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For those of you who may not be familiar slot machines and roulette wheels are the money making schemes that leveraged addicts of yesteryear. The new scam is freemium gaming and it is taking the Internet by storm.
The word ‘freemium’ is defined as “a pricing strategy where a product or service is offered free of charge but a premium is placed on proprietary features, functionality, or digital goods”.
Let’s say that you are a digital studio looking to make a quick buck by exploiting people. You could sell drugs, that would work, or you could produce a freemium gaming platform. Freemium games rely on the concept of micropaying, or spending very small amounts of money often to unlock in game features.
These games train the players to seek instant gratification (not difficult).
They then throw up barriers to that gratification in the form of wait periods. The wait period can be alleviated with a ‘god currency’ which comes from a resource pool that can be replenished with a mircopay purchase. Let’s look at an example.
In our example freemium game you are a rugged and self sufficient farmer. You must clear your wild and overgrown land, grow crops despite severe droughts and torrential rains, and you must keep an ever growing inventory of livestock fed and protected from the harsh elements. Oh, and you have to turn a profit on your farm.
Cool, I love being a pretend rugged outdoors man and in the picture for the game the cow has a cartoon smile, so that seals the deal. Let’s get farming! Clearing trees and brush uses up energy, represented by your energy bar at the top of the screen. Your energy replenishes over time, say one unit of energy every three minutes.
You clear a space for a barn. Congrats, you’ve reached level 2, have some energy as a reward. Clear some more space for farmlands and fields for crop production. Congrats. you’ve reached level 3, have some energy and god currency as a reward. You plant three fields of corn. That pesky corn takes fifteen minutes to grow, OR, you can spend some god currency and it will be ready now.
You start the game with a reserve of god currency so spend a few and you get your corn right away. Great, back to chopping down trees and shaping this digital wilderness in the ways that most benefit man. Except you’re out of energy and a particularly big tree will take six energy. You could wait 18 minutes (one energy unit every three minutes) or you could spend some god currency and replenish your energy right now.
By now you should be able to tell how the game progresses. The next crop you unlock is wheat, which takes thirty minutes to cultivate, then rice which take an hour. To open the road to the market you have to excavate a rock fall and that takes a whopping 40 energy, way more than your character can handle right now.
You could farm for hours to level him up to get the 40 energy, but it just costs a couple units of god currency. Once you have exhausted your god currency you can replenish it for $1.00 (sometime even less). But wait, if you buy a surplus of energy you will save money by getting bonus energy units. Buying enough energy to replenish your bar is a waste of money. The best deal comes when you spend $15 or more.
And on it goes. But why you ask, why and how?
Each game is a variation on that central theme. Some games put you in the role of a king who is developing a wide reaching and influential kingdom. Others, the development of more modern pursuits. No matter the variation, the formula is the same. Start from zero, collect resources, expend those resources to grow, wait (or don’t), rinse and repeat.
People play because the game is structured in such a way to stimulate players to keep going, to push just a little bit further in order to get the next level or the next doodad that will make their farm/business/kingdom/empire/city that little bit better.
The bulk of them never pay though. No one would play a game that required you to pay money every minute or two to win. Oh, right, slot machines. Not online they wouldn’t anyway. Oh, right, online slot machines.
The allure is that if you tough it out and log in frequently enough, you can win anyway. Remember that your energy is restored over time, one unit every three minutes. If you log out then log back in a couple of hours all of your crops will have grown and you will be able to chop down more trees. By the way, there is no end to these games. Making an end to the game is to put a finite cap on your potential revenue from said game so no greedy digital studio would do that.
A brief business lesson. When a company determines many of their budgets, especially their advertising and sales budget, they look at their CLV or customer lifetime value. This number represents how much money on average an average customer will give the company for the duration of their relationship with the company.
So if I have a freemium game with a micropay function, and it has over 100,000 players (a conservative estimate), and I can expect that 15% of those players will spend $2.50 ($37,500) before they realize it’s a scam and 1% will spend more than $50 (minimum of $50,000) I would have a CLV of about $0.88 a customer ($87,500/100,000).
That’s pretty low, so that’s why the game is social. You are rewarded for bringing new people into the game, and you are bombarded with offers for specials and promos within the game. 50 units of god currency is usually $3.00? Purchase today and we’ll sell you 150 units plus an upgraded pickax (faster rock clearing) for just $1.99!
