Acquiring and Retaining Gamer Users

Game Monetization
Acquiring and retaining users

Game Monetization
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2
Introduction
The video games industry is a vibrant and versatile place. User acquisi-tion
has become perhaps the primary factor in driving revenue for game
creators. For games that continue to monetize following initial acquisi-tion,
retention rates are just as vital. Player behavior and opinion towards
a monetization method can directly impact the viability of a business
model; however, there are a number of other contributing factors that
will affect both acquisition and retention.
This report details the strategies available within the games industry today
to help developers and publishers effectively acquire and retain users,
complete with key insights from the best and brightest working in today’s
video game market.

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User acquisition
On a fundamental level, the majority of developers agree that in order for
any user acquisition strategy to succeed, you must first create a quality,
engaging product that is of value to the user. However, in an increasingly
crowded marketplace, quality alone does not guarantee an audience for
any game.
There are a number of methods in which a developer or publisher can
acquire users.
Gaming the system
There are anecdotal examples of incentivized downloads and bot farms,
implemented in an attempt to effectively manipulate the way the system
of discovery and user acquisition works. Within the mobile space, for
example, a company would pay a third party to loop a program which
artificially generates a large number of downloads of a single product.
Whilst the direct effect in revenue will be non-existent, as each download
is not a real user, the effect for catalogue services such as the iOS App
Store is clear - bot downloads create the view that the game is popular,
thus pushing it up the rankings.
Because of the dubious nature of this practice, concrete evidence
for these practices is hard to attain. However, the prevalence of such
methods is likely small, as it is in platform holders’ interests to stamp out
such unethical practices in order to maintain a perception of quality for
their platform.
Paid media
Paid media includes any publicity that is gained through paid advertising.
Paid media is a strategy that should be followed once a company has
already reached significant growth. James Liu outlines the risk involved
with a small developer seeking to do traditional paid advertising. “There’s
this upper bound of when your investment starts giving you significant
returns; we don’t see the benefit in putting all our eggs in one basket
by throwing down USD 40,000 to acquire users as our first title. It’s too
much of a risk.”
Paid media campaigns can have a large impact and generate a significant
number of users for a game. However, if implemented in a non-targeted
way, the users acquired will likely not be of a high quality and will drop off
quickly. For F2P titles, these kinds of users are also unlikely to monetize.
User acquisition marketing
User acquisition costs are on the rise, especially for the emerging mobile
sector, as more and more companies seek to gain a share of the lucrative
market opportunity. “[in 2012] Gree entered the US market and bid up the
cost of user acquisition dramatically” (Takahashi, 2013a). Companies that
are accustomed to higher acquisition costs in markets such as Japan, and
using platforms such as expensive television advertising, are inflating the
costs associated with user acquisition.
For smaller companies, the cost of user acquisition through marketing

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is a risk. If the cost to acquire a user exceeds the expected revenue, that
acquisition strategy is untenable if the aim is to turn a profit.
Targeting
With user acquisition costs and competition rising, targeting has never
been more important. In terms of the user journey, the most efficient
platform on which to advertise is the one with fewest user actions
between where the advertisement is consumed and the call to action.
For a Facebook game, for example, the most efficient place to adver-tise
is on Facebook itself. This is demonstrated by Plumbee’s experience
where “the only thing that really works on Facebook is Facebook ads,
either done in-house or through an agency,” says Raf Keustermans.
Operational efficiencies must also be taken into account when planning
and implementing a marketing campaign. Keustermans suggests that
mobile campaigns are more challenging to implement. “It’s much harder
to run an efficient advertising campaign on mobile than it is on Facebook.
Advertising on mobile is a lot more like the Wild West: much less sophis-ticated
because, unlike Facebook, there isn’t just one company that
dominates, so the tools for targeting aren’t really there.” In light of this, as
the opportunity for mobile continues to grow, the solutions for targeting
advertisements will evolve to become more efficient.
Whatever the platform, the cost associated with more traditional adver-tising
means that pursuing such a route is ill advised, even for companies
with a significant ad spend. Victor Kislyi, CEO of Wargaming.net, agrees.
“The ads you see in [various magazines] are different. Don’t waste your
money. It’s marketing people’s work.”
Competitions and tournaments
The extent to which competitions are effective at acquiring users
depends greatly on the mechanics of the competition and the prizes
awarded. Any barriers to entry created through competition mechanisms,
such as a question that has to be answered or a registration that has
to be filled out, will decrease the possible entries received, and conse-quently,
the impact of the competition.
However, creating a competition with little or no barriers to entry (such
as a follow and re-tweet mechanic using Twitter) will often generate a
lot of entries, the majority of which will not be of the quality desired.
There are a number of accounts on social networks whose only activ-ity
is to enter competitions. A more lifestyle-based social network, such
as Facebook, alleviates some of these challenges; however, the cost of
running such a competition is greatly increased because of more strin-gent
terms and conditions (Facebook.com, 2013).
For competitions involving social media, if the body running the compe-tition
does not already have a significant following, any potential reach
(number of users who will see the promotion) will be severely diminished.
The greater the market value of a competition, the more likely it will be

