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Puzzle & Dragons & Monetization: How Great Game Design Drives GungHo's Global Hit
by Andrew Vestal on 07/21/13 07:02:00 pm   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

 
GungHo Online Entertainment is the current darling of the mobile game industry. Their smash hit Puzzle & Dragons has more than 16 million users in Japan, and just surpassed 1 million in South Korea. The game is generated over $100 million in April, and in May, GungHo's market capitalization exceeded industry stalwart Nintendo. Whether GungHo is the next big Japanese game developer or just a flash in the pan remains to be seen, but one thing is certain: they are making a lot of money, and everyone wants to know how. Unfortunately, Western analyses of Puzzle & Dragons' success tend to focus on the small subset of monetization techniques common to Western games, glossing over or misrepresenting the more interesting ways Puzzle & Dragons has achieved its success. The secret "special sauce" is not in GungHo's psychological prowess or monetization techniques, but in the game they have constructed around it. GungHo's Puzzle & Dragons is Balanced and FairConstantly Changing, and Surprisingly Generous. As a result, they have created an environment where players enjoy playing the game and want to spend money.

Where Does Your Money Go?

Puzzle & Dragons is a game where players form teams of creatures, then match puzzle pieces to advance those teams through different dungeons. Entering dungeons consumes stamina, which refills slowly over time. Players can spend money on 5 things:

  1. Receive a rare and random creature ($5)
  2. Add 5 slots for additional creatures  ($1)
  3. Add 5 slots for additional friends ($1)
  4. Refill the stamina bar ($1)
  5. Continue your progress within the current dungeon ($1)


Of these 5 possibilities, continuing within a dungeon is the worst value and the least likely player purchase. Adding a creature to your stable or increasing the number of available creatures/friends are permanent upgrades to the player's power. A stamina refill, while consumable, offers increased flexibility and the possibility of playing through several additional dungeons. Continuing within a dungeon, on the other hand, is a fleeting benefit that offers only a temporary boost to the current play session. A player will only continue if a rare creature (which they perceive to be worth at least $1) has already dropped and will absolutely be received upon completing the dungeon, or if they know that they can complete the dungeon quickly and safely. Otherwise, whatever killed them will probably just kill them again, and they'll end up throwing good money after bad. The bulk of GungHo's money is coming from players spending $5 per pop at the chance - not guarantee - of receiving a powerful creature to add to their arsenal. This mechanic is known as "gatcha," after "gatchapon," the random toys dispensed at convenience stores and video arcades from transparent plastic eggs. This technique is extremely popular in Japanese games, to the point that in May 2012 the Japanese Diet passed legislature banning a particularly nefarious variation known as "kompu gacha". On the face of it, this is madness. When players spend real money in a game, they want to know they'll be getting an actual advantage in return. Yet GungHo is earning tens of millions of dollars a month selling the possibility--not promise--of an advantage. But because of the game GungHo has constructed around that possibility, millions of players are willing to take that chance.

Balanced and Fair

 
Ramin Shokrizade characterizes Puzzle & Dragons as "a money game disguised as a skill game." This is incorrect and unfair. Puzzle & Dragons is a skill game that can be played as a money game. The core puzzle mechanic is more complex and interesting than the standard "match-3" of Bejeweled or Candy Crush Saga. Players can modify the layout of the entire playfield as they move their piece throughout the screen, setting up increasingly complex combos and chains. As a result, players are more engaged in the turn-to-turn action that makes up the game. Additionally, skilled players are able to quickly set up increasingly large combos, rewarding foresight and agility. Creatures in Puzzle & Dragons are carefully designed and balanced. A creature with low HP may have high Attack. A creature that is difficult to evolve may be easier to slot into your team once the evolution is complete. Some creatures may appear useless, only to reveal their full potential when used synergistically with another creature. Furthermore, "gatcha" and "drop" creatures are carefully balanced against each other such that no one side has an incontrovertible advantage. Similar (but still unique) creatures are available to both paying and non-paying players. Ultimately, any player can to build a team that matches their skill level and playstyle. Finally, Dungeons in Puzzle & Dragons are not fully randomized, but a series of set encounters against known enemies with consistent power and predictable, telegraphed attacks. This allows players to approach dungeons as larger metapuzzles, building a team capable of overcoming the specific challenges found within.


