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Neilsen Mobile recently reported on US 2008 Q2 mobile phone usage. They find that the number of calls made per month averages 204 across all users but does not vary all that much with age between 13-54:

On the other hand, as stereotypes would suggest, teens drive by far the highest number of text messages per month. Although the average across all users is 357, there is very high variability:

When looking at the ratio of texts to calls, the difference is even more marked. Teens (13-17) text 7.5x more often than they call whereas seniors (65+) call 7x more often than they text:

As an aside, the overall ratio of texts to calls is about 1.75:1 and has been greater than 1:1 since q4 of 2007.

Which companies do readers see as making the most interesting use of SMS?

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Virtual Worlds News noted last week that:

PayByCash announced … that over 50% of its US transactions were coming from its Ultimate Game Card, a prepaid card that supports over 150 virtual worlds and games, like Club Penguin, Nexon America, and IMVU. Previously U.S. consumers favored PayByCash’s direct debit options…

I’d guess one explanation for the transition, and one to watch, is that adults are more likely to set up debit options… Kids and teens, who seem to be driving much of the consumer-oriented virtual worlds growth, simply pick up cards at retail.

It is an important statistic as it really underscores the importance of prepaid cards as a payment mechanism for free to play games. Min Kim of Nexon noted in his presentation at Austin GDC this year that:

“Retailers are taking notice of card sales, and support will grow. Retailers love the regular customer, and coming back for cards is a given. Once you’ve purchased one card, statistics say you’ll probably buy another.”

Target has certainly taken notice, with 26 gamecards available for sale now, including Nexon, Neopets, Gaia, Habbo, Acclaim, gPotato, Stardoll, Zwinky, Big Fish, 3 Rings (Puzzle Pirates) and Wild Tangent. A wider selection is available in their physical stores.

I’ve spoken to several free to play publishers with prepaid cards at retail and they have seen this payment mechanism come to represent from 20-50+% of their virtual goods revenue, which is consistent with the percentage that PayByCash has seen. As Virtual Worlds News speculated, it is the games and virtual worlds that skew towards kids and teens that have the greatest proportion of revenue coming from prepaid cards.

However, publishers tell me that their sales from their own-branded prepaid cards are many multiples of their sales from PayByCash. A Game X player is simply far more likely to buy a Game X card than to buy PayByCash’s Ultimate Game Card. In fact, many publishers tell me that even though they already took the Ultimate Game Card as a payment mechanism, when they launched their own-branded card into retail, they saw a sizeable, immediate, incremental jump in ARPU. Their existing players, who had previously wanted to be able to pay them but didn’t know how, now were able to do so.

Nabeel Hyatt, CEO of Conduit Labs, has previous noted that this could create more of a problem than an opportunity:

In all, there are now over 25 digital content cards being sold at retail. I’ve been tracking this and that’s over double what it was six months ago. That means that at least a dozen online communities, and probably a dozen more in the next six months, are going to be submitting themselves to the vagaries of the retail shelf-space business. That’s a business the online web folks have little to no experience in, and one that a lot of traditional gaming vets were excited to get out of.

I am more optimistic. Retailers love prepaid cards. These cards have no inventory carrying costs and no shrinkage (theft) problems because they are only activated at the checkout. Furthermore, the cards are small and high value, creating high $s/square foot, one of the key metrics at retail. In my local Safeway (picture below), there are 6-700 prepaid giftcards for sale (for everything from Red Lobster to Bed Bath and Beyond) – one indication of how much retailers love this product.

Nabeel is right though – getting retail distribution is not something that is core to the DNA of most online game publishers. Most of the publishers that I’ve spoken with work with one or more of Blackhawk, GMG Entertainment and Incomm to get their cards into retail.

For people interested in learning more about prepaid cards into retail, the Virtual Goods Summit on October 10th looks to be a good event, specifically the 10:30 panel ,”Making Virtual Economies Work — Lessons from the Leaders” where the CEO of Playspan (which owns PayByCash) will be speaking, and the last panel of the day, “Getting Paid – Build a Dominant Payments and Billing Strategy”, where the President of GMG Entertainment will be speaking. If you’re going, use “JEREMYLIEW” for 10% off of General Admission on registration.

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Arctic Startup, quoting an article written in Finnish at Kauppelehti, the leading business magazine in Finland says:

The Helsinki based virtual goods operator Sulake saw a profitable first half in 2008. According to Kauppalehti, net profits were around 400 000 euros. The revenues rose approximately 20% to 25,6 million euros for the first 6 months of 2008. Majority of the sales came from sale of virtual goods in Habbo Hotels world wide. According to the company, the annual growth for 2008 will be around 30%.

Jussi Laakkonen also notes from the same source:

Sulake’s 22 M€ [of investment from 3i] is [quoted] from Kauppalehti, the leading Finnish business magazine, which calculated the total losses incurred by Sulake from its founding in year 2000 to end of year 2007 using public records. VC money raised is more than this.

Update: Virtual World News pulls in conflicting revenue reports over time for Habbo.

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Marketing Sherpa notes seven design elements to add to your banner ads to increase click through rates from 25-50%:

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Last year I noted how the “performance” aspects of social networks was moving more birthday wishes from private communication channels (e.g. email) to public ones (e.g. Facebook wall posts). This year, the trend is even more pronounced if my …

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At AGDC last week Bioware’s Damion Schubert spoke about end-game design in MMOs. Massively notes:

Endgame gameplay, elder gameplay, is a mandatory and compelling part of the genre’s equation. In fact, in Damion’s opinion complex elder gameplay exemplifies what makes

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Some interesting tidbits about both free to play and subscription MMOGs coming out of the talks at Austin GDC. Min Kim of Nexon says:

Not just a Korean thing:

“South Korea is still a big market for us,” Kim

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Many websites default to the 728×90 (leaderboard) ad size when designing their site. This is a reasonably good option as it has the second highest click through rate of the various standard ad units. But it is possible to do …

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This is a guest post by John Bautista. John is a partner in Orrick‘s Emerging Companies Group in Silicon Valley. John specializes in representing early stage companies.

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When entrepreneurs start a company, there are four things they …

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Cooley is one of the largest and most respected law firms in Silicon Valley. It recently released its Private Company Financings Report for Q1 2008, based on the 66 completed deals that the firm worked on in that quarter. …

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