Mobile Monetization 101: The First Steps

“We should have thought of monetization from the start”

Countless free to play games have launched and failed, and this is a constant regret many game teams have. They should have done more in the beginning to think about monetization. They should’ve been thinking a lot deeper about how their game was going to make money instead of just making a good game.

Learning how to evaluate monetization early is difficult. Most resources talk about clever monetization mechanics (ex. Pricing of in-app purchases, limited time offers, VIP systems, sales, etc.) but rarely is there much information about how to tell if your early prototype has what’s necessary to eventually monetize. The common remark to monetization is that good monetization can only come from good retention, as if just making a fun game will inherently make your game monetize. Anyone that’s launched a free to play game knows this isn’t completely correct.

The truth is that monetization and retention are strongly interconnected and you need to think about both as early as possible within your game. Monetization is not something that you can stumble into if you want to compete on the AppStore. 

But before you start obsessing over your in-app purchase prices and before you start obsessing over sneaky monetization mechanics  — you need to figure out how your game is going to survive as a free to play game. The best way to set up monetization in your game is to ensure that your game has 3 things:

  1. A clear definition of what you are primarily selling
  2. Assurances that your systems will last for years
  3. Ways of pulling the player to the end game

Completing these 3 steps will allow you to set up your game to monetize to its full potential.

Step 1: What are you Selling?

Every top grossing free to play game primarily sells the means to progress.

Progress is the strongest driver of monetization. The top grossing games don’t sell content (ex. DLCs), they sell progress towards an end game.

Progress comes in many forms and sizes. It could mean moving forward on a map. Progress could mean building up a farm. Progress could mean collecting and upgrading characters. To start, you need to define what progress means for your game.

Let’s take a look at 2 games, and what progress means for them:

Candy Crush

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Candy Crush’s core progress is to move forward on a map. Candy Crush focuses all of their monetization mechanics to help progress on the map. They sell boosts, extra moves or charms which all help you progress.

Star Wars Galaxy of Heroes

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Galaxy of heroes is all about upgrading & collecting heroes. Each game mode promotes the need to have a large collection of characters. As the game progresses, it demands an increasing upgrade level of your characters, requiring you to progress. They sell the means to progress faster: currencies to train your characters, the ability to fight battles instantaneously, and loot cards to unlock characters faster than your normally can.

Every top grossing game has a long path of progress which is the main focus of their monetization.

You must define the core progress for your game. What do you see players building over a long period of time?

Just to give more examples, here are some of the Top Grossing games’ Core Progress:

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For each of these games, this core progress is the central focus of their monetization strategy. All monetization mechanics give options for the players to speed up their progress.

When you’ve discovered what your core progress is — what the key central point you are going to be selling — then you can start designing monetization mechanics that speed up the player’s progress in interesting ways. You can start designing mechanics that pace the player’s progress giving you opportunities to monetize.

But there is one important step you need to do before you can start creating monetization mechanics: you need to ensure this core progress will actually last. Otherwise you won’t be selling progress for very long.

Step 2: How long will it last?

What you are selling must be able to scale for years.

It doesn’t matter how many monetization tricks you’ve got in your game. If what you’re selling won’t last, you won’t be successful.

This is usually where systems begin to show weakness. Not many systems can last for years. Many of the games that we all loved growing up were great games, but only lasted 10 or 20 hours before the system would crack. These games aren’t well suited for free to play.

An example of this happened when I was working on a racing game prototype. The core of the game was to race against an opponent to the finish while avoiding obstacles.

Our core progress was upgrading your car (similar to CSR Racing). The player collected loot from races to purchase upgrades which would improve their car’s stats. To progress in the game, the player needed higher and higher stats. The key stats to progress were: Speed, Handling, Acceleration and Boost/Nitro. As we tested out the game, we noticed: the more you improved the Speed stat, the harder the game became. The player’s cars were moving faster, which meant that the obstacles were becoming harder to avoid. We had a very limited cap that the speed could be upgraded to without demanding way too much skill from players.

