YuChiang Cheng, Founder and CEO of WorldGolfTour, presented at our SF Game Monetization event on May 9th, 2012. Check out the SF Game Monetization meetup: http://www.meetup.com/SFGameMonetization/ In this presentation, YuChiang shares what he learned about working with large established brands and licensing those brands for virtual goods in his games.

1. Leveraging Branded Virtual
Goods
YuChiang – WGT
World Golf Tour and WGT Baseball: MLB

3. Brands

4. Why
• Everyone else does it
• Because your VC or Mentor said so
• You can’t think of anything better
• It will look good in your product
• You think it will look good on your resume
• It will help you get funded
– Social proof
• It will add realism to your product
• Will decrease the cost of acquisition
– Maybe….

5. Contracts
• They want to make money
• They want to expose their brand
• They want to protect their brand
• Rev shares – ouch when successful
• Fixed fees – ouch from day one
• Minimum Yearly guarantees – the real pain
• Transactional fees – accounting pain
• Penalties – downward spiral
• Only structure scalable deals - one item is not enough
• Give the Brand their own marketing guarantees to you

6. The Pain
• Long prolonged negotiations
• Legal Costs
• Operational overhead
• Approval process
• Decrease margins with fees and/or rev share
• Restrictions on marketing
– Where
– How
– Look
• Takes your focus off the product
• Loss of product direction control
• Much slower on iteration cycle
• Accounting overhead
• Reporting overhead
• Constantly explain things to people who do not get your business
• SLA’s

7. The Good
• Leverage the brand equity
– Vanity
– Social Value
– Identity
– Story
• May decrease the cost of user acquisition
• May raise the ceiling on what you can charge
for a virtual item ( or not…)

8. The Back of the Napkin
• What is my CPI
– Will it be less with the brand
• Will it cover the rev share, fees, operational overhead
etc….
• Item Pricing
– What can I charge for the item
– How much more can I charge with the brand
– Is the difference more or less than the rev share,
fees, operational overhead etc….

9. Execution
• Have a single person in charge of the approval
processes and reporting
• Make the Brand market for you
• Market the hell out of the brand – you paid for
the pain now use it
• Use the same item/brand on multiple pricing
levels
• Use the same item/brand on multiple
exclusivity levels

10. Renewal
• Do your job on reporting and accounting
• Meet them face to face a lot
• Either make the brand money or get them
exposure and prove it
• Positive PR always help
• Start the renewal process 12 months ahead
• A good partner is rare and priceless
- treasure them