The complexity and balance of creatures, dungeons, team composition and puzzle mechanics results in a game where players can choose their own place on a spectrum of skill, luck, money, and time.  A skilled player can play for hundreds of hours without spending a dime. A tight-knit community of hardcore players discusses strategies, and encourages new players to learn what the game has to offer. Meanwhile, a less skilled player can try to purchase more powerful creatures from the gatcha machine. Any "unfairness" comes from an impersonal random number generator, not from the underlying game mechanics.

Constantly Changing

The world of Puzzle & Dragons is continually in flux. New dungeons are available just for a week, day, or even an hour. Special "collaboration" dungeons with popular games like Final Fantasy or Clash of Clans attract fans of those properties while giving Puzzle & Dragons players new content to explore. Time-limited events change the probability of receiving certain creatures or of unlocking certain content. New creatures, dungeons and game content are added frequently. Players are encouraged and rewarded to "check in" several times a day to see what's happening.


The greatest driver of continuous player engagement is the asynchronous co-op "Helper" system. When a team of creatures go into a dungeon, they can bring a "Helper" from their Friend List with them. A Helper grants powerful skills and bonuses to the rest of the team, and most dungeons after the first few hours cannot be completed without bringing a Helper along. However, once you've taken a Helper into a dungeon, the Helper is unavailable until that player logs in again. This encourages players to login several times a day, and to seek out other players of similar level and engagement. Players enjoy "bringing along" another player's creature to help them overcome a particularly difficult dungeon. On the flip side, if a useful Helper doesn't return for several days, most players will clear them out of their Friends list and look for someone more active.

Surprisingly Generous

In addition to the constant addition of new content and special events, Puzzle & Dragons is constantly bombarding the player with free rewards. Special events increase the chance for exceptionally powerful creatures to drop from the gatcha machine, or for particularly desirable creatures to appear inside of dungeons. Most crucially, GungHo can't seem to stop bombarding players the premium currency ("Magic Stones") used for all in-game purchases. An average player will receive  the equivalent of $20 USD /month in Magic Stones just from playing the game normally. This not only increases player satisfaction, it brings all players - paying and not - into the "premium" economy.

The Carrot or the Stick?

Let's end with a cautionary tale from World of Warcraft. World of Warcraft introduced the concept of "Rest" to MMOs. Rested characters are ones that have not been played for a while; eager to get back in the game, they receive 200% XP for a few hours before returning to the default 100% XP. Players love Rest, and almost every MMO since World of Warcraft has adopted a similar system. But when Rest was first introduced, it was called something different: Fatigue. Players would begin their play session earning 100% XP, but after a few short hours become "Fatigued" and be penalized, receiving a mere 50% XP. Players hated it. Why were they being punished for playing the game they loved? Rest, Fatigue. Same system, different name. So what's the difference? "Rest" rewards players for not playing, while "Fatigue" punishes players for playing too much. Players love being rewarded, and they hate being punished. The most profitable free-to-play game in the world has succeeded by focusing their economic model on player respect and positive reinforcement, not the overtly cruel timers and obvious withholding that usually defines the genre. So while the mechanics may be similar, the perception is night-and-day. Players can feel the difference, and that attitude makes them more likely to give money to the game. And that's why GungHo's laughing - and smiling, and sharing - all the way to the bank.

This article was originally posted at the relaunched Gaming Intelligence Agency


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Comments


Ara Shirinian
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I'm not yet convinced that PAD's long term game does not ultimately develop in a similar way to the other games that exploitatively monetize, but the structure certainly feels innocuous at first. My impression is that this design is either truly innocuous, or especially devious in the long game.

I wonder how Ramin would reply to your assertions.

In my relatively short experience with the game thus far, as I explore the free-play-only dynamic, there are already several elements that appear to be adversarial/exploitative to the player:

- Many of the special promotions seem to be deliberately misleading in terms of advertised effect. For example, they will tell you that the "skill Lv. up rate" for fusing is 2x as normal, but they will not tell you the actual rate, which I suspect is incredibly small. If the actual original rate was 0.1, then twice this is a big advantage to the player, but if it was 0.01, then the bonus odds you are getting are practically meaningless. Same thing when they tell you certain rare monsters are enjoying a 2x appearance rate at the egg machines.

- The stamina cost to play a normal dungeon at your level appears to increase steadily as you progress. While your max stock of stamina also increases, the rate of stamina recovery is always constant. Although I need to play further into the game to be certain, logically a system like this would result in gradually increasing pressure for the player to buy stamina refills because their stamina resource will be strictly decreasing in availability between level-ups (since level-ups restore stamina fully). If true, this is the same old insidious resource scarcity dynamic that the worst exmaples take advantage of.