With this cap in mind, we tried many things to avoid the issue. We made all obstacles travel with the player based on the player’s speed to make high speeds more manageable (instead of stationary obstacles, we switched to cars driving with the player on a highway). We adjusted the opposing AI’s speed based on your upgrade level to ensure that each upgrade was necessary. We tried many weird tricks to get the system to work, but all of them fell apart and were making the gameplay feel confusing.

In the end, the cap on our speed stat wasn’t high enough. In order for the game to be successful we needed the cars from the beginning of the game to be much, much slower than the cars at the end of the game. If we wanted the end of the game to take a months to reach, yet each upgrade along the way to feel meaningful to progress, the “Speed” stat was just not going to work.

This was a signal that our system wasn’t going to scale, and our game was not going to work as free to play.

Compare this Speed stat problem to a regular RPG system with Health and Attack. This system can scale almost infinitely.  A 200 HP monster when you have 20 attack is the same as a  200,000 HP monster when you have 20,000 attack. Attack and Health counter each other, allowing both to grow infinitely large. Speed had no counter stat, which made its growth eventually constrained. This is why many free to play games rely on an RPG system of Health vs Attack (ex. Clash Royale, Clash of Clans, Best Fiends, Puzzles and Dragons, Summoner’s War) this simple system can scale.

Look at your base gameplay — do the stats scale?

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Health vs Attack: The infinitely scalable system that many of the top free to play games use.

So how do you apply this to an early prototype? How do you ensure that your system will last?

2 basic tools you can use to evaluate your scalability:

  • Model your economy
  • Test your game in the Beginning, Mid and Endgame

Model your Progression

Modelling your game’s economy and progress early is an easy way to give you a sense of just how much content you need and how to pace your game.

Exactly how to do this is a very deep topic that I’d love to cover some day. If you don’t have the skillset on your team to model your economy with a tool like Excel, then you need to get someone who can. Without modelling, it is impossible to see just how you’re going to get your game to last.

But what should the goal be? How long should your game’s progress last?

10,000 hours or $10,000 dollars: that’s how long your system should last.

This of course is just a high level estimate (and easy to remember) but this is a good goal to have if your looking to reach the top grossing charts. Looking at the top games today, they easily go beyond these numbers. Games like Clash of Clans support purchases larger than $10,000 in their games. In comparison to Game Of War, this economy can support a purchases by a single user of over $120,000. These are insane values, but to give you a sense of just how long lasting and resilient these economies are. There is a lot of room in these economies to monetize.

With this model, you have a great tool to show what it will take to last. Compare your model against the models of your competitors in your genre and you’ll have even greater benchmarks for how much content you will need. If you want to beat the competition, your game has to last longer.

Test your Beginning Game, Mid Game, and End Game

When you’ve modelled your game’s economy, you will have a sense of what the beginning game, mid game and end game’s content will be. From this, you can build a prototype which can showcase how the game will feel in the beginning, in the middle and in the end. With this prototype you can ask questions like:

In the beginning, do player progress quickly?
Is each progress step desirable and felt as required by the player?
Is this beginning of the game still engaging or have you taken away too much of the depth?
Is the gameplay easy to get into?

In the midgame, has it sufficiently changed from the beginning game? Does it feel like the game is getting deeper?

In the end game, does the game still work?
Is the amount of skill required to succeed still feel achievable to all of your player types?
Is the end game sufficiently complex and deep? How does my end game depth compare to my competitors?
Is there a dominant strategy, or do you see your end game players debating over best choices?

There are many more questions to ask to ensure the depth of gameplay is there at each stage, but these 3 prototypes can give you a better sense that progress is happening and that your game will work at these 3 stages. This will ensure that the progress that you will be selling is desirable, and that the end game is worth reaching.

Using a model and effectively testing your game at multiple stages in the game is the basics of how to prove your game can last. When your game can last, then you now have the necessary base of a game that can monetize. Now it is time to start driving desire to spend.

Step 3: Why do I care?

You’ve got a core system that can last for years, and a clear definition of what you are selling. All that doesn’t matter if players have no desire to progress.

As free to play games, we are selling virtual items. In reality these things have no value. Our job as game designers is to create systems which create value for our virtual items. When our virtual items have value, we are much more likely to monetize.

Making virtual items valuable is not easy, but thus far most free to play games have focused on 2 ways to do this:

  • Visual progress & teasing a long term vision of the end game
  • Social Pressure

Visual Progress & Tease Long Term Vision

The majority of free to play games use visual progress cues to create a sense of value as you progress through the game. Visual progress can come in many forms, but it must showcase your progress thus far as well as tease future progress. Showcasing your previous progress gives value to your work so far. Gives you real value for your playing time or payments in the past. Teasing the future content gives the “carrot on the stick”. Shows players that there is lots more to come, and hopefully entices them to discover the new content still awaiting them.

The 3 most used examples of visual progress are:

  • The Saga Map
  • Base Expansion
  • Character Collection

#1 The Saga Map

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The Saga map in puzzle games clearly shows the visual progress of the player. Each time you complete a level, you progress on the map. At any time in the future you can scroll through the map and feel good about the progress you’ve made.

At the same time it clouds over the future worlds and hints at the mountain of content yet to come, giving you a reason to continue playing to discover the content.

#2 Base Expansion & Building Progress in Clash of Clans

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Clash of Clans and almost every game like it with a city/base-building component has this to create greater visual progress to the user. Looking at an early level base in Clash of Clans to a late base really shows just how far a player has come. Each time they enter the game they are reminded of their progress. Each base also feels completely customizable and your own. You decide where each piece of wall goes. This creates more attachment to the visual progress — this is your own base.

On top of this, players are teased each time they preview a greater opponent. They can look at the top of the leaderboards and be tempted by how amazing the bases look near the end game.

#3 Characters in Star Wars Galaxy of Heroes

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Looking at your character list in Galaxy of Heroes is the best way to see your progress and be teased of the future content.

You can see each of your characters and how amazing they are. This showcases their value. Just below your characters, you can see transparent versions of the characters you have yet to unlock, enticing you of the future progress pulling you along.

These 3 examples show how the top grossing games use visual progress to create value and desire. Each are also tightly tied to what the core progress is for the game itself.

When your core progress is visual, players are much more likely to feel like it is valuable and worth playing or paying for.  When progress is teased, players are much more likely to stick around to see what happens.

Social Pressure

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Want your game to monetize? Then make sure players are engaged socially within your game!

Deep Social mechanics is the key to building a game that retains the longest and monetizes the strongest. When a player is actively engaged in a lively community of players, then the content in the game is far more valuable. As a player, I am far more likely to spend . We’ve already written a lot about how strong community features in your game will heavily influence how well you can monetize:

  • Dawn of the Dragons (5th Planet Games): conversion rate for non guild members: 3.2% vs. guild members: 23%
  • Tyrant Unleashed (Synapse Games): ARPU for non guild members: $36.59, vs. guild members: $91.60

It is not a coincidence that MMOs like Habbo Hotel (pictured above) monetize so strongly with a core interactions that are quite simple. The deep social interactions that are possible in Habbo Hotel pull players in over a long period of time. Because of this strong social connection, players put a much higher value on looking good, showing off their progress and helping others. As a result players play longer and pay more money.

So when you’re thinking about monetization, make sure that you have truly defined what is going to be pulling players through the game on the long haul. Ensure you have strong visual progress mechanics that show off the player’s progress and tease the late game. Ensure that you have social mechanics which give real value to the content that you’re creating. If players have minimal desire to progress, then it doesn’t matter what monetization tricks you have — they won’t play long enough to spend.

The Last Step: Capitalize

You can see that Steps 1, 2 and 3 don’t really talk directly about monetization. There’s not much about skipping timers, VIP programs, limited time offers or designing virtual currencies. It’s because all that doesn’t matter unless you’ve got a long lasting game.

This is really why many monetization topics usually say “think about Retention before you think about Monetization”. What the real crux of it this statement is: don’t think about monetization unless you’ve got a system that can last. Obsessing over monetization mechanics before you’ve got a long lasting system is futile. However if you’ve nailed a long lasting system that can keep players engaged for a long time, the remaining steps to monetize become significantly easier.

