Casual Games Association ppt Template

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Dont Roll Over
Brian Robbins Director of Games, Game Trust,
Inc. Chair, IGDA Casual Games SIG
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(No Transcript)
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We Have a Problem
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The economics of casual games suck for developers
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Economics

• Consumer Pays 20
• Portal Takes 14
• Other costs 2
• Developer Gets 4
• Developer nets 20
• Retailer nets 70

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What does the portal do?

• They provide DRM
• Bandwidth
• Merchant fees / payment processing
• Other incidental costs

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What does Portal do (2)

• They bring the customer
• (this is their big value)
• But so do Brick Mortar Retailers
• (at a much greater cost!)
• BM retail margins are 1-20
• Games to retail have a wholesale price typically
  around 12-15 for a 20 title
• Retailer only gets 5-8 and all their costs come
  out of that!

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But wait theres more
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What about

• Advertising?
• Price Clubs?
• Subscriptions?

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Advertising

• Assume
• 10 of page views download (probably high)
• 1 of downloaders purchase
• 2 ads per page
• Every purchase 2000 page views
• Typical CPM 1 CPM (much higher?)
• Portal 2
• Goes to 4 if 1 in 20 page views download
• Skyrockets if conversion rate is lower
• From yesterday ad revenue is almost equal with
  download revenue

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What about web-demo?

• Its worth it to upsell the download, right?
• These areas are setup to drive ads, not upsell
  downloads!
• Typical ads / play 4-8
• How many plays / download?
• If 10 then every purchase 4-8000 ad views!
• Again Developer 0

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Price Clubs / Subscriptions

• Portal gets 10 / user / month
• Developer gets rev share (3) when user buys
  their game (at a discount)
• But what about breakage?
• Significant numbers of users do not purchase in
  any given month!
• Portal gets 10 (plus ad revenue)
• Developer gets 0

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Why is this?

• Most developers dont know
• They dont run the numbers
• They dont know to ask
• They just blindly accept whatever is offered
• Those that do
• Cant do anything alone

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What is Right?

• Share ad revenue just like download revenue (even
  if it is very small)
• Real and Microsoft have announced they will be so
  start asking for this NOW!
• Monetize developers for breakage
• Wholesale pricing model?

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What do we do?

• Get the word out!
• Tell new (and old) developers how everything
  works
• Dont take no for an answer
• Make the deal that works for your business

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What Else?

• You cant get it if you dont ask
• Demand ad share
• Demand breakage compensation
• Realize that your content provides value to the
  entire chain

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Dont Roll Over

• (unless you choose to)
• www.dubane.com/cons/
• brian_at_gametrust.com