- the rare monster machine guarantees a monster of at least 3 rarity, but there appear to be many monsters of such rarity that are quite useless if you are in the mid or long term game. I won't dare spend money to play this slot machine, but I get the distinct impression they are misleading the player of the true odds of getting something valuable.

- I don't know the rules currently in place for receiving free premium currency, but at first I was receiving one almost every day, and now I have not received one in several days. My impression, which again needs to be borne out by further play, is that premium currency may appear abundant at first, while as you progress it steadily becomes more and more scarce.

Andrew Vestal
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Thanks for your feedback.

Re: Skill up rates. Skill up rates are low, but not unfairly so. Players have charted it at about 10%, 20% during 2x periods. This means fusing 5x units for skill-up has an approximate "100%" chance during 2x periods. A greater concern is that monster skill-up is a necessary endgame advancement mechanic, and introduces a cumulative randomization factor (not just drop, but drop x skill up).

Re: Stamina. This is less of a concern than it might seem, as player power increases mostly independently from dungeon advancement. The metaphor I'd use is high-level raiding in MMOs; you may only be playing one dungeon a day, but that one dungeon a day contains everything you need to advance. The primary driver of players purchasing stamina refills would be for extra chances at time-limited dungeons, not for standard game advancement.

Re: Rare monster. This is the game's big "gatcha." The huge caveat is not in providing players with something "valuable," but with providing them with something "valuable" that is also USEFUL. Early on, just about any unit can be slotted into the active party as useful. In the midgame, powerful units may not jive with a player's current playstyle or strategy, and be relegated to the "back bench" for later consideration. In the endgame, the player has likely built a deep roster of powerful units, and any gatcha pulls will be going after a very particular key unit. And with randomization a huge factor, it's going to take huge amounts of money to find that unit.

Re: Currency. Premium currency is received in three major ways:
1. Completing a dungeon for the first time. Tapers off after several months of play, but never goes away as new content is continually introduced.
2. As a daily reward during monthly special events (you may have joined during one of these week-long events)
3. As compensation for gameplay issues (sporadic)

Premium currency does become more scarce; however, unlike most games, item cost is flat from beginning to end. Value, however, is random.

Booby K
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You also get free currency from the number of days logged in. For example, at 100 days you get 10 free magic stones.

Mitchell Fujino
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@Andrew: Just a small note to correct your math. 5 attempts with a 20% chance is not "100%", but actually closer to 67%. (chance of getting nothing = 0.8 ^ 5)

This is a common fallacy and part of the psychological trick that makes these gambles so attractive.

Andrew Vestal
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Mitchell points out below that I made a boneheaded math mistake in my comment. At 20% chance per creature, fusing 5 gives a 67% of receiving a skill up. Better than even odds, but still far from 100%.

However, I did track down a Japanese fusion chart and can confirm 20% is the correct 2x skill up percentage (and 67% the correct 5x percentage): http://diarynote.jp/data/blogs/l/20130517/91522_20130517014851298
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Serkan Toto
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Very interesting analysis, thank you for posting it.

I'd like to add one comment to your statements:
"Of these 5 possibilities, continuing within a dungeon is the worst value and the least likely player purchase."
(...)
"The bulk of GungHo's money is coming from players spending $5 per pop at the chance - not guarantee - of receiving a powerful creature to add to their arsenal."

-> According to P&D lead producer Yamamoto-san, this is not true.

In this interview (in Japanese only: http://www.appbank.net/2012/04/11/iphone-news/395908.php), he confirms that the top money maker in the game is indeed the continue function.

Andrew Vestal
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Thanks for your feedback. I was aware of Yamamoto-san's comment, but it dates from 16 months ago, several million players (and hundreds of millions of dollars) ago. The current content updates and incentivization schemes are clearly based around introducing 5-10 new "top tier" units and encouraging players to play the rare gacha multiple times in an attempt to obtain the "top tier" units most suitable for their playstyle. It's not uncommon for whales to spend hundreds of dollars chasing these units each time they're introduced into the game's ecosystem. So while I don't doubt that continues remain a strong revenue contributor, I do doubt they remain the game's primary revenue driver. The mechanics and metagame have evolved.

