” Kim has been around the world and back talking about his company, Nexon, and the business practice they’re leading the charge on. Free to play games are bigger than ever in the MMO space, be they local titles like Runescape or imports like Nexon’s own MapleStory.
As Nexon America’s VP of Marketing, Kim generally makes for a compelling speaker. Still, it was hard not to be impressed at the specifics and knowledge he brings to a conversation on this topic. Essentially a guide to putting together a free-to-play business model from scratch, Kim’s talk centered around hard-won lessons from the front lines.
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Read on for details on everything from the benefits of selling to kids at Target, to the dangers and pitfalls of self-publishing a game.
“Retailers are taking notice of card sales, and support will grow. Retailers love the regular customer, and coming back for cards is a given. Once you’ve purchased one card, statistics say you’ll probably buy another.”
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Min began by rehashing information about Nexon as a company. The company’s success really took off in the earliest part of this century with games like MapleStory, Kart Rider, and Mabinogi. Started in 1994, they make the claim that they created the first graphical MMO in 1995. They have about 2000 employees worldwide, and reported $230 million in revenue in 2005. Their focus is primarily in Asia and North America, and they’re starting to serve customers in Europe.
The North American arm of Nexon is huge. This generally reflects Nexon’s growth in overseas markets – the company is now something like 50%/50% between Korean and international income. The company’s revenue went up some 2.5x between 2006 and 2007. Min pins that success on the addition of card sales to stores like Target.
The meat of Min’s talk centers on four trends he’s noticed in the online gaming sector.
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Trend 1: Demand for Online Entertainment is Growing
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Min firmly believes that the PC is making a huge comeback as broadband penetration is increasing and speeds are getting better. MySpace and Facebook are ‘sticky’, interactive ways to touch base with other people, and players are looking for something to do alongside that. Kids are hooked into Club Penguin, Runescape, NeoPets … in five years time the teen market will be ready-made for online gaming.
Meanwhile, MapleStory and other titles like Free Realms and Battlefield Heroes are capitalizing on this. Once you’ve purchased one card, statistics say you’ll probably buy another. Retailers are taking notice of card sales, and support will grow. Retailers love the regular customer, and coming back for cards is a given.
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Trend 2: Imports are Big Business
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Imported products from the East are actually laying the foundation for North American development. Fundamentally lots of developers just don’t understand the model. Development of free-to-play products in the US has increased, but many products have failed. Despite the problems with bringing the gameplay/marketing framework here, a few diamonds will ship – primarily native NA developers that adopt Korean concepts. Trend 3: Free to Play is Misunderstood
“The business of game development isn’t selling items, it’s in selling social experiences.”
Item sales are not the only way to make money and ”big bucks’. Relying on that for a revenue stream is a guaranteed way not to make money. The myth that they are has prevented a lot of people with good ideas from moving forward with them. Ultimately, FTP titles are not necessarily aimed at the non-gamer. Additionally, free to play games are not required to be lower budget – high quality, polished titles dominate the top tier of the free to play market.
Trend 4: The Battle Between Publishing vs. Self-Publishing
Venture Capitalists are increasingly pressuring developers to self-publish, which means developers are increasingly going outside their core competency. Developers are also looking to go global right away. And hey, it’s all just free on the internet, right? This disregards the challenges of international markets and localization. The reason is simple: without involving a publisher, the value of the product the VCs are backing goes up.
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Overall, Nexon’s games grew because they went past the hardcore gamer motif. Kim mentions Combat Arms, noting the success of Korean FPS titles for expanding gaming beyond the hardcore player. They weren’t making games for non-gamers, they were aiming specifically at non-core gamers. “Easy” FPS titles, free to play, will get everyone on board.
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“The online/free concept is still very new to most people. Additionally, you might find that players will hesitate and question the value of the title. ‘It costs nothing? It must be crap.'”
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You actually have to play the games! Do your research to find out what these games are like, find out what the metrics on these things are. Play them with co-workers, with the intention of having fun. Understand the mindset of the people that will be playing your product. Until you’ve played, you don’t understand what the market is like. Kim cracks, “If you don’t have time, get an intern to do it.” Then, play them with people.
