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5 Premium Currency Pricing Trends and Tricks used by Mobile Free-To-Play Games
by Wolfgang Graebner on 05/01/14 04:03:00 am   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.

 

Most free-to-play games on mobile sell some sort of premium currency: gems in Clash of Clans, donuts in Simpsons Tapped Out, gold in Game of War and so on. I spent some time analysing how 32 games on the App Store sell their premium currency, and some interesting trends and tricks emerged.

If you like the kind of stuff I write about, you can follow me on my blog allworkallplay.org or twitter @awapblog.

The Games

Before we proceed, meet my data set. The 32 games analyzed are:

8 Ball Pool, Angry Birds Go!, Boom Beach, CastleVille Legends, Clash of Clans, Clumsy Ninja, CSR Racing, Disco Zoo, Dungeon Keeper, Empire, Farm Heroes Saga, Game of War, Hay Day, Hobbit: KoM, Jelly Splash, Juice Cubes, Kingdoms at War, Kingdoms of Camelot, Knights & Dragons, Modern War, Monster World, Moshi Monsters Village, Papa Pear Saga, Pocket Village, Puzzle & Dragons, Real Racing, Royal Revolt 2, Samurai Siege, Simpsons Tapped Out, Smurf's Village, Subway Surfers, Top Eleven.

My method for selecting games was pretty unscientific... just a mix of games I had played, wanted to play, or were in the AppStore top grossing. Perhaps I'll expand on the list some day.

Fancy a deeper look? Click to download my full spreadsheet with all recorded data and graphs.

Trends & Tricks

1) There is not much variety in pricing

This diagram says it best:

A lot of games offer the same 5 price points: £2.99, £6.99, £13.99, £34.99, £69.99. Those are the 5 big bubbles you see in the diagram above.

(That's $4.99, $9.99, $19.99, $49.99, $99.99 for American readers).

The most popular thing to do is to offer those 5 price points exactly with no changes, as is done in Supercell's Boom Beach for example.

Boom Beach Pricing

This exact price progression accounts for 1/5th of all games surveyed.

If you also count price progressions that are within 1 price of the most popular (meaning they can be reached by either adding, modifying or subtracting just 1 price from the progression), you've got over 3/5ths covered.

Extend it again to count price progressions within 2 prices and almost all games are accounted for.

Price Progression Similarities

Very few games deviate from this formula... Moshi Monsters Village and Empire are tied for the most unique price points award, with each offering 4 unique prices that no other game does. It's nice to see someone trying something a little different, it will be interesting to see if their pricing catches on.

2) Players agree on a minimum price, publishers don't

The only price that games seem to disagree on is the minimum to charge.

Popular Price Progressions

I wanted to know: is it worth offering a minimum price cheaper than £2.99? The App Store most popular purchase ranking reveals some interesting information.

1) In 100% of cases where £2.99 is the cheapest price, it is also the most popular purchase.

2) 17 games had both a starting price cheaper than £2.99, as well as a price point at £2.99.

3) For the majority (70%) of those 17 games, £2.99 was still the most popular price point.

The same information visualized:

Most Popular Cheap Purchase

It appears that even if you offer players a minimum price point cheaper than £2.99, chances are they will probably still prefer to buy the £2.99 option. But some questions remain...

a) When £2.99 is the cheapest option, how many sales are lost from players only willing to pay less than £2.99?

b) And how much revenue is gained from players that would have preferred a cheaper option but paid £2.99 anyways because there was no cheaper option?

c) And most importantly, which is greater? A or B?

Unfortunately I don't have enough data to answer it. But it did make me think back to a talk I watched long ago in which a publisher claimed "you'd be surprised how many people who are willing to pay a dollar for something, will also be willing to pay 5 dollars". He goes on to express regret for setting the price too low.

If it was up to me, I would probably start pricing at £2.99 and then lower the price later through special starter pack offers if need be. It's always easier to lower a price than it is to raise it!

3) Buying more is not always a better deal for the player

I assumed that by buying a larger currency pack, I would always get more currency per dollar spent. This is not always the case. The most significant example of this I came across was in Angry Birds Go:

Angry Birds Go UK Prices

Pay 2.5 times as much, but only get 2.1 times as many gems. If you want 2,500 gems, you can save money by buying 2 x 1,200 gems + 1 x 100 gems for a total cost of £29.97 - a whole £5 cheaper than the 2,500 gems priced at £34.99. Those are savings you could use to buy another 300 gems ;)

It's hardly an isolated incident. 70% of the games surveyed do this kind of thing.

Sometimes, you see the same thing happening in the US store.

Angry Birds Go US Prices

Other times I think it has to do with price localization. When something is priced at $4.99 in the US it is typically sold for £2.99 in the UK. But for some reason $9.99 (double 4.99) becomes £6.99 (more than double £2.99) whereas it really should be £5.99. Take Hay Day for example.

Hay Day US vs UK Price Comparison

Not sure how or why this practice originated, but I didn't see any games adjust the premium currency given as a result so sometimes we end up getting less currency per £1 than you would get per $1. :(

4) 'Most popular' doesn't have to mean most popular

As a player, don't trust everything publishers tell you. In only 1 out of 8 games that prominently displayed a "Most Popular" badge next to a currency pack, was that also the actual most popular purchase in the App Store ranking.

Angry Birds Go, the only one to correctly label the "Most Popular" offer:

Angry Birds Go Most Popular Purchase

Does this mean everybody else is lying? I guess if at some point in the past or in a different territory the offer tagged as "Most Popular" was actually most popular, then you could say it's just out of date.

In any case, it wouldn't be in any publisher's best interest because in all 7 cases where the "Most Popular" was mislabeled, a cheaper offer was the most popular and who would want to encourage players to buy a cheaper pack? Apparently only Rovio is honest enough.

