It started playing poker when I was a senior in high school.  At lunch time, you could find me huddled in the dark corner of the cafeteria with a bunch  friends, playing Texas Hold’em for dimes.

In the next few years,  poker consumed my mind.  There were quite a few days when I played 16-hours, stopping only to pee and eat.  I read tons of books, posted a ton on forums, and started a popular poker blog.  Over 6 years, I played roughly 500,000 hands and made decent money for a college kid.

Frank Lantz is right when he calls poker vulgar, violent, dirty, shameful, dangerous, and addictive.  But he’s also right when he says there’s an underlying beauty.  The vast majority of people will never see it.  But if you take the time to actually master the game, it changes the way you think about the world.

Playing poker transformed me.  I can’t say the same about many other games, movies, music, or works of art.  And transformative experiences can be INSANELY profitable if a business can deliver them consistently.  It’s no coincidence that self-help books fly off the shelves.

Charlie Cleveland had a great chart in his 1-Hour Video Game MBA presentation that summed it up nicely:

Sidenote: Charlie Cleveland was one of the founders of Natural Selection.  Natural Selection was 2nd best game (poker is 1st) that I’ve ever played.

As you move towards the top of the chart, customers are more willing to pay a higher price.

Facebook’s old version of Open Graph let you slap on a “Like” button on your website.  Doing so would make your website act like a FB page: your site would show up on FB searches and show up in the user’s “Likes & Interest” section on their profile.

Your website / app is the object and the “Like” button is the edge. (Tip: think of an edge as a verb and the object as a noun.)

In the new Open Graph, FB is opening up the door to a whole bunch of new edges. Instead of just “Liking” a third-party app, users will have a whole bunch of other ways they can interact.

• A music app can define the ability to listen to (action) a song (object).
• A travel app can define the ability to visit (action) a particular country (object).

FB will use its algorithms to determine how these actions will be displayed on the Timeline, News Feed, and Ticker.

Timeline
Timelines are the revamped user profiles.  It shows the user’s likes, interests, friends, important events, etc.

News Feed
The News Feed is what you see when you immediately log into FB.  It shows all the stories/updates your friends published.  There are three main ways to get on the New Feed: Likes, Feed Dialog & Feed Graph object (as described above).

Ticker
The Ticker is the right bar on your FB page.

Ticker lets you Facebook while you Facebook

Additional Reading:
https://developers.facebook.com/docs/beta/opengraph/
https://developers.facebook.com/docs/channels/

GOOD reasons for making achievements hard to get:

• High skill component
• Perfection of a core game mechanic
• Handicapping the player (in a way that makes sense and is still fun)

BAD reasons for making achievements hard to get:

• Completely luck-based (and rare)
• Perfection of non-central game mechanic that isn’t overly fun on its own
• Handicapping the player by removing a fun element of core gameplay
• Excessively grindy
• Severe punishments for small mistakes
• Real-life sacrifices (completing a game within 24 hours)
• Difficult logistics of even attempting a task (such as finding an active multiplayer game)
• High reliance on specific behavior of opponents (especially in a multiplayer setting)

- Brenda Brathwaite

Benign vs Malicious Jealousy

People expect the world to be fair.  If you work hard, you’ll be rewarded for your efforts.  If you’re lazy, you won’t get much.  You can be jealous of both the hard-worker and lazy luckbox, but it’s quite useful to classify that jealousy into two types:

• Benign Envy: You feel benign envy when you see someone you admire and you think their possessions / status are well deserved (e.g. a person who accumulated their wealth from a lifetime of hard work).
• Malicious Envy: You feel malicious envy when you think someone doesn’t deserve their possessions / status (e.g. a lottery winner).

Gamers feel benign and malicious envy too.  They’re resentful of the players that pay a lot of money to get to the top.  They respect the person that grinded out countless hours to get to the highest level and have the best gear.

Practical Advice: Don’t make it easy for users to spot the people that spent money in your game and the people that grinded their way to the top.

Hard Fun
Gamers want to be in flow.  That means giving them skill-based challenges that aren’t too easy or too hard.  Failing 80% of the time (and succeeding 20% of the time) can be really satisfying.

Easy Fun
Gamers want to feel awe, mystery, and excitement.  Think of the lights and sounds of winning a jackpot on a slot machine, exploring a new continent in WoW, or the desire to see what happens in the Final Fantasy 7’s plotline.

Altered States
Games have the power to change someone’s mood.  They can help clear someone’s mind after a stressful day, help them avoid boredom, and make them feel better about themselves.

The People Factor
Players want to compete against with each other, collaborate with each other, share in their friends’ successes and gloat over their rivals’ failures.  This effect is so strong, that they might even play a game they don’t like.

Here are some of the most frequent emotions trigged by games:

If it can't be measured, it's not worth doing.

A few months ago, I was in San Francisco and was walking home from work with a friend.  When we were about halfway there, he made a startling claim:

If it can’t be measured, then it’s not worth doing.

Whether or not you agree, there’s no excuse for failing to keep track of these basic social gaming stats:

DAU
Daily Active Users is the number of unique visitors that came to your app on a given day.
If Bob comes to your app in the morning and then comes back to your app at night, it only counts as 1 DAU.

MAU
Monthly Active Users is the number of unique visitors that came to your app on a given month.
If Sue comes to your app in the first week of the month and then returns to your app  during the last week of the month, it will count as just 1 MAU (but 2 DAU).

Engagement
Engagement = DAU / MAU.  In other words, if you have 200 DAU and 1000 MAU, your engagement would be 20%.  Engagement for most apps is around 15% – 25%.
Pro Tip: Engagement isn’t accurate unless DAU is relatively flat.  Otherwise, it will be artificially inflated when an app’s DAU is rising and artificially deflated when an app’s DAU is declining.
Lisa Marino claims that you need an engagement rate of 20% in order to be successful, but I think that’s a pretty crappy way of looking at it.  You can (theoretically) have a great app that users play only a few times per month

Retention
Retention tells you how likely a user is to come back.  Let’s say you look at all the users that installed your app on 6/1/2011.  How many of those users came back to play on 6/2/2011?  What about 6/3/2011?  etc.
Pro Tip: Small changes in retention can manifest into HUGE long-term DAU gains.

ARPU
Average Revenue Per User tells you how much money the average user is generating.  Typically, ARPU = Daily Revenue / DAU, but you can also calculate it with monthly numbers.
Pro Tip: Breaking ARPU down by geography, gender, age groups and other demographic data can be particularly insightful.

K-Factor
The K-Factor measures the virality of your game.   Historically, it was used by medical professionals to measure how quickly a virus multiplied.  A virus with a K-Factor of 1 was at equilibrium.  Anything greater than 1 meant an exponential increase and anything less than 1 meant an exponential decline.  A K-Factor of 1.1 means that the population increases by 10% in each period.  A K-Factor of 0.9 means that the population decreases by 10% each period.
Pro Tip: You can spot when someone is bullshitting if they talk about K-Factor without talking about mean time to spread.  For example, if the K-Factor is 1.1, does it take 1 day for that to happen or 100 days?  There’s a BIG difference!
The easiest way to measure this would be to look at how many installs were generated by feeds (e.g. wall posts) and request channels  (e.g. users asking their friends for stuff) and compare that to your DAU.

Additional Resources

1. Jon Radoff created this spreadsheet to help model growth curves.
2. Kontagent (one of the leading app analytics providers) put together this deck on more advanced metrics.

The human needs she outlined are really high on Maslow’s hierarchy, but they’ll still probably hit a good chunk of your userbase.

This is a MUST read.