launching a free-to-play game: strategies, risks, and pitfalls

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Launching a Free- to-Play Game: Strategies, Risks, and Pitfalls Eric Benjamin Seufert VP of User Acquisition, Rovio Owner, Mobile Dev Memo

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Page 1: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Eric Benjamin SeufertVP of User Acquisition, RovioOwner, Mobile Dev Memo

Page 2: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Who am I?

Page 3: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Who am I?

Page 4: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Who am I?

Page 5: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Who am I?

Page 6: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

Page 7: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

I. State of the Market / Current Challenges

Page 8: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

I.

Product Positioning StrategyII.

State of the Market / Current Challenges

Page 9: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

I.

Product Positioning StrategyII.

State of the Market / Current Challenges

Three case studiesIII.

Page 10: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

I.

Product Positioning StrategyII.

State of the Market / Current Challenges

Three case studiesIII.

ConclusionIV.

Page 11: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

I.

Product Positioning StrategyII.

State of the Market / Current Challenges

Three case studiesIII.

ConclusionIV.

Page 12: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Why is it difficult to launch a Free-to-Play game in 2015?

Page 13: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Why is it difficult to launch a Free-to-Play game in 2015?

•Advertising costs are high

Page 14: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Why is it difficult to launch a Free-to-Play game in 2015?

•Advertising costs are high

Page 15: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Why is it difficult to launch a Free-to-Play game in 2015?

•Succeeding on the App Store is difficult by design.

Page 16: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

App Store Discovery is Not Broken

January 2015

1.43MM apps

1.21MM apps

Page 17: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

App Store Discovery is Not Broken

Page 18: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

App Store Discovery is Not Broken

Page 19: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iPhone / USJune 1, 2015

(6)

(2)

(2)

Page 20: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iPhone / USJune 1, 2015

*

*

*

*

*

*

X

X

\

\

*X\

Existing, pre-mobile network; beneficiary of the “Great Unbundling”

Temporary viral / paid blip

Truly Viral phenomenon

(6)

(2)

(2)

Page 21: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iPhone / USJuly 29, 2015

(6)

(2)

(2)

Page 22: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iPhone / USJuly 29, 2015

*

*

b

*

*

X

\

*X\

Existing, pre-mobile network; beneficiary of the “Great Unbundling”Temporary viral / paid blip

Truly Viral phenomenon

(6)

(2)

(2)

*

b Brand integration

X

\

Page 23: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Existing Networks 6 5

Facebook 2 4

Google 2 1

Other 2 1

Viral Phenomena 2 2

Temporary Blips 2 2

Top Downloaded, iPhone / USJuly 29, 2015June 1, 2015

Page 24: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Advertising vs. Existing Networks•Advertising costs are going up…

Page 25: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Advertising vs. Existing Networks

Page 26: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Advertising vs. Existing Networks•Advertising costs are going up……because the largest developers are monetizing their networks…

Page 27: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Advertising vs. Networks

Page 28: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Advertising vs. Existing Networks•Advertising costs are going up……because the largest developers are monetizing their networks……and retaining them within their portfolio via cross-promotion…

Page 29: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Advertising vs. Networks

Page 30: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Advertising vs. Networks

Page 31: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Advertising vs. Networks•Advertising costs are going up……because the largest developers are monetizing their networks……and retaining them within their portfolio via cross-promotion…•With a single title, you’re not competing with large developers on the basis of LTV > CPI (game quality), you’re competing on the basis of network size.

Page 32: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

I.

Product Positioning StrategyII.

State of the Market / Current Challenges

Three case studiesIII.

ConclusionIV.

Page 33: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Positioning vs. Marketing

Page 34: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Positioning vs. Marketing

•Irrelevant to consider competition with networks in terms of money;

Page 35: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Positioning vs. Marketing

•Irrelevant to consider competition with networks in terms of money;•F2P market stratified into a multi-segment model based on marketing tactics;

Page 36: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Unpaid Growth Paid Growth

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2 3

4

Page 37: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Unpaid Growth Paid Growth

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Page 38: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Unpaid Growth Paid Growth

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Page 39: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Unpaid Growth Paid Growth

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“Gimmick” Games

Fast-follow Clones

Lightweight graphics-driven

experiments

Page 40: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Unpaid Growth Paid Growth

No B

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Bala

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“Gimmick” Games

Fast-follow Clones

Second-screen

Extension

Lightweight graphics-driven

experiments

IP Co-brands

Page 41: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Unpaid Growth Paid Growth

No B

ala

nce

Sh

eet

Req

uir

em

en

t

Bala

nce

Sh

eet

Req

uir

em

en

t

“Gimmick” Games

Fast-follow Clones

Second-screen

Extension

Full F2P Economy Games

Lightweight graphics-driven

experiments

IP Co-brands

Page 42: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Unpaid Growth Paid Growth

No B

ala

nce

Sh

eet

Req

uir

em

en

t

Bala

nce

Sh

eet

Req

uir

em

en

t

“Gimmick” Games

Fast-follow Clones

Second-screen

Extension

Full F2P Economy Games

Lightweight graphics-driven

experiments

IP Co-brands

?

Page 43: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Positioning vs. Marketing

•Irrelevant to consider competition with networks in terms of money;•F2P market stratified into a multi-segment model based on marketing tactics;•Traction without billions on the balance sheet has to come from product positioning.

Page 44: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Product PositioningGreenlight Questions for Quadrants 1 – 3:

Page 45: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Product PositioningGreenlight Questions for Quadrants 1 – 3:•“Does this game have a large potential Total Addressable Market?”

