Can Doing Good be GOOD for Your Business Model?
Nice guys finish last. It’s a dog eat dog world. Kill or be killed. All these phrases are heard in the business world. Personally, I do not believe it is a dog eat dog world. I believe the best business is based upon positive relationships and win-win deals.
While nosing around Facebook, I noticed a game called A Better World, so I checked it out. More of a space for positive energy than a traditional game, A Better World allows users to express gratitude, share positive messages, as well as simply hang out in a positive space. I found it refreshing that someone has taken the lessons that so many of the self-help gurus preach, and made them easier to execute.
For instance, many positive attitude experts say to express gratitude to attract more good things into your life. However, how does one do that? Not everyone has a suitable person or avenue available. A Better World provides people with a public forum to express gratitude and share positive energy. For many, this is a much-needed service.
The real question is: Will A Better World’s Positive Business Model translate to business success? Most current Facebook games focus on quick-hit entertainment. In fact, the average Facebook game user spends less than two minutes per game use. A Better World is trying to buck this trend by focusing on a segment of the market which is virtually untapped: positive energy non-core gamers.
Nintendo’s Wii has already proven that a solid business model can be generated by creating a gaming platform for traditional non-core gamers. Can A Better World pull off a Wii Version 2?
With 500 million Facebook users, it seems plausible that A Better World has a market segment large enough to thrive. The most interesting aspect of the Better World business model is the monetization potential. Popular games like Zynga’s Farmville have broad audiences across many age groups; in particular, kids enjoy playing Facebook games like Farmville.
As exciting as having millions of users might be; free child players are not the real market. The real market is the upsold virtual goods buyer. The monetization model for Facebook games is to allow free play for all uses and then to augment the playing experience with a variety of virtual goods. These virtual goods are typically the primary revenue source. However, only 8% of social gamers convert to virtual goods buyers. A Better World has the potential to improve upon this low 8% conversion rate. A Better World clearly caters to an adult market. In particular, adults over the age of 25 with jobs, credit cards, and disposable income. A Better World has the potential to capture more than the traditional 8% upsell rate.
Most Facebook gaming companies are privately held. However, market capitalization for Facebook game developers is sky-high. Even with upsell rates of only 8%, companies like Disney are paying in excess of twenty times sales for successful game developers. If A Better World can successfully monetize their older Facebook demographic, they may be able to push this multiple even higher.
As A Better World has just officially launched, it will be interesting to see if the game can capture a large share of the Facebook community. Do you think a positive message game can succeed on Facebook? Do non-traditional games like A Better World help Facebook’s Business Model or hurt it?