When you’ve got a long lasting system, you can start creating mechanics that pull the player faster forward in that progression by paying or playing the way that you want them to. With enough desire to reach the end game, you can drive players to spend repeatedly to reach it. This is where true monetization begins.

More on the ways to capitalize on your long lasting systems coming soon!

Further Reading:

Mid Core Success: Monetization, Michail Katkoff :
http://www.deconstructoroffun.com/2013/11/mid-core-success-part-4-monetization.html?q=monetization

Dimitar Dragonov, Freemium Mobile Games
https://www.amazon.com/Freemium-Mobile-Games-Design-Monetization/dp/1512322172

Critical Mobile Monetization Concepts, Joseph Kim
http://quarterview.com/?p=774

The Tower of Want, Ethan Levy
https://www.youtube.com/watch?v=tBG2G-9vl-M

Deconstructor Of Fun: Galaxy of Heroes

Over the last few weeks I’ve been working with Miska Katkoff of Deconstructor of Fun to put together a deep deconstruction of Star Wars Galaxy of Heroes. It’s now posted on Deconstructor of Fun:

http://www.deconstructoroffun.com/2016/04/galaxy-of-heroes-full-deconstruction-of.html

Galaxy of Heroes is a deep game that took strong reference from Heroes Charge. I go into a detailed analysis into all the systems in the game in this article. Some takeaways:

  • Every system in the game is built around supporting their core loop of upgrading and collecting heroes
  • Their deep, complex upgrade system allows players to have strong short-term and long-term goals
  • Galaxy of Heroes supports incredibly long session lengths. You can play this game for hours each day without the game forcing you to leave and without making a dent in its content

For further details, check out the article!

P.S.

Also, some good news about those interested in my GDC Presentation on Soft Launches: it’s available in the GDC Vault (Vault Access is required)
http://www.gdcvault.com/play/1023238/What-to-Expect-When-You

Soft Launches in 2016

This year at GDC I spoke about soft launching games. A deep dive into how Wooga looks at soft launches, and specifically what you can expect in terms of Cost, Learning and Growth.

Click Here to Download the Slides and watch here if you have GDC Vault Access

Summary & Takeaways:

  • Soft Launches have changed significantly
    • Soft Launching in 2011 was much easier — especially because of the free traffic through facebook virality
  • Soft Launches are more important than ever
    • Wooga learned this the hard way with Agent Alice. You have to validate your LTV & CPI before launching if you want to launch with an effective marketing budget.
  • Soft Launches aren’t cheap
    • Futurama and Max Ammo’s costs were around $250,000 for 5 months of soft launch. This is user acquisition costs only.
    • Wooga Soft launches now typically take 4-6 months, this is mainly to give time for both Validation (ensure LTV > CPI) and Growth (attempt to improve metrics before launch).
  • You can use Low CPI Countries, but only to test, not to validate
    • Don’t use the KPIs ( LTV, Retention ) in your Low CPI test markets to validate your game. Wooga has found that these KPIs change unpredictably from country to country. You can only predict a hit in your key markets (usually Sweden and Canada)
  • Retention is more influenced by Marketing User Quality than Features
    • Don’t just look at your day-to-day or week-to-week retention to see the impact of your changes. It’s very easy to inflate or deflate your retention profile by adjusting your marketing mix (what % of your users come from which acquisition source).
  • The only way to see real impact of your changes in Soft Launch is to A/B test
    • If you NEED to see the real impact of features you need to A/B test. But because Soft Launches have such low DAU, the time needed to get real results from this will drag your soft launch timeline out.
  • Growth of Retention is SLOW
    • We at Wooga typically see an average growth of our retention numbers by 0.5 to 1.5 percentage points per month (1d/3d/7d). So if your retention numbers are far off your target, its going to take a long time to get them up.
  • Large Retention Jumps are usually improved with: Funnel Optimization, Tutorials and Difficulty Adjustments
    • Large Retention jumps don’t typically happen, unless your game is fundamentally broken.
    • The largest bumps in retention that Wooga has seen have come from 3 things:
      • Funnel Optimization: looking for where users drop out
      • Tutorials: optimizing and paring down the tutorial
      • Difficulty Adjustments: looking for frustrations and smoothening progression
  • Growth of Monetization can be done
    • We at Wooga have seen that monetization can grow, especially during post-launch.
    • So if you’re LTV CPI equation is not working only because of monetization, you can still grow monetization during post-launch

Overall:
Soft Launches will not save your game.

