Online Game Provider Faces a Real Problem Generating Revenue From Toolbars
During a leading casual game publisher’s recent earnings call, the CFO cited that one of the primary reasons their quarterly revenue fell (Q1 2009 versus Q1 2008) was that they were generating less revenue from distributing the Google Toolbar offer with their downloads.
This is precisely the problem game publishers are faced with when having only a single offer to leverage with software recommendations from their installer, versus a marketplace of third party offers such as those provided by W3i’s Install IQ process. Had this game provider been a client of W3i’s Install IQ platform, they would have been able to recommend other offers with their downloads instead of relying solely on a Google Toolbar, and therefore closed the gap on their lost revenue from users which had now already all received the Google Toolbar offer in the prior year’s downloads.
Other companies with Windows applications should take note of this provider’s challenges, and proactively integrate with W3i before these revenue decreases show up in their quarterly financial numbers.
Today, I attempted to download from this provider to see what business models they were leveraging.
- $9.99 Monthly Recurring Subscription – The most prominent business model is to get you to register with your credit card for a free trial to their paid membership. You have 30 days to try the membership, after which time you will be auto-billed monthly at $9.99.
To cancel the trial membership, I was instructed to call their 800 number and provide my account number. I wasn’t too enthused that I could register online but was required to make a phone call to cancel. However, the customer support rep was immediately available and didn’t make life too difficult. Overall, I was pleased with their customer support. - Display Ads On Website – After subscribing to the free trial credit card subscription, you can then browse their catalog of online and downloadable games. The website has numerous banner ads on display which help them in generating revenues.
- 60 Minute Try Before You Buy Downloads – Even with a membership I was still encouraged to download 60 minute trials of various game titles.
- Toolbar and Other Software Recommendations – The first downloadable trial game came with Google offers including a Toolbar and Desktop Search option.
The Google Toolbar, when first opened, spawned an alert offering to change my default search as well as enable PageRank, further driving value to Google.
I tried downloading additional trial games and only one additional software recommendation, for Google’s Chrome Browser, was offered.
This demonstrates that even today the company has not yet diversified its dependence on Google’s very limited number of offers to be leveraged by their software recommendations.
Ryan Weber, Vice President of Corporate Strategy and Co-Founder, W3i, LLC
Entrepreneur and pioneer of Internet marketing focusing on increasing revenue and distribution for digital downloads.
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