A recent DeltaDNA report pointed out that in the past three years, the monetization structure of F2P games has been changing (*). The influence of “whales” is trending down. According to DeltaDNA, paying players in North America reached 4.02% in 2018, increasing 1/3 compared to last year; Europe reached 2.43% and increased 1/5 compared to last year.
(Source: DeltaDNA 2018)
Also changes are happening in monetization of game genres. The data shows that ARPDAU of strategy games in 2018 almost doubled compared to 2016 and reached $0.21. Casino games and puzzle games also grow by 41.66% and 25%. Action game, however, trends down since 2016.
(Source: DeltaDNA 2018)
This report actually cheers me up as it reveals a trend of healthier monetization structure. For quite a long time, revenue from whales has been the mainstay of F2P business model. It was working effectively since the unpaid-users created a community for whales, so that whales can interact with real people. That gave whales feeling of superiority or sense of contribution to the community by spending in the game, and to some extent encouraged them to pay even more. Of course there are other reasons contributing to this monetization structure, but at the end of the day, whales helped to support the F2P business model for the game industry. Game companies get a decent revenue from the whales, so that 90% of the players can play even not paying a penny.
Everything looks good, but is it? In my previous article, I mentioned that a healthy game should have a good combination of paid-users and unpaid-users (**).
Of course whales are the major contributor to a game being profitable, but developers should never blindly chase the illusion of high percentage of whales in their game. Whales exist on top of the community consist major of the unpaid-users and the minnows. Note that whales usually spent less time in a game than unpaid-users or minnows, who really know the game best and build the foundation of the game user base. Without a significant amount of these players, you won’t have any whales in your game. This is especially true in MMO.
Also we need to keep in mind that “Time Spent” is another key metric to gauge if a game is successful or not.
CEO of DeltaDNA has similar opinion with me, he said “The results of the study are fascinating as they highlight a major shift in how F2P games monetize. They reveal a trend towards a more balanced monetization model, which is lot healthier for developers as it moves away from having to rely on a small number of whales to deliver the bulk of the revenue.
As spending in F2P games slowly becomes less stigmatized and more developers offer great premium experiences rather than relying on blockers, pinch points and free-to-start type models, I believe this trend will only continue.”
Glad that we can witness this trend that F2P games monetization model moving towards a healthier future. We can see that pay-to-win IAP rarely exists in games nowadays, and players are not obsessed to spend in any particular game in order to continue the game progress. Spending in the game becomes more like a sign that players really like the game and are willing to spend a few bucks to make their experience even more enjoyable. Hopefully, this trend will continue and no one will see playing games as a bad habit anymore.
Seasun is a leading Chinese online games publisher focused on creating high quality games/game engines that push the boundaries of player experience in action entertainment. The company is also involved in small-medium sized investments for game studios worldwide. We have recently started up our U.S. studio in Redwood City, CA to create top quality content for the western market.
Seasun has shipped many successful titles, including the popular MMORPG series JX (http://jx3.xoyo.com/), the MMOARPG titles First Myth (http://fs.xoyo.com/index1) and CQ (http://cq.xoyo.com/), along with our FPS MAT (http://xd.xoyo.com/). The “JX” series has grossed more than $250 million and has achieved a daily active user count of 3.3 million. We are currently building a special team of highly talented people to create the technology for our next-generation MMOARPG at this studio.
Founded in 2015 and based in San Francisco’s East Bay, Magic Fuel Games is focusing on developing games that capture the imagination of players. With a core team of industry veterans, bringing decades of development and AAA experience from games that have captivated gamers around the world. The company's Series A was funded by Seasun Inc in February 2016 and has been growing its team and developing its 1st product since then.
Kingsoft, Seasun’s parent company, is publicly traded in the Hong Kong Stock Exchange (SEHK: 3888) with market value of 3.8 billion USD. Kingsoft has created 3 other subsidiaries alongside Seasun: Cheetah Mobile (NYSE: CMCM), WPS Office, and Kingsoft Cloud Service. Kingsoft has over 4,000 employees worldwide.