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that a significant number of users will enter. However more bespoke
content offered as a prize will more likely garner an invested clien-tele.
Joe Dale, Digital Product Manager for nDreams, notes: “If you use
competition prizes that have a direct relation to the game, like a copy of
the game itself or Free-to-Play items that would otherwise need to be
purchased, you’ll likely get fewer entries, but the chances are these will
be users who will, or already have, invested in your product”.
Promotions
Promotions have an interesting effect on sales. As one would expect,
reducing the price of an item on a limited basis, coupled with market-ing
activities, boosts sales of that item. The extent of the uptick in sales
will differ based on the cost reduction, platform and level of marketing
activity.
What is less expected is that related items will also see an increase in unit
sales. For nDreams, a recent promotion saw a PlayStation Home item,
one part of a four part set – The Complex: Silo – go on sale for a three
week period, four weeks after launch. Taking the overall unit sales of that
item at the four weeks post-launch mark, unit sales increased by 37.7%.
Another facet of nDreams’ strategy was that the item within the sale was
the least popular of the four items offered in The Complex.
With a boost of almost 40%, Silo quickly overtook two of the other offer-ings;
however, at the end of the seven-week period after launch, “Bio
Dome still leads the way in terms of units sold and revenue generated,”
reveals Joe Dale.
Boosting the sale of one item within the four item offering also helped
boost sales of the entire pack. “We saw that 52% of people who
purchased at least one [item] went on to purchase all four [items]. When
you look at the conversion from people who bought at least two, that
percentage is way higher”.
Because of this success, an upcoming strategy for nDreams within this
particular campaign is to introduce a promotional sale of one of the
other, less popular items. The boost in sales generated will likely encom-pass
both the standalone item and the sales of all four items on offer.
Any promotion should take account of the bigger picture in terms of a
publisher or developer’s portfolio. Simply reducing the price of a game or
in-game item and accompanying that activity with a marketing push will
likely see increased sales. However, a more far-reaching strategy would
be to promote a single item within a set. By showing the user benefit
of owning one piece of that set, the promoter is far more likely to see
increased sales across the board, as nDreams have shown in the example
above.
This strategy has been employed by many for some time. Sony frequently
offers games that have a soon-to-be-released sequel, such as the offer
of inFAMOUS free-of-charge to PlayStation Plus subscribers in June

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2011 as part of the “Welcome back” program following a security breach
that caused Sony to shut down PlayStation online capabilities for over a
month. This was timed perfectly with the release of inFAMOUS 2 in the
same month, and helped generate sales and publicity for the new title.
Owned media
Owned media includes any promotion channel that is directly controlled
by the creator or distributor of the material being publicized. For small
and large developers alike, this is key. The cost of creating and publish-ing
a website is negligible, and the benefits are cemented in the fact that
there will be no purer source of information on a product.
BoxCat Games’ Co-Founder, James Liu, sees the value in classic market-ing
techniques. “Getting your name out there in a traditional way is a
must”. Liu has actively been elevating his brand by generating thought
leadership pieces on gamasutra.com, as well as generating content
within forums and by attending conferences, “We went to GDC and
found it to be very beneficial. We were able to get in touch with various
journalists and specific mobile game websites that broadcast about new
games or upcoming games. So we were able to build relationships that
way”. Pursuing users and engaging with forums blurs the line between
owned and earned somewhat; however, the benefits to brand awareness
are clear.
Earned media
Earned media is arguably the most valuable and hardest to gain. This
includes any publicity gained as a result of promotional efforts outside of
paid advertising.
Nielsen’s study conducted in 2012 found that 92% of respondents
trusted recommendations from friends and family above all other forms
of advertising (Nielsen.com, 2012). David Reid, CMO of developer CPP,
agrees. “You have to have a strong community, with a lot of referrals
coming from within the community; a lot of positive word-of-mouth.”
The value of earned media is far higher than paid and owned, in that each
Facebook share or tweet, for example, is far more likely to convert an
audience into users. A paid Facebook advertisement, on the other hand,
will be trusted by just 36% of the population.