5) There's more than 1 way to calculate a bonus

A few games like to tell players exactly how much of a better deal the larger currency packs are. There are different ways of calculating this which can make the discount sound more or less impressive.

Hobbit Bonuses

This first example is from Kabam's Hobbit game.

The lowest amount of gems per £1 is found in the £6.99 pack: 100 / 6.99 = 14.3 currency per £1.

At this exchange rate, for £13.99 you should get 13.99 x 14.3 = 200 currency.

But they give you 240 for £13.99 instead of 200.

240 / 200 = 1.2, thus you are getting 120%, ie 20% more than you should get.

The numbers have been arranged so as to maximize how impressive the bonus sounds while remaining 100% truthful. Not everybody calculates it the same way.

Here's a different example from flare's Royal Revolt 2.

Royal Revolt 2 Bonuses

Like Hobbit, they use the lowest exchange rate which again is from the £6.99 pack.

At that rate, you should get 5,256 currency for £34.99 but instead they give you 7,500.

This is where the method diverges from Hobbit.

The extra amount of currency being given is 7,500 - 5,256 = 2,244.

2,244 / 7,500 = 0.299, so we can say that of the 7,500 currency you are being given 29% for free.

First off, they could easily have rounded 29.9% up to 30%. More significantly, using Hobbit's method you could say that 7,500 / 5,256 = 1.43, therefore it is equally honest to say that you are getting 43% extra.

Another interesting example is Monster World.

Monster World Bonuses

If you try to calculate the bonus using any sane method, it just doesn't make sense. It had me stumped for a little while. Then I checked the US AppStore pricing and it all fell into place.

Monster World US Prices

If you use the US prices, the bonuses make perfect sense using the same method as Hobbit. So it appears that when the prices were localized, the bonuses were not. In reality, the bonuses in the UK AppStore are far less generous than their US counterparts (eg 7% UK instead of 25% US for 100 potions and 70% UK instead of 100% US for 4,000 potions).

Final Words

I hope this information helps anyone working on (or simply curious about) f2p game premium currency pricing. There's certainly a lot more going on with the prices than is obvious at first glance. The more I looked, the more I found.

Still not satisfied? Try my spreadsheet. It's full of extra figures and graphs I didn't consider important enough to single out. And if you find something in the data I missed, let us know!

Premium Currency Spreadsheet

If you like the kind of stuff I write about, check out my blog or follow me on twitter:

www.allworkallplay.org

twitter.com/awapblog

Disclaimer: I compiled the information in this article by playing lots of games and doing some research. To the best of my knowledge, is it accurate and I have triple checked all figures and calculations. Nevertheless, it is always possible that I have made a mistake somewhere or that a game has changed since publication. Use at your own risk, I don't provide any guarantees. Please do get in touch if you find anything amiss.


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Comments


Mitchell Fujino
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Kenneth Blaney
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I think you have unveiled a whole bunch of misleading and outright false advertising in a number of these games ("most popular" and "x% more"). It sort of speaks to the thought and care (or lack there of) that goes into localization for a number of these games.

Tom Hubina
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A lot of the issues are caused by the fact that devs use the same pricing tiers in all countries, so what is most popular in the US is not what is most popular in other territories. Also, the "bonuses" are completely messed up by the non-linear localized pricing (see my other comment).

That said, some of the math some folks are doing isn't very intuitive. Thankfully I don't think that "creative" math is very popular.

Using different Tiers for different regions is complicated by Apple's testing requirements. One possible option would be to normalize the currency awarded to account for the non-linear localized pricing - which is something I've never seen anyone do, but I'm looking into for my own games ;)

Gord Cooper
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It would be interesting to see this research done inclusive of the sales that happen pretty much weekly with all these games. Have you considered going back and trying to calculate what the bonus rewards are for anyone who takes advantage of the routine "20% bonus" type sales that you see on the premium currency/energy refills in these games?

There are definitely ways to meta-game the economies in F2P games, and rather than just providing an overview of the basic mathematics, an in-depth, organized exploration would probably open a lot of doors for developers looking to model a monetization method that works well for their game, especially if it's heavily metrics-driven and takes player patterns within the core systems into account.

A lot of dirty words here, but a reminder that we are living in an ecosystem in which the race to the bottom has been won by the $0.00 price tag, and we still need to keep the lights on somehow.

Tom Hubina
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You touch on the cause of a lot of this weirdness: The localized pricing of the different tiers. The App Store uses pricing tiers which then get localized based on which App Store is being used. In the US, these tiers are perfectly linear (Tier 1 = $0.99, Tier 5 = $4.99, Tier 10 = $9.99, etc) and are exactly what you would expect. However, for some currencies things are really wacky!

It is standard practice to use the same tiers in all countries, but in the UK things are very oddly priced. Tier 1 is £0.69, which would make Tier 5 £3.49 sound about right, but instead it's £2.99! Tier 10 puts things back in like with Tier 1 at £6.99. The net result is that Tier 5 has an built in 15% discount. Tiers 2-9 are all over the place in the UK, but things normalize from Tier 10 and beyond.

If your lowest price point is Tier 5, then it sets the scale in a bad way for the following price points so people buy the Tier 5 because you're better off buying two Tier 5s than 1 Tier 10! This also affects lower Tiers .. Tier 5 is the best deal so even if you provide a lower price point, players are more inclined to purchase the Tier 5 after doing some simple math. All of this leads to a massive bias to purchase the Tier 5 item regardless of what other price points are out there.

This is such a pervasive problem (I've never seen a single game address this issue) I suspect that players in the UK have learned to look for it, further reinforcing the bias.


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