GaLA
Game and Learning Alliance
The European Network of Excellence on Serious Games
Deliverable n. D4.11
Business Modelling and
implementation report 3
WORK PACKAGE NUMBER
TASK NUMBER
DELIVERABLE NUMBER
DELIVERY DATE
TASK LEADER
AUTHOR
Date
Version
ABSTRACT
STATUS
WP 4
T 4.4
D4.11
30/06/2014
BIBA – Bremer Institut für Produktion und Logistik GmbH
Rosa García Sánchez, Jannicke Baalsrud Hauge, Hendrik Kraume
ADD all contributors- Sylvester Arnab, Poul Kyvsgaard Hansen,
Kam Star
3/ 07 / 2014
1.0
D4.11 summarize the findings of the business model task gained
during project life time. It aims at provide guidelines on business
modelling.
PU (Public)
PP Restricted to other programme participants (including the
Commission Services)
Restricted to a group specified by the consortium (including the
Commission Services) (please specify the group)
Confidential, only for members of the consortium (including the
Commission Services)
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1 DOCUMENT REVISION LOG
VERSION
DATE
DESCRIPTION
AUTHOR
0.1
25.04.2014
First draft ToC
Rosa García Sánchez
0.2
15.05.2014
Changes on ToC and content in chapter 7. Inclusion of content
provided by Sylvester Arnab in chapter 8 and 9.
Rosa García Sánchez
Content in chapter 8, 9 and 10.
Rosa García Sánchez
0.3
27.05.2014
Sylvester Arnab
Hendrik Kraume
0.4
18.6.2014
Added information from Poul Kyvsgaard Hansen
Hendrik Kraume
0.5
22.6.2014
Changes throught the doucment, prepareation for review
Jannicke Baalsrud Hauge
Comments throughout the documents, language check
Johann Riedel
0.6
0.7
2.7.2014
Comments throughout the document
Ioana Stanescu
0.8
2.7.2014
Integration of internal reviewers’ comments
Jannicke Baalsrud Hauge
1.0
3.7.2014
Preparation of for quality check
Jannicke Baalsrud Hauge
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2 TABLE OF CONTENTS
1
DOCUMENT REVISION LOG ......................................................................................................................... 2
2
TABLE OF CONTENTS ................................................................................................................................... 3
3
FIGURES ....................................................................................................................................................... 5
4
TABLES ......................................................................................................................................................... 5
1
EXECUTIVE SUMMARY ................................................................................................................................. 6
INTRODUCTION ................................................................................................................................................... 7
2
3
4
State of the art of Business Model .............................................................................................................. 7
2.1
Business model concepts .................................................................................................................... 8
2.2
Difference between business strategy and business model ............................................................. 10
2.3
Market segments ............................................................................................................................... 14
2.3.1
B2B-Business to Business Model ............................................................................................... 14
2.3.2
B2C-Business to Customer Model ............................................................................................. 15
2.3.3
B2C-Business to Business to Customer Model .......................................................................... 16
2.3.4
C2C – Consumer to Consumer Model ....................................................................................... 16
Decision dimensions for business modelling of SGs.................................................................................. 16
3.1
Economical dimension....................................................................................................................... 18
3.2
Technology dimension....................................................................................................................... 19
3.3
Stakeholder dimension ...................................................................................................................... 20
3.4
Learning dimension ........................................................................................................................... 23
Guidelines on Business Models for Serious Games Developers ............................................................... 25
4.1
Interviewed developers ..................................................................................................................... 25
4.1.1
PlayGen ...................................................................................................................................... 25
4.1.2
SGI .............................................................................................................................................. 25
4.1.3
VirtualWare ............................................................................................................................... 26
4.2
Best Practices..................................................................................................................................... 26
4.2.1
Products, Projects and Services ................................................................................................. 26
4.2.2
Synergetic effects ...................................................................................................................... 27
4.2.3
Knowledge from third party ...................................................................................................... 27
4.2.4
Unique Selling Proposition ........................................................................................................ 28
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4.2.4.1
Core Competencies ............................................................................................................... 29
4.2.5
Distribution ................................................................................................................................ 29
4.2.6
Return On investment ............................................................................................................... 29
4.3
5
D4.11 BUSINESS MODELLING AND IMPLEMENTATION REPORT 3
Guidelines on Business Models ......................................................................................................... 30
Business Model Canvas ............................................................................................................................. 30
5.1
Safety, Security, Crisis Management Games ..................................................................................... 31
5.2
Humanities and heritage games ........................................................................................................ 33
6
Conclusions ................................................................................................................................................ 34
7
References ................................................................................................................................................. 35
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3 FIGURES
Figure 1: Internet based perspectives (Temple, 2013)........................................................................................ 9
Figure 2: Extended product concept ................................................................................................................. 10
Figure 3: From business intent to performance (Ezendu, 2013) ....................................................................... 10
Figure 4: Business model's components ........................................................................................................... 12
Figure 5: Business Model canvas (Osterwalder & Pigneur, 2010) .................................................................... 14
Figure 6: Quenstions to consider ...................................................................................................................... 17
Figure 7: Decision dimensions for business modelling of SGs .......................................................................... 18
Figure 8: Stakeholders involved in SG market (refer to D4.1-page 20)............................................................. 22
Figure 9: Possible stakeholder flows within SG business models (Serious Games: Issues, offer and market,
2012).................................................................................................................................................................. 23
Figure 10: 4-Dimensional Framework ............................................................................................................... 24
Figure 11: Starting points of new SG according to an own estimate of the developers ................................... 28
4 TABLES
Table 1: Red Ocean versus Blue Oceans Strategy ............................................................................................. 11
Table 2: Business model building blocks (Osterwalder A.P., 2005)................................................................... 12
Table 3:Example of key elements for business canvas in safety, Security and Crisis management gamesdevelopers perspective ..................................................................................................................................... 31
Table 4: Business model canvas example for Humanities and Heritage games-perspective developers......... 33
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1 EXECUTIVE SUMMARY
This document presents the third and final version of the report on business modelling and implementation.
It aims at presenting a collection of the best practices identified and analyses for business models in the
Serious Games sector during the GaLA Project as well as to present some guidelines that can support
newcomers in their business considerations.
This deliverable is based on the work carried out during the past four years that has been related to different
aspects of business modelling with in the field of serious games. D4.11 summaries this work and presents
four important dimensions for business modelling in Serious Games. A set of guidelines for serious games
developers have been created based on literature, market trends and interviews with leading serious games
developers in order to support the process of business modelling for serious games developers. These
guidelines are also available on the SGS marketplace and we are aiming at supporting practitioners to better
understand and perform their own business models, as well as to provide overviews with best practices and
case studies on business modelling.
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INTRODUCTION
Competitiveness, sustainability, effectiveness and efficiency are keys to the success of businesses in the 21st