Game Monetization
47% 47% 47% 42%
47% 46% 41%
40% 40% 36% 33%
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Figure 1: Consumer trust in advertising
92% 70% 58% 58%
36% 33% 29%
Source: Nielsen, 2012
50%
For 22cans, their title ‘Curiosity – What’s Inside the Cube?’ was a runaway
publicity success, as the nature of the game was such that global media
took a continual interest. “The day Curiosity was completed, it was
number 1, 2, 3, and 4 trending on Twitter. It achieved more press than
a premier football club or FTSE 100 company,” explains 22cans’ Peter
Molyneux.
Earned media can become part of any marketing strategy and can, in
fact, be built into the game. “We have items that you get as part of referral
perks and cosmetic items that are noticeable on the field so that players
will want to bring their friends into the game,” David Reid comments,
in relation to one of CCP’s products. By not only creating opportunities
for gamers to share content with their friends, but generating a positive
social experience with referral perks, a developer can effectively increase
the likelihood of a game being positively shared by users.
Ads on TV
TV program
product
placements
Recommend-ations
from people
I know
Ads in magazines
Online video ads
Editorial content
such as newspaper
articles
Ads in newspapers
Online banner ads
Brand
sponsorships
Ads served in
search engine
results
Consumer
opinions posted
online
Billboards and
other outdoor
advertising
Ads on social
networks
Branded websites
Ads on radio
Display ads on
mobile devices
Emails I signed
up for
Ads before movies
Text ads on mobile
phones
Figure 28: Consumer trust in advertising
8%
30% 42% 42%
53% 53% 53% 58%
60% 60% 64% 67%
50%
53% 54% 59%
64% 67% 71%
„ Trust completely / somewhat
„ Don’t trust much / at all

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Table 1: Consumer trust in advertising
Table 9: Consumer trust in advertising
Recommendations from people I know 92% 8%
Consumer opinions posted online 70% 30%
Editorial content such as newspaper articles 58% 42%
Branded websites 58% 42%
Emails I signed up for 50% 50%
Ads on TV 47% 53%
Brand sponsorships 47% 53%
Ads in magazines 47% 53%
Billboards and other outdoor advertising 47% 53%
Ads in newspapers 46% 54%
Ads on radio 42% 58%
Ads before movies 41% 59%
TV program product placements 40% 60%
Ads served in search engine results 40% 60%
Online video ads 36% 64%
Ads on social networks 36% 64%
Online banner ads 33% 67%
Display ads on mobile devices 33% 67%
Text ads on mobile phones 29% 71%
Source: Nielsen, 2012
Trust completely /
somewhat
Don't trust much /
at all
The flip side of a referral scheme is the negative publicity associated
with progression wall mechanisms. In games such as Farmville, certain
in-game tasks cannot be completed unless a friend aids the player
through a social network. These types of mechanics are frequently
deemed as cynical by the player and their friends, and can often create
bad publicity for the brand. Furthermore, progression walls have bled into
the collective psyche to the extent that their use has been referenced as
a part of popular parody videos (for an example, see the Hardcore Casual
Gaming Rap on collegehumor.com, 2012). Media such as this can be
seen as wholly-negative in that the users of social sharing are actively
being ridiculed, thus discouraging future users.
James Liu warns: “Sharing out your top scores or highest scores causes
annoyance amongst other users. We want to build a brand name and
avoid the market response to social gaming companies like Zynga – we
want to avoid those types of PR scenarios”.

