Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
October 20, 2014
arrowPress Releases
October 20, 2014
PR Newswire
View All
View All     Submit Event





If you enjoy reading this site, you might also want to check out these UBM Tech sites:


 
12 Critical Mobile Monetization Concepts (Part 1 of 3)
by Joseph Kim on 08/25/13 09:54:00 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.

 

I initially published this post in my personal blog Quarterview.com. Check it out to learn more mobile gaming techniques, analysis, and industry opinions.

Are you ready to level up your mobile app monetization?

Context:

In October of 2011, an article about how DeNA leads Japan's mobile gaming market included a number of key monetization insights:

  1. High Ass ARPU: Claimed $12 ARPU (average revenue per user) - this was a strong indicator that there was a meaningful way that DeNA was designing monetization in their games not found outside of Japan
  2. User Psychology: Revealed their concept of user stress ("stress and release") and the role of user frustration to monetization
  3. User Clusters: Advocated different treatment for different "play styles." Third party analytics companies such as Playnomics and Playhaven only recently implemented segmentation and targeting by user types... but this can be taken much further.

My point is that this article and other similar reports about Japanese mobile games should have alerted us that a whole science behind game monetization existed that we, outside of Japan, were very unfamiliar with. Further:

  • Localization Required: This is not to say that the same mobile games that are earning $12 ARPU in Japan will do so here, but that I posit that the same tricks can be applied to games for the U.S. market with the right presentation and customization (e.g., see the changes to GREE's Modern War in February of this year that allegedly more than doubled their ARPDAU)
  • Non-Japanese Suck at Card Battle (for now...): Also, I contend that there is a lot of nuance and complexity in the design of Japanese games (e.g., card battle that comprises the majority of revenue in Japan's mobile market) that those outside of Japan have yet to master.

Example Mobage (DeNA) Card Battle Games in Japan (Gundam Masters, Final Fantasy Brigade, and Sengoku Collection):

denacardbattlegames

In fact, Kenji Kobayashi who was interviewed for the article specifically calls out Zynga for not really knowing how to do monetization well.

I think that Zynga has not really researched monetization. I think that people who don't know much about the Japanese market just dismiss those users as crazy, but that's not the case. You really need to research thoroughly at what time monetization becomes the most fun for your users.

- Kenji Kobayashi, Management Director at DeNA

It's no accident that the highest monetizing game in the world right now is from Japan: Gungho's Puzzles & Dragon that reportedly generates $4.9M per day in revenue.

So what are we missing and how can we catch up? I can't claim to know all of the secrets but I'd like to try to help you get on the right track with this blog post series (to be separated into 3 parts).

Let's go... :-)

12 Key Mobile Monetization Concepts:

This series of blog posts will discuss 12 monetization concepts that can help you design monetization into your mobile application better. These concepts have been framed from the perspective of a mobile game but I believe many of these concepts can be applied to any mobile application.

Further, I have divided up the 12 concepts into 3 levels of mastery to help organize the blog topic content into the associated 3 blog post parts. I will write about 1 mastery level per post.

The 12 Critical Monetization Concepts by Mastery Level:

12 Monetization Concepts

#1. Mechanics Design

A mobile game's monetization mechanics should be considered from the very beginning. Further, there should be a clear idea of what the monetization mechanics in the game are and at least a strong hypothesis of how well the mechanics will monetize.

Key Question: Based on the type of game (or app) you are developing, do you believe the key monetizing mechanics will monetize enough to be successful?

  1. What is the game/app type?
    • Games with high retention (e.g. Subway Surfers) or viral (e.g., Candy Crush Saga) don't need to have as high of a monetizing capacity as a hard core RPG (e.g., Rage of Bahamut) but obviously needs to be competitive.
  2. Can you win?
    • For the specific game/app type, you need to have confidence that the monetization mechanics used can beat competitive games in the same category and overall (top 100 grossing)

A useful tool to analyze this is an ARPDAU contribution table which I have written about: here.

He who knows when he can fight and when he cannot will be victorious.

- Sun Tzu

sun tzu

The point of this concept is to make clear from the very beginning whether your game even has a chance at success given that the mobile gaming space is one of the most intensely competitive markets in the world.

#2. Engagement over Monetization

With this concept, a game needs to always prioritize engagement and user retention over monetization. In this view, you must be able to get a user hooked into the game and repeatedly playing the game before you can easily monetize them.

