At GDC Austin, Nexon America vice president Min Kim considered what developers need to do to get ready for the "penguin army" -- kids who were born during the dot-com boom years, and the first fully-connected generation -- as they graduate from Club Penguin
These kids, which Nexon internally refers to as the "bubble babies", and describes as "the first truly connected generation, born during the dot.com bubble" are already playing online social games, says Kim. "We hypothesize the big boom is going to happen when you get these kids, and it will be very natural for them."
What they're doing now isn't his biggest worry; he's more concerned about their future interests , as his company's games, such as Maple Story
, appeal more to teens, says Kim.
"By 2012 they're going to be 11, 12, 13 and the sweet spot for our demo is around 14, 15, 16, and that's not going to happen till 2015. We think that there's going to be an explosion of this kind of [social gaming] behavior by 2015."
Where After Penguin?
These users will abandon Club Penguin
and the other kid-targeted services, and not for other games -- unless they're successfully captured, says Kim. "After they're done with all of these services, where are they going to go next? Are they going to stay social on the PC? Abandon the PC for console?" No, he says. He thinks YouTube, iTunes, and other media stand to benefit from this audience -- unless efforts are made to appeal to them.
That leads naturally to the launch of Nexon's BlockParty
service, a new brand for its social gaming portal with a new identity designed to appeal to a slightly older audience. Kim announced its existence during his presentation.
"The cool thing about this versus what else is going on in the market, is that we're going the opposite way," says Kim. "If you look at Facebook, they've gotten all of their users and are figuring out how to keep their users entertained. We've got the games and want to keep a robust community." Community is the relationships between people, Kim reminds us -- not just between users but also between companies and the users.
When it comes to advice on selling items, Kim did have one caveat, however: "I feel like all services are different, so I'm going to talk about the logic behind why people are buying things, and you can create your own mix."
'A New Behavior' For Game Monetization?
Says Kim, "We've done this from 2000 up to now, many different types of games and demographics, and from that we've been able to create our own rulesets that we apply to many different types of games," however, not all rules apply to all the games Nexon runs.
Kim pointed out that arcade games, once hugely popular, were their own microtransaction-like business model -- until they were crushed by home console games.
It was a natural fit for gamers until it was replaced, and a new generation's behavior can be shaped by its own options, says Kim. "Why can't we develop a new behavior? As these types of online services are coming to the PC, with a new generation growing up, why can't they develop a new purchasing behavior?"
Figuring out what users would pay for "was just trial and error," at first, says Kim. "And even for a lot of the services you guys are thinking of, I think it's more important to be agile and try many things."
When it comes to making changes, says Kim, "it's better to be agile than right." But if you analyze your data -- and you must, he says -- "do a lot of things and be quick enough to make changes."
"With an online game you're creating a relationship you will have with your consumer for a very long time, and if the commitment is not high at the start," says Kim. But depth of engagement is required for microtransactions to be valuable.
Quality and value are key, says Kim. If a game gains users, it will start to drive transactions, but they may not stay. "You can't sacrifice game quality for community, but if you have all your friends playing, you're going to have a great time." How to keep them playing? "The first need that you really have to satisfy is fun. I think people start off thinking business model, but if your game is not fun, the community is not going to stick around."
That's important, Kim says, because "people are content for other people -- you need the non-paying users as well as the paying users."
The Eight Game Item Types
When it comes to items, they can serve eight purposes, says Kim: function, envy/prestige, recognition, collecting, rarity/scarcity, competition, friendship, peer pressure. These are the keywords, he said several times, that you should be thinking about when designing your items to sell.
There are obviously functional items like tokens that allow you to continue your game in Nexon's Dungeon Fighter Online
, but all items fulfill some function for gamers -- it just may be largely or entirely social.
Many "vanity" items (that affect players' appearances) popular, but Kim doesn't believe the term should be used. "I get this question all the time. I really believe vanity equals function. All items are functional items. People actually talk to you if you have cash items purchased. Vanity is in the eye of the beholder."
When it comes to your business model, says Kim, "What you're trying to do is a mimic the subscription. When you're mimicking that subscription you know that most of your players aren't going to pay. Don't make the non-payers for that subscription. Don't shoot for an ARPU of $100 because you know 10 players won't pay."
It's also important, rather than concentrating on a few items everybody is forced to buy due to the game's design, says Kim, to "create a lot of different items, and hope that people will buy a subset." He also says, "Not everybody wants to buy the same thing."
When it comes to users with prepaid cards, says Kim, make sure you have a wide variety of items available so you can quickly recoup the value of the card. "Think of a candy store. When your mom gave you $2 or $3 and you walked in and you're like 'what can I buy?' and you're maxing that out. You have a lot you want to purchase and that money is never enough."
These items are also very important from a user retention perspective: "Collectable items create a relationship between you and the game."
Item lifecycle is a tricky issue, says Kim. How does Nexon drive sales? "We do a lot of events. We actually do a lot of sales. Our site is kind of like a store. If we see the lifecycle of an item is dwindling we'll put it on sale and potentially pull that item out."
"Even in a game like MapleStory
, there are so many items that are good, and there's the paralysis of choice." Kim notes that you can generate "more sales on saying you're going to get rid of [an item] than keeping it in the system for another year or two."