century. These terms indicate goals on the performance of the business in order to achieve economic
results, which have a decisive role on the survival of a company. The fulfilment of these goals and how they
influence the performance of a business are crucial for success. With these perspectives, business modelling
is a dynamic and evolving process that might result in a business model creating offerings and captures value
(Osterwalder & Pigneur, 2010). Business models in general consist of four interlocking elements that in
combination create and deliver value. Business models comprise the customer value proposition, profit
formula, key resources and key processes (Johnson, 2008). According to Porter (1998) a business model
should be dynamic and react promptly to internal and external changes. Consequently, it needs to evolve
according to dynamic changes in order to ensure the competitiveness of an organisation (Porter, 1998).
Timmers (Timmers, 1998) specifies that a business model is “an architecture for the product, service and
information flows, including a description of the various business actors and their roles; and a description of
the potential benefits for the various business actors; and a description of the sources of revenues”. This
indicates that several business models can exist for one product, depending on other factors like the nature
of the market, channel to market, customer segments, price points, dynamism of the market, etc.
The next section discusses the state of the art of business models and related concepts. A clear
differentiation is made between business strategy and business model and a structured classification of the
market sectors to commercialize serious games is presented. The importance of a proper understanding of
business model concepts and current possibilities will also support the development of new business models
for the serious games sector. This section is leading to chapter 3 and the four decision dimensions for
business modelling of Serious Games. These dimensions are: economical, technology, stakeholder and
learning dimensions. They are presented and connected to the current commercial and delivery channel
trends. These four decision dimensions are key dimensions to consider for practitioners working in the
Serious Games sector.
2 State of the art of Business Model
Business models emerged as a concept during the mid-1990 with the advent of the Internet (Osterwalder A.
P., 2005). After the Internet boom, many academicians and practitioners became interested in defining what
a business model is and providing managers with guidelines for successful business model implementation.
Nonetheless, researches do not agree on a single definition of the term because definitions have been
adapted to the individual researcher’s purpose. However, we agree on the importance of the business model
and see it as an “approach towards explaining how firms do business” (Zott, et al., 2010). Three areas of
research were identified by Zott et al. (2010): (i) e- business and the use of information technology; (ii) value
creation, competitive advantages and firm performance; and (iii) innovation and technology management.
For the purpose of this discussion a strategy-oriented definition of a business model will be employed, i.e. a
definition towards value capture and value creation. Afuah and Tucci (Afuah, 2003), for example, define a
business model as “the method by which a firm builds and uses its resources to offer its customers better
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value than its competitors and to make money by doing so”. Furthermore, business model innovation is
another important topic, since each model, in particular a successful one, will be challenged and imitated by
competitors (Teece, 2010). Casadesus-Masanell and Ricart (Casadesus-Masanell, 2010) stressed the
importance of elements such as reputation, customer’s experience, culture or relationship with the
suppliers, because they are difficult and time-consuming to imitate or develop.
Magretta (Magretta, 2002) outlines that a differentiated business model can provide a company with a
competitive advantage. The business model’s definition “moves around” value creation, revenue streams,
key resources and relationships.
Based upon the work presented in D4.1-D4.3 on Market and Value Chain analysis (Gala, 2011, 2012, 2013)
and D4.9-4.10 on Business Modelling and Implementation (Gala 2012, 2013), this section will discuss the
different business model concepts, the difference between business strategy and business model across the
existing market segments identified in the previous deliverables.
2.1 Business model concepts
The following short description of the three traditional and service based business models should give us an
overview for better understanding business models, and also for establishing new business models for SGs.
In the past few years the SGs industry, business models have focused on designing and developing
customized, often unique, game products generating revenue from their sales (Heitmann, 2011) (Serious
Games: Issues, offer and market, 2012). It is also a fact, that the market is quite dynamic with rapid
technology changes, new development concepts, delivery channels, customer needs and user needs (Di
Valentin, 2012).
Traditional product or service business models: The manufacturing industry mainly has product centric
business models, typically focusing on the efficiency of production and the sale of tangible products at a
market price. The use of machines, materials and the need for qualified personnel leads to high fixed costs,
and this standardization, automation and technological advances are important factors for the success of
product centric business models (Boyer & Freyssenet, 1995). The competitiveness of the business models is
basically influenced by the organizational structure of the production. For the software industry this is the
main cost factor also for service centric business models. For those business models, the consumer
interaction and service customization is another key element, since customer relation is a main indicator for
service oriented business. Connections to other service providers are important to indicate dependencies
and options for scaling effects (Schmenner, 1986).
Internet based business models: Internet based business models are sometimes mixed up with service
centric models or product simply by using the internet as a communication or delivery channel (Zhu, 2001).
Such business models create further value, often with a high ratio of automation. The capability to scale
without fixed linked resources is a key driver of e-business, since infrastructure, applications and platforms
can be added and removed on demand. Internet users are easily accessible via mobile or fixed entities,
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leading to high scalability of the business. At the same time different target groups can be reached through
Figure 1: Internet based perspectives (Temple, 2013)
the same channel (Teece, 2010).
Extended Product business models: The third model is a mixture of the two models before. It is a
combination of product, service and internet based business models’ characteristics by bundling tangible
products with intangible services to form an Extended Product, supported by information technology - which
creates new business models providing more value to the customer (Seifert, 2011). As we can see in figure 2,
the physical product in the centre is surrounded by its shell (innermost ring) and different kinds of services
(outer rings). While the product shell denotes physical aspects like physical device itself, packaging etc., the
services describes intangible additions to the product. Integrated services are developed together with the
physical product and are therefore especially designed to be used with it. Another opportunity is standard
services that are available on the market, for which the physical product has to be prepared with a
compatible interface. Finally, there may be universal services, where the service itself is changed with an
interface to work with the physical product. This could f.ex be a mobile phone with a 3G network or 4G
phone that can connect to 3G or 4G, or it can be services or a product like VirtualRehab. The product was
launched as a stand-alone solution (only physical, no extende product), transferred to a a cloud-based
system being more suitable (extend product) and now avaialable as SaaS (Software as a service) with
adaptable services (Wiesner, 2013, Baalsrud Hauge et al., 2014).
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Figure 2: Extended product concept
2.2 Difference between business strategy and business model
The requirements for SG application regarding business models and business strategies are depending on
the characteristics of the product, distribution channels and target groups, etc. It is also very dependent on
the speficities of the target market and that is for SG often very limited. (Gala 2012b, 2013b, Baalsrud Hauge
et al, 2014)
The terms business model and business strategy are mixed, but there is a general agreement in management
research that these are different concepts affecting different conceptual levels. Bieger et al’s (Bieger &
Knyphausen-Aufsess, 2002) interpretation for it, is that the business strategy provides the framework for the
development and the design of a business model.
Figure 3: From business intent to performance (Ezendu, 2013)
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In general, a company deduces strategies from its corporate vision or mission, and establishes an
appropriate business model within this frame. According to Casadesus-Masanell and Ricard (CasadesusMasanell, 2010), a strategy is a context specific plan aiming at reaching goals. The given frame or boundaries
are the raw material to create business models.
A business model is not a simplified representation of the business strategy but rather an implementation of
the realized strategy in respect to specific elements of the business model. Therefore the planning of
strategy and business modelling must be combined in order to gain and protect competitive advantages
(Teece, 2010). So, to deduce new business models, first and foremost, different business strategies have to
be analyzed.
Business strategies: In the last quarter of the century, company strategies have been focusing on how to
beat the competition and achieve a greater share of the existing demand (Casadesus-Masanell, 2010). Many
analyses of the industry structure, the strategic position between cost leadership and differentiation have
been made (Porter, 1998). Kim & Mauborgne (Mauborgne, 2005) discuss the views of the Red and Blue
Ocean strategies as summarised in table 2, which demonstrate the classic approaches of cost leadership and
differentiation. As companies try to outperform their rivals, cut throat competition turns the ocean of the
known market space red. On the other hand we have the blue ocean. Here companies claim the creation of
an untapped market space with new demand and lucrative growth. As we can see in the table below, the
Blue Ocean Strategy varies in several aspects from the classic Red Ocean Strategy.





