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Social currency has real value

Social currency has real value

Mon 10 Mar 2014 2:13pm GMT / 10:13am EDT / 7:13am PDT
MobileFree-to-PlayGDC 2014

Ninja Metrics CEO says industry has been forward-thinking in adapting to new business models, but still undervalues community

At next week's Game Developers Conference, Ninja Metrics CEO Dmitri Williams will be presenting a talk on "social whales," a new name for an old kind of gamer that the industry hasn't found a good way to pin down in the past. Williams took some time last week to speak with GamesIndustry International about his talk and how it ties into larger trends in the gaming industry, from what it's doing right to where it can still improve.

Starting with the social whales, Williams first described the species. While traditional whales are the heaviest spenders in free-to-play games, social whales can be just as valuable without ever spending a dime. Williams said these people are those with the most influence and impact on the spending and playing habits of their friends. And while designing titles to maximize revenues from heavy spenders can push game design to places some would deem exploitive, Williams said focusing on social whales doesn't carry the same potential drawback.

"Social whales are a different phenomenon entirely because they aren't people you can exploit. That dynamic is fundamentally different. You can't just make them spend more."

"Social whales are a different phenomenon entirely because they aren't people you can exploit," Williams said. "That dynamic is fundamentally different. You can't just make them spend more. In fact, they might not be big spenders at all. Really, what you're trying to do is reach their friends. And to do that, you can't just shout, 'Thar she blows,' giggle, and count money. You really have to think about why that player's playing and what their relationship is with their friends. You want to try to impact what is an organic process in a positive way."

As an example, Williams suggested the analogy of a coffee shop. An owner focused on the java-chugging equivalent of traditional "whales" could give out coupons to coffee drinkers. However, that same owner could instead focus on making the coffee shop a more inviting place to relax, reasoning that if people hang out there with their friends regularly, they'll wind up spending more money on coffee anyway. Getting back to games, Williams said it's a mindset he sees reflected in the success of free-to-play games like World of Tanks and League of Legends.

"Those developers have a very player-centric culture where they just figure, 'Let's make their experiences better and we'll make plenty of money,'" Williams said. "And they've been right."

These "social whales" have always been a part of the customer base, but Williams said they haven't been appropriately identified before. And while he was adamant his talk would not be a commercial for his company's services, Williams acknowledged that yes, his analytics firm offers ways to track their impact. But going beyond that concept, Williams said the relationship between players, and between the players and the developers, has been a long-standing blind spot for the industry.

"Community managers don't command a ton of respect in this industry," Williams said. "Community is often given lip-service, but it turns out it drives a ton of the spending. You can measure it, and it's a big deal. And this industry needs to get on that... I've found the community managers I've interacted with to be very thoughtful people, just not taken very seriously."

"Community managers don't command a ton of respect in this industry. Community is often given lip-service, but it turns out it drives a ton of the spending."

That blemish aside, Williams said the industry has done a fine job of keeping pace with the changing way consumers engage with their entertainment, much better than some of its peers.

"In a way, what's happening here is completely analogous to what has happened in other paid media," Williams said. "You used to have to buy the whole CD, but now you can buy a track. You used to have to go to the movie theater, but now you can rent it online, stream it through Netflix... There are all these other business models popping up realizing that people want the experience they want, and not just the pre-packaged 'this amount for this price' that used to always happen. Having watched the movie and music business learn this lesson in really harsh ways, it's actually nice to see the video game industry not fight it, and to really roll with it and do it in cool ways. In a sense, the game industry has been vastly more flexible and forward-thinking."

Williams acknowledged the game industry benefitted tremendously from watching the mistakes those other industries made in trying to adapt to disruptive forces like the VCR or Napster. But he added the game industry is perhaps inherently more adaptive.

"It's an engineering-driven culture and a creative-driven culture in a way those other industries aren't always because they're older and a little more corporate, a little more established," Williams said.

With four decades in the rear-view mirror, games are no longer in their infancy, but Williams doesn't expect the industry's inevitable maturation to quash the drive for innovation anytime soon.

"As you see more non-engineers and non-creatives lead companies, you may see more of this traditional thinking, but I don't see the game industry changing its stripes radically," Williams said. "I think it's always going to have a little more of that progressive thinking than, say, Hollywood has. It's going to be a couple more decades before we have to lament the game industry having lost its groove."

