Design Driven IAP

Editor's Notes

• #2: WHO AM I? WHY THIS PRESENTATION (I have 43 slides and only 40 minutes – so I’ll have to be fast! I’m going to use different games to explain particular IAP behaviours. That doesn’t mean that I think there are good/bad just that they explain my point at the time. Freemium has won; but many question whether this is a good or bad thing from the perspective of the player and indeed whether the current approaches to Free2Play design are sustainable or even in some cases ethical.
• #3: There is some genuine reasons for concern from a number of games recently being reported to the UK Competitive Markets Authority (CMA) over concerns about targeting children but also an economic one. Over the last 4 years the reported ‘typical’ paying player appears anecdotally to have dropped from 3-5% of total downloads* to just 1-2%. This isn’t a smoking gun and there are lots of conflicting evidence but when you consider the improvements in data analysis to aid retention and the huge increased marketing spend from games at the top, I believe it’s worth taking another look at how we can develop a more sustainable approach to game monetisation. By the way I’m not going to talk about the use of multiple or single Currency – that’s probably a talk in itself and there is more than enough to talk about with IAP
• #4: The Games Business is a Leaky Bucket: We will always lose players! Games are consumable entertainment and players will inevitably churn. This means we have two options – add more people faster than we lose them or plug as many leaks as we can. With King spending in around $500 and Supercell around $400 that’s a lot of new people being added to the bucket
• #5: & more recently there have been stats showing that more than 60% of people who play more than 10 hours actually pay…
• #6: The reality is that both Free and Paid are buying decisions and there are lots of things that get in the way of buying or indeed downloading an app: In the Journal of Marketing - James W. Taylor wrote about The Role of Risk in Consumer Behavior quoting Raymond Bauer’s 1960 work on consumer behavior as risk taking. We need to know what we are getting, what we are missing out on and we have to face what others will think of our decisions as well as having to deal with other things in our lives. In short, if we are going to make better, more sustainable IAP we have to keep more players, longer and create the conditions where they feel safe to buy things in our game.
• #7: Unlimited Content – capped by limited Energy (such as Candy Crush Saga)
• #8: Exponential Cost Escalation – Building a bigger base requires bigger stores (Clash of Clans)
• #9: Time Limited Events – special limited editions and timed events (Puzzles & Dragons) N.B. Puzzles & Dragons only obtained 36m downloads globally – compared with CandyCrush which passed 500million in 2014 and played by 100m people at day at peak Other methods include Casino Mechanics (Not part of the same model – due to differences in psychology)
• #10: The idea of ongoing spending presents different Short Term vs Long Term Risks. Most players have a budget they are comfortable spending regularly. In the heat of a game they might exceed that but that will create Buyer Remorse unless the feel they can choose to cap that cost. The first mobile IAP appears to have been Rent games at 3UK. Whist this initially failed due to a lack of access to content we found games with the option for both Rent (50p/3days) & Buy (£6) gained 3x the revenue of Buy alone yet only 20% of the revenue came from rent. Rent gave players permission to buy!
• #11: The reality is that both Free and Paid are buying decisions and there are lots of things that get in the way of buying or indeed downloading an app: In the Journal of Marketing - James W. Taylor wrote about The Role of Risk in Consumer Behavior quoting Raymond Bauer’s 1960 work on consumer behavior as risk taking. We need to know what we are getting, what we are missing out on and we have to face what others will think of our decisions as well as having to deal with other things in our lives. In short, if we are going to make better, more sustainable IAP we have to keep more players, longer and create the conditions where they feel safe to buy things in our game.
• #13: We have to consider the short or long term risk profile of the game as well as the context for players including: Escalating Costs – The perception of ever escalating costs will impact player demand. This isn’t the same as prince sensitivity but never-ending upward pressure creates Payment Fatigue. Never-ending Spend – The Perception that I will always be asked for more money from the game creates Payment Fatigue, but that is different from the desire to want to spend money of my own choice. Always have more for me to acquire on my initiative; don’t make my basic retention depend on it. Comparative Progress – Seeing others perform better than me can create a playing fatigue. If someone elses spend alone makes it appear impractical for me to compete, I will abandon the game. Claiming that its Pay-to-win. Substitute Games – We can’t ignore that there were 362 games released every day in Feb this year alone. There are always substitute games, and they are all free too.
• #14: Unfinished Business: Games like Kim Kardashian Hollywood do an amazing job with the narrative progression and the format of what are essentially ‘Cookie Clicker’ tasks and still create a sense of Unfinished Business. The gameplay may be limited but the engagement is very real none-the-less. This leaves the player always wanting more. That opportunity cost directly helps overcome the issues over any opportunity cost there may be
• #15: Continued Relevance: Games like the VEGA conflict which show the items which players will be able to unlock later in the game; and their associated stats similarly go a long way to show the continued relevance of playing as well as how what they have just unlocked fits into the game. Often this is about putting the monetisation in the Context Loop, rather than in with the core mechanics.
• #16: Social Capital: It’s also important not to ignore the social consequences and the value that players put on being able to personalise their experience as long as other people are able to observe those decisions. This was key to most of the revenue in the now shutdown Playstation®Home experience with examples like the ‘Gold Suit’ offering its wearers social capital. However, people often misunderstand this phenomena, customisation has to be authentic as it’s about real people’s response to your experience.