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Other earned media can be brought about by creating dialogue between
developer and the community.
Virality
Creating a game with mechanics that allow it to spread virally is a signifi-cant
earned media strategy that can reap huge rewards. There are several
ways in which virality can be built into a game:
Social sharing mechanics are features that are implemented to encour-age
users to post links to a game using their social media networks. This
is most often seen within the social and browser space. To go a stage
further, some games offer rewards for recruitment of players from the
social networks of users and more still offer ‘social gates’ – similar to pay
gates, these effectively act as a stopping point in the game where the
user must either recruit a friend to aid them or use in-game currency,
often the kind that can only be purchased with real money, to proceed.
These mechanics are therefore very closely related to pay gates.
The success of social sharing mechanics is clear. Zynga became the
number one publisher of social games on the Facebook platform, with
80% of the companies’ revenue reported to come through the platform
in 2012 (BBC News, 2012). By creating a loyal user base that is actively
engaged with your product, social sharing mechanics can help increase
that user base.
There are a number of drawbacks to social sharing in games, namely that
a vocal proportion of social network users find them to be an annoyance;
therefore, the ability for your game to be played, perhaps at a slower
pace of progression, without the use of social sharing will help temper
any adverse publicity and negativity from critics of the device.
The level to which the consumer is provided with choice is important, as
Kurt Bieg, Founder of Simple Machine notes: “If you force people into a
community they don’t want to be a part of, that’s not cool, but you can
use [social sharing] to give people a great experience – it’s important to
make those things optional.”
The ease [with] which this social virality can be implemented on
platforms varies. “It’s easier to invite your friends on Facebook than on
mobile. On mobile, it’s still a bit clunky,” says Raf Keustermans.
The social nature of games is a development of the last five years, and
will continue to see growth as developers build unobtrusive ways to
encourage social sharing. James Liu highlights his future strategy: “We’ll
be playing around with some of these mechanisms in future, especially
the less invasive ones such as referral codes... if we know you’re sharing
the game then we want to reward that behavior in-game”.
Bieg similarly notes the importance of social sharing within sectors of the
market – “For a free game, you have to have ways of connecting to your
audience, to grow the user base and keep people going,” while Margaret

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Wallace, CEO of Playmatics, reports that: “Social is probably the most
important factor in retaining users as well as attaining them”.
Organic virality, or ‘K’ factor
Organic growth is predicated on creating a quality product that users
will not only enjoy, but that they will want to share with their friends so
that they too can join the game and experience it. Developers have been
creating multiplayer experiences across all genres and market segments
as a response to the compulsively social aspect of the human psyche.
As we have seen, developers can build social sharing mechanics into
their games, forcing players to utilize their social networks to ease
progression. However, whilst the value of social sharing is questionable,
organic virality is a precious commodity that involves building trust with
the user. Creating a product that will be shared organically more than
once per user is an art that few games have achieved; understandably,
these games, coupled with an effective monetization strategy, are much
more likely to succeed.
As an offshoot of organic growth, a limited number of games have
created a user base that generates advertising material outside of the
direct influence of the developer or publisher. At its most basic, this
involves fandom: players become invested in the game world to the
extent that they produce content discussing aspects of the game or to
increase their enjoyment through the creation and development of social
circles outside of the game world. Many MMOs implement clan systems
– a fundamental social fabric that allows players to easily team together
to complete tasks and exchange resources. World of Warcraft has many
examples of clan members who have taken their relationship offline, with
frequent clan meet-ups seen worldwide.
EVE Online has perhaps some of the most extreme examples of organic
virality. The essence of the game is such that, rather than the develop-ers
constantly creating content for the users to consume in the form of
dungeons and combat instances, CCP create tools that players use to
create their own economies and political systems.
David Reid, CMO of CCP, explains: “The events that happen in EVE
become bigger and better headlines. The battle of Asakai that happened
in January is another example of this emergent gameplay. A guy acciden-tally
jump-gated his Titan, the most powerful ship in the game, which
can take months to build; he veered into the wrong section of space,
away from his colleagues and found himself undefended. As a result, one
of the quietest sectors of the EVE universe became hugely populated;
3,000 people showed up to join a giant battle and this story became big
international news”.
In a sense, with the implementation of a system that allows for players
themselves to create their own ecosystem, and for player actions to
shape the game world, CCP have introduced a game that will periodically
garner media interest much in the same way that real-world political

