Social Games — Few Things to Know

In the past six months or so I’ve picked up a few things on social games. These are games a company like Zynga is well known for. Which is to say games that incorporate the idea of social interaction rather than single play. But social games are much more than just building a farm or a city these days. They have evolved quite a bit and major players like KIXEYE, Rumble Games, TinyCo, Pocket Gems, Kabam and GREE are currently offering some really fun and engaging games.

I’m going to highlight a few topics on social games I find very interesting. These are things I have learned from my own research and from speaking with people working in some of these companies above.

What Game to Make

There are many approaches a game company can take when deciding on what game to make. Here are some.

1. Build what’s working. This is a market driven approach. If you see a game or a type of game that players are responding to in the market, build something similar. This approach is probably the most common since game companies are businesses. They have to make money and they are building something that has a market already. Zynga falls in this category.

2. Build what you’re are good at. If your team is interested or skilled in a particular type of game, build that. This approach usually results in better games because the team is building something they are passionate about — not just because they are told. And if you talent aligns with market demand, all the better. KIXEYE and Kabam are good examples.

3. Build something new. This is where someone builds something nobody is right now. Games from Rumble Games fall here in my opinion. This is a high risk high reward approach. And companies that do this are either backed by great investors who are patient and who believe in the product or established companies who have resources to experiment.

A lot of established companies test ideas within their existing games and then decide based on player feedback whether they are worth building on.

Business Model

Games are businesses. They need to make money. So how do you make money off games? The following are applicable to both web and mobile games.

1. Free model (with ads) — Players can play games for free. However they often have to see ads.

2. Paid model — Paying allows players to avoid seeing ads and/or offer them with some extra points/items when they start the game.

3. Freemium model — This is probably the most common model used in games, particularly social games. Games are free but they have premium (in-app) purchase options. Players are not required to pay but paying allows them to usually advance faster. They generally include ads as well.

One model I haven’t noticed that I think would be great is a Subscription model. Let players pay $1 or few dollars a month that gives them the ability to play one or multiple games uninterrupted and unbiased.

Keep in mind the current industry favorite Freemium model only has a 2–3% conversation rate. So there are opportunities for new, more effective ways to make money off games.

Four Important Concepts

Creating a great game players will enjoy is step one. After that, there are few components that are crucial to a game’s success. All of them require hard work to exercise.

1. User Acquisition — You created a great game, that’s fantastic. But to have players play the game, even discover the game, a company needs to let the world know it exists first. And this is not a one-time activity. It’s a constant practice.

2. Retention — The players need a reason to keep coming back and continue to play the game. For that reason you have to constantly update and refine your game to the players liking. This requires constant monitoring of what’s working and what’s not. Tracking user activity through metrics like DAU and MAU.

3. Monetization — Build something great, players will play, and money will be made. Given you are addressing components like User Acquisition and Retention of course. As long you have a good base, various business models can be applied to make money.

4. Virality — Your friends are more likely to play something their friends are playing. And a game has a higher chance of success in terms of popularity, time played, times played etc, if players have friends playing the same game. Shared updates and activities of players are also great ways for others to discover games and remind existing but inactive players to play again.

Ad Models

To let people know about a game and to acquire users (preferably loyal users) game companies have to spend on advertising. Here are some ad models companies can buy.

1. CPM — Cost per 1000 impressions for a displayed ad. Publishers get paid just for displaying the ad to its viewers.

2. Display CPC — Cost per click for a displayed ad. Publishers get paid only when viewers click on the ad.

3. Search CPC — Similar to Display CPC but this is cost per click for a paid/sponsored ad displayed after a search.

4. CPA/CPI — Cost per acquisition or install from a displayed ad. Publishers get paid when viewers click on the ad, download and then install the associated app.

CPA/CPI should be the most important for user acquisition. Though it doesn’t guarantee people actually trying the app, it greatly improves the likelihood. The cost is higher than other models above because it assures an app install.

Promotion Campaign

Game companies, especially small ones have to be very smart on how and how much they spend to promote their games. Let’s say a company has $100K to spend on promoting a game. How would they do it?

Assuming the game company has all the in-house manpower and technology needed and not using an agency, they can

1. Create ads (mobile displays, banners, web), landing pages (mobile, web), use social networks (Facebook, Twitter) and PR activity. Budget — 10%.

2. Work with mobile ad networks, real-time bidding platforms and incentive- based download programs, target likely audience and buy ads. Budget — 30%.

3. Track ads (mobile displays, banners, web) effectiveness, test versions (A/B testing), optimize and continue marketing in real-time. Budget — 10%.

4. Track traffic sources and put more resources on traffic sources that deliver most post-download events (registrations, loyal usage, purchases etc.) in real-time. Budget — 50%.

Following these steps and spending the budget as such should help a company get the most out of a limited budget when promoting a game.

Originally published at razeeb.com on Mar 3rd, 2013