Page 46: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Product PositioningGreenlight Questions for Quadrants 1 – 3:•“Does this game have a large potential Total Addressable Market?”•“Can I partner with someone to reach that market? Who?”

Page 47: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Product PositioningGreenlight Questions for Quadrants 1 – 3:•“Does this game have a large potential Total Addressable Market?”•“Can I partner with someone to reach that market? Who?”•“Is this game unique enough to produce viral growth?”

Page 48: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Product PositioningGreenlight Questions for Quadrants 1 – 3:•“Does this game have a large potential Total Addressable Market?”•“Can I partner with someone to reach that market? Who?”•“Is this game unique enough to produce viral growth?”•“Can the essence of the game be communicated quickly and clearly?”

Page 49: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

I.

Product Positioning StrategyII.

State of the Market / Current Challenges

Three case studiesIII.

ConclusionIV.

Page 50: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Assumption Challenge (Strawman)

Page 51: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Assumption Challenge (Strawman)A successful game launch will look like this on the Top Downloaded chart:

Page 52: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls
Page 53: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Unpaid Growth Paid Growth

No B

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Page 54: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Crossy Road

Page 55: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Developer Hipster Whale (AUS)Hipster Whale (AUS) / Yodo1

(CHI)

Release Date: November 19, 2014 January 10, 2015

Top Downloaded Rank Reached (US):

4 2

Days from Release to Top Downloaded Rank:

4 8

Crossy Road

Page 56: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iOS (US)

Page 57: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Grossing, iOS (US)

#225

Page 58: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iOS (US)

Page 59: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 1

Page 60: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 1

Strategy: Virality. Highly differentiated graphics, low-friction monetization, novel gameplay.

Page 61: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 1

Strategy: Virality. Highly differentiated graphics, low-friction monetization, novel gameplay.

Risks: Inability to monetize. Not enough gameplay depth to introduce true game economy. Once novelty (virality) wears off, growth will stop. Ad monetization experiences rapid decay.

Page 62: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 1

Strategy: Virality. Highly differentiated graphics, low-friction monetization, novel gameplay.

Risks: Inability to monetize. Not enough gameplay depth to introduce true game economy. Once novelty (virality) wears off, growth will stop. Ad monetization experiences rapid decay.

Pitfalls: Viral misfire. Game doesn’t take off due to lack of resonance and / or untenable depth.

Page 63: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Marvel: Contest of Champions

Page 64: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Marvel: Contest of Champions

Developer Kabam Kabam

Release Date: December 10, 2014 December 10, 2014

Top Downloaded Rank Reached (US):

3 11

Days from Release to Top Downloaded Rank:

2 7

Page 65: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iOS (US)

Page 66: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Grossing, iOS (US)

#10

Page 67: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iOS (US)

Page 68: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 2

Page 69: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 2

Strategy: Subsidized marketing costs through brand recognition.

Page 70: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 2

Strategy: Subsidized marketing costs through brand recognition.

Risks: Brand mismatch. Brand doesn’t resonate with fans of the game type (match 3 / build and battle / etc.).

Page 71: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 2

Strategy: Subsidized marketing costs through brand recognition.

Risks:

Pitfalls:

Brand mismatch. Brand doesn’t resonate with fans of the game type (match 3 / build and battle / etc.).

Onerous IP licensing terms prevent profitability of marketing. Social media reach of IP owner is overestimated.

Page 72: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Cookie Jam

Page 73: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Cookie Jam

Developer SGN (USA) / NetEase (CHI) SGN (USA)

Release Date: February 27, 2014 March 29, 2014

Top Downloaded Rank Reached (US):

15 17

Days from Release to Top Downloaded Rank:

36 141

Page 74: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iOS (US)

Page 75: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Grossing, iOS (US)

#26

Page 76: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Top Downloaded, iOS (US)

Page 77: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 3

Page 78: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 3

Strategy: Sustainable growth driven through profitable unit economics.

Page 79: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 3

Strategy: Sustainable growth driven through profitable unit economics.

Risks: Inability to scale unit economics beyond a minimal threshold.

Page 80: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Quadrant 3

Strategy: Sustainable growth driven through profitable unit economics.

Risks:

Pitfalls:

Inability to scale unit economics beyond a minimal threshold.

Lack of organizational commitment to reach consumer “break through” on IP. Lack of analytical sophistication.

Page 81: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Presentation Structure

I.

Product Positioning StrategyII.

State of the Market / Current Challenges

Three case studiesIII.

ConclusionIV.

Page 82: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Take-aways

Page 83: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Take-aways•Consider your quadrant and build marketing strategy accordingly, pre-product;

Page 84: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Take-aways•Consider your quadrant and build marketing strategy accordingly, pre-product;•Initial download velocity / chart position is not a prudent goal unto itself;

Page 85: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Take-aways•Consider your quadrant and build marketing strategy accordingly, pre-product;•Initial download velocity / chart position is not a prudent goal unto itself;•Product / Market fit is a better way to think about scale than LTV / CPI;

Page 86: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Take-aways•Consider your quadrant and build marketing strategy accordingly, pre-product;•Initial download velocity / chart position is not a prudent goal unto itself;•Product / Market fit is a better way to think about scale than LTV / CPI;•Don’t try to emulate a competitor’s title unless you know their financials.

Page 87: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

Thank you, Priori Data!•Provided the data used in this presentation•Berlin-based app store analytics start-up•http://prioridata.com

Page 88: Launching a Free-to-Play Game: Strategies, Risks, and Pitfalls

[email protected]@eric_seufert