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machinations do. Searching on Google for “battle of Asakai”, without
even using the name of the game, currently brings up over 83,000
results. With the battle of Asakai, EVE Online has received a fantastic
amount of publicity, with no direct effort from the CCP marketing team.
The developers have not only created a game that lends itself to such
headline-grabbing stories, but are actively developing with that in mind.
“With the Odyssey expansion, we’re expecting more of this to happen
because we shook up and rebalanced ships and resources; the value
of assets in the EVE universe changed quite a bit, and so Corporations
with tens of thousands of people in them are going to war right now,”
reveals Reid.
Discoverability increasingly harder
The number of competitors within the market has also increased user
acquisition costs, explains BoxCat’s James Liu: “You have such a large influx
of applications, practically 100 apps a day on iOS App Store. So you have
to scream louder than them in order to get an audience”. In the month of
March 2013, Xylogic counted almost 31,000 new iPhone apps and over
22,000 new Android apps in the US app stores alone (Garth, 2013).
Andrew Swanson, VP of Sales for Twitch, sees a future where discov-erability
becomes as much of an issue for consoles as it is currently for
mobile platforms. “If it becomes easier to self-publish on console, then I
think we will run into a similar to the mobile challenge of discovery.”
For BoxCat Games and many small companies like them, the current
risks associated with traditional advertising are enough for them to seek
alternative methods to acquire users. “We are not paying advertising
money because we’re not certain about that yet; we’re testing various
places like Tapjoy and Chart Boost, which are both great services,” reveals
Liu. However, Simple Machine’s Kurt Bieg is of a different opinion. “A
game almost can’t be judged on its merits in the free market without an
advertising spend to gain exposure”. Some ad campaigns can also prove
to be cost effective, even for small developers, as Bieg points out. “Even a
little bit of Facebook advertising can pay unbelievable dividends – in the
neighborhood of around 400 users from USD 50”.
The featured effect
There are few media strategies more powerful than being featured or
backed by the platform holders themselves. For CCP, developer of DUST
514, this was a key consideration when outlining the project along with
the technology that would allow them to fulfill their vision of a true
cross-platform franchise. “When a title comes in that is strategic for the
platform then they can get behind that game in a big way and that can
carry a lot of weight,” comments CCP’s David, Reid. “It’s not just the
access to the users; it’s the active promotion that the platform are able to
do to keep the game top of mind for players.”
Knowing early that it had the platform holder’s support meant CCP could
choose to measure the effect themselves. “When we launched DUST 514,

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we decidedly used the PlayStation network as our primary vehicle for
advertising. We did a light online advertising campaign to make sure we
got the word out, because not everybody is logging into their PlayStation
every day.” This is a particularly innovative strategy in that it provides a
company with empirical data as to the effect of their own advertising
campaigns.
Support from the platform holder is also the method with the least resis-tance,
Reid notes. “There is no more efficient way for us to promote the
title than on the platform, because the journey for the user is immediate;
you’re right there to click and download the title.” Comparing this user
journey with a simple trailer for example, the user has to remember the
content to react to any call to action at a later date, or be so driven by
the content that they immediately divert their attention and respond to a
call to action. Both drive up the need for quality advertising, and will likely
increase the cost of creation.
For mobile, with a particularly crowded marketplace, being featured by
the platform holder is arguably more crucial than on other platforms. ICO
Partners’ Diane Lagrange notes that being featured alone will not neces-sarily
lead to success. “The effects of being featured don’t last. It’s a good
start, but having a good retention rate is crucial in the first place.”
Developer Johnny Two Shoes have some experience of the effect being
featured by Apple, as their co-founder Maxwell Scott-Slade points out.
“Plunderland was not only featured in 2010, but it was preinstalled on the
Apple products in store. For the whole of that period, we had an income
of between GBP 10,000 and GBP 12,000 a month, which is a lot for an
indie developer.”
The extent to which being featured on any particular storefront will vary
hugely depending on your position within the featured content and
length of time featured, as well as the assets that accompany your game.
It is important to remember that being featured does not guarantee
success; having effective app descriptions, rigorous taxonomy and entic-ing
artwork are all key considerations.
User retention
The development and implementation of new content is the single most
effective way to retain users. New game features can also be added to
change gameplay over time to provide players with new experiences.
Alexander Mamontov, Product Lead at Wooga, notes that many new
features are added to their products after launch. These new game
mechanics will have an impact on retention rates. “With one particular
feature we’re seeing that people are coming back just to see the feature
in action and to try and figure out how it happens.”
Certainly, the evidence for both iOS and Android suggests that there
is a positive correlation between a game being updated recently and
its popularity. Within the top 100 paid apps on the iOS App Store, 58%
of apps were updated in the last 60 days. This figure is even higher on