If you don’t see strong metrics during Soft Launch, then don’t expect the Soft Launch to give you the clear learnings of how to fix and grow your game to be a hit. Costs are high, Learnings are difficult, and Growth is slow.

 

 

 

Deconstructing Clash Royale

Supercell has dropped a bomb on the mobile gaming market. Their new game, Clash Royale, soft launched just as 2016 got started. They have soft launched in only 8 countries, but this game is already a sure success. Supercell has already committed the game to a global launch in March.

The game is already Top 3 Grossing in Canada
The game is already Top 3 Grossing in Canada

Supercell has made a lot of smart choices with this game. They have a fun, competitive, forward-thinking game that exemplifies what modern free to play design should feel like. Previously I’ve talked about just how difficult Multiplayer on Mobile is to get right, yet here Supercell threw out the rulebook. They’ve now proven that Synchronous multiplayer can work on mobile. Many have even gone as far to say this is the first successful MOBA on Mobile.

Whatever you want to call this game, it will be a success, and it did so while breaking many of the rules.

But enough praise for the game, today I’d like to talk about my favourite subject when it comes to mobile game design: sessions. Specifically, where I think Clash Royale succeeded in creating session design that pulls players back each day.

They did so with 2 clever systems:

  • Free Chest Systems
  • Chest Slot System

Overview of the Game

Clash Royale is a card-based real-time strategy game. The best way to explain it is to watch:

Player use cards to spawn various units to attack opposing player’s towers. The goal is to destroy their towers before they destroy yours. The strategy is in choosing when and where to place your cards: to counter your opponent’s units, and to ultimately press the opponent enough to destroy their central tower.

Overall it is a hectic strategic game that lasts only a few minutes. It feels like a real-time hearthstone match mixed up with the clash of clans gameplay.

The Core:
  • Winning a battle will reward you with chests (in various ways)
  • These chests give you random rewards: gems, coins, and random cards
  • Cards can be upgraded with enough duplicates of the same card, and enough coins
  • To win, you need a variety of Levelled up cards
The Goal:
  • Players want a collection of competitive cards
  • To win as many matches as possible
  • To get as many crowns and trophies as possible
  • To reach highest Arenas
  • To reach the top of the leaderboard (With your clan or by yourself)

The loop is focused on collecting and gathering cards. Not unlike Hearthstone. The big modification though is the ability to upgrade these cards.

bomberupgrade
Comparing Clash Royale to Hearthstone, the ability to upgrade cards changes matchmaking and progression quite a bit.

To upgrade a card, you need to collect duplicates as well as coins. The real key comes in the rarity of the cards. Some cards are inherently better than others (ex. the Giant), and since they are RARE or EPIC, they drop a lot less than others. So not only do you want to collect these rare cards, you also need to collect a lot of them to fully upgrade the card.

This strong desire to collect and upgrade your cards is what drives all systems in the game. Each session is about attempting to get as many chests (and thus cards) as possible. To collect cards the fastest, the player has to play by the rules that Supercell desires to drive retention and monetization.

#1: The Free Chests System

To analyze Clash Royale’s sessions, let’s start with the most obvious system: how Clash Royale starts and ends its sessions.

For any game, good session design is marked by two things:

  • You’re rewarded each time you come back to the game
  • The game quickly gives you a short-term goal, that can be accomplished within that session, or at least within a few sessions

This is usually accomplished in most games by a few things:

A Rewarding Start:

Good sessions always start off with a instantly rewarding mechanic. Most games aim to have a collection of resources each time you return or a Daily Reward System. This gives the player a good feeling instantly after starting up the game.