Red Ocean Strategy
Focus on current customers
Compete in existing markets
Beat the competition
Exploit existing demand
Make the value-cost trade-off
Align the whole system of a firm’s activities with
its strategic choice of differentiation OR low cost





Blue Ocean Strategy
Focus on noncustomers
Create uncontested markets to serve
Make the competition irrelevant
Create and capture new demand
Break the value-cost trade-off
Align the whole system of a firm’s activities in
pursuit of differentiation AND low cost
Table 1: Red Ocean versus Blue Oceans Strategy
In Red Oceans, the industry’s boundaries are defined and the competition takes place in the already existing
market space, while in Blue Oceans the goal is to create uncontested market space beyond the original
boundaries and this makes the competition permitting to that, irrelevant. While classic methods call for a
trade-off between differentiation and low cost to exploit existing demand, the creation of new demand in
Blue Oceans breaks this value-cost trade-off. The whole systems of a firm’s activity is no longer ranged by a
strategic choice of differentiation or low cost, but to both goals combined. The blue ocean strategy is of
specific interest when also changing business models towards an extended product.
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Business Model Canvas: To analyse the impact of different business strategies on a business model, we need
a specific description of its elements. Table 2 presents the proposed pillars from Osterwalder et al.
(Osterwalder A. P., 2005) that illustrate the relationship between the four key elements and the nine
building blocks that define a business model.
Pillar
Product
Customer
Interface
Infrastructure
Management
Financial Aspects
Business Model
Building Block
Value
Proposition
Description
Gives an overall view of a company’s bundle of products and
services.
Describes the segments of customers a company wants to offer
Target Customer
value to.
Distribution
Describes the various means of the company to get in touch with
Channel
its customers
Explains the kind of links a company establishes between itself and
Relationship
its different customer segments
Value
Describes the arrangement of activities and resources.
configuration
Core
Outlines the competencies necessary to execute the company’s
competency
business model.
Portrays the network of cooperative agreements with other
Partner network
companies necessary to efficiently offer and commercialize value.
Sums up the monetary consequences of the means employed in
Cost Structure
the business model.
Describes the way a company makes money through a variety of
Revenue Model
revenue flows.
Table 2: Business model building blocks (Osterwalder A.P., 2005)
Figure 4 further summarises these components with their relevant building blocks.
Figure 4: Business model's components
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Osterwalder & Pigneur (Osterwalder & Pigneur, 2010) developed and updated these attributes into the
Business Model Canvas approach (figure 5), which further defines nine building blocks that will shape the
final business model of an enterprise, or that can be used to analyse the business model of an enterprise.
Their framework is consistent with the frameworks proposed by other authors of research on the same topic
(see (Teece, 2010); (Morris, 2005); (Nenonen, 2010); (Amit, 2012)). These nine blocks are: Customer
segments, Value Propositions, Channels, Customer Relationships, Customer Segments, Revenue Streams,
Key Resources, Key Activities, Key Partners and Cost Structure. Such a classification is offered by the
business model canvas as a method for illustrating the building blocks of a business model. The business
model canvas is a template that is used for strategic management and offers idea template to describe how
an organization creates, delivers and captures value. It splits a business model into four pillars with all nine
building blocks that are intended to realize it. The pillars and building blocks of the business model canvas
are illustrated in the figure below.
The application of the business model canvas, especially the nine building blocks, will deliver a complete
view on the impacts of business strategies on a business model. Every business can be reflected with this
model and every model is focused on different blocks. This makes the business model canvas a basic
framework without a pre-determined focus and characteristics of specific industries. The starting point to
develop a business model with the Canvas is not unique and is always depending on the characteristics of
the business as well as the policy and strategy of the enterprise which is shaping the business model.
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2.3 Market segments
Nevertheless, business models do not exist in isolation; other elements coexist and have influence on their
development including the competitive environment, the management team and performance indicators.
Moreover, a business model designed for a specific region might not work in another (Osterwalder &
Pigneur, 2010). A thorough understanding of the particular market and the environment is necessary for the
successful implementation of a business model, which brings us back to the challenges faced by SGs. The
market and application expectation is different from traditional digital games. A business model for digital
games might not be relevant to SGs.
The market for SGs can be divided into three main segments: Business to Business (B2B), Business to
Customer (B2C), and Business to Business to Customer (B2B2C). Another potential market is Customer to
Customer (C2C).
2.3.1 B2B-Business to Business Model
The B2B model is the most common and it is one in which businesses provide products or services to other
businesses. The B2B segment involves SGs companies that are developing games for other private or public
bodies. At the moment the development of an SG is mostly commissioned and follows a request of a client
(tailor-made SG) and targeted to big organisations. An example would be “Pulse!” designed by the UScompany BreakAway for trainings. Other potential buyers in the B2B sector include schools or universities
interested in adoption of such learning tools. However, many of them do not have the capabilities to
purchase the equipment and many universities are involved into the research of SGs and are developing
Figure 5: Business Model canvas (Osterwalder & Pigneur, 2010)
their own tools such as the socialPsych platform initiative in the Old Dominion University, USA (Landers,
Collan 2011). Corporations interested in computer assisted trainings that will allow them to decrease costs
for employee training, hiring, special equipment, etc. are another targeted B2B domain (Susi et al. 2007).
Inside this model, some sub-models are observed:

In the “order-based model” - It is the typical situation in which a customer passes an order to a
provider to design and develop an SG. The game can only be used by the customer. The customer
can be a public or private institution, if the sponsor is the government then it will be called B2G
(business to government model).

In the “licence-based model” SGs are produced and made available for a fee as payment of a licence.
The license application may be used against payment for a certain period.

In the “consulting/training model” a public or private institution designers/developers are trained in
all the different stages of SG development on-site.” Another example: rather than hire a trainer,
companies prefer to focus on the long term by developing a training program, which will include an
SG, specific to the learning needs of its employees.
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The potential business value of streamlining inter-enterprise business processes has sparked a renewed
interest in process management technologies. However, the conventional intra-enterprise process
management architecture faces a number of challenges. First of all, there must be a mechanism to allow
participating enterprises to reach agreement on the business process description and the data to be
exchanged during process execution. To allow scalable B2B interoperation and alleviate the burden of pairwise negotiation of integration points, a collection of common, standard processes must exist so that by
binding to a common, standard process, an enterprise achieves the capacity of collaborating with a large
number of partners’ processes. Second, the process management function needs to be carried out as
collaboration surrounded by multiple distributed process managers. In essence, in crossing enterprise
boundaries, the technologies traditionally suited for central coordination and integration need to be
fundamentally reworked.
2.3.2 B2C-Business to Customer Model
The B2C sector involves merchants (developers, publishers, distributors) selling their products/ services to
consumers. A company, mostly developing companies, develops a SG and sells it directly to the customers, in
many cases online. For instance, the game American’s Army is offered to individual users for downloading.
Another example is Wolfquest, a game about ecology and the lives of the wolves. It is interesting that
although the game was designed for children, ages 9 and above, the core audience contain wolf enthusiasts
(Mayo, 2010). There is a big interest in the development of SGs for young children until the age of 15 when
the parents are taking the decisions regarding software purchases. SGs can also be designed for the niche
markets such as games for children with extremely low or high achievements (Mayo, 2010). The audience
aged between 15 and 24 is more demanding in terms of video games quality and they are playing principally
to relax, meet up with friends, or for fun (Interactive Software Federation of Europe, 2010). However, games
that can be integrated into their learning process and help them receive more practical experience can
significantly increase in popularity (Alvarez, 2008). The interest in gaming among the age group 24 to 55
decreases due to their limited time and increases again for people aged 55 and above, due to their desire to
interact with their grandchildren. Happyneuron, for example, developed by the French company SBT, is
targeting this market and it is designed to stimulate the memory and the brain (Alvarez, 2008). Inside this
B2C business model, some sub-models can be observed:


