Category Archives: Monetization

The Power of Relativity

This article was originally published in Game Developer Magazine. It was the seventh in a series of business columns that I am writing for GDM.

One of the most frustrating things a game developer will ever hear is “that [PERCEIVED GENRE] game isn’t worth [PRICE]—I can get [OTHER GAME] for [LOWER PRICE].”

It’s frustrating for a whole bunch of reasons. Your game might not be very similar to the games to which it is being compared, or might offer more content or replayability. Heck, you might simply think your game is “better” and deserves a higher price. But it doesn’t matter. The comparisons are being made and now you’re getting 2-star reviews calling your game good but your company “greedy.”

If that sounds familiar, congratulations: You are part of the very large and growing club of developers who underestimated the power of relativity. No, not E=MC2. I’m talking about the fundamental human tendency to compare everything in our lives to something else we’re familiar with. An organic apple seems ludicrously overpriced to you at $1.99 because conventional apples sell for $0.79, but that same apple would have seemed cheap if your grocery store only carried the organic variety and if organic mangos appeared nearby for $5.99 each. It’s all relative.

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Your First F2P Game: Where You Will Go Wrong

A video of my 2012 Casual Connect lecture is now freely available online. TY to Casual Connect for sharing it!

The Magic of F2P

No-More-Pirates.jpg

This article was originally published in Game Developer Magazine. It was the fifth in a series of business columns that I am writing for GDM.

The first successful f2p games — aka “games whose primary revenue source were in-game purchases” — hit the market over a decade ago. Now they’re everywhere. They account for 8 of the top 10 grossing games on iOS as I write this. Rumor has it that all the major consoles will support f2p games in the next generation. Even our industry’s most prominent, respected developers (i.e. Popcap, Valve, etc) have begun to embrace the model.

And yet there are still many game developers in the West who have mixed feelings about f2p, worrying that it is “evil” or that it perverts gameplay. But f2p is just a tool, and like any other powerful tool it can be used to create beautiful things or it can be used to create ugly things.

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Bucking Convention with RotMG

RotMG

This article was originally published in Game Developer Magazine. It was the third in a series of business columns that I am writing for GDM.

What would the typical publishing executive do if someone came to them and said, “We’ve taken open source, 8-bit art and created a f2p, nethack-inspired MMO with permadeath. You can attain the maximum character level in just 30 minutes of play. The game currently has no means of generating revenue and can only accommodate 60 concurrent players per server. Will you work with us on it?”

That’s essentially the question posed to Spry Fox one year ago by Alex and Rob, co-creators of Wild Shadow Studios, when they presented us with an early build of Realm of the Mad God (RotMG). And I can guess what others might have said to them, because when we subsequently described the project to contacts of ours, the reaction was inevitably one of skepticism. Permadeath? In 2011? How the heck are you going to retain users? And surely you mean 600 concurrent players per server, not 60?!

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Battlefield Heroes: the long road to profitability

When I posted debating F2P monetization back in August, it attracted quite a lot of attention. In the post, I argued that most F2P games cannot rely on purely aesthetic monetization features — not enough consumers are willing to pay for that alone.

Some folks were grateful for my post. Some folks were furious because they felt that I was advocating for the sale of items that “make a game less fair.” (I had done nothing of the sort, but it’s no surprise that the charge was leveled at me.) However you feel about it, here’s another proof point worth paying attention to. EA has been kind enough to share some details about the profitability of Battlefield Heroes before and after its development team resorted to selling items that impact gameplay.

I highly recommend reading this article, especially if you’re still convinced that Western gamers will reject “aggressively” monetized F2P games.

Who is a bad customer?

For a long while now, the video game industry has had a very simplistic definition of a “good customer” and a “bad customer.” A good customer is someone who pays you $60 for your game (and better yet, pre-orders it.) A bad customer is someone who buys a used copy of your game or worse, pirates it. The problem is, this worldview ignores a variety of important factors and doesn’t translate very well to the digital markets that most indies are focused on.

Tell me which of these people is the best customer:

  • Customer A: pays 99 cents for a copy of your game immediately after launch, gives it a 1-star rating for some trivial reason and deletes it forever.
  • Customer B: pays 99 cents for a copy of your game, gives it a 5-star rating and even tweets regularly about it, but is such a toxic presence in the forums and/or in-game that she drives other customers away.
  • Customer C: pays 99 cents for a copy of your game and enjoys it, but never rates it and does nothing to promote it.
  • Customer D: pirates your game and regularly tweets about how awesome it is to her hundreds of followers. She also eagerly and politely answers the questions of newbies who visit your forums and happily beta tests your new games.

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The Business of “Steambirds: Survival”

Today we launched Steambirds: Survival (SB:S), the first true sequel to the original Steambirds. It’s essentially “Steambirds meets ‘Horde Mode’ from Gears of War” — your goal is to fight off ever-growing waves of enemies for as long as you can manage. Aside from this central conceit, the key differences between SB:S and the original SB are:

  • In SB:S, you can choose from 24 planes, all of which need to be unlocked, and nearly all of which have very distinct characteristics which heavily impact your play style.
  • In SB:S, when enemies are shot down, they leave a collectible powerup where they crash. Judiciously deciding when to collect these (and how to use them) is key to your survival.
  • In SB:S, there are microtransactions. Seven of the twenty-four planes in the game can only be unlocked with cash. One of the twenty-four planes is unlocked for free, if you create an account and sign up for our newsletter.

Monetization headaches

Adding microtransactions to SB:S proved to be non-trivial. To understand why, you need to understand our distribution strategy. We’re excited about Flash because it opens up such a huge audience to our games. Part of that huge audience comes from the hundreds of Flash gaming portals who will happily host and promote your game for free, without any negotiation or formal arrangement needed, in exchange for the opportunity to monetize the game via their own site’s advertising system. Normally, all you get in return (aside from exposure) is a prominent link (or links) in the game to other websites of your choosing. But we wanted more than that – we wanted to monetize content inside the game, no matter where it was hosted. That turned out to be a huge pain in the butt.

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Debating F2P Monetization

One of the things holding back the evolution of F2P gaming in the West is the understandable discomfort that many Western designers feel about the “aggressive” monetization strategies employed by Asian game developers. For the purposes of this post, I’m defining “aggressive” as the sale of items that impact gameplay and/or speed up a player’s progress, in addition to other, less controversial premium features like aesthetic items and account personalization.

To many developers, the idea of designing a game to be anything other than “fun” is heretical (they may also fear the possibility of offending sensitive players.) Consequently, they either ignore the F2P business model or attempt to create games with relatively tame revenue-generating systems; for example, focusing on the sale of items with aesthetic benefit only, or roping off a portion of the game and hoping enough players voluntarily pay for access.

The irony of these fears should not be lost on anyone who was designing games thirty years ago. Classic arcade titles were explicitly designed to eat quarters over brief, regular intervals, and people of all ages still put up with it. By comparison, modern F2P games are positively generous to players!

All this is why, up until the social game explosion, we heard of so few financially-successful F2P games in the West. The social gaming companies get a lot of credit for leveraging Facebook and for rediscovering the market potential of asynchronous gameplay, but they deserve equally as much credit for realizing that people in the West are not culturally predisposed to hating any game with an aggressive monetization model. As with everything in life, context matters.

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