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Monetizing MMOG players without creditcards through retail May 21, 2008

Posted by jeremyliew in business models, digital goods, games, games 2.0, gaming, mmorpg, virtual goods.
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Raph’s latest post says that there is a market glut of MMOGs, but most of them will survive. In passing, he shows a picture that is worth a thousand words:

MMOG cards at Target

… here is the rack of game cards available at Target — snapped this weekend, and strongly reminiscent, finally, of similar shots I have taken in Korea, Japan, and China. For years, there was no such rack in the US. Then it was just a couple of cards, and only at some checkouts. Now it gets a rack right between the TV box sets and the top pop albums (you can see REM’s latest CD there, abandoned on the top shelf).

Besides the cards you maybe expect to see, like Club Penguin, WoW, and Zwinky, there’s also a large stack of ‘em for gPotato games (Flyff, Shot Online, etc) And Acclaim, which make their living by bringing over games from Korea. There’s WildTangent cards, and the Gaia cards are almost sold out. The diversity is interesting, as is the lack of cards for most of the core gamer MMORPGs. The strong presence of the often-marginalized Korean games is telling.

One of the challenges in monetizing MMOGs through virtual goods in the US has always been finding a way to sell them to young players who don’t have credit cards. Gaia even employs 3 people whose sole job it is to open snail mail envelopes full of cash that people send in for virtual goods.

Pre paid cards at retail are an excellent way to monetize this audience. I have heard from a number of MMOG companies that they have seen a substantial increase in both ARPU and velocity of spending since releasing these cards. Watch this space.

Comments»

1. brinking - nabeel hyatt - May 22, 2008

Are online games going to kill themselves at retail?…

Yesterday Raph Koster posted an exhilerating, and disturbing, photo from the gift card rack at Target. This led Jeremy Lliew to talk about the power of gift cards to allow young players who do not have credit cards to pay for virtual goods. And while I…

2. Q dub - May 28, 2008

I’m curious what kind of margins are they giving away to retailers, who have no qualms with asking for 40% from typical suppliers. Maybe they can narrow the margin because:

a. This stuff takes up very little shelf space
b. negligible shipping/logistics/warehousing costs
c. by being a digital good, the retailer doesn’t actually have to bear any inventory risks by making it more like a revenue sharing agreement rather than traditional buy-and-resell

3. BestBuy launching prepaid cards for online games « Lightspeed Venture Partners Blog - August 20, 2008

[…] noted in the past that prepaid cards at retail are an excellent way to monetize MMOG players. Earlier this year, Raph posted on the game card endcap at Target who have pioneered this category. […]


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