the digital gold rush

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Page 1: The digital gold rush
Page 2: The digital gold rush

Introduction

Page 3: The digital gold rush

Social Network

+ =

570.000.000Facebook Users

Page 4: The digital gold rush

Facebook Growth

Page 5: The digital gold rush

Facebook

Video

Photo’s

Events

Messages

Page 6: The digital gold rush

Social Games

Page 7: The digital gold rush

Farmville

Page 8: The digital gold rush

Farmville growth

Page 9: The digital gold rush

Free-to-playMicro Transactions

Page 10: The digital gold rush

Top 250 Growth

Page 11: The digital gold rush

Research Question

How has the free-to-play micro-transaction business model

influenced the growth of Facebook Games?

Page 12: The digital gold rush

F2P Business

Model

Data

Other Game

Business

Models

Methodology

Looking for the correlations

Page 13: The digital gold rush

MethodologyData from:

Articles From:

Page 14: The digital gold rush

Presentation

General Business ConceptMetrics

MonetizingAcquiring Users

Digital Gold Rush

Page 15: The digital gold rush

General Business Concept

(LTV – CAC) * scale = profit

LTV = Life Time ValueCAC= Customer Acquisition Cost

Page 16: The digital gold rush

Balancing LTV & CAC

Page 17: The digital gold rush

Positive Balance

Page 18: The digital gold rush

Metrics

Google Analytics

Kon

Web metrics

Page 19: The digital gold rush

Social Gaming Metrics

Kontagent

Specialised metrics: Viral & FB Demographics

Page 20: The digital gold rush

Metrics

Optimize through A/B testing

Page 21: The digital gold rush

Metrics vs Intuition

Intuition lets you find new designs.

Page 22: The digital gold rush

Life time value

=Daily ARPU * Retention

ARPU = Average Revenue per UserRetention = Avg. Active Days

Page 23: The digital gold rush

Micro Transactions

Selling Digital Goods

Advantages:No price Barrier

Continual Revenue Stream

Page 24: The digital gold rush

Digital Goods

Gameplay enhancing

Progression boosting Customizing

Page 25: The digital gold rush

Daily Arpu

ARPU = Average Revenue per User

$30Divided by1000 users

=Daily ARPU of $0,03

Page 26: The digital gold rush

Total Average Days spend

Retention

Page 27: The digital gold rush

Customer Acquisition Cost

=(Cost per Acquisition / Conversion

Rate) / (1+k-factor)

Page 28: The digital gold rush

Cost Per Acquisition

Advertisement

Page 29: The digital gold rush

Conversion Rate

%Of

Users who completed the tutorial

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Conversion Funnel

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Viral

• News Feeds• Invites• Sending gifts• Referals

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Viral

K-FactorK-Factor >1

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Conclusion

((LTV – CAC) * scale) – Investment =

profit

LTV = Daily ARPU * RetentionCAC= (Cost per Acquisition / Conversion Rate) / (1+k-factor)

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Digital Gold Rush

Viral

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Digital Gold Rush

Each ad earns you more than it costs!

Page 36: The digital gold rush

Policy Change

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Policy Change

Viral Channels and 3rd party apps blocked from Facebook

Page 38: The digital gold rush

Policy Change

Viral

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Smaller titles Growth

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Top 250 Growth

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Smaller titles Growth

Page 42: The digital gold rush

Questions

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New Development Style

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Cityvilles Growth