Scientific Revenue's own Ted Verani conducts a masterclass in annuity design. If you're thinking about adding annuities to your game., you need to see this presentation.

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How
to
Design
Annuities
Ted Verani, VP of Business Development
Pocket Gamer Connects, London

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Scientific
Revenue
is
a
machine-­‐‑
learning
based
dynamic
pricing
platform
for
in-­‐‑app
purchases

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The
magic
of
selling
the
same
thing
at
different
price
points
How
much
is
the
large
human
bridle
worth?

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Background

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Typical
Game
• Your
conversion
is
between
.5%
and
3%
• ¼
to
½
of
your
purchasers
buy
something
in
the
first
two
days
• Somewhere
between
!
"⁄ and
$
"⁄ of
your
players
don’t
visit
the
coin
store
at
all.
• You
have
a
lot
of
people
who
will
never
purchase,
but
who
will
play
the
game
for
a
extended
period
of
time
• Some
of
them
have
money!

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Classifying
Players
Long
Term
Players
Purchasers
First
Day
Purchasers
Impulse
Purchasers
(“unplanned
purchases”)

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How
do
we
reach
players
that
don’t
buy
on
impulse?

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Inspiration

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More
Inspiration:
Daily
Login
Rewards

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On
Annuities

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http://www.gamasutra.com/blogs/IsaacKnowles/20160512/272484/Want_to_Increase
_Your_FreetoPlay_Game_Revenue__Retention_Experiment_With_Virtual_Currency_Annuit
ies.php

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The
Simplest
Annuity
That
Actually
Works
• First,
implement
a
daily
reward
system
based
on
currency
• Make
sure
it
works,
and
brings
people
back
• Make
sure
it
doesn’t
cannibalize
revenue
• On
a
selective
basis,
offer
to
double
the
daily
login
reward for
fixed
price
to
people
who
have
high
engagement
and
are
unlikely
to
buy
anything

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KEY
GOAL:
Little
or
No
Cannibalization
• Annuities
should
NOT
replace
regular
IAP
spend
• Done
properly,
they
cause
grinders
to
become
spenders
• Done
properly,
they
often
increase
demand
for
goods
and
currency
(teaser
/
taste
model)
• Add
people
to
the
conversion
pool
and
to
the
long-­‐‑term
retention
pool

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How
big
should
your
annuity
be?

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Things
You
Must
Know
About
Your
Game
• Lifetime
Spending
Caps
• Is
it
possible
to
“Buy
the
game”
• Depth
versus
Breadth
• Do
players
“level
up”
their
gear
or
do
they
buy
new
things?
• Minimum
Values
• Daily
Login
Bonuses
• Easily
earned
currency
amounts
(typical
daily
earn)
• Maximum
Values
• Average
daily
spend
• Typical
“medium
end”
purchase
• Annuities
shouldn’t
cover
your
spend

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Design
Considerations
for
Annuity
• Duration
• Needs
to
be
long
enough
to
delay
most
of
the
reward
• Need
to
login
/
need
to
click
• It
shouldn’t
just
accumulate
while
the
user
is
inactive
• One
at
a
Time
• Do
not
let
people
purchase
or
receive
multiple
annuities
simultaneously
• Exchange
Rate
for
how
much
• Use
your
Black
Friday
sale
as
a
starting
point

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Graduate
School
• Randomized
Rewards
• Intermittent
Availability
• Hyperbolic
Discounting
• Accumulations
• Punctuated
Rewards

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The
Monetisation Design
Library
• SR
Resources
Page.
http://www.scientificrevenue.com/resources/
• On
Pay
to
Win
Strategies.
http://www.gamasutra.com/blogs/WilliamGrosso/20161102/284598/Looking_at_Pay_to_Win.php
• On
Daily
Login
Bonuses.
http://www.gamasutra.com/blogs/WilliamGrosso/20160613/274759/The_Science__Craft_of_Designing_D
aily_Rewards__and_Why_FTP_Games_Need_Them.php
• On
Annuities.
http://www.gamasutra.com/blogs/IsaacKnowles/20160512/272484/Want_to_Increase_Your_FreetoPlay_
Game_Revenue__Retention_Experiment_With_Virtual_Currency_Annuities.php
• Our
IAP
Survey.
http://www.pocketgamer.biz/data-­‐‑and-­‐‑research/63436/scientific-­‐‑revenue-­‐‑survey/
and
http://www.scientificrevenue.com/iap-­‐‑survey/
• On
Feeder
Apps.
http://www.scientificrevenue.com/blog-­‐‑posts/how-­‐‑to-­‐‑turn-­‐‑free-­‐‑viral-­‐‑apps-­‐‑into-­‐‑feeder-­‐‑apps-­‐‑that-­‐‑actually-­‐‑
make-­‐‑money/
• On
Powerup Design.
http://www.scientificrevenue.com/blog-­‐‑posts/rescues-­‐‑buffs-­‐‑skips-­‐‑how-­‐‑to-­‐‑design-­‐‑mobile-­‐‑game-­‐‑power-­‐‑
ups-­‐‑for-­‐‑optimal-­‐‑iap/
• On
Payment
Wall
Design.
http://www.scientificrevenue.com/blog-­‐‑posts/how-­‐‑to-­‐‑design-­‐‑an-­‐‑in-­‐‑app-­‐‑purchase-­‐‑paywall-­‐‑that-­‐‑earns-­‐‑
you-­‐‑money-­‐‑without-­‐‑annoying-­‐‑your-­‐‑players/
• On
Non-­‐‑virtual-­‐‑currency
IAP
Strategies.
http://www.gamasutra.com/blogs/WilliamGrosso/20160202/264646/IAP_Strategies_Most_Mobile_Game
rs_Dont_Hate__And_Most_AAA_Publishers_Should_Try.php

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Continuing
the
Conversation
Twitter:
Excellent
Mailing
Lists:
https://mailman.stanford.edu/mailman/listinfo/gsb-­‐‑videogames
https://gaminginsiders.mobilize.io/users/sign_in
https://twitter.com/SciRevenue

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Thank
You
Ted Verani, VP of Business Development
ted@scientificrevenue.com

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Pulling
it
togther
• Things
you
already
know….
• For
general
players,
annuity
should
be
193
coins
• Make
it
200
because
the
difference
is
small
and
200
is
psychologically
more
friendly
• What
is
the
cost?
• You
know
it
is
200
coins
x
28
days(Duration),
which
is
5600
coins
in
total
• Take
the
Black
Friday
Exchange
Rate,
which
is
$.004
for
single
coin
• Then,
the
annuity
cost
is
5600
x
$.004
=
$22.40
• Which
is
$19.99
once
you
make
it
psychologically
friendly