I recently read the transcript of an investor-focussed session on social games. They talked about ‘3 pillars of social game monetisation’ as being viral channels, cross-promotion and advertising. That’s were most companies are right now although I would extend that a little as follows:

The key components to building large user volumes (fostering ‘virality’) are:

  1. Intrinsic ‘shareability’ – users instantly feel compelled to tell their friends/followers about it because they like the game so much – the story is ‘baked into’ the product. It doesn’t need ‘marketing’….it needs great product design.
  2. Integral ‘social gameplay’ – users intrinsically benefit from involving their friends in the game play experience and are therefore intrinsically motivated to persuade their friends to join them in the experience
  3. Cross-promotions – the publisher is able to leverage an existing user audience in order to promote new games to them
  4. Paid-for advertising – the publisher pays to acquire new users (e.g. on a ‘cost per install’ basis).
[1] and [2] are absolute essentials – without a good product that has been designed with the end use environment in place there can be no hope of success irrespective of how much promotion or advertising is undertaken as players simply won’t revisit the game after an initial exploratory visit (first install).  The old saying of; “You can’t polish a turd’ is particularly true when applied to consumer digital media.

Zynga are very well-placed (resourced) to do [4] and have a massive head start on [3] from their previous hits. There are other companies out there that are not spending oodles of coin on advertising though, which is encouraging given that most indie developers don’t have the cash to pay to acquire customers on a grand scale. See Crowdstar and Booyah for a starter.

The 2 areas I see for innovation in terms of revenue are

  • better payment options – get those that can’t yet pay to be able to through innovative means, and
  • find ingenious ways to yield additional value to new revenue sources through the medium of very large playing masses.
We need to look beyond ‘build a massive player base and monetise the hell out of a small %’ (a brilliant start though that has been!) and work out new ways to track that what they are doing in these games – on massive scales – relate that to, for example, purchasing behaviours or product preferences and to derive monetary value from that.

That’s what we are trying to do at www.soshigames.com and our mission is to do this in a way that helps charities and NGOs gain increased donations, additional sources of unrestricted funding as well as to raise awareness of issues and, utlimately change behaviours for the benefit of our society.

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