“Market driven model”: Sometimes the development of an SG is an answer to a demand in the
market (e.g. if in the market there is growing need of some SGs they are produced as “commercial
off-the-shelf” and put in the market). There are still a few SGs developed by this model, and we can
find some of them on the Health and Fitness application field. Sports Active 2 is one of these
examples, which was developed by EA Sports, aimed to the general population and provides an
interactive personal trainer.
“Research driven model”: Sometimes a SG is developed as the outcome of a research project and
proposed to the market.
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2.3.3 B2C-Business to Business to Customer Model
The B2B2C sector involves companies that purchase SGs from the developers and offer them to the public. It
generally refers to services sold through e-commerce, it is when an intermediary acts between the
developer and the user. A developer designs and develops a SG for an intermediary who will distribute and
sell the game to the end-user. It is the “publisher/developer model”: a publisher publishes an SG (which they
commissioned from an SG developer company), and offers it for sale directly, without any prior demand or
order. The SGs here are ready-to-use, and they are available to all types of customers. Here, the final
consumer pays for his purchase most often. An example is Food Force, a game that was developed by
UbiSoft for the United Nations and was then distributed to the public (Alvarez, 2008).
2.3.4 C2C – Consumer to Consumer Model
The idea of C2C Models is to bring people together to buy, sell, or trade. For example an online auction like
ebay is a perfect example for this business model. The origin of C2C ecommerce lies in the real world of
Newspaper classified Ads. In recent times the blogging phenomenon has incorporated this business model
well. The development of online communities with specific niches can gain huge followings. People with the
same interest are forming communities. A website, or blog, can charge a small fee for advertising on its
pages, which can be very profitable. There is a potential for independent services or game platforms that can
be hosted by a single customer or a community of users sharing and trading game resources.
3 Decision dimensions for business modelling of SGs
With the perspectives of the state-of-the-art of business modelling and market segments, in order to model
business in the SG field, one has to take into consideration the following issues:








Stakeholders: involved in the value chain of the SG development and deployment, as well as key
stakeholders that provide added value to the final product like technology or content providers.
Markets: SGs can be applied in a wide variety of areas which have different structure and
possibilities.
Delivery Channel: what are the different distribution channels that can be used in the SGs sector.
Funding: That will provide the economic resources for the development and deployment of the SG.
Platform: There are different platforms that can be used for SGs, from board games to video games
consoles, to web and mobile apps, with different technology applied and cost implications in each
case.
License: SGs need to have a license that will protect the IPR of the owner of the game and return
profits to them.
Customer: they have the need of SGs in their businesses for different purposes that define the
requirements.
End-user: they are the users that take advantage of the benefits of the SG.
All of these considerations have to be applied to Business Modelling on SGs to gather and disseminate the
knowledge to mature the business perspective in the SG industry. Setting these goals up through an
appropriate Business Model helps to take some decisions on the structure of the appropriate value chain,
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market channels, probe product adequacy, offer precious and useful value propositions to end-users and
customers, etc. All these decisions have to be made for a specific enterprise or SGs since a Business Model is
unique for the purpose it is shaped for and it must be updated periodically to answer the dynamic business
environment, reducing economic challenges and exploiting business opportunities. There are several reasons
why it is essential to have an appropriate Business Model for SGs:




To adapt the processes and business of SGs to new markets and technologies
To achieve commercial success in the changing environment
To have a reasonable and sustainable growth of the SG market
To involve all the appropriate stakeholders and increase collaborations between the game industry,
research communities and end-users in order to achieve relevant products with optimised benefits
With these views, in order to gain competitive advantage, it is essential to find the niche and explore the
undiscovered potential of Serious Games, optimising the synergy between research, industrial and user
perspectives. A provisional business model must be evaluated against the current state of the business
ecosystem, and also against how it might evolve. Questions to consider (which are summarized in figure 6
below) include:
-
-
-
How does the product or service bring utility to the consumer? How is it likely to be used? Inasmuch
as innovation requires the provision of complements, are the necessary complements already
available to the consumer with the convenience and price that is desirable (or possible)?
What is the “deep truth” about what customers really value and how will the firm’s service/product
offering satisfy those needs? What might the customer “pay” for receiving this value?
How large is the market? Is the product/service honed to support a mass market?
Are there alternative offerings already in the market? How is the offering superior to them?
Where is the industry in its evolution? Has a “dominant design” emerged? Strategic requirements
are likely to be different in the pre- and post-paradigmatic periods,
What are the (contractual) structures needed to combine the activities that must be performed to
deliver value to the consumer? Both lateral and vertical integration and outsourcing issues need to
be considered.
What will it cost to provide the product/services? How will those costs behave as volume and other
factors change?
What is the nature of the appropriability regime? How can imitators be held at bay, and how should
value be delivered, priced, and appropriated? (Teece, 2010)
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Figure 6: Quenstions to consider
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The decision dimensions for SG business modelling can fall into four generic areas (figure 7), but the required
decisions are not limited to only these ones. The interrelation between the different dimensions is
something different and unique in each case. It is important to identify at the beginning of the design of the
business model the most important issue for the commercial success of the SG and depending on this
dimension shape and take decisions on the other dimensions.
Figure 7: Decision dimensions for business modelling of SGs
3.1 Economical dimension
For every new development there are economical aspects to define. The first economical issue to solve is the
funding of the development that can be done in different ways - own funding, looking for a sponsor (public
or private), or crowd-funding as an innovative solution. But this is not the only hot topic, because a revenue
model and cost structure must be defined (Johnson, 2008). On the revenue model, decisions like the kind of
license to commercialize the product, profits, expected ROI, etc have to be made. The cost structure is aimed
to direct costs, indirect costs and economies of scale. Another important input in this dimension is a market
analysis to get information about the size, trends and growth of the market. (Compare Gala D4.9, D4.10,
D4.6, D4.7 for an overview of different games and the involvement of different stakeholders in the
developement phase of the game)
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As described in the previous section 2.3, in the B2B sector the commonly used revenue model is the orderbased model where a company hires SGs developers to design the game. For such a model the collaboration
between the client and the developer is essential, so that issues such as game design, scenario, testing,
planning, or funding are thoroughly discussed (Alvarez, 2008). However, the model is not sufficient because
it does not offer a sustainable revenue stream (Mayo, 2010). Another model for this sector is the licensedbased model where the SG is available for free. The application can be a ready-to-use SG (for example,
INNOV8 by IBM), a piece of development software to support the development of SGs (eg. 3DVIA Virtools)
or a SG integrated with another product, as was the case with Whyville and Dell (Alvarez, 2008); (Mayo,
2010). Another revenue stream comes from consultancy or training For example, Toulouse Ecole Nationale
d’Aviation Civile (ENAC, National School of Civil Aviation) has contracted videogame designers to develop
video game elements and serious gaming approaches for their computer training devices and development
software (Alvarez, 2008). Revenues in the B2C sector can be obtained through traditional Brick and Mortar
purchases, ingame advertisements or downloads against a fee. The skill-based model, in which the game can
be played for free and the users purchase additional levels and functionalities, is also possible (Alvarez,
2008). Another interesting approach is creating a community. For example, Little Big Planet developed by
Sony allows player to download, share, and create their own levels or games. As of July 2012 the community
has created more than 6 million different levels (Sony, 2012).
Mayo (Mayo, 2010) described other problems concerned with the development of a sustainable revenue
stream from paying customers and commercial distribution. Lack of marketing expertise can prevent the
developer of bringing traffic to the website of the game and thus, from distributing the game to the users.
Another problem involves the design of SGs and that they follow fixed scenarios which might lead to
disengagement or boredom of some of the players (Bohannon, 2010). In addition, children, for example,
change easily their preferences towards the game and creating loyalty and stickiness is more difficult.
Constant technology changes also outdate games and platforms relatively quickly and cultural differences
might prevent the worldwide adoption of a game, especially if it is a game for schools, which have specific
requirements and demands in each country (Klopfer et al. 2009). Despite these obstacles, due to advances in
technologies and positive views among researchers regarding the use of SGs, the games hold promise
(Baranowski et al. 2011).
3.2 Technology dimension
The decisions on this dimension are related to technological aspects of the SG sector. The decisions taken on
this dimension should answer issues like the game technology to be chosen for the development, the
platform needed to accomplish learning goals or engage further the target audience. This dimension offers
many possibilities and innovative solutions. In some cases, a good option can be to come up with a special
device that increases the learning outcome or the assessment of the performance of the game. In Air Medic
Sky One biofeedback sensors are used to gain insight into how physiological functioning affects performance
(Air Medic Sky One, 2012). Within the technological decisions is also included the distribution channel that
can be from an online playable SG to the most traditional channel with retailers but also innovative solutions
like adopting distribution channels and models from other industries. Virtualware developed a SG to test if
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children have Asperger’s syndrome, the previous business model of psychologists was that they paid for
each test, so now psychologists pay Virtualware 1 € for each test following the business model, with
economic and distribution model, that they had.
The role of marketing and the distribution choice is crucial for digital games. Reviews in video game sites,
different contents, updated screenshots of the game, or even press releases on the company’s website can
be very beneficial for word of mouth marketing (Mayo, 2010). Likewise casual game SGs should be
distributed through portals which are visited by many users. It is of particular importance that the website
where the game is posted already has enough traffic. For example, Kauffman’s game All Terrain Brain
received around 1000 monthly unique visitors (MUV) compared to Hot Spot Business distributed through
Disney’s website which had around 300,000 MUV (Mayo, 2010). The PLAYER project was distributed
through Facebook and had enjoyed around 3000 register players (Fonseca, et al., 2012). Alvarez and
Michaud (Alvarez, 2008) also emphasise on the importance of viral marketing and advergames. For example,
in Everquest II the player is able to order a pizza directly from Pizza Hut. A SG solution can also be paired
with a piece of hardware or a device. In this case the revenue can be obtained through either an
arrangement with the hardware provider or through interaction with the game (in-game advertisements or
sales of virtual goods) (Mayo, 2010).
In this dimension, perspectives on the SGs value chain is important to inform the decisions on the
technology to be employed, which commonly has fewer links compared to the classic video game chain. The
most common structure is a single player that handles the development, publication, distribution and sales
of its games. Many players actually publish only a single title whose sales and installation/implementation
for customers occupy its entire sales and support staff. Affordability plays a key role. At this stage in the SG
sector’s development, the value chain is more software and service-centric than device-centric. Accessibility
is also crucial, where mobile devices are emerging as alternatives to PCs, and it is also the platform of choice
for the development of SGs in emerging economies where people can get hold of a mobile device much
easier than a computer. The social aspect of a SG, which fits naturally with a multi-user or even a massively
multiplayer approach, will be the prime areas of focus in the coming years, for both the “player” of the game
and the professional using it as an educational tool.
3.3 Stakeholder dimension
This dimension is changing a lot depending on where your business is on the value chain or where you would
like to be on the value chain. In this point the enterprise has to answer some questions: Which stakeholders
do I need to reach the customers, the learning content or the technology? How should I involve these
stakeholders in my business? The four categories of stakeholders are:
The prescriber: The role is to disseminate and raise awareness about the SG. It generally comes from the
application’s business field and can be either a professional body or a representation of SG users. Clusters
can also play a prescribing role based on the position they occupy within the business ecosystems.
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The funder(s): any type of model is possible at this level, be it licensing or delivery-based, promoted by
government subsidies or based on private funding. The funder can thus be end users, their residential, social
or economic environments, private businesses, public agencies, etc.
The distributor: this position can be occupied by SG developers and publishers, as numerous players in the
field have shown. But the distribution role can also be filled by the "trade" commissioner, which is supposed
to better understand the target audience than the developer.
The technical operation: may be left at the discretion of the distributor, the developer or publisher. The
proximity of developers with a game’s technical issues gives them clear legitimacy. Payment and customer
relationship issues tend, in turn, to give more legitimacy to the SG’s commissioner.
According to the IDATE (Alvarez, 2008), there are four main groups of stakeholders involved in the SGs
domain (see figure 8):




Software companies stand for developers, publishers, distributors and retailers (in the case the
software company cares about the distribution and selling to the customer);
Players intermediaries represents media companies, marketing agencies, telecom operators and/or
internet service providers and consumer electronics;
Investors are composed of bodies with very diverse backgrounds, namely; R&D units of universities,
public authorities, education sector or any kind of enterprises.
Target sectors include the various application domains.
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Figure 8: Stakeholders involved in SG market (refer to D4.1-page 20)
Depending on the nature of the SG, the stakeholders may highly vary. IDATE’s categorisation above mainly
covers the primary stakeholders of any SG. In every SG, we will see the software company’s dimension, and
depending on the target sector and nature of the SG it will affect the presence of different stakeholders
stated on the figure. The secondary stakeholders are highly dependent on the target sectors. For instance a
SG targeting healthcare sector would cover health practitioners, whereas a military simulation has
stakeholders as military officers or even armies of other countries.
The previous figure 8 is an incomplete representation of all possible scenarios, which are changing rapidly
with new technology or innovative solutions on the business aspects. Figure 9 demonstrates an idea of
possible stakeholders involved in the value chain with their generic roles and making possible the
identification of potential stakeholders and their interaction in the value chain. For example, in this figure all
the stakeholders are connected to the SG users, but in a concrete scenario it could happen that just the
distributor agent is in contact with SG users to obtain the requirements and the other agents just get the
information from the distribution agent.
However the possibilities and decisions that the industry faces to develop a new game are not just related to
the stakeholders involved in the value chain. When an agent decides to develop a new SG, it has several
decisions to take into account on economical, technological, learning and stakeholder areas. All of these
decisions are interrelated and one decision can define the proper solution on other area. The problem is to
know which one of these decisions is the most important one; or in other words, which decision will make
that game commercially successful and following this decision shape the rest of the areas.
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Figure 9: Possible stakeholder flows within SG business models (Serious Games: Issues, offer and market, 2012)
3.4 Learning dimension
This area of decisions shapes the topic of the game, the content that will be included to transfer skills,
knowledge or training concepts, engagement techniques for end-users, but also value propositions for
customer and/or end-users (depending on the case, these sometimes both appear – a kind of double agent).
Various measures and KPIs specific to the target domain and audience will play key roles in the design and
development of the SGs. The role of users, in this case learners and their learning requirement is emphasised
by user centred design (UCD) and participatory approach, informing the decisions made in the stages within
the SG’s design and development value chain that will have a direct impact on the success of a business
model. The UCD approach places the learners at the centre of the R&D cycle to address scientific, technical,
adoption and deployment challenges involving existing practices of the learners and relevant intermediary
organisations.
The learning dimension will also include other parameters that influence the decisions on how the SGs will
be deployed and the pedagogical perspectives of the desired learning process. De Freitas and Oliver (de
Freitas, 2006) proposed the Four Dimensional Framework (4DF- figure 10) of learning, which has not only
been used to analyse SGs but also to design SGs (see (Arnab, 2013)). Four discrete dimensions that will
inform decisions for SG design include the context within which learning takes place (e.g. disciplinary
context, blended or standalone, place of learning, formal or informal), learner profiling (e.g. demography,
ICT skills, gaming experience), selection of pedagogies used (e.g. learning methods, models and mechanics)
and mode of representation (e.g. game concepts, game engines, mode of deployment, level of fidelity,
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interactivity). The consideration of the individual characteristics of each dimension contributes towards the
creation of a successful game-based learning experience (Bellotti, 2011).
By following the 4DF model, game developers should be able to deconstruct SG design into key components
by taking into account the characteristics of learners and the different pedagogical and contextual
constraints to enact effective absorption, promote reflection on knowledge and transfer these learning
variables into real-world scenarios. Deployment choices are very important adhering to the context
dimension of learning.
Figure 10: 4-Dimensional Framework
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4 Guidelines on Business Models for Serious Games Developers
During the last year of the task business modelling and implementation we have focussed on making known
the best practices and guidelines discovered for business models in the Serious Games sector during the
GaLA Project.
The Choice of Business Model plays a major role for the success of a Serious Game. But as diverse the Games
are, as diverse are the Business Models. The experiences can differ and are depending on several factors. To
get a comprehensive look at the practices in the Serious Gaming Sector it is necessary to get first-hand
information and experiences. Based on this fact, an interview was developed during the first year of the
GaLA project to get information about companies’ actual Business Models and experiences to identify best
practices and lessons learned. This chapter presents the results of three interviews with leading developers
for Serious Games in Europe, resulting in 5 guidelines for serious games developers.
The information was prepared with regard to motivate developers, who want to participate in the
experiences of these three companies and perhaps adjust their own Business Models. The guideline on
Business Models for Serious Games Developers is a conclusion of all this information and specifies the most
important elements of a successful Business Model for Serious Games. The developers should thus be able
to adjust their idea for a Serious Game to a convenient Business Model.
4.1 Interviewed developers
This section describes the main findings on business models based on interviews of the three developing
companies. Interviewed are briefly described below (more information can be found in D4.9, D4.10, D4.6,
D4.7)).
4.1.1 PlayGen
PlayGen is a developer for Serious Games sited in London (UK). PlayGen was founded in 2001, primary
specialized on Gamification, Behaviour Change and Simulations and claims to be global leader in Serious
Games and Gamification. Clients are for example Samsung, The European Commission, BBC, HSBC, AXA,
McKinsey & Company and several universities. The most often used platforms are Web, tablet, smartphone,
Wii and Microsoft Kinect, actually almost all the platforms on the market. PlayGen’s Portfolio covers
products from Authoring Tools, Social Platforms, Gamification Toolkits and Simulations up to Consultancy.
Furthermore, PlayGen is also offering Client Projects with a focus on Enterprise Creativity and Learning,
Government Policy Engagement, Personal and Social Learning, Defense and Security as well as Corporate
and Finance.
4.1.2 SGI
Serious Games Interactive (SGI) is a Serious Games developer sited in Copenhagen (Denmark). SGI was
founded in 2006 and is operating from offices in Denmark, Sweden and Washington DC. Clients are British
American Tobacco, Maersk Group, Nykredit and others. SGI uses game technology and design to develop
user experiences that engage, educate and entertain. SGI is developing and marketing Serious Games and
Simulations, especially Trainings, Branding & Marketing Games. In their portfolio educational Games are a
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successful product for schools. The most often platforms used by SGI to develop Serious Games are Web,
tablet, smartphones, Wii and Microsoft Kinect, actually almost all the available platforms in the market.
4.1.3 VirtualWare
VirtualWare is a developer for Serious Games Software and Hardware founded in 2004 and located in the
United Kingdom, Spain and Latin America; the main offices are in Spain. Virtualware is made up of
a multidisciplinary team of highly qualified professionals working together to create truly interactive
experiences based on immersive and interactive technologies. Core competences are Serious Games, Virtual
Reality, Gamification and new technologies on issues like Health, Education, Training, Tourism and Culture,
Marketing and Training. The platforms used by Virtualware for their developments are usually Web, tablet,
smartphones and Microsoft Kinect. Well-known products are VirtualRehab, VirtualRet and VirtualTriage.
Beside Software, VirtualWare is also offering optimized hardware for their products, such as an interactive
table.
4.2 Best Practices
The interviews disclosed the best practices of the developers and will be described in the following sections:
-
Products, Projects and Services
-
Synergetic effects
-
Knowledge from third party
-
Unique Selling Proposition
-
Distribution
-
Return on Investments
4.2.1 Products, Projects and Services
For the further consideration of the Business Models, it is important to define the terms Product, Project and
Service. Products describe the Software and Hardware that is produced by the developer and is offered
constantly to all customers at a particular market (Business Dictionary, 2014). Projects in contrast are
initialized by clients and solve a very specific problem in a preset period and often preset budget (Business
Dictionary, 2014). The funding may in both cases be of same type, f.ex based on crowd sourcing or research
funding. Service describes the intangible activities that cannot be transferred, owned or stored and are
instantly perishable and come into existence at the moment they are consumed (Business Dictionary, 2014).
Services can be combined with a good, for example an instruction for using a good. Trainings, workshops and
also software can be developed especially for a physical product. The advantages of the connection of
product and service to a bundle are specified in chapter 8.1 “Extended Product Business Models”.
In the majority of cases, PlayGen is being requested for developing a Serious Game. Beside Products and
Projects PlayGen is offering services such as workshops and consultancy, which are also developing the
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contact to potential clients as a positive side effect. This combination of Products and Services is typical for
extended product business models.
SGI is separating their portfolio in client projects and productions and is using different business models for
both. Productions are funded and then developed while projects are paid by the client during the
development in two or three fees. This division leads to traditional product or service business models.
Although VirtualWare is also working on products and projects, they ascribe the product a much higher
potential and higher revenues. Nevertheless, projects are, and will be, part of the portfolio, as they are still
profitable and with little risk compared to the development of products.
The interviews pointed, that products in short-term consideration demand the developer a higher
investment involving a higher risk than projects but also possibly higher profits in long-term consideration.
Projects offer a limited time effort and a controllable investment risk but the success is temporary limited to
the duration of the project.
4.2.2 Synergetic effects
A synergetic effect is generated, if two or more factors together produce an effect, greater than the sum of
their individual effects (Business Dictionary, 2014). In terms of the development of a Serious Game,
synergetic effects can be generated by reusing several parts of one game in the development of another
game. Therefore the developer needs to own the Intellectual Property Rights (IPR) of his works.
PlayGen is successful in keeping the Intellectual Property Rights of the Games that PlayGen develops. By
