‘Tis the Season: Boost Your Virtual Goods Sales for the Holidays
Introduction
From early in the morning on the day after Thanksgiving to late in the night on Christmas Eve, traditional merchants experience their busiest weeks of the year. According to the National Retail Federation, “For many traditional retailers, the holiday season can represent anywhere between 25—40% of their annual sales.” Retailers often offer generous sales and discounts, conduct special giveaways and promotions, or even launch entire new product lines featuring holiday-themed designs in order to capitalize on consumer’s charitable moods and open wallets during the holiday season.
But what about the merchants that sell virtual goods—the developers of online games and social networks that sell digital items such as virtual gifts, in-game functionality, or decorative goods? What can they do to capitalize on the holiday season?
Our advice: follow these same strategies.
With the holidays fast approaching, it’s not too late to start planning how you can boost your virtual goods sales this season. To offer a few ideas, we took a look at some of the common practices followed by popular social games and virtual worlds during the recent Halloween season.
Tip #1: Introduce Holiday-Themed Items
One of the best and most obvious ways to leverage the holiday season is to introduce a set of specialty items with holiday themes. Think Christmas trees and Menorahs, snowmen and jingle bells – even virtual replicas of those obnoxious sweaters with the flashing lights that somebody’s father inevitably wears to the annual holiday party.
For Halloween, there were plenty of examples of social applications and web sites that introduced seasonal items. The Facebook application Barn Buddy, for example, introduced dozens of spooky or downright scary items users could display on their farms, including haunted barn houses, black cats, “Beware” signs, and the bandage-wrapped arm of a mummy reaching out from the ground.
Similarly, the application Fish World, with 9 million Monthly Active Users (MAUs), introduced special Halloween-themed fishes, including a Pumpkin Fish, Skeleton Fish, Zombie Fish, Mummy Fish, Ghost Fish and others. They also created Halloween-themed backgrounds and decorations for their user’s fish tanks. The decorations came in both regular versions, which could be purchased either through “Coins” (their in-game currency) or “Fish Bucks” (their Real Money Transfer currency) and “premium” versions, which could only be purchased with “Fish Bucks.”
There are several ways to boost the demand and sale of these specialty items during holiday seasons:
- Promotion: Significant promotion of special items on key pages and during user log-in is critical to establishing demand for them. Also try showcasing users who have purchased these items and the creative ways they have used them on some type of community page or “Leaderboard”-type feature, as this may help draw the attention of other users interested in purchasing similar items.
- Limited Time or Supply: Try keeping specialty items limited in supply (e.g. only 50 pumpkin faces) or offer them for a limited time (e.g. a Halloween shop open for 7 days only) in order to create urgency in the users’ minds. It also positions these items as rare or premium items, which takes us to our next point, about premium pricing.
- Premium Pricing: Just like in real economies, seasonal items should be priced slightly higher than regular items due to the higher demand during a particular season.
- Dual Currencies: It is also possible to balance your dual currencies by allowing users to purchase seasonal items exclusively through Real Money Transfer (RMT) currency in order to generate direct revenue streams or exclusively through in-game currency to increase overall activity and engagement. For further information on managing dual currencies, see our white paper Monetizing Dual Currency Economies in Online Games.
Tip #2: Conduct Holiday-Themed Events
Nearly every holiday has at least one singularly identifiable event, whether it’s an egg hunt at Easter, a cookout for Memorial Day, or a fireworks display for the Fourth of July. By hosting your own such event – virtually, of course – you can get people excited about participating in your application or web site and thereby increase your user engagement, viral distribution and monetization.
The virtual world Gaia Online, for example, holds a special event for Halloween every year. This year’s event was called “DemonBusters.” Taking place over several days surrounding Halloween, it asked users to pick sides between two Gaian demigods who had been fighting for centuries. After picking the “Light Side” or the “Dark Side,” users were asked to complete specific missions that would let them build up their skills, acquire new items, sabotage the enemy and charge up their team’s weapons.
By steering pre-game conversation about the event to the Gaia forums in order to let people get to know their teammates and “prepare for war,” the virtual world increased user activity and peer-to-peer interaction. The event also created a viral distribution channel by encouraging users to rally their friends to join them in battle by promoting it on Facebook, MySpace, Twitter and digg.
Other special events that took place around Halloween included costume contests that were held on a large number of applications and virtual worlds. WeeWorld, for instance, allowed users to trick-or-treat in the virtual neighborhood of Woodland Hills, where they could actually walk their avatars up to the front doors of haunted houses for a trick or a treat.
Tip #3: Create Special Tasks, Quests or Missions
Another way to monetize through the holiday seasons is to come up with special holiday-themed missions, tasks or quests for your users to take part in. Consider having them decorate a tree or light a Menorah, and award them with virtual currency when they are finished. Missions like these help deepen user engagement and, if done correctly, can also create a viral channel.
While tasks or missions could be part of a larger event, as seen in tip #2, they could also be as simple as offering virtual currency in exchange for users showing off their avatars on Facebook, as the virtual world Zwinky did during their “Trick AND Treat” event.
Tip #4: Launch a New Product, Feature or Game
Lastly, some developers time the launch of new products, features or entirely new applications around certain holidays. Traditional retailers do this all the time—think of all the toy, food, clothing and entertainment companies that launch new product lines just in time for the holiday shopping season.
In 2008, the social application Hatchlings was originally launched shortly before Easter as Worldwide Easter Egg Hunt, an app focused around the game’s core social feature of users going around and searching for decorative eggs hidden in other users’ profile pages. Today, the app has more than 800,000 very active and very loyal Monthly Active Users, and it has expanded its functionality to let users hatch “cute little critters” and help them collect eggs of their own, hence its change of name.
Just this past Halloween, the app Monster Farm was launched on Facebook to capitalize on both the popularity of farming apps and the holiday tie-in by letting users “replenish the world’s stock of monsters…by farming them.” Launched about a week before Halloween, the app grew to more than 40,000 MAUs in just its first two weeks. Its usage has slipped a bit in the brief time since then, but given the clever design of the monsters and well thought-out mechanics of the game, we wouldn’t be surprised to see it evolve into more than just a one-time novelty app.
Conclusion
The holidays hold plenty of opportunities for social game developers to tap into seasonal themes in order to engage their users more deeply and get them to spend virtual currencies. Obviously, some holidays hold more opportunities than others – Halloween, for example, is probably a better holiday to design a special event or special virtual goods around than, say, Arbor Day (although the latter is an ideal holiday for “green” apps to come up with something special).
The holiday season that includes Christmas, Hanukkah, Kwanzaa, Ramadan and others, however, is the most ideal time of year for developers to develop special goods, events, missions or even new games and applications. The tips provided in this white paper are by no means an exhaustive list. We’ll be interested to see what other unique and compelling ideas developers come up with for this holiday season.
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