Just as drug dealers give free samples to hook users before making them pay, engagement must be established prior to monetization.

drugs1

However, I do have two reasons for sort of hating this concept: 1. This concept has been adopted by the usual industry conference speakers and other "pundits" and repeated ad nauseum and 2. Too many mobile game developers use this as an excuse not to carefully think through game monetization and rationalize poor game performance.

In using this concept, your mobile game launch strategy should carefully stage the implementation and execution of various monetization features carefully while prioritizing engagement and retention. Hence, higher risk monetization features or events should be gradually introduced and engagement/retention features implemented first.

Monetization and Retention are the Yin and Yang of LTV (life time economic value of a user) but that's not to say that one doesn't come before the other.

#3. Shop Volume & Monetization Capacity

It's amazing how some games do as much as possible to not take your money. Once your shop has been designed, try to perform the following exercise:

Go into the shop and purposefully find ways of spending money.

  • How much are you able to spend?
  • At what points in the game can you continue to spend?

"Shop volume" speaks to the potential for your shop to monetize users based on the breadth (types) and depth (number, repeatability, and quality) of products in the shop.

  • Breadth: There should be an interesting mix of types of products and categories in the shop
  • Depth: In each shop category there should be a good mix of soft and hard currency items. Further, there should be a number of items that users really want to buy at every stage of user progression (e.g., by level, etc.)

Shop Volume

How big is your app's Shop Volume?

Note: Even if the shop only sells one type of item or even one item, so long as that same item can be monetized a lot (or even better infinitely) then Shop Volume should be considered high.

An associated concept with Shop Volume is the concept of "Monetization Capacity". This refers to the ability to continuously sell more hard currency items to the user without materially disrupting the game balance or economy. I believe the usual Japanese mobile game company suspects refer to this as "Unlimited Monetization Potential" and is a key characteristic of card battle games using Gacha Fusion.

Screen Shot 2013-08-15 at 2.51.20 PM

In the above diagram, you should be able to continue to sell an unlimited amount of hard currency items while maintaining a power gap within acceptable game levels. Game balancing is outside the scope of this article but does impact monetization in that without proper game balance, monetization limits will manifest. Power gap is maintained by various methods such as: 1. logarithmic power growth, 2. multiple upgradable units (e.g., card battle decks with multiple upgrade paths required), 3. user power matching in PVP, etc.

An optimal power gap level is one in which you maximize monetization while minimizing user disengagement (and especially rage quitting which is then difficult to do user re-acquisition for). Acceptable power gap levels are typically defined by an operations or monetization group to set KPIs of user disengagement.

#4. User Flow

User Flow refers to a user's activity path within a game. The core idea of this concept is to embed monetization points within a user's set of activities. Whether within the core loop or whatever other activities the user engages in, you should design monetization calls to action where the user actually goes in app.

The point is that we cannot just rely on the user to tap within shop to monetize the user.

See the examples below:

Example #1: Candy Crush Saga (Core Loop Flow Pre-game Boost)

Candy Crush Saga User Flow

Here, the King.com guys built a monetization point directly within the core loop prior to starting any game.

Example #2:  Mino Monsters (Character Profile Flow Upgrade Option)

Mino Monsters User Flow

As users browse their character they are presented with upgrade options for hard currency.

Example #3: Final Fantasy Air Brigade (Loot Drop Conversion in PVE Flow)

FFAB User Flow

In this example, users are presented with a monetization mechanic that randomly occurs within the PVE flow. Users are presented with the opportunity to guarantee a loot drop by paying hard currency for a special feed (in this case the Vomp Carrots which are purchased via hard currency).

In summary, as all three of the examples show, we must intercept the user within their User Flow to give the user as many opportunities to monetize as possible.

Conclusion

In conclusion (for now), I hope you have now mastered the first level of mobile monetization mastery.

Prepare for gaining an additional level of mobile monetization mastery upon my next blog post. :-)

Until then...

ffab level up


Related Jobs

Filament Games LLC
Filament Games LLC — Madison, Wisconsin, United States
[10.20.14]

Quality Assurance Associate
Filament Games LLC
Filament Games LLC — Madison, Wisconsin, United States
[10.20.14]

Game Engineer II
Filament Games LLC
Filament Games LLC — Madison, Wisconsin, United States
[10.20.14]

Game Engineer I
InnoGames GmbH
InnoGames GmbH — Hamburg, Germany
[10.20.14]

Team Lead Online Marketing - TV (m/f)






Comments


Harry Styles
profile image
Monetization is surely a great topic among developers, but when it comes to the point of view of gamers the story is a whole lot different I’ll say. There are great titles out there that are still managing to get downloads without all this money making business! Ninja Barbecue Party https://play.google.com/store/apps/details?id=fr.virgoplay.application.ninja_bbq_party for example is a fun slicer title without any in-app purchase and it is doing great for as newly launched.

