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Game monetization: Overview of monetization methods for free-to-play games

Re-design of my old presentation about free-to-play games monetization

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Game monetization: Overview of monetization methods for free-to-play games

  1. 1. GAME MONETIZATION Overview of monetization methods for free-to-play games
  2. 2. Agenda • Monetization loop. Action -> Incentive -> Expansion. Structure of paywall. • Key elements of Engagement. Mechanics, Progress & Goals, Social Factors, Game Evolution. • What do players pay for? • How to sell virtual items. Steps to sell virtual items, desirability parameters, economy & pricing.
  3. 3. Monetization Loop Transition from one phase to another blocked by paywall. Action – core gameplay (“Action phase”, basic actions of the player). Incentive – what does the player wants (win the match, finish the level, get new item, get the highest score etc.). Expansion – player’s progress (level up, new content, new difficulty levels etc.).
  4. 4. Paywall structure Player can overcome paywall by three main ways: Grind, Spam and Pay. Grind + Spam = 80% of progress Player Grinds, then Spams and asks friends for help, after that player has to Pay “just a little bit” to finish the task and finally overcome a paywall. Grind – player can overcome paywall spending time, make numerous attempts, grind in-game currency. Spam – player can overcome paywall by asking friends for help (and advertise the game and improve retention by viral mechanics). Pay – player can overcome paywall by buying premium content.
  5. 5. Engagement The key element for successful monetization is player’s engagement. The more player engaged in your game, the more times player moves through monetization loop. More times the player moves through the monetization loop, the higher is the chance that the player will pay. There are four key elements of the player engagement: 1. Mechanics 2. Progress & Goals 3. Social factors 4. Game evolution
  6. 6. Mechanics: Core Loop First and the most important key element of player engagement is the core gameplay loop. Properties of good core gameplay loop: • Fun 1 time — fun 1000 times. “Endless” mechanic with “uncertain outcome”. • 4-6 steps max. “Magical seven” of human memory limitation. • Clear and immediate feedback. • Layers of complexity. Base layer of the mechanic is very clear for casual players, but deep enough for skilled players. “Easy to learn — hard to master”. • Elements of “emergence”. Interdependent elements with simple behavior which creates much more complex behavior. • Viral requests tied to the core loop. • Rewarded by the main game resource (usually, soft currency).
  7. 7. Mechanics: “Fun pain” One of the of ways to monetize core game mechanic, is to make it simultaneously fun and little bit annoying. Zynga calls it “Fun pain”. Player can buy items that reduce pain. Surprisingly, such items are very popular. Good example of such mechanic was a Tractor from Farmville. Base gameplay action of crop gathering is fun and rewarding for the player, but if the player has a lot of farm tiles, it’s pretty annoying to gather crop from all of them. And the player can buy a Tractor to gather crop faster!
  8. 8. Progress & Goals Second key element of engagement is feeling of progress: • Keep the player busy. The more interesting activities the player has, the higher is the chance that the player will stay in game. • Allow players to plan their time. Allow them to choose period between sessions. Asynchronous multiplayer. • Every game session ends with feeling “I've done all I could”. Reward players after returning to create feeling “I've done all I could, reward will be awaiting me when I return”. Player starts a loop during the first session, close it during next session and create new loop. • Create long-term goals: Leaderboards, Quests & Achievements, Events. • Look for intrinsic motivation. Game mechanics that allow players to create their own goals can lead to much higher engagement (Competition, User-generated content).
  9. 9. Social Factors Third key element of player engagement is sociality. Strong social mechanics can create a huge natural growth of game audience and can be an important element of re-engagement for existing players. • All social mechanics are retention mechanics. It's not only about audience growth, it's about re-engagement. • Executing a social mechanic creates a reason for the player to come back. Player opens loop during first session, close this loop during next session and create new. • Game events and core gameplay loop should be designed with ability to be “viral”. Social mechanics tied to core gameplay loop. • Clear and visible metrics of competitional mechanics (Leaderboard, Friend panel)
  10. 10. Social Factors: Viral Loop One of the most important parts of the social mechanic is virality. Usually, viral mechanics are based on such loop: The key elements of virality: • Social Proof. People see behavior as more correct when see others performing it. • Persuasion. Viral message should be very clear and motivate people to respond on it. Create “loglines”. • Reciprocity. Virality exploit human “social obligation” to respond on favors from other people.
  11. 11. Social Factors: Viral Messages Viral messages is a way for the players to express their motives — getting help, gaining tools, show achievements etc. Two main properties of the viral message are Shareworthy (it's worth sharing from player's perspective) and Clickworthy (it's persuasive enough to respond/click). Shareworthy conditions of the viral message: • Message has prospect of reward • Message shows personal achievement • Participation of other people grants mutual benefits • Element of charity, player can help others for free Clickworthy conditions of the viral message: • Message has prospect of reward • Message provokes competition, curiosity or empathy • Message is socially obligating, motivate player to respond on social gesture • Message is visible in main communication channels Three the most popular viral messages: • Offering partnership • Cry for help • Sharing reward/resources
  12. 12. Game Evolution: Schedule Forth and very important key element of engagement is Game Evolution. 70% of players left the game because there are no new updates. Common schedule of game updates: • 3-6 months of content on the launch. • Major expansion every 3-6 months (new game modes, new experience). • Minor expansions every 4 weeks (new items). • Daily events (quests, challenges, tournaments). • Multiplayer and user-generated content can reduce amount of content
  13. 13. Game Evolution: Community Be caring – listen to player concerns, communicate with the game community, it will create loyalty. If players invest many hours into your game they begin to feel some ownership. The game now is their experience, even if it’s your game. • Be visible – forum, chat, e-mail. Policy of “one voice”. • Handle things quickly. • Give players notice about future changes in advance. • Be generous with compensation. • Don’t do something unless you’re willing to do it for everybody. • You can make any promises only after you’ve already made next update. Before that – no any clear deadlines.
  14. 14. What do players pay for? Identity expression – players will pay for items that are socially surfaced in the game and presenting player somehow (farm, city, avatar etc.). Vanity – players will pay for exclusive items, limited in number or to get things before other players. Competition – hardcore players, especially males, will pay to get a competitive advantage against their opponents. Social value – players want their friends to play and want to help them. Items that have social value are much more valuable to pay for it. Chance – random chance is a huge incentive for people to buy. Lotteries (GACHA) and “Mystery Boxes” might be a great monetization features. Progress – players will pay for progress (“time for money”) or temporary power in a game, especially a competitive one. Very stable and consistent way of monetization. Story – players will pay very well to advance the story (quests). They feel a sense of progress when completing quests and will pay to overcome roadblocks in that progression. Fun – items that make the game more convenient and remove “pain”.
  15. 15. How to sell virtual items There are four main stages of selling virtual item: 1. Awareness — item must be visible, players needs to be aware of existence of this item. 2. Understanding — item functions need to be explained to the player. The more intuitive item functions, the better. 3. Desire — increase desirability of the item. Usually, based on the item functionality or artifical scarcity. 4. Ability — access to the item must be easy. Payment methods and structure of the shop must support player's desire to buy item. Awareness Understanding Desire Ability Sale
  16. 16. Awareness Awareness methods: Shop • Mix premium with non-premium • Non-payers see the products • Products are comparable • Clearly distinguish premium items • Lead player to the shop, highlight it Advertising • Can be used in many UI screens • Be careful with being too annoying • Need to be interesting • Mix with regular game info • Refresh frequently • Might be personalized
  17. 17. Understanding Understanding methods: Tutorial • Can explain complex content • Requires significant work • Useful for very desirable items Demo products • Is very effective • Using item makes its value well understood • Very good for high desirable items • Special abilities of the item must be very clear • Works great when mixed with in-game events
  18. 18. Desire Desire methods: Events • Limitation by number, sale duration, availability • Limited unique/special items • Limited bonuses/discounts • Artificial scarcity increase perceived value and reduce time for judgment Pricing • Free products are seen as worthless • High prices create a feeling of quality • High prices reduce availability • Prices are relative and make sense only compared to others
  19. 19. Desirability parameters There are ten attributes that influence item desirability: • Customizability – players have higher feeling of ownership to items that they can customize. • Cultural references – items that attached to the real world can be very popular (holiday items, national flags, popular jokes etc.) • Licenses – items that based to popular licenses might be popular among fans of that IP. • Rarity – limited items can be very desirable and valuable for player. • Price – items with high prices can be desirable only because of their high prices. • Performance – item parameters (dmg, armor, income etc.) • Functionality – how useful is the item for gameplay. • Visuals and sounds – “look and feel” of the item. • Background fiction – items that are tied up to the story are more valuable. • Provenance – items that are tied to in-game stories.
  20. 20. Economy Economy guidelines: • Fluid economy. Amount of sources and sinks must be balanced. Do not allow players to save a lot of resources. Player’s resources are always limited, it’s never enough resources to finish all the activities. • Entice users to make more than one purchase, people spend money easier 2nd time. >50% of revenue are repeat consumers. First buy must leave a positive impression. • Create shopping baskets (low/medium/high spender) then correct them based on statistics. You can set prices based on these shopping baskets. • Use principle of “central resource”. All game resources are tied to premium currency/time and have prices in premium currency/time.
  21. 21. Pricing Pricing guidelines: • Keep in mind psychological barriers: 49, 99, >100, >1000 etc. Use these barriers for item grouping into price categories. • Keep in mind price similarities. 889, 899 and 999 are all similar prices in the user mind as they look similar. • Use numbers similarity. Users don’t seem to care if they pay 449 or 490, but they do care between a 449 or 549 prices. • Price discrimination policy. Prices set based on current statistics (ex. amount of soft currency of every player). • Start with high prices, test them as soon as possible, then change.
  22. 22. Ability Ability methods: Payment options • Clear and accessible. • Provide variety. Players can choose favorite payment method. • Options with the best revenue set as default. Starting bonus • Teach player how to use payment system. • Player can take a look on the premium content. • Integrated into tutorial. • Try to avoid situations of “wrong spending”, it might be frustrating for the player.
  23. 23. QUESTIONS?