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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 Birth of Web 2.0 has been driven by making costs variable The games industry is starting to feel the same dynamics
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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
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
Marketing: Online distribution allows CPC and CPA advertising $30M in marketing - Primarily offline 10M copies sold - 90+% through retail
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
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
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
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