• Announcements

    • khawk

      Download the Game Design and Indie Game Marketing Freebook   07/19/17

      GameDev.net and CRC Press have teamed up to bring a free ebook of content curated from top titles published by CRC Press. The freebook, Practices of Game Design & Indie Game Marketing, includes chapters from The Art of Game Design: A Book of Lenses, A Practical Guide to Indie Game Marketing, and An Architectural Approach to Level Design. The GameDev.net FreeBook is relevant to game designers, developers, and those interested in learning more about the challenges in game development. We know game development can be a tough discipline and business, so we picked several chapters from CRC Press titles that we thought would be of interest to you, the GameDev.net audience, in your journey to design, develop, and market your next game. The free ebook is available through CRC Press by clicking here. The Curated Books The Art of Game Design: A Book of Lenses, Second Edition, by Jesse Schell Presents 100+ sets of questions, or different lenses, for viewing a game’s design, encompassing diverse fields such as psychology, architecture, music, film, software engineering, theme park design, mathematics, anthropology, and more. Written by one of the world's top game designers, this book describes the deepest and most fundamental principles of game design, demonstrating how tactics used in board, card, and athletic games also work in video games. It provides practical instruction on creating world-class games that will be played again and again. View it here. A Practical Guide to Indie Game Marketing, by Joel Dreskin Marketing is an essential but too frequently overlooked or minimized component of the release plan for indie games. A Practical Guide to Indie Game Marketing provides you with the tools needed to build visibility and sell your indie games. With special focus on those developers with small budgets and limited staff and resources, this book is packed with tangible recommendations and techniques that you can put to use immediately. As a seasoned professional of the indie game arena, author Joel Dreskin gives you insight into practical, real-world experiences of marketing numerous successful games and also provides stories of the failures. View it here. An Architectural Approach to Level Design This is one of the first books to integrate architectural and spatial design theory with the field of level design. The book presents architectural techniques and theories for level designers to use in their own work. It connects architecture and level design in different ways that address the practical elements of how designers construct space and the experiential elements of how and why humans interact with this space. Throughout the text, readers learn skills for spatial layout, evoking emotion through gamespaces, and creating better levels through architectural theory. View it here. Learn more and download the ebook by clicking here. Did you know? GameDev.net and CRC Press also recently teamed up to bring GDNet+ Members up to a 20% discount on all CRC Press books. Learn more about this and other benefits here.
  • entries
    6
  • comments
    20
  • views
    8532

The Truth Behind In-App Purchases

Sign in to follow this  
Followers 0
Yaniv Nizan

1129 views

Unless you have been living on another plant in the past 18 months, you must have heard that In-App Purchase is a great monetization model. Publications like Business Insider and others have provided a lot of data to support this claim but the reality is that the picture they painted is a bit misleading.
Let's take a deep look into the market of mobile games. The reality is that there are many kinds of in-app purchase methods but, believe it or not, only one of them is really effective.
There are games that allow you to upgrade to the premium version from within the app, others allow you to buy extra levels of features while some games are based on virtual economies and allow you to buy in-game currencies. All of these are considered in-app purchases - can you guess which one is making the most revenue?
Here is the punch line - out of the top 50 (grossing) games that use in-app purchases, 46 are selling virtual currencies and if we look at the top 100 the trend continues with 91 that are based on virtual economies.
InAppPurchaseMileading.png
So saying that virtual economies are powering 85% of the revenue in mobile games is much more accurate than saying that it's driven by in-app purchases.
This distinction seems subtle but it's actually critical for mobile game developers looking to turn their premium game to a freemium game or ones that are just designing their game. If you don't pay attention closely you might end up with a game that yields only poor revenue and might not even cover your investment.
Just to be clear - a virtual economy means that the game has at least one type of 'soft currency' that the user can earn by regular game play. It is not really about monetization. It's about engaging your users and giving them ways to advance in game play, measure their progress and add an extra layer of fun into the game. So the games are not successful because their monetization is better but actually because these games are more fun and engaging that way.
While some might think that virtual economies are only used in MMO games or resource management games the reality of mobile gaming is different. There are ways to add virtual economies to just about any game genre and the top games of all genres are games that have created complex virtual economies successfully.
Unfortunately virtual economies are complex to build and take experience and time to balance but they are well worth it. So next time you hear the myth about in-app purchases being a magic solution to monetizing mobile games remember that the real answer is virtual economies.

4
Sign in to follow this  
Followers 0


6 Comments


real answer is virtual economies

... the real answer is market(ing) power. If you reduce the top 50 apps on the company behind it, how many companies will be left beside zynga ?

0

Share this comment


Link to comment

Thanks for the research and article(s).  I was initially leaning on a freetoplay with flat-price monthly subscription upgrade available, and was deciding between that and virtual currency as the model.  After reading these and thinking about it some more, I'm now leaning much more on going with a virtual currency model ( both paid virtual currency  as well as a secondary currency earned through gameplay).   

