As I mentioned in an earlier post, I just started the Networked Life course taught by Michael Kearns from the University of Pennsylvania on Coursera. Part of the coursework has been about “heavy tail distribution,” a phenomenon typical in a large-scale network (like Facebook). To summarize, a heavy tail distribution (see image below for an example) means there is a clustering of vertices (users or in the case of Facebook, friends) with a very low number of connections but a long tail of vertices (users) who have a lot of contacts. Thus, in the case of Facebook (or any other typical network) the large majority of users have only a few Friends but there is a long tail of people who have a lot of friends (say over 1,000). These latter people are called “Connectors” in network theory. What is particularly interesting is that this structure, which again is typical of large-scale networks, is effectively the inverse of a traditional bell shape distribution, which would show a few users at the low end, a peak (the top of the bell) and then quickly trail off. The heavy tail is typical of all social networks, Facebook, Twitter, LinkedIn, etc.
What I find interesting is that you find a similar curve in virtually all free-to-play social games when it comes to users’ monetization tendencies. Depending on the game, you normally 90-97 percent of the players do not monetize. You then have a heavy tail where some players monetize at a low level but others (the high value players often referred to as “whales”) will spend thousands of dollars in a game. Thus, these high value players are serving the same role in making a free-to-play game viable as Connectors do in making a social network work.
Why the heavy tail is important
This finding is important for several reasons. First, many critics of the social game industry argue it is not viable because the games rely on only a small number of players to drive the game’s revenue. By understanding heavy tail distribution theory, though, it becomes clear that this clustering is a natural phenomenon and does not show weakness in a game (or business model). Saying Chefville is flawed because it relies on four percent of its players to drive profitability (no inside information here, just an educated guess) is like saying Facebook or LinkedIn are fundamentally flawed because they need their few users who have 1,000+ friends/contacts for the network to work. Second, for many social game designers and companies, their holy grail is to increase the number of people who monetize, even if they get them only to monetize in small amounts. Just as you cannot deny the laws of physics, you cannot deny the heavy tail. Efforts to increase the number of percent of players that are monetizing is likely an uphill battle if not impossible and you are better off using your resources to focus on the high-value players.