Is social gaming impacting console game sales?  Youbetcha. Social games have seen a tidal wave of interest over the past few years, and are rising to the top of the charts in popularity and revenue generation.  Screen Digest forecasts that social games will be worth $1.5 billion in 2014. 

While retail sales of console games are starting to feel the pressure.  The NPD Group states that “U.S. retail sales of hardware, software and accessories are down 6 percent from a year earlier, to $1.1 billion.  Game software has taken a hit in sales decreasing 15 percent to $531.3 million, while hardware sales grew 5 percent to $401.7 million in June, 2010.  Another important statistic is that total industry sales for the year through the end of June were down 9 percent to $6.66 billion according to NPD. 

 Let’s be honest, we were playing social games for centuries.  From poker, to billiards to backgammon, to chess, we used games to be more social.  It is just in the last decade that we became infatuated with new online social games.  Many companies are benefiting from the buzz and popularity that these games are generating.  

Edge Magazine states that “Zynga is by far the most profitable social game company thus far and has generated revenue over $100 million.”  It is reported that Zynga earns over $1 million per day with its social game, Farmville.  Farmville has nearly 60 million active monthly users; and Zynga plans on expanding their user base in the next couple years. 

 Social games are less complex compared to console games like Xbox 360 and Playstation.  Users have the ability to socialize with friends in their network while playing the game making the games appeal to a more mainstream audience.    

Disney acquires Playdom, a maker of social games, for $763 million; and the talk in the industry is that Google is developing a new social media platform to give Facebook a run for its money.  This would help developers be less dependent upon Facebook to distribute their social games.  “The common denominator here is that social games have the highest growth rate in the video game industry right now,” Colin Sebastian of Lazard Capital Markets said in an interview.

How do companies make money marketing social games?  Charging for the game, freemium or ad-supported revenue models are common.  But 90% of all revenue generated by the world’s top social game developers is through virtual goods.

 “Comparing information from 1st party sites, Social Networks lead the way with the median spent on digital goods coming in at $50 per year. This was followed by MMO ($40), Casual Games ($40), Free to Play Games ($40), PC Games with Online Play ($37) and Console Games with Online Play ($20). Also worth noting is that overall 32% of respondents made purchases within social networks.” reported by VSC PR for PlaySpan.

Matt Machacek, Marketing Communications, W3i, LLC
Matt is a senior in the Marketing program at SCSU.  Matt is applying his learnings to W3i’s social media outreach.

Aaron Kardell, developer of iGarage Sales and other successful apps, gives great tips on how to create awareness for your iPhone, Android or other mobile applications in this video. The three key points are summarized here and can increase your chances for success after release.  

Apply viral hooks in your app that will encourage people to share the app with others.  Include links that make it easy to share the app on Facebook, Twitter, etc.  If the app is only useful when a friend installs the app too, the referral will create additional installations.  

People look for apps to download that have good ratings.  There was a catch in the AppStore that users were only asked to rate an app after uninstalling.  This created a negative bias.  To improve ratings prompt users after they use the app awhile to provide feedback and ratings will improve.  Attached are two examples of apps that include a request for ratings while users are playing the game, Angry Birds by Clickgamer.com/Rovio Mobile and Golf Putt Pro by Neon Play. 

Don’t blindly introduce your app into the app store.  Put a marketing plan together.  Take into consideration doing pay per install, press releases and pay per click to increase your ratings in the app store. 

You can watch the full version of Aaron Kardell’s video by visiting Untether.tv.  By using these tips to generate awareness for your iPhone, Android and other mobile apps your app will pull ahead of the competition.  

Rob Weber, Vice President of Business Development and Co-Founder, W3i, LLC
Rob is an Internet marketing pioneer with over ten, profitable years evolving W3i in the consumer application industry.

W3i’s new custom toolbar platform, 3quency, helps publishers increase engagement and user retention, as well as strengthen their brand presence and generate meaningful revenue through the creation of browser toolbars.  Each toolbar can be customized with a unique look and feel, as well as cool apps, buttons and features.   As product manager for 3quency, I know well the great things our platform can do.  This is why I’m introducing a weekly blog post called “3quency Highlights”.  I’ll be highlighting the awesome apps that 3quency offers and the cool features that 3quency is capable of each week and how they can be used to benefit your site or business.  This week I’ll be focusing on 3quency’s Social Apps.