8 Comments

Jakub Mikyska
CEO

199 1,091 5.5
So, the article basically says "If you want people to recommend your games to their friends, you have to stop making games that f#@k people over, but actually make good games. Look at what World of Tanks is doing".

That is a real eye opener for many, I believe ;-)

Posted:5 months ago

#1

Gary Riccio
Socio-Technical R&D

10 9 0.9
I think Mr. Sinclair is talking about more than just influencers on the purchase of games. I think his insights go much deeper than this to influencers on the experience of online games and to the nature of their influence. My colleagues and I are running a TED Conversation to explore some of these effects (see link below). We would love to hear your thoughts on this topic before the Conversation closes on March 13.

http://www.ted.com/conversations/22958/community_organization_and_imp.html

Posted:5 months ago

#2

Steve Wetz
Reviewer/Assistant Editor

196 499 2.5
This article could basically be summed up thusly:

"Let's find ways to manipulate gamers who aren't impressionable idiots so they can influence their friends who are."

It's no wonder why the F2P industry has had such backlash as of late. There's a real lack of self-awareness, isn't there?

Posted:5 months ago

#3

Nick Parker
Consultant

280 144 0.5
This is not new - marketing should always attempt to target the "mentor" in a group, that person who a group of people trust to endorse specific purchases or entertainment. This can be in the playground, a respected individual within a peer group, a mate or a celebrity personality. In games, consumers rarely respond to TV advertising as the primary reason to buy a game (except as a means to inform pending launch); one of the strongest influences to purchase is endorsement from respected sources, which could also include review scores, as well as somebody they know and trust. Social whales are similar mentors but, it seems, they don't have to have spent any money to recommend their "students" to do so.

Posted:5 months ago

#4
I don't recommend exploiting players, although I'm sure that any tool or technology will be used that way. What I'm advocating here, though, is something a little different and Nick seems to have gotten it. Let me spell out the next step:
You find your social whales and you understand how they interact with their friends. Then rather than exploiting it, you empower it. Go back to my coffee shop example. People go there for coffee, but also for friendship and community. So, anything you do to improve their friendships and community will inevitably end up causing them to spend more time and money in the coffee shop.

If you're really crass about it, it'll backfire. The open question is What kinds of strategies can devs take to support those friendships? You target those at the whales and then enjoy the positive feedback loop. Groups thrive and the dev ends up being the coffeeshop owner enjoying the side effects.

Posted:5 months ago

#5

Benjamin Crause
Supervisor Central Support

79 36 0.5
I believe for something like this you need to leave typical marketing approaches aside. Marketing is often about reach and creating buzz. But if you want to have the social whales share your story, make others join and spend money you need (as mentioned above) community service.
This requires that the player comes first. I have seen a lot examples of community services and most were disappointing or flat annoying marketing campaigns without real service.
The good examples are in low numbers in my opinion.But from my experience good community service can drive players and social reach far more than most marketing campaigns.

Posted:5 months ago

#6

Curt Sampson
Sofware Developer

596 360 0.6
I was initially surprised by the negative reaction to this article. But Benjamin's statement,
This requires that the player comes first. I have seen a lot examples of community services and most were disappointing or flat annoying marketing campaigns without real service.
hit home when I thought about my recent experience with Far Cry 3. Ubi is apparently trying to offer some sort of social support with their UPlay product. I like the idea, but by restricting their achievements and the like to UPlay, they've completely cut me off from my Steam community, which is where I share things. This seems like a classic example of putting on the veneer of what players want without actually giving them what they want.

Posted:5 months ago

#7
It's true that there are effective community and relationship-enabling approaches, misfires, and even devisive interventions.

Ultimately what the Social Value metric does is to measure these objectively. The dev gets a value that shows the amount of play or spending driven by the game, and another that's due to relationship. The first thing they can do is to see the aggregate numbers and understand right away what % of play or revenue is coming from product vs. community. That's a key step right there and often eye-opening.

Then they can look at it on a player-by-player basis. Then the logical next step is to test the several approaches and ideas out there. This is social AB testing, and what is so powerful about it is that the dev can see if they moved the needle on the product or the social portion, or both. This lets the dev know if their intervention was indeed crappy veneer or actually engaging and supportive of the community, or some mix of +/- between the two.

I don't believe in hating or loving the several approaches to community, although I have theories of which I think are most likely to work. In the end, I believe in objective measurement, and listening to the story it tells--whether it's what I want to hear or not.

Posted:5 months ago

#8

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