02 August 2016

5 Tips to help you improve game-as-a-service monetization

Posted by Moonlit Wang, Partner Development Manager at Google Play Games, & Tammy Levy, Director of Product for Mobile at Kongregate

In today’s world of game-as-a-service on mobile, the lifetime value of a player is a lot more complex, where revenue is now the sum of many micro transactions instead of a single purchase with traditional console games.

Of course you don’t need a sophisticated statistical model to understand that the more time a player invests in your game, and the more money they spend, the greater their LTV. But how can you design and improve monetization as a mobile game developer? Here are 5 tips to help you improve game-as-a-service monetization, with best practice examples from mobile games publisher, Kongregate:

1. Track player behavior metrics that have a strong and positive correlation with LTV

  • D1, D7, D30 retention indicates how well a casual player can be converted into a committed fan.
  • Session length and frequency measures user engagement and how fun your game is.
  • Completion rate at important milestones can measure and pinpoint churn.
  • Buyer and repeated buyer conversion, represents your most valuable user segment.

2. Optimize for long-term engagement and delight your best players

Retention is the first metric that can distinguish great games from mediocre ones. Games with higher retention rates throughout the user’ lifecycle, monetize better consistently. Retention is king, and more importantly, long-term retention should be prioritized. Therefore, when designing your game, aim to create a sophisticated and engaging experience to delight your most committed fans.

[This chart shows the retention of top games / apps over time]
  • When considering long term retention, focus on achieving a strong D30, but also look beyond the first 30 days. Measure long term retention by assessing the following rates: D30 to D60, D30 to D90, and D30 to D180. The higher the rate, the stickier your game is in the long term, which will increase your LTV.
  • Players are willing to pay a fixed amount of money per hour of “fun”, so think about updates when designing your game, to make the content rich and fun for those who will play at very high levels and spend the most time within your game, don’t gate your players or hinder their in-game progression.
  • Use the Google Play Games Services - Funnel Report to help you track different milestone completion rates in your games, so you can identify drop off points and reduce churn
3. Increase buyer conversion through targeted offers

First-time buyer conversion is the most important as player churn rate drops significantly after the first purchase, but stays relatively flat regardless of the amount spent. Also, past purchase behavior is the best predictor of future purchases. Find your first-time and repeated buyer conversion rate directly in the Developer Console.

  • Use A/B testing to find the price that will maximize your total revenue. Different people have different willingness to pay for a given product and the tradeoff between price and quantity is different for different products, so don’t decrease prices blindly.
  • Tailor your in-game experience as well as in-app purchase offers based on the player’s predicted probability to spend using the Player Stats API, which predicts players churn and spend.

For example, in Kongregate’s game Spellstone, testing two pricing points for a promotion called Shard Bot, which provides players with a daily “drip” of Shards (the premium currency) for 30 days, showed players had a much stronger preference for the higher priced pack. The first pack, Shard Bot, priced at $4, granted players 5 daily shards, and the second pack, the Super Shard Bot, was priced at $8 and granted players 10 daily shards.

[Two week test results showing preference for the more expensive pack, which also generated more revenue]

Kongregate decided to keep the higher priced Super Shard Bot in the store, although both packs resulted in very similar retention rates:

4. As well as what monetization features to implement, take into consideration why, when and how to do so

  • Why: “Buyer intent” is most important. Any item with a price tag should serve to enhance your players in-game experience. For example, a new map, a new power, something exciting and additional to the free experience. Don’t gate your players with a purchase-only item as happy users means more time spent with your game, which will lead to higher revenue. Educate users by gifting some free premium goods and currency during the tutorial, and let users experience the benefit first.
  • When: Time offers based on when users may need it. If your IAP is to continue gameplay after timeout, then you should surface it right when the timer ends. If your IAP is to offer premium equipment, then you should surface it when users gear up their characters. The offer should be contextually relevant, such that the content should cater to the player’s current status and needs in-game.

    In particular, Starter Packs or New Buyer Promos need to be well timed. Players need to understand the value and importance of all the items before they are shown the promotion. If surfaced too early, players will not feel compelled to purchase. If surfaced too late, the offer will not be compelling enough. The Starter Pack should appear within 3 to 5 sessions since install, depending on your game. Additionally, limiting its availability to 3 to 5 days will urge players to make a quicker purchase decision.

    For example, BattleHand’s starter pack is surfaced around the 4th session, it is available for 36hrs and contains the following items to aid players in all areas of the game:

  • Powerful cards that have an immediate effect in battle
  • High rarity upgrade materials to upgrade your card deck
  • A generous amount of soft currency that can be used in all areas of the game
  • A generous amount of hard currency so players can purchase premium store items
  • Rare upgrade materials for Heroes
[Example starter pack offer in Battle Hands]
Thanks to the strength of the promotion over 50% of players choose the Starter Pack instead of the regular gems offerings:
  • How: There are many ways you can implement premium content and goods in your game, such as power-ups, characters, equipment, maps, hints, chapters etc. The two most impactful monetization designs are:
      Gacha - There are many ways to design, present and balance gacha but the key is to have randomized rewards, which allows you to sell extremely powerful items that players want without having to charge really high prices per purchase.
[Example of randomized rewards in Raid Brigade’s boxes]
      LiveOps - Limited time content on a regular cadence will also create really compelling opportunities for the players to both engage further with the game and invest in the game. For instance, Adventure Capitalist has been releasing regular limited themed time events with their spin on the permanent content, their own progression, achievements and IAP promotions.
[Example timed event for Adventure Capitalist]

Through this initiative, the game has seen regular increases in both engagement and revenue during event times without affecting the non-event periods:

[Timed events drastically increase engagement and revenue without lowering the baseline average over time]

5. Take into account local prices and pricing models

Just like different people have different willingness-to-pay, different markets have different purchasing powers.

    • Test what price points make sense for local consumers in each major market. Don’t just apply an umbrella discount, find the price points that maximize total revenue.
    • Consider charm pricing but remember it doesn’t work everywhere. For example, in the United States, prices always end in $x.99, but that’s not the case in Japan and Korea, where rounded numbers are used. Pricing in accordance to the local norm signals to the customers that you care and designed the game with them in mind. The Google Developer Console now automatically applies local pricing conventions of each currency for you.

Check out the Android Developer Story from games developer, Divmob, who improved their game’s monetization threefold simply by adopting sub-dollar pricing strategies. Also, learn more best practices about building for billions to get more tips on monetization.

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