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Gaming, Platform Diversity and Online Business Models

Many of you have heard about the revenue troubles facing social game publishers now that the sheen has worn off their utter reliance on Facebook.

While the jury is still out as to what and how Facebook will respond to potential publisher churn, a number of game companies have taken matters into their own hands to diversify their platform dependence.

Kabam, a publisher of free-to-play social games for hard-core gamers, recently outlined its platform strategy to VentureBeat. I found a number of different aspects of that conversation quite interesting.

  • Kabam has moved from utter reliance on Facebook to a point where 70% of their revenues come from non-Facebook platforms. At their scale - $100M and growing rapidly - this is an impressive achievement.
  • An interesting question is whether Kabam's players are loyal to their games and will play on the platform most convenient to them at any given point in time, or whether Kabam attracted a whole new set of customers when they ported their games to other platforms: mobile, other portals, kabam.com, etc. In other words how much incremental customer acquisition did Kabam generate through multi-platform support?
  • They're seeing higher monetization on mobile than on the web. What's unclear from the article is whether this means their profitability per player is higher or whether their average revenue per player is higher. What would be interesting is to compare, if possible, the average revenue per player across the same game across different platforms.
  • Kabam fundamentally believes that there are more hard-core players on iOS devices than on Facebook, so it made absolute sense to focus on Apple devices given their target audience.

The gaming industry is going through much transition right now, as publishers seek to optimize the business models and platform choices for their key audiences. We discuss the pros and cons of Facebook as a platform in this webinar, and also highlight the many different online business models available to digital businesses, including game publishers, in this Best Practices Guide.

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