Kongregate - Maximizing Player Retention and Monetization in Free-to-Play Games: Comparative Stats for Asian & Western Games (Tokyo Game Show 2013 JETRO presentation)

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Tokyo Game Show 2013 JETRO presentation: …

Tokyo Game Show 2013 JETRO presentation:
Kongregate - Maximizing Player Retention and Monetization in Free-to-Play Games: Comparative Stats for Asian & Western Games

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  • Self-introAs a platform for F2P games, Kongregate has a unique perspective on what types of mechanics and characteristics of F2P games are most effective at maximizing player retention, monetization and satisfaction. This talk will look at F2P trends and specific game metrics with a comparative analysis of free-to-play games by Asian & Western developers.  We will examine the similarities and differences between games as it relates to retention/ monetization, share best practices and statistics to understand how to maximize your success with Western audiences.This presentation builds on the series of talks by Kongregate co-founder and COO Emily Greer (who couldn’t be here but I must thank for doing the bulk of the hard work in this presentation!) The format will be familiar to those that have attended those talks in the past but are updated with new stats and content.
  • Hardcore gamersDriven by achievements (1M+ badges/wk)93%+ of users already have Unity installed
  • Hardcore gamersDriven by achievements (1M+ badges/wk)93%+ of users already have Unity installed
  • The statistics that most F2P developers look at DAU, $/DAU, D1, D7 and D30 retention. 30-day retention is usually used to measure to “long term” retention in the F2P industry. While it is a good stat, 30 days is not “long term”, it is just a start.
  • So let’s take a look at some of that data. Before I dive in I want to give a few definitions so that it’s clear what I’m talking about.Very important how you define a user as they can change ARPU dramatically We believe the # of play sessions does a better job of capturing the intensity of gameplay. For instance, with 30-day retention, a player that plays the game twice in 30 days and another player that plays the game 100 times in 30 days are not differentiated.
  • ARPU and ARPPUs for F2P games on Kongregate. X-axis is ARPPU, Y-axis is ARPU, size of bubble represents gross revenuesARPPUs for single-player games cluster around $5-$10Multiplayer games range $20-$350
  • Big spenders mattersX-axis is % of buyers who have spent $300+Strong correlation between ARPU and (R2 factor = 0.5)For the top multiplayer games 67% of revenue comes from those spending $300+. For the rest of the multiplayer games it’s 48%, still quite high.
  • We all tend to obsess over games/companies showing exponential growth but more often that not that’s followed by a crash. Linear may be less sexy and headline-catching, but the tortoise generally does win out. Top games still making as much or more as at launch as they hit 2- and 3-year anniversaries on Kong.
  • Average ARPPU for a multiplayer game from Asia: $181Average for Western multiplayer game: $51Only 9 Western games have an ARPPU above $100ARPPU is the main factor in high ARPU for Asian games, important factor for all games
  • Asian games tend to have lower % buyersWestern game tend to have higher conversion rates
  • Asian games also tend to have lower initial retention as you can see hereWestern games tend to have higher initial retention
  • And consequently also less players making it deep into the game since Asian games lose more players in the early game
  • Let’s put the data in chart formYou can see a strong correlation between long term retention and monetization- a player can only spend if they are still in the game!The more they plan, the more they are likely to buy, buy multiple times, spend more per transaction and overall.Revenue is dramatically weighted towards those who play a game very, very deeply – more than 80% of revenue comes from the 2% of players with more than 100 lifetime sessionsAsian multiplayer games lose more players in the early part of the funnel, but more than make up for it by getting extremely deep investments from their most dedicated players.
  • Now that you have seen the data, you are wondering what the top games are doing in order to retain and monetize better than others. In this next part, we’ll look at best practices and give examples from games to help maximize player retention, monetization AND satisfaction. We work very closely with developers to help them optimize their metrics and success on Kongregate.
  • Let’s start by looking at some ways to optimize retention
  • First of all, let’s look at daily bonuses. Daily bonuses are a good tool to get users to play a game regularlyBut there are ways to improve on the typical 5-7 day daily bonus you see out thereExample from an Asian MMO called Wartune, a big hit in China by Seventh Road that has been brought to the west by R2 Games.
  • Here is another daily bonus example from a game called Card Monsters from a Western developerThe daily play bonus here has ben turned into a roulette mini-game
  • Since we want people to keep playing, lots of game take the tack of punishing people (crops withering, troops dying, account deactivated) when they’re gone for too long. This is bad – we all have times (exams, vacations, work crunches, illnesses) when we need to take a break from a game. And the problem with punishing people is that the consequences are experienced not when they’re gone, but when they come back – the exact behavior you want to reward. If they feel like they’ve lost too much they’re likely to quit – why start again if you’ll just lose it?
