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Evolution of Online Gaming in the Web 2.0 Era

Discover how the online gaming industry embraces the variable cost model of Web 2.0. Explore the rise of "Low-fi" games, effective marketing strategies, social distribution, and monetization trends in Games 2.0. Learn from industry leaders about multiplayer dynamics, viral growth, and revenue sources shaping the future of social gaming.

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Evolution of Online Gaming in the Web 2.0 Era

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  1. Games 2.0 Web 2.0 Expo April 25, 2008 Jeremy Liew MD, Lightspeed Venture Partners www.lightspeedvp.com lsvp.wordpress.com jeremy@lightspeedvp.com

  2. Birth of Web 2.0 has been driven by making costs variable

  3. The games industry is starting to feel the same dynamics

  4. Development: “Low fi” games gathering more users Development Costs ($M) Players (M) Halo 3 Power Challenge Zynga’s Texas Hold’em Friends for Sale SGN’s Jetman Sources: Lazard Capital Markets, Adonomics, Press Releases, LSVP Estimates

  5. Marketing: Online distribution allows CPC and CPA advertising $30M in marketing - Primarily offline 10M copies sold - 90+% through retail

  6. New user growth (illustrative) Marketing campaign supports big launch, with sales declining thereafter Friend invitations drive increasing growth curve as user base grows TYPICAL AAA GAME SOCIAL GAMES * Not to scale Distribution: Viral growth and social networks allow games to grow virally

  7. Content: Multiplayer is user gen content for games • Single-player games • Need new levels to keep player interest • AI for NPCs to maintain challenge • vs. • Multiplayer Games • Each game is different, keeping player interest • Other players have real intelligence, not AI Asynchronous Play - Large pool of other players - Easier to play against friends - Players playing in sequence, not in tandem.- Requires persistent state which all players affect, and which in turn affects all players.- Breaks between players are the organizing principle Source: Ian Bogost, Lightspeed analysis

  8. Monetization: Online games market growing as revenue sources become more variable ONLINE GAME REVENUES • Sale of downloads • Advertising • Digital goods • Self expression • In-game power • Extra levels/content • Attention • Convenience

  9. If Web 2.0 is the social web, then Games 2.0 is social gaming PANELISTS MODERATOR Jeremy Liew: MD, Lightspeed Venture Partners Siqi Chen: CEO, Serious Business (Friends for Sale) Johan Christenson: CEO, Power Challenge Shervin Pishevar: CEO, Social Games Network Mark Pincus: CEO, Zynga Game Network

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