Rewarding Start

Short Term Goal:

But having an instantly gratifying mechanic isn’t enough. The player must quickly form a goal which will drive the player further into the game. They need a goal which asks them to engage in the core gameplay.

This dynamic is usually created by a Daily Mission system or wanting to use up all Energy.

Session Goal

Clash Royale creates these 2 dynamics with 2 systems: A free chest every 4 hours, and a crown chest after collecting 10 crowns.

clash-royale-chests

The free chest system marks the beginning of your session: you come in, open up your free chests. It feels rewarding just to come back.

20160111042712a0eavbdtriwnw35g

Secondly, the crown chest. To open you must collect 10 crowns from opponents. This gives me a nice short term goal. Even if I am far away from ranking up, I want to collect 10 crowns so I get the crown chest. Realistically this goal can be accomplished in 1 session, or at least within a day.

This is perfect for driving a strong session length. A clear goal as soon as they’ve opened up the app. Something that the player feels good for accomplishing.

Crown_Chest_Tip

This chest can be opened once per 24 hours, which gives a strong daily goal for players. Players wanting to get the maximum number of chests come back each day and play enough matches to collect 10 crowns.

These 2 chests, which take up a small portion of the UI, incentivize strong sessions per day and strong session length.

#2: The Chest Slots System

Secondly lets look at the Chest Slot system.

Each time you play a round, if you win (score more crowns than the opponent), you will receive a chest. This chest is randomly chosen from Silver, Gold or Magical. Each chest takes time to open: 3h, 8h or 12h. You can only open 1 chest at a time, and to restrict things further, you only have 4 slots to store chests.

chest-drop-order-clash-royale

No other game on mobile has used this pattern for pacing players. This is the first I have ever seen someone attempt something like this. Instead of pacing the players through energy or construction timers, they went with a system that limits the rewards players get. Players can play as often as they like, but in order to progress and upgrade their deck, they need to pace themselves.

This system can only work if they know that :
#1: players won’t grow tired of playing their game… no matter how much they play
#2: their matchmaking and card upgrade system can prevent players from progressing into the higher leagues too fast

#1 is no easy feat, but I believe they accomplished it. Clash Royale is a game, like Hearthstone, that has a shifting meta, no clear answers. Every battle feels different, especially because its synchronous multiplayer.

#2 is based on the big change they made over a pure Trading Card Game system. Because you can upgrade each card, eventually the player will be confronted with decks that are stacked against them. No amount of skill will be able to defeat a deck with higher level units. Because of this, players will eventually need to play the chest opening game. There’s no avoiding it.

Matchmaking aside, what about the overall feeling of the sessions?

This system fulfills the goals of Flexible Sessions. Rather than blocking the player from playing the game, they ask the players to be smart about how they spend their time.

But what about having to come back every 3 hours to clear out a single chest? Why not allow for chests to be opened up automatically? Opened up in queue?

My guess is that Supercell knows the pain that the chest slots creates, and this is intentional for retention and monetization purposes. Players have to organize themselves to hit all their timers. This uncertainty of hitting their Chest Timers drives players to come back, and pay to speed up the timers when they know they won’t be able to return optimally. I know for myself this chest slot system has converted me into paying to skip timers.

But regardless if you’re chest slots are full, the player can continue to play, which really is what drives the flexible sessions. Even if you’ve filled up your chest slots there is a lot of productive things you can do in the game:

  • You can continue to play and push as far up the leaderboard as you can go with your current cards
  • You can continue to collect crowns for the Crown Chest
  • You can donate cards and request cards from clan mates
  • You can chat and read messages from other clan mates
  • You can watch other battles from around Clash Royale (and be teased of late game content or tempted to speed up progression…)

So although the Chest system is restrictive, its not nearly as restrictive as a straight up energy system. And having this “soft” restriction allows highly engaged players to opt-in to leaving the game when they feel smart about it.

Conclusions

Supercell have a big success on their hands with Clash Royale.

They crafted strong sessions with 2 systems:

  • A Free Chest system that gives rewards just for arriving and setting a strong session goal
  • A Chest Slot system that effectively paces players without energy

This base of strong session design is driving strong retention and monetization. I don’t expect Supercell to change much as this game moves towards global launch. I expect that they are mostly focusing on making their end game deeper and more competitive. This will drive the game even further up the Top Grossing charts, and drive even stronger long term retention. This game will be on the charts for a long time to come.