Understand the marketplace and who is getting excited by this type of game. Focus on Fun, not Money and Items
The business of game development isn’t selling items, it’s in selling social experiences. Examine how other people are making their ‘shops’, how they’re handling microtransaction sales. There are lots of examples; just go out and look. Have an idea instead of just building out needlessly ahead of time. If players find value in the experience, they’ll pay to enhance their gameplay. If anything, that can help you figure out who isn’t currently being targeted. If the game isn’t fun, no one will be left to buy the items.
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Free to play doesn’t imply the concept of Shareware. These components are just not where free to play games make their money. Additionally, expansions and additional content added to the game should be free. If you’re entering the market, you should be offering the full experience to all players.
Players shouldn’t be locked out of major features or areas of the game. If a player can’t experience the full game without paying, they’re going to feel pressured by friends to put up money. Don’t bombard players to upgrade; ultimately you want the player to want to pay you. Spending money should feel like a positive experience!
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Challenges to the Free to Play Concept
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“Ultimately proving to the consumer that the product is valuable is entirely about perception. Free to play gaming still isn’t recognized as a legitimate platform yet – even if they have 10x the number of customers.”
Most players don’t understand what it means to play a game for free online. Additionally, you might find that players will hesitate and question the value of the title. “It costs nothing? It must be crap.” At demo events, players will hear the description, play the game, get excited, and ask where they can buy it. The online/free concept is still very new to most people.
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PR will play a big role in perceived value. Ultimately proving to the consumer that the product is valuable is entirely about perception. If they’re not being updated and tweaked, they’ll get stale and players will walk out the front door. Media sites are still reluctant to cover free to play games at all, some dismissing them outright as ‘not games’. Free to play gaming still isn’t recognized as a legitimate platform yet – even if they have 10x the number of customers. As a requirements, FTP titles must constantly change to keep them competitive.
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Watch Your Weight and Your Specs
Large clients can kill your playerbase. Every year it will get bigger, so keeping it small initially will allow you to grow. The perceived value of time vs. Most consumers are just not used to large downloads. cost of the game is a big issue for them. “It’s free, so this huge download isn’t worth my time.” The nature of the game is to grow/expand. Deliver a small client just to get the player started, and then stream in additional content to keep them moving. Clients also cost money to deliver.
Graphically intensive doesn’t mean better. Ultimately players judge a game based on how fun it is. If you can get away with ‘older’ graphics while maintaining a high level of fun, go for it. When you’re creating for the mass market, consider the install base and what your minimum spec looks like.
Barriers to Play
You don’t have to deal with marketing if you don’t want to. It chisels away player investment in for-pay products. There’s zero cost to the consumer to get in, so everyone can theoretically try your product for themselves. The result is that free-to-play gaming is a really aggressive business model, despite the innocuous appearance. getting to hardcore gamers and a younger audience via word-of-mouth. It sidesteps the problems of credit cards, allowing everyone to play together. Player word of mouth results in viral growth.
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Put up a Barrier to Exit
Because it’s incredibly easy to get into the game, it’s also very easy to get out. Have them invest in your game and they’ll feel a need to stick with your product. Conversely, because the game is free to play, there’s no pressure to leave! Once you get a player to open up their wallet, they’ve already committed. Protect the new players coming in, because it’s just as easy to leave as it is to join.
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Build Your New Player Experience
Most North American players have zero experience with free games online. Min notes his own history visiting relatives in South Korea, playing social games online with friends in PC cafes. American games went in a very different direction, as consoles encouraged players to play by themselves. Without a tutorial, players will leave without giving a new title a chance.
Without PC cafes, there are huge challenges in getting FTP interest to breed in North America. In the US it’s about you in your room downloading the game by yourself, hoping it will work. Veteran players will detract from the ‘newbie’ experience if they’re allowed to interfere. A good tutorial will protect players from the hardcore endgame user.
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These games are not just boxed products. Ultimately the reason people keep playing any game is the other people playing them. Build strategies to increase duration times, keep people playing.
On to part 2 >>
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