Shifting Online Gaming Strategy: Micro-transactions as a Metric
Shifting Online Gaming Strategy: Micro-transactions as a Metric
Think Equity gaming analyst Atul Bagga talks with an important player in gaming. I was particularly intrigued by the change in revenue mix, and this applies to nearly all social media gaming models. CEO of Oberon Tal Kerret responded in the Q&A below.
Oberon Media provides games solution (sourcing, QA testing, porting, analytics and reporting) on various platforms including online, TV, and mobile with partners such as Microsoft, Yahoo, EA/Pogo, AT&T, Orange, Dish Network, DirecTV, and Comcast.
The company sources games from third-party developers and also owns game IPs; in-house games contribute about 10-15% of the company's revenue.
The company monetizes its audience through selling games, micro-transactions, subscription, and ads, and shares revenue with its publishing partners and game developers.
According to Oberon CEO Tal Kerret, the revenue breakup on its platform has changed dramatically over the last three yearsthree years ago it was 90% from one-time purchase and 10% from advertising, and today it is 50% from subscription, 25% from one-time purchase and 25% from micro transaction and advertising. Kerret expects 50% of the revenue to come from micro-transaction over a longer term.
Oberon sees strong interest in social games by its partners (mostly online portals) and that seems the top focus by Oberon. The company is in the process of rolling out a social games solution using Facebook social-graph, which it expects would help partners acquire new users. The company is focusing on publishing Facebook games on partners' sites and is working on acquiring social games from Facebook developers who are looking to expand the reach of their games.
Across the company's partners, conversion rates range from 1% to 5% but can go as high as 20% for some of the high-definition games, and ARPU range from $80 to $100 per year
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