mobile games revenue models presentation at gamer tech law conf. oct 2013
TRANSCRIPT
Pillsbury Winthrop Shaw Pittman LLP
Mobile Platforms and Business Models Presented by: Riaz Karamali, Partner Palo Alto, California [email protected] Monday, October 07, 2013
Gamer Technology Law New technologies, opportunities, regulations
and business models
Foundation: Common Revenue Models
Show Me the Money! Advergames Advertisements Auctions – Player Trades Crowd-Funding Free Games In-App Purchases Real Product Sale Selling Games Subscriptions
1 Mobile Platforms and Game Revenue Models
Revenue Model: Advergames
Game is made to a specific advertisement campaign of a company.
Different types: above the line, below the line and through the line
Pros Simple production Shared risk
Cons Shared risk (brand and developer) Unlikely to be a hit – capped upside
2 | Mobile Platforms and Game Revenue Models
Revenue Model: Advertisements
Using ads inside games.
Different types: static, dynamic, product placement, others
Pros Users aren't charged for this and allows apps to be free.
Cons Less money per user, need great user base to make good money.
3 | Mobile Platforms and Game Revenue Models
Revenue Model: Auctions / Player Trades
Create in game or parallel online economy around virtual goods.
Pros Can be lucrative and engaging to users.
Cons Best suited for virtual worlds and MMORPGs. Fraught with real world issues.
4 | Mobile Platforms and Game Revenue Models
Revenue Model: Crowd-Funding
Use a crowd-funding platform to pre-sell the game
Pros Cut out the publisher Validate demand prior to large investment in development Engage your community
Cons The odds are stacked against lesser known developers Managing a successful kickstarter campaign is a full time job
5 | Mobile Platforms and Game Revenue Models
Revenue Model: Free Games
Game devs use free version of games to promote the paid version, use free games just to promote themselves or in combination with other revenue model.
In combination with free: shareware / paid upgrades or solicit domations
Pros Lowers barrier to download
Cons Cannibalization Can lower quality of user interactions with each other
6 | Mobile Platforms and Game Revenue Models
Revenue Model: In-App Purchases
One of the most successful models for mobile games.
Game is a free-to-play game that sells virtual goods to let users accelerate things, get more money or buy special thing.
Goods – functional, decorative or functional AND decorative
Pros Users can decide how much to spend – hello whales!
Cons Need strategy to engage users to pay for goods
without alienating them or skewing gameplay
7 | Mobile Platforms and Game Revenue Models
Revenue Model: Real Product Sale
Sell products around your game and sell them to players within game setting
Pros Source of revenue beyond game itself
Cons Players must be fan of game outside of game setting
8 | Mobile Platforms and Game Revenue Models
Revenue Model: Selling Games
This is the most common revenue model
Pros Easy and straighforward Quick results Users are familiar with this model Ability to change pricing / have “sales”
Cons Some players will not buy; so demand is reduced May invite free imitators
9 | Mobile Platforms and Game Revenue Models
Revenue Model: Subscription
Players pay a periodic fee to play.
Pros Recurring revenue
Cons Frequent updates Difficult to manage
10 | Mobile Platforms and Game Revenue Models
Hybrid Approach: Using Multiple Models
Free Games + Ads
Selling Game
This is a good combination to earn money both ways, using a limited free version to let people try your game but still monetizing them with ads and if they like it sell the game.
In-App Purchases +
Ads
A nice combination to have a good number of users and monetize them in two ways: Selling premium options (ex. Virtual goods) and ads. This way you monetize even the user that don't buy premium options
Selling Games +
In-App Purchases
This combination is selling game and using in-app purchases to sell virtual goods to maximize the game revenue.
11 | Mobile Platforms and Game Revenue Models
A few possible examples:
Changing Gears
12 | Mobile Platforms and Game Revenue Models
King Quits Advertising Since It Earns So Much On Candy Crush Purchases
Game developers are using a number of different revenue models: • Some game provide multiple revenue models within one games • Other games are changing their revenue models as they build and engage a player
foundation
App Stores
13 | Mobile Platforms and Game Revenue Models
When in the initial stages of game development, developers should clearly outline monetization strategy and goals and align those with legal and regulatory guidelines
Mobile Operating Systems: Competitors and Also-Rans
14 Mobile Platforms and Game Revenue Models
Operating System Units 2012 2012% 2011% Android 136 million 75% 57% Apple 26.9 million 14.9% 13.8% Blackberry 7.7 million 4.3% 9.5% Microsoft Windows 3.6 million 2.0% 1.2% Symbian 4.1 million 2.3% 14.6% Linux Mobile 2.8 million 1.5% 3.3%
Analysis of Key Terms and Conditions Governing Software Application Development and Distribution
15 | Mobile Platforms and Game Revenue Models
Case Study: Crowd-Funding
Typical Scenario – product pre-sales
Android Terms Open distribution policy – no problem
Apple Terms Apps must be sold through the AppStore 50 promo codes per version
Possible Solutions Brief free period Gifting Special donor version with unlock code Special deal with Apple (e.g. Amazon free apps)
16 Mobile Platforms and Game Revenue Models
Questions?
Riaz Karamali | Partner Pillsbury Winthrop Shaw Pittman LLP 2550 Hanover Street | Palo Alto, CA 94304-1115 Dir 650.233.4052 | Fax 650.233.4545 | Cell 650.814.5597 Email: [email protected] Bio: http://www.pillsburylaw.com/riaz.karamali
17 | Mobile Platforms and Game Revenue Models