The free-to-play micro-transaction business model has influenced the growth of Facebook games. This model monetizes users through small, optional in-game purchases of virtual goods. It allows games to reach a large audience with no upfront cost, generating continual revenue. Key metrics like lifetime user value, retention, and cost per user acquisition are balanced to optimize profit. Viral sharing features also helped growth, though Facebook policy changes restricted some viral channels. Overall, the model created a "digital gold rush" environment supporting massive growth for top titles and opportunities for new developers.

2. Introduction

3. SocialNetwork + = 570.000.000 Facebook Users

4. Facebook Growth

5. Facebook Video Photo’s Events Messages

6. Social Games

7. Farmville

8. Farmvillegrowth

9. Free-to-play Micro Transactions

10. Top 250 Growth

11. Research Question How has the free-to-play micro-transaction business model influenced the growth of Facebook Games?

12. Methodology Looking for the correlations

13. Data from: Articles From: Methodology

14. Presentation General Business Concept Metrics Monetizing Acquiring Users Digital Gold Rush

15. General Business Concept (LTV – CAC) * scale = profit LTV = Life Time Value CAC= Customer Acquisition Cost

16. Balancing LTV & CAC

17. PositiveBalance

18. Metrics Google Analytics Kon Web metrics

19. SocialGamingMetrics Kontagent Specialised metrics: Viral & FB Demographics

20. Metrics Optimize through A/B testing

21. MetricsvsIntuition Intuition lets you find new designs.

22. Life time value = Daily ARPU * Retention ARPU = Average Revenue per User Retention = Avg. Active Days

23. Micro Transactions Selling Digital Goods Advantages: No price Barrier Continual Revenue Stream

24. Digital Goods Gameplay enhancing Customizing Progression boosting

25. DailyArpu ARPU = Average Revenue per User $30 Divided by 1000 users = Daily ARPU of $0,03

26. Total Average Daysspend Retention

27. CustomerAcquisitionCost = (Cost per Acquisition / Conversion Rate) / (1+k-factor)

28. Cost Per Acquisition Advertisement

29. ConversionRate % Of Userswhocompleted the tutorial

30. ConversionFunnel

31. Viral News Feeds Invites Sendinggifts Referals

32. Viral K-Factor K-Factor >1

33. Conclusion ((LTV – CAC) * scale) – Investment = profit LTV = Daily ARPU * Retention CAC= (Cost per Acquisition / Conversion Rate) / (1+k-factor)

34. Digital Gold Rush Viral

35. Digital Gold Rush Each ad earnsyou more thanitcosts!

36. PolicyChange

37. PolicyChange ViralChannels and 3rd party appsblockedfrom Facebook

38. PolicyChange Viral

39. Smaller titlesGrowth

40. Top 250 Growth

41. Smaller titlesGrowth

42. Questions

43. New DevelopmentStyle

44. CityvillesGrowth