Margaret Wallace of venture-backed startup Rebel Monkey -- itself developing an MMO -- was at Austin GDC's Worlds in Motion Summit to discuss user retention in multiplayer spaces. The question she posed: If you build it, will they come?
It's an area of particular interest, as Rebel Monkey's situation isn't unique. Many panel attendees raised their hands when asked if they were developing an MMO -- but only one hand stayed up when these participants were asked if they had yet launched.
As many new companies hope to launch successful online products -- and as their investors watch eagerly for their success -- retention becomes not just interesting and important, but crucial.
By 2008, it's estimated that the casual games business will be worth $2.1 billion dollars, and some 150 million players average 28 hours of gaming per month. Virtual worlds have seen rapid revenue growth from $5.9 billion in 2006 to $14.3 billion by 2009.
"It's a catch-all phrase; it can mean anything from Gaia Online to Club Penguin, stuff like that," says Wallace of virtual worlds, an area where new revenue models are quickly gaining traction through microtransactions and in-game advertising, the latter of which is expected to reach $1.8 billion dollars by 2010, according to DFC Intelligence.
So you've built an MMO -- now what? "If you're an independent content creator, you're not working with a larger publisher -- at Rebel Monkey, we're self published -- you have to pull out all the tricks of the trade you possibly can in order to ensure audience," Wallace says. So what are some lesser-known strategies that can help get players to become payers?
Customer acquisition is like a funnel, Wallace says -- at the top is a wide net that uses any means possible to draw users to a website, through methods including online advertising, finding distribution partners and leveraging the press. "Online advertising is a common way to attract customers, but in a lot of ways it can be very inefficient," says Wallace.
On one hand, services like Google AdWords can be targeted to keywords and geographical areas in order to reach people interested in your genre. "But it's a very crowded space and it can get expensive very fast. I can spend an infinite amount of money on Google AdWords, but sometimes it's hard to tell... how much of your money is well-spent."
A big portal can spend $20,000 a month on AdWords alone -- "You can lose a lot of money making mistakes," she says. Buying the keyword "virtual world" is very general, for example, so using it can cost a lot without providing a particularly targeted result.
"You have to constantly monitor the keywords you bought; oftentimes Google will raise the price on the keywords you bought... and what used to cost you ten cents per click will cost you a dollar fifty. And you'll often find there's fierce competition for certain keywords. So the more specific you can be, and the less other people are 'onto you,' the more successful you'll be," she advises.
Another method of online advertising involves joining with agencies like CPMStar, which Gaia Online and Three Rings' Puzzle Pirates employ. "They buy ad space on websites across the internet, and they target game websites in particular," Wallace explains. "Then you will pay a premium for every user that registers that is sent your way from CPMStar."
Unfortunately this is also highly costly, from fifty cents to a dollar fifty for every registered user. "You want to have a steady stream of users, but this can easily cost in the tens of thousands of dollars over several months time."
So the faster you want to acquire users, the more it's going to cost, says Wallace. "A lot of people don't have 40, 50, 100,000 dollars every few months to spend," Wallace notes. "You definitely don't want it to be the only way [you get users.]."
So what other acquisition strategies are there? Another possible method is working with ad companies such as MochiMedia. They're different from CPMStar -- "If you have a way to provide a limited version of your game, or a widget for Facebook, that will drive traffic back to your website," she says.
Distribution is interesting for companies like Rebel Monkey. Wallace was formerly the CEO of Skunk Studios that focused primarily on downloadable games. She says getting distribution for those titles through portals was "no sweat."
Portals might dominate the scene, but they're "walled gardens" often concerned about losing their audiences. "I think the trend has moved away... from [the fear of] losing audiences that way," she says. "While they're protecting their audience and not really offering... new kinds of exciting and compelling content, there's a whole crop of new players coming onto the scene that will at least engage in discussions with you about getting a distribution deal."
"It's increasingly difficult for those who are doing browser-based MMOs to get distribution," says Margaret. "You have to seek out all the different players who are out there, and it's not always going to be the usual suspects." Wallace points to Kongregate.com, Yahoo! Games, AddictingGames and other portal partners that can advertise the game or do a page-wrapper around an MMO and distribute it that way.
Press outreach is another method. "I can't emphasize enough how important it is," says Wallace. Even without a marketing exec, someone from the company should develop relationships with members of both the trade and consumer press. "When I have relevant news in the form of a press release, I will email people to let them know that I've made a press announcement."
"I try not to abuse the list -- but it just gets you on people's radar. Don't wait until you need a story written about what you're launching -- build that relationship months ahead of time," she says. "And build those relationships one on one -- don't just have a blanket list."
"To coincide with your development plan, have a product strategy that focuses on how you're going to work with the press," says Wallace. Potential players and customers will read the story. She also advises connecting with "opinion leaders."
Another underused customer acquisition strategy involves reaching out to bloggers. "These guys and gals have devoted followings," she says. "They are very active and opinionated, and also can be very specialized in what they focus on. A few months before you launch a product, why not create a list of bloggers that have an area of interest in what you're doing?"
And be specific about the game -- "Don't just say, 'I'm doing a great game,'" she says. For example, language offered around a tennis game should focus specifically on any synergies.
Focus on modularity, Wallace says. "Create a total media experience for your product," she says. As an example, she discussed Gaia Online, which has some ten million registered users. It has the second biggest auction site on the internet, surmises Wallace -- and it's now embedded its Gaia Lounge widget on Facebook, providing a portal that can lead to the full Gaia Online website.
"It really gives you a good sense of what Gaia Online is," says Wallace. "[They realized] how to take a modular component of their experience and put it on Facebook... you have the potential to reach millions of people." Strategies for translating Facebook's widget use into actual web visits and user registration requires a bit of targeted strategy specific to a site's own strengths, but it can be useful as part of this modular approach.
And finally: "Never underestimate the power of word-of-mouth," Wallace says. "The people who will register is much higher if it's based on a word-of-mouth recommendation than if they find you randomly on the internet," she says. Therefore, building in product features that encourage people to tell their friends about the experience can be a key strategy.
The "depressing part," however, is after even the most successful customer acquisition efforts, "you'll be lucky if only 5 to 15 percent take the time to register," warns Wallace.
And in an uncertain economy, retaining the customer becomes more important than ever -- Wallace warns attendees not to become so focused on acquisition strategies that they forget to plan for how they will hang onto their users, or entice them back if they leave.