• #17: Inertia: It’s also easy to underestimate how important it is to keep your players playing – even if they are Freeloaders! The deliberate choice of a player to accept your game as their hobby is hugely valuable. It’s a massive compliment to you and your team and you should respect that. This is what gives you’re the opportunity to generate revenue in the first place and their ongoing commitment will be hard to win. That’s why your initial on-boarding process is so vital. Acknowledge that every player has a lifecycle and be careful how their needs will change as they move from Discovering to Learning then Engaging. Building Longevity takes an understanding of the community as we as how your games the rhythm of play fits into your players’ lifestyle.
• #18: We should not consider someone who pays once to be a customer. They may have purchased, but unless they do it again there is work to do not just to create a business that can scale but also one which delivered what our players actually want! According to Park & Lee, Players are buying because they have an expectation of value, not just because they are happy with the game. They are demonstrating a desire to get more out of our game and we have to sustain that if we are to encourage them to keep spending. You can’t sustain that if your IAP doesn’t deliver logical value as well as emotional value. The reward if we respect players is Longer Lifetime Value but unfortunately no matter how good our game is there will be a diminishing return.
• #19: Sustenance – Goods we require to continue playing
• #20: Shortcuts – Goods which speed up the actions we are performing
• #21: Socialisation – Goods which are primarily about social capital
• #22: Strategy – Goods which open new playing options
• #23: Consumable – a one-time use item
• #24: Consumable – a one-time use item
• #27: The reality is that both Free and Paid are buying decisions and there are lots of things that get in the way of buying or indeed downloading an app: In the Journal of Marketing - James W. Taylor wrote about The Role of Risk in Consumer Behavior quoting Raymond Bauer’s 1960 work on consumer behavior as risk taking.
• #28: Bundles – Whether it’s a BOGOF or a pack of 10, selling more than one consumable in one transaction not only makes the offer more attractive to the player it also means that they may have some left over that means they need to come back to use them.
• #29: Ratchet Mechanisms: Whether it’s scaling how many recharge crystals you need to continue your run having died multiple times, like in Blades of Brim by SYBO; or the classic mechanic where to upgrade your HQ you first have to upgrade your Gold and Mana Stores which of course takes an escalating amount of time and resources to complete. I’m falling out of love for this system to be honest, but it’s still valid when spread amongst larger number of assets such as the different heroes in Marvel Future Fight. This method also includes multipart items such as the Blueprints in the Force Collection.
• #30: Scissor-Paper-Stone: This remains my favourite approach to scale and I think the most consumer friendly, add a touch of dilemma to the purchase. Do you buy the Blue Sword or the Red one. Blue is better on Green, but Vulnerable to Red attacks. Done well and you turn purchase decisions into a positive part of the reason to play. Look at games like Hearthstone or DOTA where players have no problems with spending. Dilemma doesn’t have to be profound it can be as simple as the mental switch between collecting gems and avoiding obstacles in Lets Go Rocket from Cobra Mobile.
• #31: Customisation: The more creativity you give your players the more engaged they will be with their characters emotionally and the better impact your purchases will have on ongoing retention. However, this has to be authentic. You can’t fake Geek Cool.
• #32: The reality is that both Free and Paid are buying decisions and there are lots of things that get in the way of buying or indeed downloading an app: In the Journal of Marketing - James W. Taylor wrote about The Role of Risk in Consumer Behavior quoting Raymond Bauer’s 1960 work on consumer behavior as risk taking.
• #33: The reality is that both Free and Paid are buying decisions and there are lots of things that get in the way of buying or indeed downloading an app: In the Journal of Marketing - James W. Taylor wrote about The Role of Risk in Consumer Behavior quoting Raymond Bauer’s 1960 work on consumer behavior as risk taking.
• #34: Help from a Friend: Games like Criminal Case actively use Facebook connections to offer gifts to their friends of freely available consumable items like energy. Learning from Puzzles & Dragons as well as Marvel Future Fight we can connect with other players who are online at the same time as us and make tentative allies. These can be a great excuse to see what impact a power or new character might have on our game, and make it easier to get past a troublesome boss.
• #35: Free Use of an Item: Sometimes we have to show people what they are missing out on; unless you have used a better car/gun/etc how you will know how much more fun it is that the one you already have. Sometimes this temporary use can be a reward or part of a daily challenge, but it can also be highly effective to use ‘Opt-In’ Video Ads to offer such experiences. These put a commercial value to the free item, something the player often appreciates more as a result.
• #36: Predictable Uncertainty: Knowing you will get something but not knowing what is a great tool. This is often used crudely by throwing a roulette wheel into the game. However, it’s more interesting in its use in Crossy Road or Puzzles & Dragons. I regularly get a random creature from the coins I earn through play or from watching Opt-in Videos. These creatures are all delightful in some way, and each time I get one the other become more interesting. There are some which I just had to get my hands on straight away and as a result I was willing to spend real money to get the ones I wanted, Emo Goose and Frankenstein.
• #37: Limited Offer: Whether it’s limited by time or event it can be really effective to make players authentic and in-game context plausible offers. Fake scarcity will add to Playing Fatigue.
• #42: Finally, the point of making sustainable IAP is to look at the Sale as the beginning not the end. If we are to really achieve that we have to recognise that each purchase we initiate creates its own sense of buyer remorse and build playing and paying fatigue – leading to churn. We have to constantly fight this inevitable loss by building Post-Purchase Utility. That means making the user feel special every time they make a purchase, think about the unboxing experience of an Apple product. Identify and allow players to show off ‘Landmark items’ which genuinely expand the scale of play but then don’t forget to show me what my money has bought. All this has also to take into account how my purchase affects the game of others; we can’t afford to increase the engagement of one player at the cost of dozens of others. Show me as a player that you respect my decision to invest in your game and give me a reason to do it again!