Ramin Shokrizade
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Serkan, thank you for clarifying that because I was having a very difficult time believing that part of this article. Since the difference between my analysis and Andrew's analysis really hinges on the concept of Reward Removal that I explain in the paper cited here, if people were not falling for that lure then that lure would not have the level of efficacy that I asserted.

EDIT: To comment on Andrew's comment, it would make sense that veteran players would become more sophisticated and not fall for the reward removal ploy as often after they know the game better. This is in line with what I discuss in my paper. So as the population matures, players would gravitate more to buying hard boosts (rare monsters) which again suggests that this is a money game not a skill game since you are paying for advantage and advancement. Since the playing population in Japan is now mature, they may be spending there more as Andrew suggests.

Daniel Boy
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@Andrew
So it is an informed guess that the gacha element is GungHo's top money maker?

(edit spelling)

Benjamin Sipe
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I've worked with similar games and games in the same genre. In all cases, items that reduce delay were the highest revenue generating. I also sat in on the Blood Brothers GDC lecture this year (http://schedule2013.gdconf.com/session-id/824120) and they too said that the highest revenue generating were items that reduced delay. Either morale or stamina depending on the event that week. Their emphasis for popularity and revenues focused on events and tournaments more than anything else.

@Ramin - I know of at least one game that's older than a year that still makes the most on delay reducing items so I think it's hard to make a general statement like "veteran players will by X" without watching how the game and players adapt. Maybe you have more experience with more developers, or maybe it's more platform specific?

Ramin Shokrizade
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Benjamin I was speaking only to trends, not some arbitrary 50% line. Trends tend to be fairly reliable across products with similar mechanics, even if they have individual variation. By knowing the trends you can say "A>B>C" even if you don't know the quantitative value of those variables.

Doug Creutz
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The issue with the 'reward removal' thesis is that 99% of the time there is no reward to remove. Most dungeons involve fighting easily obtainable trash mobs until the final boss. If you beat the final boss, no problem. If you die to the final boss (or before that), you haven't won anything yet that you'll regret losing (except on very rare occasions). There are a very few limited time end game dungeons that almost require 1-10 revives to beat, but you can't remotely make it that far unless you have gotten seriously hardcore into the game (and thus have a good understand of the metagame and economy).

I'm in Andrew's camp on this one. If I had to make a totally uneducated guess as to how in-game currency spending breaks down now (well, educated by my own play experience), I'd say something like 50% gacha, 25% stamina refresh, 15% friend/box expansion, 10% dungeon revive. Serkan, perhaps you can prod GungHo for an update . . .

Ian Bogost
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This article advances a deeply perverse and revolting understanding of "generosity."

Kirk Black
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The current crop of cash-grab game "features" such as lives, social checkpoints and gambling currently being championed in games like PAD and Candy Crush hopefully will get retired to the history of shameful game development once players get tired of being manipulated for no other purpose than to pay some money.

Ask yourself honestly, would such features exist if the whole goal was focused entirely on maximizing the fun of a game for the player? These features don't add value to the game other than to extort money from what are otherwise very well crafted games. I've enjoyed both Candy Crush and PAD immensely, but, the current monetization implementation strategy is distasteful.

Incidentally, my upcoming game, Enspira Online ( www.EnspiraOnline.com ) will also be free to play and will have an in-game monetization strategy (after all, developers have to make money somehow, just ideally not through such off putting means as actually limiting your gameplay for no other reason than to cough up some money) that allows players the chance to spend some money to multiply their already achieved success, but, not allow them to pay to trivialize content nor artificially limit their ability to even play the game they want to be playing.

Let's stop defending and propagating game "features" that serve no purpose other than to extract money from its players and focus on making awesome games that players want to invest their time and money in. League of Legends does an excellent job of that without forcing you to cough up a buck just to play another match on the Fields of Justice. There's only so many cash-grabbing clones with little more than alternate visual styles tacked on established game mechanics that companies can churn out before players are tired of it all and stop buying into the scheme.

Eric Robertson
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Not sure. Gambling has been popular since before Roman times.

Lihim Sidhe
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"This not only increases player satisfaction, it brings all players - paying and not - into the "premium" economy."

I read that several times for it to really sink in. This is such a brilliant idea and it's such a clearly good idea. I honestly would love to add an in depth analysis to this but I just don't want to tarnish it.

I will say all the best restaurants I've been to serve some kind of free appetizer. I always had the thought, "Well damn I already filled up on the freeness of these appetizers. I don't have to spend as much as I thought and if I do, I'm already ahead of the game."