Overall Supercell clearly have opened up new doors with their designs. It shows that synchronous multiplayer can work on mobile, and energy is not needed to pace players properly. Lets see whether this ushers in a new “Clash of Royale Clones” or developers can apply these design lessons to new games on mobile.

GDC 2016: Learnings from Soft Launches

Hey, just a spam post that my GDC 2016 speech has been confirmed and is now in the schedule:

Screen Shot 2015-11-25 at 4.26.55 PMhttp://schedule.gdconf.com/session/what-to-expect-when-youre-expecting-a-soft-launch

This is the first year that I’m in the Main Conference in GDC San Francisco.

What I’ll be covering:

  • Show how Soft Launches have changed from 2011 to today
  • How to effectively manage acquisition cost & targeting to maximize learnings while minimizing costs
  • Show by example what numbers (Retention, Monetization, CPIs) can grow quickly in Soft Launch
  • Show with some examples what makes changes these KPIs

Looking forward to GDC!

Addendum: Making the First Purchase

From my post last weekend on “Making the First Purchase“, Jun Otsuka, Wooga’s Head of Studio in Japan, made an interesting discovery. While giving a starter pack is a smart decision, sometimes this can have unforeseen consequences.

On November 6th for Mixi’s Investor Relations meeting, they discussed why their sales trend went down for Q2 2015:

From Mixi's Investor Relations : https://mixi.co.jp/en/ir/
From Mixi’s Investor Relations : https://mixi.co.jp/en/ir/

They reported a downward trend due to existing paying users of their massive hit Monster Strike taking advantage of the beginner’s pack. They added a starter pack (a High Conversion Item) to the game which was meant to incentivize the first purchase. This pack was also meant to get new players ranked up quickly so they could join the mid-game, where most of the users were competing.

The pack contained for $5:

  • A guaranteed 6 star monster (would usually cost $50-$80)
  • 10 Monsters to Fuse for XP
  • 5 Gems ($5 worth)

This pack is seriously high value, which is a huge incentive for new players. As a result, they had the benefit of increased # of paying users. However, as an unforeseen consequence, because the deal was SO good, existing users found ways to take advantage of this deal, which killed the regular In-App Purchase economy. This resulted in lower overall bookings for Monster Strike.

This just serves as a warning for developers looking to create a great first purchase. Ensure that this pack’s economic impact is controlled. It must be limited in use, otherwise you can end up in a situation where existing players are only purchasing this conversion item, rather than spending on the real purchases you intended.

Thanks again to Jun for pointing this out!

PS. If you’re at SLUSH this year in Helsinki, I will be there! Contact me on Twitter or via Email.

Free to Play Monetization: Making The First Purchase

When a player first starts a new free to play game, they have very little intention of spending money. No matter how good your game is, no matter how good your brand is, it’s unlikely that players are willing to drop money soon after starting the app. There’s a period of time where players wait and experiment before buying their first item.

Usually during this early time, heavy monetization should not be your main concern. When free to play first began on mobile, the common approach was to throw monetization in the player’s face immediately. Developers would do whatever they could in the first session to convert players. This has changed.  Modern free to play design puts much more importance on being generous with currencies and content from the first session, and pushing for monetization only after the player really has tried out the game. This method results in players playing longer, and more likely to spend more often through their lifetime with the game.

But there’s an obvious concern here. If you’re being so generous with currencies and content in the beginning, how can you monetize effectively in these early stages? Is there any way to get players to pay early without making them turn off the game? Yes!

With smart design, monetization does not impact retention. More likely, strong monetization actually improves your retention. After a player has dropped their first dollar in a free to play game, they are more likely to stick around. Especially if you make sure that their first purchase feels good.

That really should be your goal: A great feeling first purchase.

The High Conversion Item

A great feeling first purchase is commonly referred to as the high conversion item. It is a virtual item or a mechanic which is likely to incentivize a player’s first purchase.