If anyone takes that deal then they have already beaten their CLV numbers for that customer and they know that there is more where that came from. Plus, what they are selling cost them very little. Perhaps an hour or two of work from a designer and a half hour from an artist that totals less than $150 can be sold potentially hundreds of thousands of times over for $1.99? That’s what I call a sustainable business model.
And that doesn’t even take into account the fact that people will make random in-game purchases, some god currency here, some gold coins or some lumber there, in the end if enough people spend more than $0.88 then your CLV could rise to $1.20, or even $2.60. That’s nearly a doubling of revenue.
Okay so what, people can make their own decisions with their own money. Yes, but these games are essentially slot machines that never pay out. Flashing lights, fun sounds, keep feeding it quarters, the whole shebang. All kinds of people play these games but the at risk segment of the demographics are the elderly, unemployed, teenagers, and young adults.
In other words, people without the disposable income to make a habit of flushing money down the drain. While freemium games are clearly more healthy than cigarettes, the business model is the same.
It seems like I am always a day late and a dollar short when it comes to keeping up with music. Have you guys heard about this new chick Taylor Swift?
I recently came across British singer-songwriter James Blake. I can’t say I discovered him, he’s won a handful of awards. I have to say, the bulk of his material seems to be the electronic equivalent of a WG squared: a white guy with a guitar.
Steady pop or R&B influenced beats compliment his voice that is a little on the side of ‘I’m way to into myself to get what you’re doing over there’ but overall it’s nice evening music. Lots of piano, lots of soaring vocals.
His best song, hands down, “Take a Fall for Me” features the one and only RZA. Yes, James Blake just took a turn of the one-eighty persuasion.
The song itself is a gorgeous hip-hop ballad that borders on anthem. RZA’s cool liquid vocals flow over the chill beat and mix to form a truly fantastic experience. I’m not the first person (definitely not the first white person) to say “Hey, you guys ever heard of this Rizza guy? He’s pretty sick, he’s pretty dope, you should check him out”.
And this song certainly isn’t RZA re-imagined or anything silly like that. It’s just smooth and sharp at the same time. I just calls ’em like I sees ’em. Do yourself a favor and check the song out.
“Take a Fall for Me” feat. RZA-James Blake Overgrown
Also, what would our fair blog be without advertising considerations. Scotch and Hot Dogs recently acquired an affiliate relationship with Coffee Club. They’re an awesome brand that genuinely does great things so check them out and subscribe today for your own dose of aroma therapy.
For those of you who are unfamiliar, SEO stands for Search Engine Optimization. It is the methods and strategies that website administrators use to make sure that traffic comes to their site.
The Internet is a big place and it is easy for individual sites to get lost in the sea of content. SEO tactics ensure that search engines like Google index your site and give it favorable ranking when displaying results to those browsing online.
This is not a discussion of blackhat SEO, the under the table and behind the scenes methods of gaining traffic, or even the above the board methods. It is instead a discussion about what some sites have done to increase their traffic and why it is killing our souls.
The Internet has been a longtime soul killer no one will dispute that. It turns out that connecting all of the first world humans and a great many of those who live in situations less than first world actually erodes our humanity. Who could have guessed except everyone?
So it goes…
Let’s say that you have a blog (like this one) and you want to share it with the world (like the one we live in). No one is going to search ‘Scotch and Hot Dogs’, ‘ramblings of a psuedo-intellectual in Upstate NY’, or ‘useless un-constructed narrative’. And I’m okay with that. Besides, it’s not like my tired and uninformed opinions were going to make me any money.
But if I want people to find my blog I have to employ aggressive SEO tactics. And I do want them to find my blog but not to read the garbage that I put on here. I want to make money with advertising.
Okay, I want you to read the garbage. But that’s the conundrum. Do I (do any of us) write what I want for free or do I write what will get traffic and see a trickle of income?
In order to make money with the advertising I have to generate traffic. So to get the word out I have to sell out. I could post list after list of ‘shocking things you didn’t know about a thing’ or the aptly titled ‘list of things you listed another time list read list ten’. I would get traffic, I would get clicks on my ads.
The ads would be invasive too. Good Lord would they be invasive. The flashing, hyper-targeted based on your history, moving to follow your cursor type of ads. The kind of ads that overload your computer’s processing power because they are combing your hard drive to figure out what shit to try to sell you.
But that’s not the point. I am perfectly happy to not make any money and stay on the murky fringes of the Internet. This is a blog. You should expect a small amount of promotion, especially me telling you all about the great projects that I’m working on. So there’s a couple of adulterants in the form of some links no one will click on, so what? The point is that I have my integrity .
