5 ways to use behavioral economics to monetize your mobile game’s users
UX expert Om Tandon shares 5 examples of mobile game developers using behavioral economics principles to drive monetization in their games
Editor’s note: Om has been in the games industry for over 14 years building teams, processes & pipelines. He’s created massively entertaining & monetizing experiences for some of the world’s best known IP’s & brands, including Disney, 20th Century Fox, Hasbro, Blue Sky, CBS and many more. Om currently runs a part time games consultancy through his blogsite uxreviewer.com.
Over the years, I have been testing and reviewing numerous mobile games and apps in different genres. While I enjoy deconstructing and analysing different aspects of the digital products, on-boarding, core loop, social, meta, PvP and so on, monetization patterns are of special interest to me due to my background in economics.
Behavioural economics is a fascinating offshoot of economics, which explores the psychology of the decision making process of customers. Below I share 5 unconventional monetization patterns that differ from the crowd but work incredibly well, each based on a sound behavioural economics principle.
But before we dive into what these patterns are, we first need to understand the underlying behavioural economics principles.
What is ‘Behavioural Economics’?
The study of psychology relating to the economic decision making processes of individuals and institutions.
Consumer spending is inversely proportional to buying pain, which reflects how much pain spenders feel after parting with a dollar (or any other currency unit amount).
Behavioural economics divides consumers into 3 distinct categories, based on how much buying pain they endure while spending.
- Tightwads (24%): These customers spend less on average before they hit their pain limits.
- Unconflicted (60%): These are your average spenders.
- Spendthrifts (15%): These customers spend more on average before they hit their pain limits.
Studies show nearly a quarter of the buying pool is ‘Tightwads’: these customers have a very low threshold for spending due to high buying pain sensitivity. This spread is even more skewed in free-to-play games where only 1% of your player base actually opens their wallet!
How do we reduce ‘buying pain’ for tightwad customers?
The answer lies in various principles behavioural economics provides that make the product’s cost less painful, as we will see below:
1) Decoy effect — Price anchoring
A customer’s decision making changes depending on the decoy thrown into the mix.
Choices often occur relative to what is on offer rather than based on absolute preferences. The decoy effect is technically known as an ‘asymmetrically dominated choice’ and occurs when people’s preference for one option over another changes as a result of adding a third (similar but less attractive) option.
If customers are given options to purchase a large popcorn for $7 and small popcorn for $3, they’ll purchase as per their normal preference. But, if we introduce a 3rd, medium-sized popcorn option for $6.50 (which is marginally better in terms of value/volume than the lowest price, but inferior in value to the highest price option), it will shift the focus from low cost value to purely the comparison between the decoy and the highest priced option.
People feel they can get far more value by paying just marginally more and therefore feel smart about it.
Anchors distract customers’ attention to the option companies want them to buy whilst giving a feeling of satisfaction of having outsmarted the system.
In the example above, both options B and C are actually decoys to up-sell option A, which provides value offered by both the packs for a mere $3 more — which is a no brainer for the customers.
Many mobile game shops use this kind of decoy anchoring to sell high value price points.
Case study: Diamond Digger Saga
In King’s match-3 game, Diamond Digger Saga, they only show the player three options upfront when they click on the store, which use decoys to anchor player preferences.
Showing just three offers rather than “all offers” helps reduce choice paralysis by not overwhelming players with options.
Notice in both the above screens, there are “More offers/packages” buttons which range from 5 to 10 offers, but for decoy effect only 3 are shown upfront.
Need more proof? See how Hearthstone utilises this strategy here.
2) Reciprocity— The psychology of free samples
Reciprocity is a social norm that involves in-kind exchanges between people, mainly responding to another’s action with another equivalent action.
It is one of the basic laws of social psychology. It says that in many social situations we pay back what we received from others. In other words, if someone does you a favour, you’re likely to return it to him.
Charities often take advantage of reciprocity by including gifts in solicitation letters, while supermarkets try to get people to buy more by offering free samples.
Below is a common sight in supermarkets around us. We see companies offering free samples of products, beverages and food items to whet customers’ appetite without any upfront investment. But how can this real world model be used in virtual stores in games?
Case study: Pet Rescue Saga
Using King again as an example, in their match-3 game Pet Rescue Saga, players are exposed to similar experiences. Initially, the game follows the same design as other match-3 games, whereby players unlock “boosters” as they progress. They get a few boosters to sample and once they run out of those, they’re prompted to buy more.
Pet Rescue has many boosters but there are a few common ones displayed on various levels, like the Bomb and Rocket, that are not available for purchase in the game.
When the user fails in early levels, they are shown a screen with: “Out of moves: buy +5 moves”.
But this initial behaviour changes over time. As players progress deeper into the game, failure screens prompt changes to accommodate new kinds of boosters — ones that cannot be equipped up front but are only available at the failure screen.
You may ask, what’s the big deal? They just replaced the “+5 moves” offer at the failure screen with a bunch of random boosters?
… random. Really?
Look closely. The new offers are POWERED UP versions of existing boosters (ones that players occasionally consume for free)!
Again what’s happening? Let us visualise it better:
There are more King games that use this model frequently which I have covered in another article, which you can find here.
3) Counter offering — Bargaining
Bargaining and counter offering have been around for ages. As humans, people love to bargain before actually making the purchase. Both buyers and sellers understand this and leave room for significant margin in the marked price of goods.