An important part of making your custom toolbar “sticky” and thus increasing the amount of time users keep it installed is to ride upon the shoulders of social media.  Most users have Facebook, Twitter or YouTube accounts these days, so why not extend those services directly to your user base in your custom toolbar?  3quency has three great apps to charge your toolbar with the power of social media:

Twitter app:  Users can log directly into their Twitter account to view their timeline right on their toolbar.  Compose a clever 140 character or less quip or reply to tweets directly from the app.

Facebook app:  This app allows users to log into their Facebook account, view their Newsfeed, submit updates, and view events, among a plethora of other features.  Why go to your Facebook page when you can access your social network from within your toolbar?

YouTube app:  View most popular, top rated, and top viewed videos or search videos on YouTube with this app installed on your toolbar.  There’s no better way to make your toolbar sticky by providing direct access to today’s viral video sensations.

Your custom toolbar can leverage the power of social media by including social media buttons piggybacking on the strength of social media to continue to engage your valued users. 

Look forward to more 3quency Highlights in the coming weeks!  And if you want to become a 3quency custom toolbar publisher, click here to get started!

Eric Montag, Product Manager, W3i, LLC
Eric is a Pragmatic Marketing Certified Product Manager and uses his experience in internet marketing to lead the charge in product research, planning, and execution from both a consumer and business standpoint.  

Ngmoco made headlines last week when Jason Kincaid at TechCrunch reported that Google Ventures made an investment valuing them well above $100 million.  It’s amazing, considering that August 15^th marks only the ten month anniversary of Apple supporting in-app purchases through free apps.  In this post, I’ll brief you on key market information relating to the business of freemium mobile app publishing.

The Challenge

There are now over 244,000 apps in the App Store.  Getting your app noticed is no small feat.  It is even more difficult for paid iPhone apps since they comprise 72% of this total while contributing a far less proportionate number of downloads.

The Opportunity

Free apps are getting more than four times the number of installs as paid apps (source: Admob ‘09).  A few developers, like Ngmoco, are earning more money from free installs than most earn on paid installs.

According to data provided to VentureBeat from 21 companies, iOS freemium game apps are generating $14.66 per user per year.   Neil Young, CEO of Ngmoco, said in an interview hosted by Jason Calacanis on 6/29, that WeRule had received 2.5M unique installs leading to high hundreds of thousands of daily active users.   WeRule was only released in the U.S. on March 20, 2010.  Let’s assume that WeRule averages 800,000 active users for an entire year with no additional installs.  This would lead to revenue of $11.7M per year and $4.68 per install. The average cost of a paid app ($2.98) is less than the revenue generated for a free install of WeRule.

How does Ngmoco make so much money per user?

Inside Social Games reported that Jason Oberfest, VP of Social Applications at Ngmoco, told them that they were earning 40% of their revenue from in-app virtual goods purchases and the rest from other revenue sources including brand and app-install advertising.

Distimo reported in July that just 2% of iPhone apps leverage in-app purchasing.  The freemium model is working for more than just games too. Distimo reported that a significant number of apps from a range of app categories are leveraging in-app purchases including top performers. 

Freemium Mobile App Publishing Costs

Global app store revenue is expected to grow at 60%+ CAGR for the next few years according to many analysts.  Freemium mobile app revenues will grow even faster.  A market as ripe as this one is going to attract a boom of competition.  However, the costs to develop and market a freemium mobile app are modest.  The following is a high level breakdown of freemium iOS app publishing expenses.

The most basic freemium mobile apps require native iOS development as well as a web application backend.  The costs vary greatly depending on the complexity of the app.  A couple of established for hire custom game development studios have shared quotes with me ranging from $30,000 to $300,000.

There is plenty of organic installs being generated for freemium mobile apps. To accelerate the growth of your user-base I recommend that you also spend some money advertising your app.  Incented app advertising ranked the most effective method according to a few dozen developers we surveyed.   You can buy incented app distribution from W3i and others.  Create a campaign that drives around 50,000 installs daily for a couple days to achieve a top 50 ranking in the App Store.  100,000 incented app installs will cost you around $35,000.

Are you looking for a strategic partner and/or investor for a freemium mobile app? Contact me (ryan.weber at W3i.com) regarding an opportunity to raise $10,000 without giving up any equity for funding your freemium mobile app.

Ryan Weber, Vice President of Corporate Strategy & Co-Founder, W3i, LLC
Entrepreneur and pioneer of internet and mobile marketing, focusing on increasing revenue and distribution for mobile applications.

