The use of virtual goods in a physical form is one of the most interesting (and profitable) monetization techniques that I have seen. By “physical virtual goods” (my term), I mean taking a virtual good that is normally sold through an in-app purchase and making it into a physical retail item that is used to unlock the virtual good inside the game (with no functionality for the physical product).
The Skylanders example
Activision’s Skylanders are the perfect example of this monetization strategy. Activison has two video games, Skylanders Giants and Skylanders Spyro’s Adventure, that sell at retail, just as you would purchase Call of Duty or Super Mario Bros. However, instead of selling downloadable content or offering upgrades through in-app purchases (depending on the platform), players must purchase Skylanders characters at retail, place them on a game-specific portal (a device that plugs into the game console) or enter a code that comes with the character (again, depending on the platform) to unlock the character in the game. Continue reading “Physical virtual goods”
As I said, 2013 will be the year of crowd-funding.
The three most important letters for any social game company, and arguably any B2C or B2B company, is LTV, or “lifetime value.” Although most social game industry professionals acknowledge the importance of LTV, they often fail to realize it is the determinant to a company’s, product’s and / or game’s success and survival. It is the primary factor in why companies fail or are sold for tens or hundreds of millions of dollars.
What LTV consists of
LTV is a function that shows the present value of a new customer, how much that customer is worth to your company. Although I will be focusing on its application for social games, LTV can be used for any business, from valuing new customers for a restaurant using a GroupOn promotion, to a car dealer deciding how (and whether) to motivate buyers to visit the showroom. Continue reading “LTV, the lifeblood of your business”
I am not a big fan of end-of-year predictions, as they are usually not worth the bandwidth they take up; instead, I thought I would instead start the year by discussing two areas that I feel are the most exciting part of the tech space. These are already sectors that are experiencing strong growth and have generated a lot of attention from investors, but hopefully this post will help you see the opportunity and how it could impact your efforts.
Although Kickstarter and its reward-based crowd-funding has already found a solid position in the game space, crowd-funding will explode once non-accredited investors can actually obtain equity in companies. In the spring of 2012, President Obama passed an act that will drastically alter the landscape of crowd-funding platforms. Prior to this act, a small pool of existing crowd-funding sites were only permitted to operate on a reward or donation basis (e.g., Kickstarter), essentially offering a product, discount, or enticement in exchange for monetary funding. With the launch of the JOBS Act, the ability for the general public to receive company equity in exchange for funding is now a possibility. Continue reading “Two big trends in 2013”