The first example that comes to mind of a high conversion item is the “Double Coin” boost in Endless Runner style games. Every game play after a player has purchased this boost will give double that amount of collected coins. It’s a single purchase ($2) which can only be made once, but is permanent unlike most In-App Purchases. Any engaged player will see it as a great deal and be more likely to spend their first dollar on the game with this purchase over the regular currency purchases.

Jetpack_Joyride_counterfeit_coins

So how do we create this type of mechanics for different genres?

It’s actually quite simple. The optimal components of a high conversion item are:

  • High value to the player
  • The value pays off over time (only if the player is engaged)
  • It’s limited by either time or use

High Value

If the item you are selling is not desirable, players won’t convert. Players want to feel smart about making that first purchase, and are unlikely to fork over cash unless they feel they are getting a great deal.

But creating the feeling of getting a great deal is easy when you think of common pricing strategies. The easiest for showing value is Price Anchoring. Ensure the player has been shown the “usual” value of gems and items, but offer an option which is clearly lower than that. This will create the feeling of a deal.

deadpool

A great example of this is Kabam’s Contest of Champions. In the first session, the player is constantly brought into the crystal vault and shown the regular price of crystals. They are also shown the value of heroes and currencies during the first session. The player’s value and price have now been anchored. After this is in place, there is a starter pack with tons of currency and a guaranteed awesome hero (Deadpool) to get you started. They have hinted at the value, and clearly shown that this is a low price. This is a high value purchase for the player.

Pays off over Time

But just creating a “on-sale” pack of regularly purchasable items is not the optimal way of asking a new player to make their first purchase. The best conversion items also aim to drive the player to play more. To do this, the value of a conversion item must only pay off over time. Instead of giving massive value upfront (ex. a bunch of currency that can be spent quickly), the player should have to play and engage with the game in order to see the purchase’s true value.

Giving too much upfront can mean that a paying player will spend all the currency quickly, feel like they have “beaten” the game, then leave. Instead, asking the player to engage in the game because of their purchase can turn a monetization mechanic into a retention mechanic.

Monthly Jewel Purchase. Spend a little, get a lot. But only if you come back daily!
Monthly Jewel Purchase. Spend a little, get a lot. But only if you come back daily!

The best example of this is Heroes Charge monthly card or COLOPL Rune Story‘s monthly jewel. A player can pay a small amount of money to receive premium currency over a month. In order to collect it, the player has to come back each day. This builds investment in the player. They paid the money, they have the opportunity for massive value, but this value can only be unlocked if the player is engaged.

Aim for your high conversion item to only unlock its true potential if players commit to returning to your game.

Limited

The last tactic of a high conversion item is about making it limited in time and/or in use.

Just as I spoke about before, the Contest of Champions Starter Pack is a great value purchase. It’s also on a timer — you can only purchase the pack within a set amount of days, which puts pressure on players to make up their mind. This pressure increases the conversion rate.

But also the conversion item should be a once-in-a-lifetime type of offer. Limiting the number of times the player can actually purchase this item is important. Especially since this item provides such high long term value, you don’t want the player to get addicted to spending only on this item, rather (eventually) have to convert to spending on regular purchases.

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A good example of limiting the use is the Clash of Clans builder. It’s a high conversion item. If a player purchases the builder, a player can construct 2 buildings at once, effectively doubling their progression speed and allowing them far less restrictions when their economy is under attack from other players. Builders are very high value which pays off over time. However, the builder hut can only be purchase 5 times, with each stage getting much more expensive. The value eventually has to come in line with the actual costs, and making sure this is capped allows the economy to be effectively balanced.

Ensure that your high conversion item is limited by both time and of use. You want to pull the player to eventually start making your regular purchases.

In Summary

During the early stages of a player’s engagement in your game, it is important to build a High Conversion Item. This item must:

  • Demonstrate a high value to the player
  • The value can only pay off in time, building investment in the player
  • Be limited by both time and of use, to ensure its felt as special, and that players eventually move over to regular purchases.

Using this as your guide, you can create a strong high conversion item that will drive monetization and retention.