Joseph Kim
profile image
Harry, Ninja BBQ Party isn't even ranked in the top 500 free or grossing or even 1K in most countries. If that's "doing great" then no need to learn the concepts in this blog post.

If you want to take the craft of mobile game design and development seriously you need to know monetization. There's a place for hobbyists and a place for those who want or need to make a living in the mobile games space.

I'm a huge proponent of hobbyist game makers who want to just make a fun game out of love for games without the need to get wide distribution or to make money on their game. This article is not for those people.

Curtiss Murphy
profile image
Everytime I read one of these articles, I get into an argument with myself. One side says, 'Yes, we gotta eat, so its okay to use psych to monetize', and the other says, 'Drug dealers and casino's say the same thing!'

I accept that free is the new reality (see Chris Anderson's book), and yet, I feel strongly that skinner-box & addictive psychological manipulation is not the best our industry has to offer. Consider the example of Candy Crush. It intentionally addicts the player by appearing to be a skill-based game, and slowly over time, migrates into an Ante based pay-to-progress experience (see Ramin's articles).

Perhaps it's a spectrum, where on one side sits the purchase of permanent content (ie levels, features, etc) and on the other sits consumable content (energy/time/one-time-use). Each of us has to decide where they want to be.

Robert Crouch
profile image
Games are all psychological manipulation.

It's just prior to the era of microtransactions and free-to-play games, it was bundled differently. Games still wanted to hook you, cause you stress and excitement. The difference is they did that to get you to buy the game, or the sequel, or tell your friends.

Now it's meted out in smaller doses in order to get you to pay again and again.

The difference in my experience is that those people who do end up paying don't want to tell their friends, and they feel ashamed or at least defensive of the fact that they're paying to continue playing a game.

It brings up the question, "what are you making the game for?". Some people want to bring pleasure to people, or share pleasurable things that they remember, so they want to make games. Other people want to make money, so they don't mind not only not bringing pleasure to their audience, but making them suffer in order to maximize that.

In reality, nobody and no business can really be fully on one side of the spectrum or the other. I don't like articles like this so much simply because it tells the story entirely from the money side. The reality is none of the successful games come entirely from the money side, they have a reasonable dose of the pleasure side in them as well.

Personally, I'm morally against anything that's attempting to cause someone to do something they don't want to, something that they will regret. That means letting the player attribute some value to the purchase. Take League of Legends for example. Not a mobile game but a successful one. They sell items that players appreciate, mostly cosmetic, and they present their company as one that players want to support. I have spent money in that store and never felt ashamed about it. I want to show off the things that I've bought, and I buy them because I enjoy the game, the things I buy look nice, and I want to support the company.

I guess you can use psych to get me to spend money, as long as you use the same tricks to make me happy to show off that I spent the money first. Don't make me feel like a dirty addicted candy-fiend.

Evtim Trenkov
profile image
If you don`t like a game, the smartest thing you can do is drop it. If you don`t drop it - you are weak. So whats the difference between all consumer product companies, hardware companies, auto manufacturers and f2p game developers - Nothing. At least fundamentally. You pay to use/acquire a product, you need or at least you believe you need. If you like it - you are paying for it. If you don`t - noone is poiting a gun at your head.
A business must protect their investment. Otherwise its not a business. Now, about the techniques they use to do it - still not proven to be illegal... Whats the point of hating then?

Joseph Kim
profile image
Hi Curtiss, thanks for the comment.

So a critical point that may not be coming across clearly is that increasing game monetization doesn't actually require doing something evil.

In fact, most of the monetization concepts actually make the game better and the user experience better (as well as providing a way for game developers to support themselves).

There is a picture of a drug dealer in this post but the point of that is to say that the game actually needs to be compelling enough and engaging enough to the user before the designer can monetize. This burden means that the picture you paint of a poor user being manipulated by evil game makers is not as true to reality as a poor developer who must risk making a great game and providing a lot of free entertainment to users with the hope that they can somehow monetize the users.

One other important point that you should understand is that, unfortunately, in the mobile app space, discovery and distribution are all part of the same platform. The platform of which happens to sell discovery on an auction system. Think about this for a moment...

This is not true for music (although Apple hasn't figured out the difference yet for apps).

The implication of this is that with no monetization, your game will not get distribution (or you are at Apple/Google's mercy to feature - and good luck with that...).

luo brent
profile image
where is P2&P3?


none
 
Comment: