Understanding Content Inflation: How to avoid it and when to Use it

Content Inflation is one of the largest banes of any game developer. Entire monetization and development strategies revolve around how to leverage content for monetization and how to sustain that level of monetization. This balancing act is what separates long-lasting games from those which decline over time. Luckily it does not have to be this way. A key lesson to Free to Play (F2P) Games is that the value of something fluctuates over time. Managing content inflation means managing the value of game content throughout the lifetime of the game.

By content inflation, I mean the process of content that initially was more scarce or reserved, that becomes generally more available to players over time, thereby reducing it’s value. Monetization that relies on specific content will decline as that content becomes inflated. Understanding content inflation requires you to understand the Content Deprecation Cycle (CDC).

The Content Deprecation Cycle

Every F2P game has a content deprecation cycle (CDC). The idea behind a CDC is that content’s value is tied to how expensive the source of that content is. The more expensive the source of content is, the more valuable that content will be. As the same content is given out in less expensive sources, it’s value declines. New content released in more expensive sources will have a higher value.

The CDC looks different in different game genres. Casual games will have very light CDCs, mainly just the devaluation of cosmetics. Hardcore games, on the other hand, live and die by their CDCs. Proper planning of the CDC is necessary in order to maximize the value of content at different parts of the CDC and leverage that value for monetization.

How does the CDC affect Content Inflation?

Cannibalization occurs within a game when content that is lower on the CDC is objectively as valuable or more valuable that content higher on the CDC. While it can be hard to objectively assess the value of virtual goods, it can be done, especially in certain game genres.

In Genshin Impact, 4-Star Weapons can be found through Gacha (Wishes) or through forging.

But suppose 4-Star Weapons dropped from Bosses in Abyssal Domains. Direct Loot Farming is generally less expensive than purchasing Gacha, so players would accordingly begin to farm Abyssal Domains more until they have enough 4-Star Weapons to fill their roster. This would lead to a cannibalization of revenue from Gacha, as fewer players would pay for Gacha when they can directly farm the weapons from Abyssal Domains.

This doesn’t mean that players won’t eventually spend on Gacha. 5-Star Weapons still maintain their high value. But Gacha monetization is likely to be delayed and reduced if Genshin Impact were to start dropping 4-Star weapons in Abyssal Domaines.

Assessing objective value in virtual goods is easy to do with stat-based items. The higher the stats, the more valuable it is. Other types of virtual goods are more tricky. The trick is to try to assess how often a Player would choose one virtual good over another. With stats, nearly all players would choose a 4-Star, 39 Attack Sword over a 2-Star, 33 Attack Sword. That’s easy enough in RPGs, but what about other Genres?

Resources and Speedups in Strategy Games like Rise of Kingdoms

Like stats in RPGs, it’s pretty easy to assess the objective value of resources and speed-ups. Basically, more is better. Resources and speed-ups given throughout the CDC will only cannibalize resource and speed-up sales if the quantities of resources/speed-ups earned through grinding or low-cost activities rivals quantities earned through purchases.

Boosters in Match-3 Games like Gardenscapes

In Match-3 Games, Boosters that clear more of the board are objectively more valuable than Boosters that clear less of the board. The Dynamite Booster has a higher value than a single bomb. Cannibalization occurs in Match-3 Games when the better boosters are given out too freely, or when lesser boosters are given out too frequently so that Players don’t feel compelled to spend on the better boosters.

Cards and Gacha in RTS Games like Clash Royale

Cards, and by proxy Gacha, are the bread and butter of Clash Royale. Any effort to sell cards directly (like the Store does) or to give out Gacha more frequently, results in lower monetization from Gacha. This explains why the Pass Royale (Clash Royale’s version of the Battle Pass) hurt retention so much. The free chests and auto-chest queuing that the Pass Royale gave, along with other rewards, hurt existing monetization of Gacha.

Boosters in Farm and other Sim Games like Hay Day

Whereas Boosters in Match-3 games are evaluated more on interplay with the board, we can assess the value of Boosters in Sim games more easily by looking at 1) what does the Booster apply to, 2) how big is the bonus of the Booster, and 3) how long the Booster lasts. Again, more is better is generally the rule when trying to assess the value of a Booster. Content inflation occurs if more powerful Boosters are distributed too frequently or if enough lesser Boosters are available to let the players achieve what they want to.

We can see that properly managing a CDC within a game can help a Game Developer preserve their game’s monetization. However, when content inflation does occur, what should developers do to fix it?

The Payoffs and Perils of Inflated New Content

Game Developers who may have cannibalized future monetization for the sake of meeting this month’s revenue targets do have one powerful tool for partially healing or mitigating the future effects of their content inflation: New Content. Because content inflation occurs when a lower-cost action provides similar value to a higher-cost action, adding more value to the higher-cost action will partially solve the problem. If revenue from the +50 Attack Sword in Gacha is being cannibalized by the +40 Attack Sword dropping from the dungeon Boss, try having the Gacha drop a +70 Attack Sword! Easy Peasy, right?

