On Annuity Design - Pocket Gamer London 2017

© 2017. Company Confidential and Not for Redistribution. [email protected] 1

How to Design AnnuitiesTed Verani, VP of Business DevelopmentPocket Gamer Connects, London


Scientific Revenue is a machine-‐‑learning based dynamic pricing platform for in-‐‑app purchases


The magic of selling the same thing at different price points

How much is the large human bridle worth?


Background


Typical Game

• Your conversion is between .5% and 3%• ¼ to ½ of your purchasers buy something in the first two days• Somewhere between ! "⁄ and $ "⁄ of your players don’t visit

the coin store at all.

• You have a lot of people who will never purchase, but who will play the game for a extended period of time• Some of them have money!


Classifying Players

Long Term Players

Purchasers

First Day Purchasers

Impulse Purchasers (“unplanned purchases”)


How do we reach players that don’t buy on impulse?


Inspiration


More Inspiration: Daily Login Rewards


On Annuities


http://www.gamasutra.com/blogs/IsaacKnowles/20160512/272484/Want_to_Increase_Your_FreetoPlay_Game_Revenue__Retention_Experiment_With_Virtual_Currency_Annuities.php


The Simplest Annuity That Actually Works

• First, implement a daily reward system based on currency• Make sure it works, and brings people back• Make sure it doesn’t cannibalize revenue

• On a selective basis, offer to double the daily login reward for fixed price to people who have high engagement and are unlikely to buy anything


KEY GOAL: Little or No Cannibalization

• Annuities should NOT replace regular IAP spend• Done properly, they cause grinders to become spenders• Done properly, they often increase demand for goods and

currency (teaser / taste model)

• Add people to the conversion pool and to the long-‐‑term retention pool


How big should your annuity be?


Things You Must Know About Your Game

• Lifetime Spending Caps• Is it possible to “Buy the game”

• Depth versus Breadth• Do players “level up” their gear or do they buy new things?

• Minimum Values• Daily Login Bonuses• Easily earned currency amounts (typical daily earn)

• Maximum Values• Average daily spend• Typical “medium end” purchase • Annuities shouldn’t cover your spend


Design Considerations for Annuity

• Duration• Needs to be long enough to delay most of the reward

• Need to login / need to click• It shouldn’t just accumulate while the user is inactive

• One at a Time• Do not let people purchase or receive multiple annuities

simultaneously

• Exchange Rate for how much • Use your Black Friday sale as a starting point


Graduate School

• Randomized Rewards• Intermittent Availability• Hyperbolic Discounting• Accumulations• Punctuated Rewards


The Monetisation Design Library• SR Resources Page.

http://www.scientificrevenue.com/resources/• On Pay to Win Strategies.

http://www.gamasutra.com/blogs/WilliamGrosso/20161102/284598/Looking_at_Pay_to_Win.php• On Daily Login Bonuses.

http://www.gamasutra.com/blogs/WilliamGrosso/20160613/274759/The_Science__Craft_of_Designing_Daily_Rewards__and_Why_FTP_Games_Need_Them.php

• On Annuities.http://www.gamasutra.com/blogs/IsaacKnowles/20160512/272484/Want_to_Increase_Your_FreetoPlay_Game_Revenue__Retention_Experiment_With_Virtual_Currency_Annuities.php

• Our IAP Survey.http://www.pocketgamer.biz/data-‐‑and-‐‑research/63436/scientific-‐‑revenue-‐‑survey/ and http://www.scientificrevenue.com/iap-‐‑survey/

• On Feeder Apps. http://www.scientificrevenue.com/blog-‐‑posts/how-‐‑to-‐‑turn-‐‑free-‐‑viral-‐‑apps-‐‑into-‐‑feeder-‐‑apps-‐‑that-‐‑actually-‐‑make-‐‑money/

• On Powerup Design.http://www.scientificrevenue.com/blog-‐‑posts/rescues-‐‑buffs-‐‑skips-‐‑how-‐‑to-‐‑design-‐‑mobile-‐‑game-‐‑power-‐‑ups-‐‑for-‐‑optimal-‐‑iap/

• On Payment Wall Design.http://www.scientificrevenue.com/blog-‐‑posts/how-‐‑to-‐‑design-‐‑an-‐‑in-‐‑app-‐‑purchase-‐‑paywall-‐‑that-‐‑earns-‐‑you-‐‑money-‐‑without-‐‑annoying-‐‑your-‐‑players/

• On Non-‐‑virtual-‐‑currency IAP Strategies.http://www.gamasutra.com/blogs/WilliamGrosso/20160202/264646/IAP_Strategies_Most_Mobile_Gamers_Dont_Hate__And_Most_AAA_Publishers_Should_Try.php


Continuing the Conversation

Twitter:

Excellent Mailing Lists:

https://mailman.stanford.edu/mailman/listinfo/gsb-‐‑videogames

https://gaminginsiders.mobilize.io/users/sign_in

https://twitter.com/SciRevenue


Thank You Ted Verani, VP of Business [email protected]


Pulling it togther

• Things you already know…. • For general players, annuity should be 193 coins• Make it 200 because the difference is small and 200 is

psychologically more friendly

• What is the cost? • You know it is 200 coins x 28 days(Duration), which is 5600

coins in total • Take the Black Friday Exchange Rate, which is $.004 for

single coin • Then, the annuity cost is 5600 x $.004 = $22.40 • Which is $19.99 once you make it psychologically friendly

Data & Analytics

On Annuity Design - Pocket Gamer London 2017