keeping the IPR, especially the background Intellectual Property, methodology and existing technology,
PlayGen can reuse material and generate synergetic effects. As a result PlayGen is able to minimize effort
and can increase the profit of its projects over time. The client can also benefit from this practice: Prices for
the development of a game decrease, while receiving the same or even better quality. PlayGen is applying
this synergetic effect especially in personal and social learning Serious Games.
In Projects, SGI is keeping the Intellectual Property Rights of the technology while the clients keep the Rights
for the content. That way, SGI is able to reuse technology but also to minimize their responsibility for
content.
4.2.3 Knowledge from third party
If a project requires knowledge that can’t be delivered by the developers themselves, it is necessary to
engage external experts. The collaboration with experts makes them into stakeholders of the game and
therefore a part of the business model. According to the four stakeholder dimensions, their role can be
described as that of the prescriber. The collaboration usually is high-priced. In the experience of PlayGen
though, the possibility to take part in the development of a Serious Games animates a few to work without
payment but for fun. Collaboration with universities also turned out to work good for PlayGen. In their
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experiences the know-how of the developer and the ideas coming from universities can complete one
another well.
SGI is using the knowledge of experts for certain topics. At the same time, collaborations with universities
are rare. The selection of experts is in their experience made by the client who is requesting the Serious
Game. In those cases, SGI is not choosing the expert and their scope of action is limited.
VirtualWare is including external professionals in every four industry branches they are working on.
Furthermore VirtualWare is taking advantage of this collaboration with these experts by benefiting from
their networks when a product is on the market. In this way, hiring external experts do pay off twice: During
the development the requirements of professionals can be found out and once the product is saleable, good
contacts can help in terms of distribution.
4.2.4 Unique Selling Proposition
The Unique Selling Proposition (USP) describes an eminent component that differentiates the products or
services from the ones of competing developers and offers a unique value proposition to the customer.
Positioning a brand, product or service on a competitive market can also take place by finding and focusing
on a small but profitable segment, a niche with no competition. To be able to develop services or products,
which differ from the competitor ones, research is an essential and worthwhile expense for developers. All
three interviewed developers are doing this research and market analysis to get a starting point for new
Serious Games (Figure 11-1).
Figure 11: Starting points of new SG according to an own estimate of the developers
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Core Competencies
The Core Competencies (CC) are describing the unique ability in delivering value to its customers that cannot
be easily imitated by competitors. This concentration on a certain chosen field gives a company knowledge,
experience and systems, resulting in one or more competitive advantages (Markides and Williamson, 1994).
PlayGen started with a cost based strategy to develop the market but is nowadays trying to differ from
competitors by product differentiation and market segmentation. This enables PlayGen to become an expert
on a particular topic (such as Gamification) and to develop highly specialised products. SGI was focused on
education but tries not to be limited on single areas. Still SGI is active on the field of education but separated
its activity in Education & Children as well as Training & Simulation. VirtualWare defined four branches for
themselves and stays focused on activities for health, culture, education and training.
4.2.5 Distribution
The Distribution covers the whole way of getting goods or services from their source to the user or
customer. The Business Model Canvas is not mentioning the term distribution but “Channels”.
The developers were asked about their distribution channels and licensing model, to figure out which ones
are working best and most cost-efficient for them.
PlayGen is selling unlimited and worldwide licenses to non-transferable and limited licenses. Time-limited,
territory-limited and non-transferable licenses are the most profitable. PlayGen also sold licenses per user
but the success fell short of expectations. They concluded that commercial success requires selling a great
number of licenses, accompanied by a large distribution. Small companies usually do not have this capacity
for this extensive process and are more successful by selling volume licenses (for example to government).
Some games are offered for free, if it is presumed, that the game will have a positive effect in the long term.
This investment can be seen as marketing, as the aim is to win new clients.
Virtualware uses existing distribution models on each different field, trying to adopt the economic model
and use already established distribution models. The introduction to the market becomes less complicated
for VirtualWare but also for the purchaser, who is getting access to the products or services in already
known way. The end user buys a service from the professional healthcare, who is the customer of
Virtualware (Baalsrud Hauge 2014, Gala 2013c).
4.2.6 Return On investment
The Return On Investment (ROI) indicates the profitability and efficiency of the activities of a company. It is
usually measured as the ratio of the net income to the average capital employed in a company or project
(Business Dictionary, 2014). We didn’t perform a whole ROI analysis and didn’t calculate any percentage. In
this case the ROI should just describe the time that is needed, approximately, to retrieve the investments of
a project or the development of a product to reach the profit zone.
While projects are always tried to be realized without investments, SGI is calculating three years for products
and one year for mobile applications for reaching the profit zone. Projects are taking four months up to a
whole year on average. Another possibility is funding a game through Kickstart (Kickstart, 2014). SGI didn’t
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apply this funding but started a trial that went really good. VirtualWare is considering funding through
Kickstart for products in the future.
4.3 Guidelines on Business Models
The conclusion of the interviews leads to five important factors, which make Business Models for Serious
Games Developers successful:
1. Niches: Finding a niche allows the developer to concentrate on a certain subject and become an
expert. The Unique Selling Point is easy to communicate to the client and the development itself
becomes more efficient by using a lot of synergetic effects.
2. Spreading the risk: Projects and products differ in their risks and revenues. A combination of both
offers a wise equation of these risks and revenues.
3. Doing research: The domain of SG is still full of undiscovered potential. Research is necessary to
discover this potential and although it is a huge expense, research is worth the effort. In an
economic angle of view, too.
4. Asking experts: Bringing in experts doesn’t have to be costly for the developer. The collaboration on
a project that is exciting and interesting is often worth more than a high salary.
5. Using synergetic effects: Searching for potential and keeping reusability and interoperability in mind
from the beginning of the development till the end will result in lower cost development.
5 Business Model Canvas
The Business Model Canvas, is a strategic management and entrepreneurial tool. It allows you to describe,
design, challenge, invent, and pivot your business model (Gala 2013, YouTube,
2014,businessmodelsgeneration, 2014). In the previous deliverables of this task we have been analysings
several different business models being used for specific games (Gala 2012b, 2013b) as well as presented
different examples of good practices. Based upon these analysis and using the Business model canvas as
described in D4.10, we have developed some examples on what to take into consideration for different SIGs.
We here present the suggestions for SIG 3.4 and SIG 3.5. These Canvases are aimed at potential developers
of serious games to help facilitate developing a business plan.
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5.1 Safety, Security, Crisis Management Games
These games cover a broad base covering the many facets of Safety, Security and Crisis Management
including war games, protection and surveillance, safety and tactical games. For detailed description of this
domain of games see SIG 3.4.
Table 3:Example of key elements for business canvas in safety, Security and Crisis management games- developers
perspective
Opportunities
Challenges
Customer
Segments
Local/National/International Government
authorities
Military Forces (national, NATO)
Emergency response services (Fire, Ambulance,
Police, Coastguard)
End-users include all stakeholders such as :
Operational staff, management, strategic planners
and tactical executors.
Solutions for customers interested in
:
Natural disaster
Technological crises
Confrontation
Malevolence
Organizational Misdeeds
Workplace Violence
Rumours
Terrorist attacks/man-made disasters
Customer
relationship
Tie into regular training
One off simulation runs
Training the trainers
Online portal
On going relationship with
commissioners may be difficult due
to nature of organisational changes.
Channel
Tradeshow / Magazines
Calls for Tender
Existing training providers
Learning platform providers
Access to market can be difficult as
end-users may not be commissioners
Value
Proposition
Improved professional training, from operational to
tactical
Making training more interactive
Increasing security (better training)
Better insight into team’s performance in crisis
Experience of information flow dynamics
Psychological pressures and stresses modeling
Learning that may be inaccessible offline
Help setting procedures, procedure rehearsal,
Making the game immediately
usable.
Avoiding overuse of textual direction.
Increase replayability and
believability through better
randomness and artificial
intelligence.
Avoiding slowness or stops in game
flow.
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feedback, reinforcement
allow for noninvasive performance measurement
Deal with situations hard to simulate otherwise,
either to complicated, too dangerous or expensive.
Achieving a high degree of realism on
points where the training is focused.
Key Activity
Design and develop educational games
Find new customers (marketing and sales)
Retain existing customers
Ensure material is relevant, updated and up to date
Support users, troubleshoot
Design and delivery of cooperative
games.
Difficulty in penetrating some
security markets due to clearance
Difficulty in access to support users
directly, deploy in secure location
Key Resource
HR (Development staff, instructional design
Access to subject matter experts
specialists, sales reps, customer support, marketing, Access to end users for testing
subject matter experts)
Intellectual property over software
Customer relationships
Key Partners
Training companies
Tradeshows
Trade Magazines
Publications
Interoperability with existing training
Interaction of trainees with trainer
Feedback for improvement
Revenue
Streams
Direct / intermediary sales.
per country/county
per establishment
per individual
per subject…
Demonstrating Return on Investment
Repeat purchase
Cost Structure Human resources
Design
Development
Marketing
Sales
Support
Software/Hardware
Office/Shop
Advertising
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Cost effectiveness particularly in
comparison with other techniques.
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5.2 Humanities and heritage games
These games cover a broad base covering the many facets of humanities and heritage games including those
covering history, geography, languages, literature, religion, art, law, philosophy, politics, cultural awareness,
historical reconstruction and heritage awareness. For detailed description of this domain of games see SIG
3.5.
Table 4: Business model canvas example for Humanities and Heritage games-perspective developers
Opportunities
Customer 
Segments 




