Five tips to improve your games-as-a-service monetization
Practical tips to grow revenue without turning players away
In today’s world of games-as-a-service on mobile, figuring out the lifetime value (LTV) of a player is complex. Revenues are the sum of many micro transactions, instead of a single purchase, as they are with traditional console games. However, you don’t need a sophisticated statistical model to appreciate that the more time a player spends in your game leads to more money spent and a higher LTV.
However, I’m often asked by mobile game developers “how can we design for and improve monetization without turning players off?” More often than not, I’ll suggest they follow one of these five best practices:
1. Track player behavior metrics that have a strong and positive correlation with LTV
It’s important to understand how your game stacks up against the industry averages. Having a robust reporting plan will help you see how improvements are impacting players. The most important measures that correlate best with player LTV are:
- Day 1, Day 7, Day 30 retention, are the percentage of users coming back X number of days after the install. These measure how well you retain users, and therefore how well casual players are being converted into committed fans.
- Session length and frequency measures average user engagement, based on how much time users spend in your game and how often they visit.
- Completion rate at important milestones can measure and pinpoint churn.
- Buyer and repeated buyer conversion measure how well your game converts users into buyers and higher value repeat buyers. It’s often the repeat buyers who are your most valuable user segment.
For example, when looking at Day 30 retention across game genres, typically we find:
- Casual: 18~23%
- Mid-core: 14~18%
- Core: 10~14%
If you are not achieving close to industry averages, you will need to focus on improving long-term engagement, as measured by retention, in your game.
You can find more details on the averages for other game genres in the Play Console under Acquisition reports.
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 consistently monetize better. Retention is king and, more importantly, long-term retention should be prioritized.
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 will be in the long term, which will increase player LTV. Therefore, when designing your game, aim to create a sophisticated and engaging experience to delight your most committed players.
Perhaps the biggest challenge here is planning ahead. This means that when designing and building your game, think beyond the launch: plan how you will roll out new features and challenges as well as how they will be implemented. Games with an ongoing content release plan are more likely to achieve higher long-term retention rates.
Also, make the content rich and fun for those who will play at very high levels and spend the most time within your game. It’s important to make sure that you don’t gate your most active players or hinder their progress due to a lack of play features: always give players the ability to continue playing. Remember, more time spent in your game leads to higher engagement and ultimately a higher player LTV.
3. Increase buyer conversion through targeted offers
A buyer’s first conversion is the most important since player churn rates drop significantly after the first purchase. While the outcome is similar regardless of the amount spent on that first purchase, it’s also interesting to note that past purchase behavior is the best predictor of future purchases. You can find your first-time and repeated buyer conversion rates in the Play Console.
Use A/B testing to find the price that will maximize your total revenue. Willingness to pay for any given product varies among users, and the relationship between price and quantity purchased will also differ between products, so manage price reductions strategically.
For example, Spellstone by Kongregate offers players the ShardBot, a drip feed of the game’s premium currency (the Shard) over 30 days. As part of a promotion for this feature, Kongregate tested two ShardBot packs: a $4 ShardBot that gave players 5 daily shards and an $8 Super ShardBot that gave players 10 daily shards. Results showed players had a much stronger preference for the higher-priced pack, while both packs resulted in very similar retention rates.
These results show that player behavior isn’t always predictable. One might have expected the lower priced pack to be more popular, while buyers of the higher priced pack were more likely to be retained. This is why testing is always the best way to understand players’ willingness to pay and find the revenue-maximizing price point.
4. As well as what monetization features to implement, take into consideration why, when, and how to do so:
Why: “Buyer intent” is important and players should buy because they want to, not because they have to. Therefore, design all items with a price tag to enhance your players’ in-game experience. It’s also key to make sure you don’t gate players’ in-game progress with purchase-only options. Instead, make sure to give them something that adds to the free experience such as an exclusive level, gear with cool power-ups, or something that’s valuable and exciting to players. Happy users mean more time spent in your game, which leads to higher revenue. It’s also important to educate users by gifting some free premium goods or currency during the tutorial to let users experience the benefit of IAPs early.
When: Time offers based on user need. If an IAP enables continued gameplay after a timeout, you should surface it when the timer ends. If another IAP offers premium equipment, you should surface it when users gear up their characters. The offer should be contextually relevant and the content should cater to the player’s 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 after install depending on your game. Additionally, limiting its availability to between 3 and 5 days will encourage players to make a purchase decision.
In the example of BattleHand, the starter pack is surfaced around the 4th session and made available for 36 hours. The pack 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 card decks.
- 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.
Thanks to the strength of the promotion, over 50% of players chose the starter pack instead of the regular gems offerings:
How: There are many ways to implement premium content in your game, such as power-ups, characters, equipment, maps, hints, chapters, and more. The three monetization designs with the most impact are:
IAP store optimization — While surfacing IAP (in-app purchase) content within the game flow is a great driver for sales, don’t overlook your in-app store. Players who buy will often explore the options available looking for content that will enhance their gameplay.
Therefore, it’s important to keep your store content fresh and relevant, but also to make it player specific based on their game play and purchase habits. A few techniques to employ include:
- Hide higher priced items until after the player has made their first purchase. Social psychologists call this the foot-in-the-door technique.
- Add new IAP items at regular time intervals and as players progress through the game.
- When offering packs, ensure you highlight the “bonuses” for purchasing the package.
- As you learn about player purchasing habits, reorder products to present items similar to their previous purchases at the top of the store.
Gacha — There are many ways to design, present, and balance gacha, but the key is to have randomized rewards. This enables you to sell extremely powerful items that players want, without having to charge high prices for them.
LiveOps — Offering ongoing limited time offers creates a compelling opportunity for players to engage and invest more in the game. For instance, Adventure Capitalist regularly releases limited, themed, and timed events with each one taking a spin on the permanent content and offering their own progression, achievements, and IAP promotions.
This initiative led to increases in both engagement and revenue during the events, without affecting the non-event periods.
5. Consider local prices and pricing models
In the same way that willingness to pay differs between people, markets have differences in purchasing power.
- Test what price points make sense for local consumers in each major market to adjust for a wide variation in purchasing power. You may find that reducing prices actually increases your overall revenue. When Divmob introduced sub-dollar pricing in a number of markets, they found it increased the number of paying users threefold. But again, 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 .99, but that’s not the case in Japan and Korea, where rounded numbers are used. Pricing in accordance with the local norm signals to players that you care and designed the game with them in mind. The Play Console now automatically applies local pricing conventions of each currency for you.
The most important thing you can do to increase monetization in your mobile games-as-a-service is to create a long-lasting fun experience. I cannot emphasize enough that engagement is the first step to sustainable and long-term monetization. You also need to make sure anything with a price tag enhances the player’s in-game experience, as they could lose interest if their spending doesn’t lead to greater enjoyment.
Every day you should ask yourself, how can I make my game better? Continually rolling out improvements is essential, and hopefully, by following the suggestions and tips in this post, you have some fresh ideas to work with. Please share your innovations and successes in the comments below. I’d love to hear about them.
Special thanks to Tammy Levy, Director of Product for Mobile at Kongregate for her help in refining the tips and providing such excellent examples.
Any further thoughts?
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