Not exactly. Yes, swapping out the +50 Attack Sword with a +70 Attack Sword will better differentiate the Gacha from Boss drops, and push players to purchase more Gacha, thereby remedying the content inflation in the short run. The problem is that once you inflate one source — Gacha in this case — you need to inflate the content that players purchase Gacha to get through or overcome. If the difficulty of enemies are the same after the Gacha inflation as before, players will mow through content faster, which will result in lower monetization across the board.

Inflated new content is one of the strongest tools for changing player incentives and influencing player behavior, but it must be handled very carefully. Game Developers opting to use inflated new content to solve short-term content inflation problems without doing the leg work of setting up additional content to absorb that inflation might find themselves no better off in the long run, even if they see short-term gain from inflating the Gacha.

In the above example, a better way to handle inflation the Gacha content would be to release the inflated Gacha with a new tier of enemies, so as to have players who purchase the Gacha make progress, but still have challenging content later on that they will have to rely on Gacha to overcome.

Are there ways to combat content inflation besides inflated new content?

Sometimes getting a new Treadmill is better than repairing the old one

The steady treadmill of new content that uses the pushes and pulls of inflation alongside a disciplined Content Deprecation Cycle (CDC) keeps a game’s monetization healthy. Over time though, that treadmill becomes harder to maintain. The gap between average players and spenders typically will increase as the game gets older. This gap makes it very difficult for Game Developers to figure out who to design and balance content for. It could get to the point where either you are focusing solely on your spenders and your non-spenders drop off, or you cater too much to free players and your monetization suffers.

When this happens, it is sometimes easier to cease creating content for an existing system and instead create a new system to transition your spenders to. Doing so frees you from considering both ends of your player base, and instead design around your spenders. In the meantime, the CDC will funnel the old system’s content to free players over time.

One of the clearest examples of this happening is in Clash of Clans. The second “builder” base was introduced with a separate new economy, alongside new PvP modes and other updates. Progress from the first Base didn’t really affect a lot of what was happening in the second base. Because of that, the builder base allowed Supercell to control the content experience for spenders and non-spenders alike.

For games that have utilized inflated new content a lot to fix content inflation, it might be a good idea for the Developers to start planning for a replacement to systems that are getting harder and hard to maintain or balance.

Content Inflation isn’t all Bad

While this article has focused on the pitfalls of content inflation, it is possible to use content inflation to squeeze out additional revenue from content that is headed towards obsolescence.

The trick is to spot content whose value is at 0 or near-zero, and pair it with content that still has healthy value in a way that increases the sales of the healthy content. For example, suppose a +50 Atk Sword normally costs $10 in the store, and sells approximately 100 units a day, for total revenue of $1000 a day. The store also sells:

• +40 Atk Swords for $5 in the store, and sells 150 units a day, for a total revenue of $750 a day.
• +30 Atk Swords for $2 in the store, and sells 125 Units a day for a total revenue of $250 a day
• +20 Atk Swords for $1 in the store, and sells 50 Units a day for a total Revenue of $50.

When creating a bundle from this content, a common mistake Game Developers will make is for selling the Bundle for less than the cost of the healthiest item (the +50 Atk Sword).

A bundle like this above, while increasing sales, has the potential to cannibalize future sales of the +50 Atk Sword. At a value of $15 sold for $8, it’s definitely possible that the increase in sales will outweigh the cannibalization. But it’s possible that it won’t. Instead, if you bundle enough low-value items with the healthiest items, and sell at a price above the healthiest item, you reduce the risk of cannibalization. For example:

In this case, a $26 value bundle is sold for $12. The value to cost ratio is similar to the first bundle. The difference is that the content that is cannibalized in this second bundle is the lesser-performing +30 Atk and +20 Atk Swords. Once the bundle ends, the value of the +50 Sword will still be $9.99. The value of the +30 Atk and especially the +20 Atk Swords will probably have reduced. But they only accounted for $300 a day vs. $1000 a day for the +50 Sword. The cannibalization of the lower-performing items is less likely to impact the long-term health of the game.

One Game Developer that whole-heartedly embraced this mentality when it came to bundling items is Machine Zone. In Game of War, many bundles would have a ton of crafting content in them that was much less valuable when compared with what they were currently selling. Yet, adding this near-0 value content to a bundle made the bundle appear much better. Basically, when you know content’s value is low to the point of obsolescence, don’t be afraid to try and squeeze more money out of that content by bundling it with other healthy content.

Content Inflation is Unavoidable, but Game Developers can mitigate it’s Damage

It is natural for content to be inflated over time.. This article is not meant to suggest otherwise. However, diligent game developers can reduce the instances of content inflation and prevent it from largely harming the game’s monetization. Organizing and running a thoughtful Content Deprecation System, carefully planning new content into the game that replaces the inflated content, and taking advantage of monetization opportunities that deprecating content offers will help make your game’s monetization last over time.