NeoPets case
NeoPets
NeoPets is a highly addictive game that immerses users into the virtual world of Neopia. The website is considered one of the “stickiest”, where users routinely spends seven hours a day caring for their virtual pets and navigating through the simulated world. As a business, much of their success and growth can be attributed to the customers. The growth of the user base grew by word of mouth, which led to the initial and continued success of the business. The NeoPets business model and the immersive advertising strategy are the precursors to the trending free-to-play model numerous successful gaming giants, like League of Legends and Farmville, follow today. The services (games) they provide are free and revenue is generated through advertising and in-game purchases. The word “free” attracts many potential customers and the addictive nature of the game keeps users absorbed, which generates a bounty of exposure time for advertising opportunities. This makes NeoPets customers very valuable as an asset. From a business perspective, the social nature of the business model takes full advantage of the customer base by turning them into company assets. Customers voluntarily perform various services for the company for free. Current customers advertise and promote the site by word of mouth, which eventually leads the more memberships. The rise in traffic instantly makes the site appealing to potential advertisers and increase profits. Support from the customers such as surveys, reviews and creative design significantly improves NeoPets by making sound decisions based on customer input. If I have to assign a monetary value on NeoPets customers, it will have to be 30% of the company’s current value. I did some research and found that in 2005, MTV purchased NeoPets Inc. for an estimated value of $160 million, which makes 30% $48,000,000. I believe the number of customer membership is a critical piece of how the company is able to produce its main
NeoPets is a highly addictive game that immerses users into the virtual world of Neopia. The website is considered one of the “stickiest”, where users routinely spends seven hours a day caring for their virtual pets and navigating through the simulated world. As a business, much of their success and growth can be attributed to the customers. The growth of the user base grew by word of mouth, which led to the initial and continued success of the business. The NeoPets business model and the immersive advertising strategy are the precursors to the trending free-to-play model numerous successful gaming giants, like League of Legends and Farmville, follow today. The services (games) they provide are free and revenue is generated through advertising and in-game purchases. The word “free” attracts many potential customers and the addictive nature of the game keeps users absorbed, which generates a bounty of exposure time for advertising opportunities. This makes NeoPets customers very valuable as an asset. From a business perspective, the social nature of the business model takes full advantage of the customer base by turning them into company assets. Customers voluntarily perform various services for the company for free. Current customers advertise and promote the site by word of mouth, which eventually leads the more memberships. The rise in traffic instantly makes the site appealing to potential advertisers and increase profits. Support from the customers such as surveys, reviews and creative design significantly improves NeoPets by making sound decisions based on customer input. If I have to assign a monetary value on NeoPets customers, it will have to be 30% of the company’s current value. I did some research and found that in 2005, MTV purchased NeoPets Inc. for an estimated value of $160 million, which makes 30% $48,000,000. I believe the number of customer membership is a critical piece of how the company is able to produce its main