Customer 
relationship 

Channel






Value

Proposition 


Key Activity 




Key Resource

Challenges
Schools and Universities students
Tourists
Heritage / Cultural site owners
Heritage / Cultural site visitors
General public
Local/National/International organisations

Extending real site visit into virtual visit
Tie into existing learning / programme
Tie into tourist visit

One to one customer relationship
may be limited
Tradeshow / Magazines
Learning providers (schools/colleges)
Museums / Art Galleries
TV Channels (History/Culture)
Tourist networks
Online / App store

Access to market can be difficult as
end-users are often not
commissioners
Installation on site could be
complex


Solutions for customers interested
in a wide range of topics and of
varying ages.
Access to customers is highly
dependant on channel.
Help bring history and culture to life

Enhancing engagement with concepts, processes and
content of the subject
Making learning more interactive

Provide opportunities to experience situations hard to
simulate otherwise, either too complicated or

expensive.
Making the game content useful
and entertaining to variety of end
users
Cause and effect in history may be
contested and complex
Allowing the player to learn
constructively
Design and develop the games

Find new customers (marketing and sales)
Retain existing customers
Ensure material is relevant, updated and up to date 
Support users, troubleshoot
Design and delivery of games that
tie into a location or programme
Difficulty in access to support
users directly
HR (Development staff, instructional design specialists,
 Access to subject matter experts
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

Key Partners



Revenue
Streams






D4.11 BUSINESS MODELLING AND IMPLEMENTATION REPORT 3
sales reps, customer support, marketing, subject
matter experts)
Intellectual property over software
Customer relationships

Training companies
Tradeshows
Trade Magazines
Publications

Direct / intermediary sales.
per site
per user
per establishment
In game purchases
Extended site visit

Cost Structure
 Human resources
 Design
 Development
 Marketing
 Sales
 Support
 Software/Hardware
 Office/Shop
 Advertising



with relevant depth of knowledge
Access to end users for testing
Interaction of trainees with trainer
in the case of language and law
Feedback for improvement
Demonstrating Return on
Investment
Repeat purchase
Cost effectiveness particularly in
comparison with other techniques.
6 Conclusions
This deliverable has discussed the Business Model concept as applied to serious games. The document
started by describing the business model and distinguishing it from business strategy. The elements of the
business model concept were then introduced and explained. Based on the work conducted within this task
we can conclude that a key for success lies in early discovery of market changes. The analyses carried out
shows that SG can learn from other sectors and that some of the implemented business models within the IT
industry (like servitisation) can be transferred to the SG sector (the Virtualware case). However, the market
analysis conducted also shows how important reusability and interoperability of the product in order to
reduce the time-to –market and increase the flexibility to react on customer needs regarding service
composition are. It also show that there needs to be focus on innovation, incremental and discontinuous/
radical innovation, in order to be able to take advantage of concepts like extended products including SaaS.
This innovation is not only related to technical innovation, but also on discovering marked needs and desires
at an early stage. This is a challenge for several SG developers, consequently the guidelines for SG
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developers and the general Business Models Canvas take these aspects into account. These are based on
interviews conducted with three SG developer companies to gain their insights and experience, and these
also contributed with their knowledge to the development of the Business models Canvas examples. From
these and the work conducted over three years guidelines for SG business models were derived. In order to
make the business models more efficient, serious games can also prove a viable solution, leading to cost
reduction, increase in productivity and better prepared employees. The future opportunities lie in the field
of collaboration, as licensing opportunities will reduce the differences between SMEs and large companies
regarding serious games implementation (licensed products are less costly). The companies will need to
capitalize on the frenzy for solutions with social content, as well as on developing tools which would quantify
better the benefits of the serious games solutions for business and management. Innovation of the value
proposition through the offering of Extended Products is suggested as an approach to escape the
competition, especially from low-cost countries. Value innovation however cannot be implemented as a
stand-alone concept. It has been shown that it implies changes to other areas of the business model, i.e.
requiring new competencies and thus new networks of partners. In order to show the effects of the above
approaches to the elements of a SG developers’ business model, the BM Canvas can be chosen as a graphical
representation of the BM areas. The deliverable concluded by illustrating the business model canvas with 1
or 2 examples. The business model canvas provides a powerful way to visualise the key aspects of a specific
business model. Importantly it can be used to develop business models and is recommended for this
purpose in formulating BM for SGs.
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