Wednesday, October 14, 2009
Tuesday, October 13, 2009
Free To Pray
It seems that everyone's trying to figure out freemium in online games. Certain people make it work, like Zynga, others struggle to get people to pay up. 2 things that the freemium model reveal about us as consumers: 1) we get addicted to progression for progression's sake and 2) ease of use is paramount. Zynga apparently have a bible that they call the Zynga Playbook, that allegedly was handed over to the their rival Playdom, when the latter hired 4 of the former .
This Playbook might as well have been called the bible, for it contains all the secrets to creating a highly monetizable freemium service. I assume in there is contained the sum total of their knowledge, which you can probably glean a lot of if you play through their games and dissect. Ease of access, tying into an existing userbase and the users' network, viral growth techniques, progression ramps, monetization barriers, etc. This Playbook clearly works. Farmville has 54m uniques per month, Mafia Wars has something like 25m. Assuming an attach rate of maybe 10%, and an ARPPU of $20 per year (which probably isn't too far from the truth given they are reported to be near $100m in annual sales), they're making a very pretty penny on games that must cost peanuts to develop (relatively, compared to a AAA console title). I'll be first in line at the IPO.
However, all that's really happening here is technology enabling something in an overtly commercial way that religion has been doing for centuries. All of these games are free to play - all religions are free to play (some aren't, like Scientology, but let's think of those as offering a premium service - more like a subs-based MMO). Most religions benefit from having a huge engaged community (in 2002, there were 2 billion Christians in the world), low cost base (most relgions are exempt from paying taxes AND their infrastructure costs were largely paid off centureis ago), and incredible reach through viral marketing (faith schools and religious education). They also have the most sought after product in the world: The Answer. No wonder they continue to thrive despite all the progess of science and reason.
The big question mark, for me, is their attach rate to purchase. If a standard freemium service ranges from 1-10%, I'm guessing that religion is even higher. Think about collections at services and buying religious items (The Bible is still the best-selling book the world has ever seen), not to mention that they have an amazing B2B business (the Catholic church is a huge landowner). One thing you never hear - a religion folding due to lack of funds.
So, there's a lot we can learn from religion to create a great freemium service:
This Playbook might as well have been called the bible, for it contains all the secrets to creating a highly monetizable freemium service. I assume in there is contained the sum total of their knowledge, which you can probably glean a lot of if you play through their games and dissect. Ease of access, tying into an existing userbase and the users' network, viral growth techniques, progression ramps, monetization barriers, etc. This Playbook clearly works. Farmville has 54m uniques per month, Mafia Wars has something like 25m. Assuming an attach rate of maybe 10%, and an ARPPU of $20 per year (which probably isn't too far from the truth given they are reported to be near $100m in annual sales), they're making a very pretty penny on games that must cost peanuts to develop (relatively, compared to a AAA console title). I'll be first in line at the IPO.
However, all that's really happening here is technology enabling something in an overtly commercial way that religion has been doing for centuries. All of these games are free to play - all religions are free to play (some aren't, like Scientology, but let's think of those as offering a premium service - more like a subs-based MMO). Most religions benefit from having a huge engaged community (in 2002, there were 2 billion Christians in the world), low cost base (most relgions are exempt from paying taxes AND their infrastructure costs were largely paid off centureis ago), and incredible reach through viral marketing (faith schools and religious education). They also have the most sought after product in the world: The Answer. No wonder they continue to thrive despite all the progess of science and reason.
The big question mark, for me, is their attach rate to purchase. If a standard freemium service ranges from 1-10%, I'm guessing that religion is even higher. Think about collections at services and buying religious items (The Bible is still the best-selling book the world has ever seen), not to mention that they have an amazing B2B business (the Catholic church is a huge landowner). One thing you never hear - a religion folding due to lack of funds.
So, there's a lot we can learn from religion to create a great freemium service:
- Have a great service (church services, community) with a great consumer promise (heaven, absolution, forgiveness).
- Go after the largest userbase possible (the whole world), with the lowest min-spec (a brain).
- Have a great launch marketing campaign (martyrdom) or an existing userbase (the religion in question).
- Grassroots and viral marketing (faith schools and relgious education, indoctrination).
- Low-barriers to entry (free to pray).
- Low cost base (zero taxes, volunteers).
- Monetization barriers (buying a bible, donations in church).