 

One of my concerns is initially I won't have very many paid upgrades available.  In my spare time, I will eventually be able to produce and deploy a basic version of my game with a few upgrades available.  However, I don't have the resources to quickly produce all the additional content that is needed to populate a deep virtual store.   

 

 

I'll be directly funding the gameservers, and don't really have an idea yet as to whether the revenue generated from the virtual store will be sufficient to cover hosting costs or not.   I guess one related question is in a situation like this, would you recommend launching as soon as possible (even with a tiny, say 10 item store), or taking a much longer amount of time to develop many more features and paid content and only then launching?      

0

Share this comment


Link to comment

Great to learn I was able to help.

 

I guess the answer to your question depends on the actual game. There are games that have been successful with very few virtual goods to buy in their store but that requires these items the items to be really crucial for gameplay to proceed.

 

Can you share more details about your game?

 

As for game servers - You don't really need servers to change your game to free 2 play. If you want to be able to edit the store remotely, you can use our service at http://designer.soom.la but actually many games do well with a store that resides on the client side only.

0

Share this comment


Link to comment

Thanks.

 

The game is inspired by League of Legends-- but on tablets instead of PC, with spaceships instead of champions, and 100 players per multiplayer battlefield instance instead of 10.  

 

To play the game will require the player to have an internet connection to be able to connect to game server(s) that I host (and thus pay for).   There isn't a single-player mode per se, though technically there is in the sense that if literally there is only a single person playing the game in the US, there would be one single game instance running, consisting of that 1 player and 99 Bots.  That situation isn't ideal; the Bot starships are really meant more for placeholders during transition as Players enter and leave the game to keep starships from just disappearing and reappearing, the idea being at any one point in time a full game will have 90-95% of the slots being occupied by live players with just a couple of these Bots.

 

My current plan for an initial version is a total of 2 free spaceships, and 2 paid upgrade spaceships available.  The spaceships, much like champions in League of Legends, are a one-time, permanent purchase.  Getting at least 1 premium spaceship would be pretty compelling for any active player, as while the 2 free spaceships allow you to play a full game, they are starter ships that are underpowered than the premium ships (they are starter/noob ships).  They are still fun to play and don't just instantly die or anything, but active players would likely be interested in purchasing additional ships (if priced correctly) to be able to experience some variety, just as in League of Legends each Champion has a distinct ability set and gameplay so if you get bored of one playstyle you can just switch to another character.

 

I eventually would like to have a much bigger store than that-- something like 50 paid upgrade starships instead of 2, as well as things like XP Boosts that allow your meta-character to level faster to more quickly hit the level cap as well as slight ability boots you can itemize (much like Runes from League of Legends).

 

Unfortunately, building these additional paid content items takes a good amount of time.   I might be able to do an alpha launch in about a year with a very small amount of paid content upgrades available, or perhaps another year or two after that but with a much larger selection available.  I'm leaning on launching sooner rather than later, even if the game isn't as polished as I'd like and even though the limited amount of items available in the store would limit revenues, but at least it would get the game going and I would immediately start getting feedback from players and kind of see what's working.    

 

I guess, my concern is if let's say the servers cost $5/year/player ( this number is just a wild guess right now ), but revenue averages less than that because there aren't enough items in the store to purchase or the items aren't compelling enough to purchase.   In that case, the business model would not be sustainable as the more people play, the more money I am losing.  In that scenario, I would have to put a hard cap on the maximum number of players to keep my financial losses manageable.

 

I'm leaning on just going for it (by this I mean launching as soon as possible, with an unpolished game and with a small store), and seeing what happens to at least get a rough idea of the overall viability of the game and what people think.  If I wait longer, I could certainly polish the game and add a lot more content, but by then other competing games by have been produced, so it's a tricky balance.   Thanks again!

0

Share this comment


Link to comment

Hi There,

 

Thanks for sharing. I would recommend investing a bit more time before launching. Since it's a multi-player game, you need a critical mass for it to be interesting so if you launch too soon you will get burnt.

 

I think you missed a big part of what makes games that use in-app purchases successful. It's not so much about selling the user stuff but rather creating a micro-economy in your game so he can earn coins and thus he can justify the purchases. 

 

Based on what you mentioned, I would try take a look at the game CSR racing and try to model the store of this game after their store.

 

The store in CSR racing have many types of cars and each cars have 5 types of upgrades but since everything comes at different levels it creates infinite amount of purchase possibilities. At the same time all the different cars and upgrades boils down to 4 parameters: bhp, weight, grip and gearbox so it's easy to support all the different car configurations in gameplay.

 

I recommend taking a look at a deck of slides from a speech I gave at the Shenkar Game Design School.

 

Speakerdeck.jpg

 

As for the server cost - my gut feeling is that your estimates are way too high. A $50/month machine on Amazon should be able to handle millions of users as long as it's just handling meta data and not rendering the display for all the players (which it shouldn't)

0

Share this comment


Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now