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Google Play, with 81% of apps having been updated in the past 60 days.
In the modern marketplace, developers need to continually support their
products with new content long after launch in order to continue driving
revenue from their portfolio.
Licensing
The implementation of licensed intellectual property (IP) is a tactic that
Kabam has seen large success with. This strategy can be extremely
cost-effective with regards to marketing because, for well-known IP
especially, consumer awareness of your product can be brought about
indirectly. “Having your game IP topical will help with discovery. For the
Hobbit, for example, we made sure the game was ready for the release
of the movie, and that really helped it succeed,” says Matt Curtis, Senior
Director of Project Management at Kabam.
IP licenses can, however, increase development cost, as Margaret
Wallace, CEO of Playmatics notes. “Even some parties, they can
sometimes get revenue just for waking up in the morning, even if they’re
not in the game”.
The additional costs must be weighed against the projected benefits.
These benefits may include marketing, as well as the benefits of an
already established brand. Kabam recently announced that Fast and
Furious 6: The Game had over 17 million installs in the first month of
launch, which was timed to coincide with the US movie premiere. Fast
and Furious 6: The Game is F2P and was featured by the iOS App Store in
more than 90 countries worldwide.
Persistent worlds, immersion and investment
The generation of real investment within a game is one of the most
powerful ways in which developers can retain users. For this to occur, the
gameplay either has to be compelling enough for the game to remain in
the psyche of the user after a play session has concluded, or the game
world must be persistent and social. Interaction between players creates
a near-infinite number of gameplay variations, and it is this unpredictabil-ity
that may well cause players to return again and again.
Chief Marketing Officer of CCP, David Reid, notes the value of unpredict-ability.
“For CCP, every new player in the game isn’t just another person to
monetize, [they are] a source of content creation. It’s a very fundamental
part of our universe. 500,000 players worldwide working and interacting
together exponentially creates more content than just 400,000 or 300,000.”
CCP see virality, player investment and potential for earned media through
persistent game worlds as a crucial strategy that they will build into their
entire portfolio in future, “With EVE, as it gets bigger, it gets better, and
we’ve built these same mechanics into DUST 514,” Reid discloses.
Tournaments
Tournaments and e-sports are recent phenomena that are slowly gaining
traction. Popular MOBA game League of Legends has created a long tail

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to the lifecycle of the game by holding frequent tournaments with real
cash prizes for the victors. The marketing brought about by commu-nity
members employing their social networks and fan consumption of
streamed tournament gameplay that isn’t necessarily published by the
developers themselves is extremely cost effective. Whilst the cost to put
on a tournament may at first seem high, the cost to gain similar coverage
using traditional means would likely be several times higher.
Services like twitch.tv have built an entire business model around stream-ing
gameplay and tournaments, with ad revenue shared between the
content creators and twitch.tv themselves. The most popular content
creators are invited to become Twitch Partners. Members to the partner
program receive additional perks to help build and interact with the
community to further drive subscriptions and thus revenue.
David Reid believes that the inclusion of tournament events could help
elongate the life of products. “The idea of cyber gaming and tournaments
in the first person shooter space is pretty well proven, and tournaments,
arenas and e-sports are very much on the road map of things to do for
DUST 514,” he says.
Notably, turning a game into a viewing experience for e-sports does not
work for every genre, and lends itself currently to the PC market rather
than consoles or mobile because of the difficulty of creating a viewing
experience on smaller-screened devices for games with high levels of
complexity. “We absolutely see the value in stand-alone tournaments.
League of Legends, for example, works very well for online streaming.
We’re currently thinking through what a robust tournament philosophy
looks like for EVE because of the size and challenge of understanding a
match as a viewer,” says Reid. League of Legends is a PC only multiplayer
online battle arena game (MOBA) with arguably the most robust tourna-ment
infrastructure of any game currently on the market.
Wargaming have even changed their business model to better accom-modate
the tournament culture that has grown around World of Tanks,
removing the exclusivity of pay to win items. “We are removing this ‘real
money only’ for golden bullets and similar, inside the battle,” announced
Victor Kislyi, the company’s CEO.
Player investment and P2P
Paid applications, by nature of their monetization method, require a
player to enter the game world with a higher level of personal invest-ment
than F2P games. This is a difficult line to walk as the developer has
created a barrier to entry for players: that of making payment before
any gameplay has been experienced. The added consideration for
player investment in P2P games is that their expectation will be higher,
especially if the price point is higher than the platform mode.
However, if implemented effectively, P2P games are more likely to attract
users who will invest their time in a game and are therefore more likely
to further invest. James Liu, Co-Founder of BoxCat games, notes of their

