average Sale Price $1.50.$2.50 · $10.001-- $17.50" · 540 .72· .. •
Estlmated Ann ual US <$0.58 " $18?· · $28" · $5.3B· ·· ·Revenue
Is a new console game really worth 4-5x the average PC game? 20-25x theaverage paid mobile game?
·Guesstimate from looltil'l8.t tile to p pIIid cllarts ··Very rougtl guesstimate from tillking10 PC d~elopel"S
•• •ApprO Kimalt', but I know some people who s~1 a 101 of uloed conwle games ·· · ·N PO
Reason 2: Spend is More ConcentratedP~id Mobile App Freemlum M obIle
-ppenuOI I f2P GOIIme MMO F2PGOIIme
Down loadi 50,000 1,000,000 1.000,000 500,000
Conversion ''''''' 15 " 1.5% 1.5"
It of Bu~rs 50,000 15,000 15,000 7,500
ARPPU $2.99 $2.99 $15.00 $75.00
Total Revenue $149,500 $44,850 $225,000 $562.500
ARPU $2.99 $0.04 SO.23 $1.13
Note s f ree, one low price Multiple buckets of Multiple buckets o runlock currency, $0.99- curre ncy. $499-
$19 .99 $99.99
Demand for Games is Inelastic
.... lne lutlc Demand
L..- "- Qo ' d .
Area of th e box = total revenue
Wait, What About Steam Sales?UGUI. ALIE~S:
COLO~IAL MARI~ES
LOOKS AWI'UL.
au MY GOO ALI~:Cot..OlJIAL MARIAJE:S
1:S 90,. ot:r:l
Reason 5: We don't value gamesequally with other hobbies
______ ..-.. -..J
so VIDEOGAMES IS AWASTE OF T1MEjI,- 1 .4jI. ..,1,J]~I..I· k. •~. . . • I
PIIASETEU ME HOw KHDWING WHAT i.--- - -THE IlARDASHIANS An FOR BREAUASTIS IMPDJiTANt·; ,
. -...... . ..
KONGREGATE
Thanks to many people for help with this talk. You know who you are.
To read this talk and othe rs visi t our blog:b!!P://[email protected]/blog
To learn more, submit a game, or contact us visitb!!P://[email protected]
Follow us on Twitter: @EmilyG and @KongregaleDevs
And finally please visit our booth in the Expo.