St. Cloud, MN, August 12, 2010 – The W3i Content API is launching at Affiliate Summit East 2010 for all W3i affiliates.  The W3i Content API simplifies the display of W3i content on affiliate web sites providing access to the full W3i content catalog of over 500 free downloads, creating new content experiences for users –driving affiliate revenue growth.

Through the new W3i Content API affiliates display W3i content with total ease eliminating labor costs.  Affiliate sites are integrated with the W3i Content API so W3i content can be pulled dynamically.  Free downloads are available in popular download categories:  video, music, games, social networking, utilities and desktop entertainment.    

The W3i Content API allows affiliates to create new content experiences by requesting the type of content to be displayed on a themed web site.  Web sites can be built quickly for various market segments.

By using the W3i Content API affiliates can also capture the long tail of consumer interests to drive earnings.  As new download content is added to the catalog, it will automatically populate to the web site using the Content API.

The W3i Content API is easy to implement.   Each W3i content, category and content type have associated information. For example, content has associated information such as content name, description, images, etc. Content is assigned to both categories (such as Holidays) and a content type (such as Games). Make a query to request all content or the content belonging to a category or content type that you want to display on your site and the API responds with what is requested. Display only the information wanted on the site. The W3i Content API is a RESTful API and returns information requested in the form of XML.

“W3i’s Content API is a powerful tool that gives W3i affiliates easy access to W3i’s expansive catalog of free downloads.  Now affiliates can easily build sites that drive incremental revenue during peak seasons by creating a download portal that showcases all of W3i’s free downloads.  The W3i Content API is our commitment to partner growth, speed to market and ease of use.” comments Eric Montag, W3i Product Manager. 

Current W3i Affiliates can access the W3i Content API by going to the W3i Associate Portal: associate.w3i.com. To become a W3i affiliate, visit W3i.com and click on Affiliate Sign-Up in the Make Money menu drop-down.

About W3i:
W3i increases revenue, distribution, and engagement for consumer desktop applications, browser add-ons, and mobile applications.  On the desktop app side, app publishers get paid for recommending relevant applications giving advertisers a mass, performance-driven distribution channel.  On the mobile side, W3i Mobile Solutions offers low-cost, targeted advertising campaigns for iPhone apps on a pay-per-install basis.  W3i’s solutions use the company’s InstallIQ, intelligent installation technology, for recommending PC and mobile applications that users value.  InstallIQ was optimized on more than 400 million app installs–including more than 100 million in 2009.  W3i will prove to be a valued partner in growing your application business.  To learn more, visit www.W3i.com.

Press Contact:
Deborah Manthei
Director of Marketing Communications
320-257-7571
deborah.manthei@W3i.com

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Do you know the performance of your download network?  It’s important for application publishers to understand how their delivery network is helping or hurting their download completion rates.  Often end users’ internet speed is thought to be the only factor in the speed of downloads to the user’s desktop.  However, the network outside of users’ internet service providers can also greatly affect performance.  Generally the greater the distance between your downloads and end users, the greater chance for high levels of latency which translate to slower download speeds and lower completion rates.

According to a 2009 study completed by Gomez Inc. a slowdown in web response time from 2 to 10 seconds caused abandonment to increase by 38%.  This effect is similar to customers walking into a restaurant only to find the wait time is too long which prompts them to take their business elsewhere.  On the internet this effect is amplified further by the fact that users have so many other engagement points readily available.   For application publishers losing customers to lack of speed is simply not acceptable.

So how can you ensure a fast download experience and high completion rates? Make sure your download network utilizes CDN (content delivery network) technology.  CDN providers place your content in geographically distributed locations decreasing the distance between downloads and users.  By distributing the content, customer download requests have less distance to travel, which reduces latency, increases download speeds and completion rates.

Publishers who utilize W3i’s IntstallIQ platform by default, experience the benefits of CDN technology through W3i’s partnership with Limelight Networks.  Limelight’s advanced global computing platform distributes W3i’s publisher’s files among 900 access points worldwide ensuring users have the fastest route possible to their content.  In addition to providing the fast downloads, the distributed network also provides layers of redundancy should a particular data center or network become unavailable.  Best of all, W3i provides the use of its CDN to all its publishers at no additional cost.  Publishers not only enjoy InstallIQ’s monetization capabilities but also rest assured that their content is being delivered via one of the most advanced content download networks available today for optimized download completion rates.

Jeff Bollinger, VP of Information Systems, W3i, LLC
Jeff is W3i’s Information Systems’ leader with over 7 years of IT experience.  He is a firm believer in Agile and Lean development principles.