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game Nameless: The Hackers, “Because we’re a paid application rather
than a free application, we fall into a different bucket. As users have
invested [an up-front payment] in us, so that’s why our Appstore review
rates are higher – at around 20%, rather than the industry standard of
between 1-5% on free Apps” (Liu, 2013).
So whilst P2P games will see higher feedback rates, F2P games will
require significantly more users, and implement gameplay features that
encourage players to invest in the game in order to generate the same
level of feedback.
Removing barriers
For EVE Online, developing a universe and economic tools for players
to create their own stories has not only worked as a way of generating
earned marketing content, but has worked to attain a user retention
percentage that is much higher than the industry average.
However, CCP have also implemented an innovative strategy that hybrid-izes
the subscription model to allow low-income players to continue
playing the game. “One thing that CCP pioneered a few years ago is what
we call PLEX: Pilot License Extension.,” explains Reid. “I can buy a PLEX
from CCP directly – it is an in-game item that has a value of 30 days of
game time. If a player has more money than time, they can buy a PLEX
directly and take that into the game to sell to a player on the in-game
market for ISK, the in-game currency, to another player. So a player with
more time than money can earn a lot of in-game currency, and CCP
gives you the ability to have somebody else pay for your subscription.”
Through PLEX CCP have, to a certain extent, removed the barrier to entry
that subscription places on the game, without reducing their revenue
accrual. “The reason PLEX works in EVE is that somebody still has to
go through the effort of making in-game currency in order to pay for
my subscription as opposed to paying with cash.” The true innovation
here is that CCP have taken the concept of F2P and applied it within the
subscription model without devaluing the subscription. Reid continues:
“What we see with our implementation of PLEX is geographical differ-ences.
In Russia, for example, we had a lot of players who couldn’t pay
for their subscription in Rubles, so Russian players were earning a lot of
in-game currency and paying for their subscription using PLEX.
Community engagement
Social media tools are so prevalent within the gaming population that
almost every company should be expected to have a digital presence.
James Liu highlights the ease of social media saying: “It’s something
you can do very well with all the technologies available, to talk with
your users and engage with them on that level – because, if they like
our game, then they’ll tell their friends.” Kurt Bieg, Founder of Simple
Machine, notes that building a community can have additional benefits.
“Releasing new games will help you build up a fan base, and they end up
going through and paying for your back catalogue.”

Game Monetization
16
For hardcore games, or those that serve a particular niche, engag-ing
with hobbyist communities directly within the spaces they already
interact is a fantastic technique for gaining users and nurturing word of
mouth. BoxCat Games felt they were “trying to fit into a very particu-lar
niche market so we’re going into forums that are JRPG oriented or
anime oriented and saying ‘hey, here’s something on the app store that is
unique’” (Liu, 2013).
Victor Kislyi, CEO of Wargaming.net, agrees. “For kids’ games, maybe you
go to MacDonald’s. With World of Tanks, it was easy: museums, history
societies, websites, magazines… then MMO websites… We don’t advertise
in the New York Times very much simply because it isn’t as targeted as
these other outlets.” By targeting a niche that a developer knows their
game directly caters for, the higher quality of user attained and, thus, the
percentage of users retained goes up.
Actively engaging with and building a community also comprises a
business strategy, as the popularity of a product even before launch will
affect relationships with platform holders and publishers in the same
way that a proven track record of game development will. “Using social
media helps create a buzz, making your game feel bigger than it is in the
early days. So community building can be more of a business strategy
rather than a simple direct drive for downloads,” underlines Steve Stopps,
Founder of Kumotion.
Developing a quality portfolio is valuable beyond measure for any devel-oper.
Chris Petrovic, industry thought leader, explains: “We are a hits
driven industry; previous success does not guarantee future windfall”.
Whilst this is certainly true on a micro level, the bigger picture is that the
ability for a company to build and maintain a brand is extremely import-ant
when driving a subset of the gaming audience to download a title.
Summary
Undoubtedly the most effective promotion that can be done for a game
is to be featured by the platform holder. Whilst any effect will be short
term, coupled with a strong retention rate, you have a robust business
model that can be built upon. Of course, no developer or publisher can
guarantee that their game will be featured; however, we have seen that
there are a number of techniques that will increase your chances.
Word of mouth is the strongest endorsement available, and develop-ers
have to maximize their ability to build a following for their game by
finding and engaging directly with their community. This goes hand-in-hand
with every other marketing strategy, and should be the first step
within any marketing plan.

Acquiring and Retaining Gamer Users

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