At work, our biz dev guy forwarded around this highly interesting article about the future of paid video content on the Net: The Ala Carting of Video on the Net – Will it lead to disaster?
He commented that this had relevance for games — something about which I agree completely. I strongly suggest reading the full article, but here’s a brief sampling (which I gather is quoting a report from Bernstein Research):
On the web, early evidence suggests that consumers will tune out – click away – if they are forced to watch more than 30 seconds or so of advertising up front, and maybe another 90 seconds of advertising over the next thirty minutes. Hulu.com, for example, which has already been lionized by many as the future of TV, serves two minutes of advertising for every 22 minutes of programming(i.e. the programming duration of a typical half hour show from television). Assuming identical CPMs for web video and TV, and after accounting for lost affiliate fees, a 30 minute program on the web with two minutes of advertising yields approximately 1/8th as much revenue per viewer.
Are content producers prepared to reduce production costs…by 88%?
Of course, this echoes lengthy posts I have written in the past on the future of content, wherein I ended on the somber note
…the question is whether all forms of fixed content will effectively be donations to the common weal.
This may seem ludicrous in a world where Grand Theft Auto IV has just had the largest entertainment opening of all time for any form of media — but keep in mind that it reportedly took 1000 people to make, and $100m. At those prices, you had better have a big hit.
The thread here at the office commented that in a world where everyone is surfing all the time, and people stick for very short amounts of time, high page rank and search results will matter even more. In other words, the game-and-web convergence may well land you at a world where “games SEO” is really important, because traditional marketing starts to fall down. (Look at how aggressively Kongregate pursues Diggs for their games, for example). Our biz dev guy again:
SEO could be as important as compelling content. Great news for innovation, not so good news for games as art.
I am unsure this is the case necessarily. As I have argued before, the value lies in the relationship to the consumer. Get them to love you, then squeeze them like grapes for their dollars. Like the Russians do! From the latest Casual Connect Magazine, a case study by IT Territory, a Russian game development firm:
On average out of every 100 downloads, only one or two users actually purchase the games. In our experience, by contrast, up to 30% of those who play free-to-play games will make some sort of microtransaction purchase.
Average amount that a player who makes in-game purchases spends per month: $30 USD.
In the a la carte world, you monetize passion. The surfers are the loss leader. And that isn’t necessarily bad for games as art, given that passionate fans are probably more willing to follow the creator wherever their muse leads them.
13 Responses to “A la carting games”
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What does it mean that “the surfers are the loss leaders?” Maybe I misunderstand the term; I thought “loss leaders” were products.
What I mean is that the surfers will cost you money, and the product offerings for them (shallow, instant gratification, designed for that quick surf experience) is the loss leader.
Thanks. The confusion was mine. It’s not a term I’ve ever actually typed or said aloud before 🙂
Does he have a name, your biz dev guy?
I don’t know why Raph was keeping his name so hush-hush in this post. Jason Hable is Director of Business Development at Areae, Inc., formerly Principal at Crescendo Ventures, one of Areae’s venture-capital investors. I think he telecommutes. Livin’ large! 😉
That all makes sense. So, for games, it seems that a quick knock out (fantastic experience) adventure to grab the surfers would be good. Maybe even an earned special item. I’m thinking of a tutorial for the basic game play that’s designed to grab the wonderer. Maybe start with a very quick movie that moves right into a play experience.
Imagine: You’re watching Indiana Jones take the golden bust and start to leave, the round boulder starts to roll out…and then you are put into the player mode. Can you beat the rock to the entrance? Change it, of course, add in some dexterity jumps and timing avoidances, shooting spears, etc.
Then offer a free adventure. Keep your rewards and move into the game.
“SEO could be as important as compelling content.”
Absolutely true, however a little over simplified and only one part of the picture. Bringing in a constant flow of new users is important no matter what the business model is. Assuming you’re on an ad model, you might be able to get away with shallow, flashy content directed at the casual surfer. I rank SEO third after viral marketing and distribution / partnership strategies for bringing in new users. New users brought in through SEO also churn like crazy.
Bringing them in is easy relative to getting them to stay long enough to spend money. We’re on the ad model, so this post is certainly relevant to us however subscription and ROT are much more common models for MMOs. To monetize surfers there needs to be something under the surface beyond just flash and a great intro to get them to commit. This can be fun, smart, deep content but can also be the power and stickiness of the community you’ve created. I would rate community ahead of content but obviously they interrelate.
“ROT” – I meant RMT. My bad.
comes across a bit whiny… “Owie, I fell down and broke my business model from the 1960’s”.
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Pardon my ignorance, but what does SEO stand for?
Search Engine Optimization.
http://en.wikipedia.org/wiki/Search_engine_optimization
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