Even in an era of fixed prices, shoppers always compare prices with other stores and e-commerce sites like Amazon, Macy’s etc. to get the best deal and feel empowered.
How can this real world model be used in virtual stores in games?
Case study: Farm Heroes Saga
Many free-to-play games have been using this lately. Observe the below example from Farm Heroes Saga, a typical match-3 game scenario. When the player runs out of moves before completing a level, they receive a purchase message:
5 moves for 9 gold bars, to continue without losing progress
However, if the player doesn’t buy, they receive a discounted counter-offer next time they see this screen:
Observe how the price for the purchase is the same — 9 gold bars — but the deal has been sweetened by giving players extra value by bundling in a bonus pack that offers higher value compare to the previous offer!
Important: Notice how the new offer is given as a choice now (instead of just showing one price button, two are shown). This lets the players know on a subconscious level that they are being offered a counter offer.
Notice also the subtle changes like differences in sizes and slashed prices (15 vs 9 gold bars) to help up-sell the new discounted offer.
4) Endowment Effect— People ascribe more value to things they own
In psychology and behavioural economics, the endowment effect (also known as divestiture aversion and related to mere ownership effect in social psychology) is the hypothesis that people ascribe more value to things merely because they own or create them.
Case study: Slotomania
Slotomania utilises a unique monetisation model based on the endowment effect. It is used as an effective conversion mechanism by making people feel smart about their choices.
Notice the ‘Pig’ icon which appears as part of the HUD in Slotomania (above) that is similar to the mental model of a saving piggy bank.
How does the ‘PIG’ model work?
In essence, Slotomania creates an IAP that follows the mental model of a ‘Piggy Bank’ in real life.
Player sees that his efforts = Winnings + Time spent in the game =< the amount of HC the Pig holds.
But how does this make the player feel smarter or different from any other IAP in the game? Why should the player buy or prefer this offer?
For $3, the store offers 45,000 coins, for $2.99 the time limited offer is 51,750 coins. But breaking the pig offers only 5,000 coins. Right?
However, as the player continues playing the game, the Piggy Bank keeps swelling, and as you can see, it now offers 132,334 coins for just $2.99! It beat the lowest shop offer (45,000 coins for $3) and the time limited offer (51,750 coins for $3) by a huge margin and looks like a smart buy!
Also, the player can break the bank for a fixed cost of $2.99 anytime in the game irrespective of the amount it contains.
Psychologically, the player feels the amount in the “Piggy Bank” is a result of their own campaign. Amount in the Bank = Time spent by a player in the game. This creates attachment.
NOTE: There are two principles at work here, we can say that in addition to the endowment effect, the other offers act as Decoys to push “Piggy Bank” IAPs. Read about this in further detail here.
5) Supermarket psychology — Show customers what you want them to see!
When you walk into a supermarket, you probably want to spend as little money as possible. But the supermarket wants you to spend as much money as possible, which they try to achieve through the design of the store.
In any supermarket or shopping centre, the most essential or daily use items are always kept at the back of the store, which forces customers to pass the expensive products they’re not planning on purchasing.
This store layout strategy is used by the majority of supermarkets around the world. But how can this real world model be used in virtual stores in games?
Case study: Marvel Contest of Champions
Marvel Contest, a mobile game developed by Kabam, provides a good example of the “supermarket strategy”, the final principle of the behavioural economics framework that reduces customers’ spending pain.
In the screenshot below, you can see the vertical, scrolling crystal inventory they deploy in the in-game store, showing the player the high vanity and visually impressive items the moment they land on this screen.
For the player to see or claim the crystals they’ve won in battles, they’re forced to manually scroll down.
To ensure the player returns to this inventory space frequently, Kabam gives them free hourly and daily crystals.
UX Take: Any UX designer would, under normal circumstances, think of making the screen more accessible by sorting the list with free or ready to open crystals at the top and not hiding it under a scrolling list at the bottom, so players do not have to put in much effort to find it.
But in this case the flow is designed to nudge players to come to this store as often as possible and notice the high vanity stuff using supermarket and retail psychology. Free items are deliberately hidden from players’ view, making them first see the premium offerings before scrolling down to perceived low value freebies (bread and eggs).
Read about this case study in more detail here.
Summing up
The strategies illustrated above have been used in the marketing of products and services for a long time already, but as we move to the era of digital and virtual goods, the same sound principles can be integrated into the mobile gamer’s experience without appearing too invasive, using clever UX design. Let’s recap the principles:
- Decoy effect — Price anchoring
- Reciprocity — The psychology of free samples
- Counter offering — Bargaining
- Endowment effect — People ascribe more value to things they own, or think they own
- Supermarket psychology — Get customers to buy more
While the above examples were discussed in the mobile games context, they can be readily adopted for any digital apps and services.
A word of caution
PLEASE NOTE: I would urge developers to never use these as dark UX patterns for overtly monetizing users — that would be counter intuitive to building great UX. The purpose of these methods is to reduce buying pain, as the economic theory mentions in the beginning of this article. As with everything else please use them responsibly and in moderation.
This article was originally published on Gamasutra and Deconstructor of Fun. If you liked this post, you can check out my other Game UX Deconstructs. For consulting queries please reach out here.