With the key takeaway I go to those restaurants the most. Hence favorite.

BRILLIANT ARTICLE!!!

Brian Schaeflein
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I've played some games where the player is able to earn the "premium" currency without paying for it. In the end, what the player could earn was paltry in comparison to what the player had to pay to buy. The prices in premium currency were so much higher than what a player could earn in a reasonable amount of time, it effectively embittered me toward the idea of paying anything at all.

From the player's perspective, it doesn't seem worth the effort. But when wearing my developer's hat, I'm not sure how to reconcile that issue.

Lihim Sidhe
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@Brian: Those games that embittered you - what if the premium currency was in fact very easy to obtain? That's where P&D differs from most F2P games I've come across and it seems you've come across the same.

In P&D's case premium content is not seen as an unfair advantage because everyone can get the same content within a reasonable amount of time (each player nets about $20 of Magic Stones a month via normal gameplay). "So you want Creature X, the hottest new creature on the block that is awesome in every way but don't have the Stones? Play for a few hours or couple days OR pay right now."

Seems fair to me.

Secondly since it's so easy to earn Magic Stones any purchase a player does make must seem like they are getting a deal. That's where I was going with my restaurant analogy.

Third spending money may entice you to... spend money.

All I can say is the game pulls in a 100M a month. That's ridiculous. If that isn't a sign that this game has some lessons to teach I don't know what does.

Pallav Nawani
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It is not a new idea though. Nor is it particularly effective. Older Facebook games like Castle Age did it. Didn't help them much. Player would focus their gameplay on earning the premium currency and eventually burn out of the daily grind and stop playing altogether.

Brian Schaeflein
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@Lihim Sidhe, it's entirely possible that P&D is different. After I had time to think about it further, I discovered that in the games I previously mentioned, I essentially ended up hoarding the premium currency I earned, never spending it. I guess if items were cheap enough, I might have started spending some of that earned currency. Maybe that would have caused me to pay for more. Maybe not. I don't know. I just know that it has never happened to me yet.

David Gibson
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We have asked GungHo recently and they said 50-60% of ARPPU (around ¥6000/month) is for continue to play. So its not small proportion at all. The company's plan is to cap ARPPU so that big spenders dont end up being the winners in the game...but this results in huge retention...they say over 80% of players are retained after 30 days as a result. An amazing number.

Ramin Shokrizade
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In my research and my models I put caps on the total spending in order to shift the consumption burden away from "whales" and back to the other 98% of players. I think putting such caps actually raises total revenue for the reasons I explain in my Supremacy Goods microeconomic model. If GungHo is coming to the same conclusions then that is a very promising sign.

Benjamin Sipe
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Interesting stats David.

I think people underestimate "continue to play" monetization. Well, on mobile at least. Perhaps they're trying to think too logically about "value" or putting their personal feelings on IAPs into the equation? For instance, I will never play for continued play and I fit in their target market so most others must have a similar thought process. Maybe they're listening to the vocal minorities about their hared towards energy mechanics? Otherwise how are people coming up with their theories on how game's monetization? (BTW I did read the article and still can't find the equation or historic data behind the theories.)

I don't think paying for continued play works as well on desktop F2P but I'll leave that analysis/answering to someone with more experience than me. All I know, is I've seen some impressive monetization stats around continued play on mobile.

Christopher Furniss
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It makes a ton of sense that players would engage with continue to play, even if it seems illogical if you do a side by side analysis of the value of purchases in the game. Humans are pretty terrible at planning for our future, and given the opportunity will usually give in to impulse. This article on procrastination mentions a few studies in relation to this phenomenon. http://youarenotsosmart.com/2010/10/27/procrastination/

Doug Creutz
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I guess I have to bow to Ramin's superior analysis on this one. Just goes to show how 'homo economicus' is a myth - continue to play is an obviously (after about 10 seconds thought) inferior choice to refreshing stamina in the vast majority of cases. I think your point around capping ARPPU driving high retention is key though.

Daniel Thompson
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Sounds to me like a combination of the bemoaned classic F2P monetization strategy combined with genuinely fun mechanics and quality assets.

I see people playing on the train here almost every morning; these gamers seem to be engrossed and having fun. What's more, some of their impressive skills... So impressive! It takes some serious brain power to get the largest combos.

I saw one lady who was pounding out the most mind-blowing combos -- her mind whirring like a powerful computer.


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