SGS 2010: $3M Required To Get To 1M DAUs

Game developers are on their toes as the distribution landscape continues to shift. How can a company jumpstart its game and gain strong distribution? Ro Choy moderated a panel today with Kavin Stewart of LOLapps, Jia Shen of RockYou, Keith Rabois of Slide, and Rex Ng of 6Waves, revealing insights into the gauntlet of virility, their experiences and the opportunities that lie outside of Facebook. The conclusion: Facebook is still the utopia for developers, atleast for the foreseeable future. The problem of viral growth is plaguing the entire social gaming landscape, with the highest observed K factor at around 0.6. "Opportunities to grow have been significantly constrained," commented a subtly optimistic Keith. The early days of Facebook made it easy to jumpstart viral growth - hence you have the flixsters and slides of the world that saw massive growth that is difficult to replicate today. An interesting question the moderator asked was how much money is needed to launch a successful game to 1 million DAU's. Jia Shen responded with a figure of $3 million assuming 50% retention. Companies modeled and leveraged Playfish's stride in pioneering engaging concepts that accelerate engagement, but now have to innovate on their own. Although the question of focusing on gameplay vs virility is a bit nebulous, all panelists commented on balancing as a key skill of the managers involved in driving the products forward. Jia Shen of Rockyou added, "Ultimately you want to look for someone who understands game designs and virility." Dependence on Facebook has led many developers to sleepless nights. Keith stated, "Facebook will make it difficult to re-engage users through their channels for a game." Facebook will focus on what's best for its users. Panelists affirmed the need to look at everything as a necessity and to use those channels in an optimized fashion. The evolution of social networks is in full effect hence the difficulty companies face in accurately predicting the future of the acquisition and virility. The discussion then shifted to the ecosystem outside of Facebook, with a limelight on Asian social networks. Ranging from Mixi and DeNA in Japan to Cyworld in Korea an Xionei in China, there's opportunities for developers to try their luck at a more savvy asian consumer that can monetize 1.5 - 2x of the typical ARPU found with US consumers, although theres significant challenges to overcome in establishing those relationships. It's too early to say what the new Facebook policies such as the "like" feature will bring, but one thing is clear: launching on Facebook first is a superior model. As games expand beyond Facebook on to the shark-infested waters of the open web, will anything go?

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SGS 2010: $3M Required To Get To 1M DAUs

Azam Khan

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Azam Khan