28 January 2015

Game Monetization – How to Build a Smart Game Economy?

Game Monetization – How to Build a Smart Game Economy?Objective: Building an optimal game monetization mechanism to maximize revenue.Challenge: Where do I start…?So, how do we go about it? This topic actually has quite a few aspects to it, including building a smart game economy to begin with, applying an enticing value exchange, and making your monetization options accessible within the game, each a chapter on it’s own…

Let’s start with a bit of an intro to “Game Economy”:

“A game economy is a virtual economy that configures all game loops in the game (Currencies, time loops, XP, levels, pricing, etc.…). Different game economies will structure different player behavior within the same game”.

Now let’s review a few do’s and don’ts:

  1. You have to have a game economy

All games need an economy. The game’s economy is the heart of the game’s reward structure, and is imperative to its success. Our focus will be on F2P games, which are based on micro transactions, and therefore often introduce a dual currency mechanism, thus allowing the user to further himself within the game using both real-money currency (AKA “Hard Currency”), as well as virtual currency (AKA “Soft Currency”).

  1. Reel them in first, monetize second

Let your users experience the game, get them engaged with and hooked on the game, and then, and only then, gently introduce them to the different monetization options… never start picking their pockets right from the get-go… Moreover – focus on user LTV! Identify those stages within your game where the “tension” created is at its best – not too early, as you will ‘dis-convert’, not too late – as you will ‘miss-convert’ – you need to get it just right… When you reach the perfect moment when a user is immersed within the game so he will be willing to pay or be monetized to get ahead in the game, yet is still able to play but will have a harder time without the benefits – then you’ve hit gold…!

  1. Give the user more than one currency, and multiple sources!

As mentioned above, most F2P games are based on a dual currency mechanism, and for good reason… if we look into it, the majority of the top revenue generating games use more than one currency.

Using only one type of currency limits the user’s spend flexibility. If you are using only hard currency in your game, you are literally forcing the user to pay out of pocket for any advantage he wishes to obtain for himself within the game, yanking him out of fantasy land, and causing him to calculate his steps, time spent and actions within your game. Add to that the fact that the % of users willing to spend out-of-pocket is only about 2%-7% on a good day… well, you’re pretty much setting yourself up for failure…

Instead try implementing more than one possibility to monetize your game, and enable your users with more than one type of currency to spend. Your paying users will continue paying, and allow them to obtain a significant advantage by doing so, but the remainder ~95% are a monetization force to be reckoned with, and can make you heaps of money, if you let’m.

When you implement both hard and soft currencies, and multiple sources (through both in-game achievements, user actions and in-game ads), you not only make your mobile game more interesting to play, but it also provides your users with more ways to spend time in your store.

  1. Balance your sources and your sinks

An imperative key to building an enticing game economy is balance.  You must ensure your sources (a user’s buy + earn) are in optimum balance with your sinks (a user’s spend), and that the game’s buy/earn ratio is at its optimum as well.

  1. Focus on THEIR EARNINGS, not on YOUR SALES.

The more options users have to gain in-game currency – the better.

Let the user earn, and make it fun and effective to spend.

Earning a sum is a pleasure on its own, and watching your in-game currency pile up is rather gratifying – so give your player the ability to enjoy it. However – that, on its own, gets old pretty fast – and you have to give your users goals they wish to achieve, and for which they are accumulating funds… As for spending (be it game currency or real money), it should be intuitive and inviting to access, fun and effective, so that the player feels it makes his gameplay better.

Don’t get me wrong – what you sell is a very important question – but the ways in which players can earn currency in your game’s virtual economy – is even more imperative. Once you’ve cracked the code for using currency collection as a way to increase engagement and loyalty – you’re half way there. Now add personalized gain options (in-game, via smart ads) per each user’s preferences, interest and mindset – and you are guaranteed to double your user LTV.

  1. Cause giving is receiving…

A great way to increase monetization of non-paying players is by implementing appealing value exchange advertising within your game. That may sound simple, but implementing a value exchange ad mechanism that will enhance your users’ gameplay, contribute to their gaming experience and not only increase monetization but actually prolong their game session and increase user LTV – well, that it a bit more tricky…

Tricky, but doable.

If you want to learn more about innovative in-game value exchange advertising solutions – tune in next week.

  1. Currency Balance!

If your game oh so generously rewards the user with soft currency, but enables him with spend options of mostly hard currency – well, that just ain’t right… it is imperative to ensure that all currencies are of value to the user, and can be used in a manner and frequency that add value to his/her gameplay – throughout ALL levels of the game.

  1. Get the user ‘collection hungry’ and ‘spend savvy’– start him off with a positive balance

Although in many other aspects of our lives ‘starting point = zero’, for in-game economies, well, this isn’t quite the best approach… Truth Is, that best practice is to get your user ‘collection hungry’, i.e start him/her off with a little, and make him/her want to earn a lot right from the get-go. Another crutial aspect, just as important – make your users ‘spend savvy’, meaning make sure they are well informed of what value they can buy (be it via their game currency, through ads and/or real-world money), how to buy it, and how much fun it is to further themselves in the game through buying it.

  1. “Diamonds are forever” – well, not in game-world…

Virtual goods are the engine that runs your game economy. A user must want to buy, buy more, and buy again… If you provide him with goods that never expire, well, he might buy, once, but he has no reason to buy more, and definitely not buy again… Virtual goods must be of evident value, and linked either to consumption, or expiration over time – thus driving the user to purchase them (be it via game currency, through ads, and/or via real-world money) – time and time again.

  1. You’ve got to invest in a dynamic and enticing store – If you play your cards right, your store will be visited by your players often, and it too has to deliver a great, game-enhancing experience. A few pointers:
    1. Dynamic: offered store items need to progress as the game progresses. Add new items from time to time
    2. Selective: Different items need to be offered to different players at different points of the game flow. Don’t make all items available to all players at all times.
  2. Accessibility! Accessibility! Accessibility!

Give your users multiple access options to the different offers!

Let’s focus on the ~95% of non-paying players for a minute. Assuming you have acknowledged this is an audience you do wish to monetize, and you have provided them with means to both earn (vial both smartly integrated in-game ads and via game achievement) as well as to spend – there is one huge mistake you’d want to avoid… Normally – where would you place your offers? in the game’s shop? If you were a player who had no intention to pay – would you go into the shop?

The non-paying audience is comprised of 2 types of players:

  1. those who don’t wish to pay, yet are aware of a game’s alternative sources and sinks and will actively try to locate and engage with them.
  2. those who are absolutely clueless… will never pay out of pocket, will never seek alternatives, will never visit your game’s shop, and will never obtain visibility of your offers…

Integrate offers both in-shop as well as out of shop, make it clear, intuitive, fun and accessible, and watch your revenues grow faster than you thought possible…


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Cause giving is receiving… how to build the optimal value exchange ad mechanism