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I gave this talk at Unite 11 and will be giving a similar talk at GDC Online 2011. It's an ode to microtransactions. I walk through the history of games monetization on the open web, Facebook, and later mobile. I arrive at microtransactions and how they have quickly become the standard for monetization across all platforms. I also run through best practices when designing a game to maximize revenue through microtransactions.
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Microtransactions: A Love Story
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How do Games Monetize?
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Paid Download
• Pay once, and that’s it• Try and buy (reduces friction only slightly)
• Max revenue per customer is the cost of the download
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5
Is this Free-to-Play?
(hint: NO!)
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Play or play not. There is no try.
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Advertising
• Game is almost always free• Ads appear as banners, during interstitial
moments• Developer is paid per 1,000 views (CPM)• Revenue potential is small
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Subscriptions
• Great for MMOs with months/years of content
• Not so great otherwise• Max revenue is defined by length of
customer engagement
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Microtransactions (MTX)
• Customers buy in-game currency and spend it on...• weapons• upgrades• skills• Expansions• avatar customization• faster service• anything you care to offer
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MetalStorm
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How Do Games Monetize?
• Paid Download• Advertising• Subscriptions• Microtransactions
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Revenue
Lack of Friction
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Revenue
Lack of Friction
Paid Download
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Revenue
Lack of Friction
Advertising
Paid Download
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Revenue
Lack of Friction
Advertising
Paid Download
S u b s c r i p t i o n s
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Revenue
Lack of Friction
Advertising
M i c r o t r a n s a c t i o n s
Paid Download
S u b s c r i p t i o n s
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F2P vs. MTX
• F2P removes barrier to entry• MTX removes cap on revenue/customer
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Revenue
Lack of Friction
Advertising
M i c r o t r a n s a c t i o n s
Paid Download
S u b s c r i p t i o n s
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Revenue
Lack of Friction
Advertising
M i c r o t r a n s a c t i o n s
Paid Download
S u b s c r i p t i o n s
F2P MTX
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Why MTX?
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Why MTX?1. Revenue
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Why MTX?1. Revenue2. Revenue!
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Why MTX?1. Revenue2. Revenue!3. REVENUE!!!
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Some Stats
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Top 10 iOS Grossing
1. 7 of 10 are F2P
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Top 10 iOS Grossing
1. 7 of 10 are F2P2. 9 of 10 have MTX
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Top 10 iOS Grossing
1. 7 of 10 are F2P2. 9 of 10 have MTX3. 10 of 10 are games
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Top 10 iOS Grossing
1. 7 of 10 are F2P2. 9 of 10 have MTX3. 10 of 10 are games4. No. 1 slot earns $100K+/day
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>40% of revenue from IAP (paid download is $6.99)
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Whales and Long Tails
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Long Tail: 20% of Customers 80% of Revenue
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Designing for MTX
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Designing for MTX
1. Scalable game play2. Don’t break the game3. Don’t give away the farm4. Server-side when possible5. Hire an analyst6. Leave the building
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Scalable game play
1. Time = $$$2. Engagement loops3. Solve this in pre-production!
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Don’t Break the Game?
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Don’t Sell the “I Win” Sword
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Don’t Give Away The Farm
1. Price high on day 12. Caviar items3. Apply some menu science 4. Manage the content furnace
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Hire an Analyst?
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Tiny Zoo
Tap Zoo
Zoo Story
Tap Pet Hotel
Tap Petshop
Restaurant Story
Tiny Chef
World of Fashion
Fashion Story
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Clone & Quant
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Clone & Quant
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Clone & Quant
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Hire an Analyst
1. Get metrics a. What metrics? Google AARRR from Dave McClure b. Where do I get metrics? Talk to Kontagent. Have your analyst query your DBs.
2. Experiment!3. Don’t get lost in data
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Server-side When Possible
1. Optimizing requires constant change in assets and values2. Client updates in iOS = ~1 week3. Server updates = immediate4. Bonus: Configure from the web
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Leave The Building
1. Get the “Why”2. Customer development3. Cater to your whales
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The Magic Recipe
Great Game Designs + Great Technology (Unity!) + MTX =
Great Businesses
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Q&A
