Core Games Real Numbers Comparative Stats for Asian

Core Games, Real Numbers Comparative Stats for Asian & Western Games Emily Greer Co-Founder & COO| Kongregate November 2012

Core Games, Real Numbers Comparative Stats for Asian & Western Games Emily Greer November 2012

What is Kongregate? • Open platform for browser-based games – Flash, Unity, HTML 5, Java, etc. • • • 60, 000 games, 1300 uploaded monthly ~200 games selling virtual goods Revenue from virtual goods (70%) & ads (30%) 15 M monthly uniques, core gamers Traffic is 40% US, 40% Europe, 10% Asia Acquired by Game. Stop July 2010

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Background • • All stats are lifetime ARPU: average revenue per user ARPPU: average rev per paying user User = Player: a registered user who loaded the game at least once • Games included have all been on Kongregate at least 6 weeks • Bubbles on charts represent size of total revenue

ARPU & ARPPU • ARPPUs for single-player games cluster around $5 -$10 • Multiplayer games range $20 -$230 • Average ARPPU for a game from Asia: $118 • Average for Western multiplayer game: $40 • ARPPU is the main factor in high ARPU for Asian game, important factor for all games

ARPU & % Buyer • % Buyer ranges from 0. 05% - 3. 6%, much larger range than ARPPU, average is 0. 63% • Single-player average 0. 9% • Multiplayer game average 0. 57%, slightly higher in Western games, slightly lower in Asian games • Much greater range from top to bottom in % buyer in Western games • High revenue multiplayer games 1. 5% or higher

Big Spenders are a Big Deal • 4 out of the top 5 games get the majority of their revenue from those spending $500+ • All top 10 games get the majority of their revenue from players spending $100+

How We Look at Retention • % Repeat – What % of players ever return – Shows initial impressions/interest in the game • Repeat Reg – What % of players who repeat become regulars (10+ plays)? – How strongly is the player hooked in the early-middle parts of the game? • Reg Commited Player, aka % Commitment – What % of regulars become committed players (50+ plays)? – Engagement of end-game content

ARPU & % Repeat • Surprisingly little correlation with ARPU – Games that lose 75% of players immediately are just as likely to have a high ARPU as one that keeps 75% • But games with higher repeat rates have higher revenue at the same ARPU – Games that have high repeat rates get higher ratings and viral spread, more players more revenue • Average for Western games slightly higher than Asian games but top performers much higher

ARPU & % Commitment • Strong correlation with ARPU – Smaller bubbles to the right are generally newer games, their revenue & ARPU will grow with time • Correlation slightly weaker with Asian games, but Repeat Regs very strong – Longer sessions lengths & stronger early-game monetization probably explain

Asian vs Western Style • Asian games: High ARPPU, tight player funnel – Monetization caters well to big spenders • Western games: Lower ARPPU, wide player funnel – Monetization focuses more on initial retention and broad conversion to paid at lower prices – Pay 2 Win is not accepted • Mixed games: can combine the best of both approaches – High conversion, wide funnel, still create big spenders

Commitment REALLY Matters Type of Player % Buyers Non-Repeats 0. 03% Repeats (2 -9 plays) 0. 40% Regs (10 -49 plays) 4. 68% Committed (50+ plays) 16. 53% Avg Trx 2. 10 1. 85 2. 61 7. 03 ARPPU $ 24. 69 $ 19. 61 $ 21. 35 $ 96. 92 $ $ ARPU % Players 0. 01 43% 0. 08 40% 1. 00 10% 16. 02 7% % of Rev 0% 3% 12% 84%

First Advice #1 Don’t push too hard too fast – People are not going to buy the first time they play your game. In the first few sessions focus on fun & giving them reasons to return, not upsells. – Western players expect & value some level of fairness – pay for advantage (and reduction in grind) okay but non-buyers should feel they have some chance to compete #2 Don’t underprice, don’t intimidate – There is very little price elasticity below $5. It’s an emotional decision to spend for progress and status, focus on that. – Use intro paid currency, first time buyer packages & deals to get people into the habit of purchase – Really expensive items early may scare players away who might accept them later

Big Spender Advice #3 Make sure players can spend $1, 000+ – Games are hobbies, no different from golf, cooking, live music – Those who get deeply involved devote significant time, energy, and money – Have lots of items that are appealing and useful to a committed player and price them higher (if possible) than items meant for early/midgame play. [Higher means $30 -100, not $1000] – If you make a fun game someone will want to spend an infinite amount. Don’t create a situation where spending is capped by availability or utility.

The Most Important Lesson #4 – Retention, Retention • Every high ARPU and high revenue game on Kongregate has a strongly social and competitive end-game. Common features (mix and match): – – – Guilds/leagues Guild warfare or leaderboards Pv. P (either synchronous and asynchronous) Visible status & character progression Guilds/leagues (it bears repeating) • You have to keep feeding the game – New content, new modes, new events – New servers are good but not enough

Fantasy Online: A Coming of Age Tale • By Pixelated Games (Jeromy Stroh) • Launched May 2010 • 4. 20 rating • 7. 2 M gameplays

Fantasy Online: A Humble Start • Popular and good retention, but couldn’t monetize well. Only sold aesthetic equips. First month (Jun ‘ 10) Monthly ARPPU: $5. 50 • Added new zones for modest growth to $8. 50 in Sept. Minimal updates for next few months. • Nov 2010: Monthly ARPPU faded to $8. 11 • Dec 2010: Guilds launched, Monthly ARPPU jumped to $12. 93 • Jun 2011: Crafting, mining, XP potions, etc. , kept growing to $18. 66

Fantasy Online: Big Growth • Jul 2011: “Gem Packs”, expensive “uber” items ($30+) were added to court whales. Monthly ARPPU soared to $32. 80 • Nov 2011: New content, new equipment slots, Halloween event, grew to $36. 23 in • Jan 2012: Guild Warfare, peak of $41. 86 • Mar 2012: New high level content, $54. 37 • June 2012: 2 -year anniversary event. Lots of revenue, still high ARPPU at $43. 97.

Fantasy Online: Monthly ARPPU

Fantasy Online: Monthly ARPPU

Fantasy Online: Summary Stats • Traffic stayed strong through high rating and repeated Kongregate promotion • % Buyers generally ~1. 1% with promotion, ~1. 5% without • Monthly ARPPU grew from $5. 45 to $54. 37 • Monthly ARPU grew from $0. 04 to $0. 70

Fantasy Online: Revenue

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