Or an integrity-shaped hole where principles used to be. One or the other.
Speaking of other projects, check out my product blog Keep Beer Cold for cold beer and great deals. And for the love of God, don’t click any ads!
Advertising has been a reality of the Internet since Al Gore invented it some 30 years ago. This is capitalism: if you have something nice I want to ruin it with monitization schemes. Of course, the advertisers on this blog are the best. We love you guys. We mean all of the other advertisers. We hate those guys.
Back to interactive ads. These are those sneaky ads that make you do something before they will let you access your content. Click a survey, click the picture of the guy who smells better, swipe, tap, and evaluate. Companies are spending tens of thousands of dollars on campaigns to ‘engage’ me with their brand.
You know that somewhere around a corporate table a marketing exec said “Woah guys. I just realized. We can make them work for things and still call them free”. That’s exactly my beef with interactive ads and a lot of advertising in general. Free doesn’t mean free. Free means we want some of your time that you will never get back. Free means the cost is built into the price.
Of course that’s not new. We have always known that money doesn’t grow on trees and nothing is free. Especially not lunch. There is no such thing as a free lunch. Get any ideas about lunches that may or not be free out of your head right now.
But what about advertising as an enabler? What about great companies like Fiverr and Photos.com that make or beloved Scotch and Hot Dogs possible? And how intrusive to our content should they be?
The last question is one of those trick questions you have heard so much about; no one reads this blog. We actually won an award for having exactly one person read our blog so thanks. You know who you are.
Of course it’s great that our advertising considerations can keep us afloat but you know what helps? When people click on them. We also won an award for worst advertising performance of any site ever. The very unpopular search engine Bing gets more hits than we do and that downright sucks.
But then we’re just as bad as the vultures who are circling your IP address and trying to peddle their junk to you aren’t we? No, because we don’t call it that.
If you ask me, I would say that this is a free blog. If you were to ask anybody who dismisses our lazy content they would say “What’s in it for me?” I’m afraid I would have to agree. Blogging, like advertising, is pretty narcissistic. It’s not what’s in it for you, rather what’s in it for me?
If you’ve had any forays into the world of freelance work (either buying or selling) you will have come across the ‘gig site’ Fiverr. Like the character from Watership Down, just spelled differently. The premise of Fiverr is that any gig is just $5. Freelance professionals from around the world stand ready to help clear your schedule for an Abraham Lincoln (Or five Washingtons, or a Jefferson and three Washingtons, or two Jeffersons and a Washington). That’s enough chit chat about the two dollar bill.
What makes Fiverr cool are the business services sure; anyone can get a logo designed or a video made or what have you on the cheap. There’s IT and data entry jobs, but the best jobs are the ones that have nothing to do with the business world.
When starting a gig Fiverr gives you this prompt ‘I will ____ for $5’, so all of these entries will follow that format.
I will write any message on my lips and take a picture for $5.
This seems like it has better reach than the kissing booth at the county fair. A couple of the messages are clearly promotional in nature so this actually could be construed as an advertising gig more than performance art or excessive drug use.
I will wear an animal mask and hold a sign for $5.
Again this straddles the line between performance art and advertising but serious points for originality. I wonder if you have to pay extra for fantasy creatures. Come to find out that a unicorn is ‘classified’ by ‘the man’ as a fantasy creature. You can also select his torso covering as in wearing a shirt or shirtless. At what point does he say ‘no’ I wonder?
I will take a picture of my cat or dog in any scenario for $5.
This is a great find. I’ve been paying $35 for my current animal photography service. It also oozes confidence. Any scenario? Really? I want to see your cat fighter-bombing ISIS forces who are actually your dog…the same dog pictured left who is watching dog porn on what I can only imagine is dial-up.
I will send you pictures of my corgi for $5.
I emailed and checked. She is fresh out of Dachshund. This is actually a brilliant alternative to a Kickstarter program; send us funding for our wacky project and we’ll send you pictures of our cute dog. Although the sample picture she provides kind of defeats the purpose. You can save %5 just by viewing her gig.
Of course this wouldn’t be a post about silly Fiverr gigs if I didn’t share my own with you: I will write a haiku for you for $5. That’s right, I will write you a three line poem about whatever topic you want with the syllable pattern 5-7-5 for $5. For $10, I’ll write two. High five for capitalism!
To get an original haiku from the author click here. To check out the wonderful world of people who want to part you with $5 click the banner below.