1. Core Games, Real Numbers Comparative Stats for Asian & Western Games Emily Greer Co-Founder & COO| Kongregate November 2012

2. Core Games, Real Numbers Emily Greer November 2012 Comparative Stats for Asian & Western Games

3. What is Kongregate? Open platform for browser-based games –Flash, Unity, HTML5, Java, etc. 60,000 games, 1300 uploaded monthly ~200 games selling virtual goods Revenue from virtual goods (70%) & ads (30%) 15M monthly uniques, core gamers Traffic is 40% US, 40% Europe, 10% Asia Acquired by GameStop July 2010

4. Select Developers

5. Background All stats are lifetime ARPU: average revenue per user ARPPU: average rev per paying user User = Player: a registered user who loaded the game at least once Games included have all been on Kongregate at least 6 weeks Bubbles on charts represent size of total revenue

7. ARPU & ARPPU ARPPUs for single-player games cluster around $5-$10 Multiplayer games range $20-$230 Average ARPPU for a game from Asia: $118 Average for Western multiplayer game: $40 ARPPU is the main factor in high ARPU for Asian game, important factor for all games

11. ARPU & % Buyer % Buyer ranges from 0.05% - 3.6%, much larger range than ARPPU, average is 0.63% Single-player average 0.9% Multiplayer game average 0.57%, slightly higher in Western games, slightly lower in Asian games Much greater range from top to bottom in % buyer in Western games High revenue multiplayer games 1.5% or higher

14. Big Spenders are a Big Deal 4 out of the top 5 games get the majority of their revenue from those spending $500+ All top 10 games get the majority of their revenue from players spending $100+

15. How We Look at Retention % Repeat –What % of players ever return –Shows initial impressions/interest in the game Repeat  Reg –What % of players who repeat become regulars (10+ plays)? –How strongly is the player hooked in the early-middle parts of the game? Reg  Commited Player, aka % Commitment –What % of regulars become committed players (50+ plays)? –Engagement of end-game content

17. ARPU & % Repeat Surprisingly little correlation with ARPU –Games that lose 75% of players immediately are just as likely to have a high ARPU as one that keeps 75% But games with higher repeat rates have higher revenue at the same ARPU –Games that have high repeat rates get higher ratings and viral spread, more players  more revenue Average for Western games slightly higher than Asian games but top performers much higher

21. ARPU & % Commitment Strong correlation with ARPU –Smaller bubbles to the right are generally newer games, their revenue & ARPU will grow with time Correlation slightly weaker with Asian games, but Repeat  Regs very strong –Longer sessions lengths & stronger early-game monetization probably explain

25. Asian vs Western Style Asian games: High ARPPU, tight player funnel –Monetization caters well to big spenders Western games: Lower ARPPU, wide player funnel –Monetization focuses more on initial retention and broad conversion to paid at lower prices –Pay 2 Win is not accepted Mixed games: can combine the best of both approaches –High conversion, wide funnel, still create big spenders

26. Commitment REALLY Matters Type of Player% BuyersAvg Trx ARPPU ARPU% Players% of Rev Non-Repeats0.03% 2.10 $ 24.69 $ 0.0143%0% Repeats (2-9 plays)0.40% 1.85 $ 19.61 $ 0.0840%3% Regs (10-49 plays)4.68% 2.61 $ 21.35 $ 1.0010%12% Committed (50+ plays)16.53% 7.03 $ 96.92 $ 16.027%84%

29. First Advice #1 Don’t push too hard too fast –People are not going to buy the first time they play your game. In the first few sessions focus on fun & giving them reasons to return, not upsells. –Western players expect & value some level of fairness – pay for advantage (and reduction in grind) okay but non-buyers should feel they have some chance to compete #2 Don’t underprice, don’t intimidate –There is very little price elasticity below $5. It’s an emotional decision to spend for progress and status, focus on that. –Use intro paid currency, first time buyer packages & deals to get people into the habit of purchase –Really expensive items early may scare players away who might accept them later

30. Big Spender Advice #3 Make sure players can spend $1,000+ –Games are hobbies, no different from golf, cooking, live music –Those who get deeply involved devote significant time, energy, and money –Have lots of items that are appealing and useful to a committed player and price them higher (if possible) than items meant for early/mid-game play. [Higher means $30-100, not $1000] –If you make a fun game someone will want to spend an infinite amount. Don’t create a situation where spending is capped by availability or utility.

31. The Most Important Lesson #4 – Retention, Retention, Retention Every high ARPU and high revenue game on Kongregate has a strongly social and competitive end-game. Common features (mix and match): –Guilds/leagues –Guild warfare or leaderboards –PvP (either synchronous and asynchronous) –Visible status & character progression –Guilds/leagues (it bears repeating) You have to keep feeding the game –New content, new modes, new events –New servers are good but not enough

32. Fantasy Online: A Coming of Age Tale By Pixelated Games (Jeromy Stroh) Launched May 2010 4.20 rating 7.2M gameplays

33. Fantasy Online: A Humble Start Popular and good retention, but couldn’t monetize well. Only sold aesthetic equips. First month (Jun ‘10) Monthly ARPPU: $5.50 Added new zones for modest growth to $8.50 in Sept. Minimal updates for next few months. Nov 2010: Monthly ARPPU faded to $8.11 Dec 2010: Guilds launched, Monthly ARPPU jumped to $12.93 Jun 2011: Crafting, mining, XP potions, etc., kept growing to $18.66

34. Fantasy Online: Big Growth Jul 2011: “Gem Packs”, expensive “uber” items ($30+) were added to court whales. Monthly ARPPU soared to $32.80 Nov 2011: New content, new equipment slots, Halloween event, grew to $36.23 in Jan 2012: Guild Warfare, peak of $41.86 Mar 2012: New high level content, $54.37 June 2012: 2-year anniversary event. Lots of revenue, still high ARPPU at $43.97.

35. Fantasy Online: Monthly ARPPU

37. Fantasy Online: Summary Stats Traffic stayed strong through high rating and repeated Kongregate promotion % Buyers generally ~1.1% with promotion, ~1.5% without Monthly ARPPU grew from $5.45 to $54.37 Monthly ARPU grew from $0.04 to $0.70

38. Fantasy Online: Revenue

39. To learn more visit developers.kongregate.com Contact us at apps@kongregate.com