  • Since we want people to keep playing, lots of game take the tack of punishing people (crops withering, troops dying, account deactivated) when they’re gone for too long. This is bad – we all have times (exams, vacations, work crunches, illnesses) when we need to take a break from a game. And the problem with punishing people is that the consequences are experienced not when they’re gone, but when they come back – the exact behavior you want to reward. If they feel like they’ve lost too much they’re likely to quit – why start again if you’ll just lose it?Clash of Clans on mobile handles this well as well. Your base may have been looted but that shows just briefly before your base restores itself and you can fill up your resource bars. You may even have gained trophies…Wartune and Dawn of the Dragons actually reward you with gold and XP after an absenceAsians MMO automatically have your character “meditate” while you are gone
  • This is Wartune, a big hit in China by Seventh Road that has been brought to the west by R2 games. It has so many currencies, bars, buttons, etc that it’s almost hard to see the screen of an advanced player, though they do a good job of introducing them gradually. There’s synchronous solo & team PvP, solo & team PvE, asynchronous plundering, guild battles, farming, town building, weapon synthesizing & upgrading, astral collecting & combining, and I’ve definitely forgotten something. It is important to pace the introduction of new features/gameplay modes to not overwhelm players with a long and intimidating tutorial.
  • RPG is defined a bit loosely here, and really means that you’re building up your account over time, leveling up, adding skills, etc.
  • The very top games have both synchronous and asynchronous multiplayer because more things to do is better, but asynchronous generally the focus. Aysnchronous allows players to play and interact at their pace and convenience which leads to deeper engagement.
  • Now let’s look at best practices and examples to optimize monetization
  • Shopping should be easy AND frictionlessExample in which user could not find the shop because it was a hot air balloon floating above your town. You had to move your screen up there (and there is no reason to do that if you didn’t know there was a store up there). Make it easy for users to find the storeMake it easy for them to shop and find what they are looking for (meaningful categories and descriptions, no massive scroll bars)Mix soft and hard currency items But don’t try to sell too hard, too fast. First few sessions should focus on fun and giving players reasons to come back and play and get hooked
  • Provide bonuses % or/and items provide incentives for buying larger hard currency packagesClearly call out bonuses of larger packages! Decrease friction, do the math for the player and make shopping easier.Make all packages visible in one pageHide $100+ packages until after first purchase. Prevents sticker shock and users getting turned off by seeing $250, $500+ packages early on
  • Make sure players can spend $1k+ if they want to
  • Okay, so what do I need to do to build my awesome linear business? The first one seems sort of stupid but is actually both hard & complicated once you add that 6 month caveat. There’s lots of fun games that you enjoy for an hour or two, or even a week or two, but quickly run out of steam. Here are some ways to fight that.
  • We’ve got chat next to every game, and forums just below, and we think it’s a big contributor to games reporting significantly higher ARPUs (generally 2-3x ARPU over FB and other platforms, sometimes 5-10x) on Kongregate than on Facebook.
  • Revenue is generally 20x higher for guild members than non-guild members, though generally true of late-stage players it’s a bit hard to tease out causation. However the addition of guilds, especially competitive guilds, is often an inflection point for revenue for games. Upbends dynamics of pay-to-win – symbiotic relationship between time-rich and money-rich users
  • 1) And ideally, fun – let the players see you’re human2) You don’t have to agree. Players sometimes want things that are batshit crazy. But if they know you heard them, it immediately feels like a dialog and a partnership.3) Explaining your “why” goes a very long way4) Advance notice gives players time to adjust OR get excited5) Engage the rational in calm discussion, but never let yourself get combative and disengage once 1-4 have been satisfied. This can be hard.
  • This includes fixing bugs & exploits as well as answering emailsIn the face of a real problem/issue, how much does some virtual currency or items cost you? Token amounts are often enough to acknowledge the issue, and keeping the player = pricelessBecause news will spread and players will (correctly) think you’re unfair. So have rules for what you will and won’t do and why, so you can be consistent.
  • Example of an Asian developer turning a weakness into an opportunity to have fun with their community. Players appreciate the humor and the developer acknowledging the issue, explaining the situation and letting players know that they will work on it
  • Fantasy Online, by one-man-shop Pixelated Games / Jeromy Stroh, is a retro-styled MMO, sort of an 8-bit World of Warcraft with a quirky sense of humor. It has a high rating and has been played quite a lot.
  • At launch, the game was rather acclaimed by players, but they only sold aesthetic items. It was quite popular but didn’t monetize well, with few people buying, and those that did spending on average only about $5.50 in the first month. We’re going to focus on monthly ARPPU for this case since it shows the story more clearly than ARPU. The reason is that during larger promotions, which are usually timed with big releases and events, a wide audience of new players is brought to the game. New players are less likely to purchase right away, so this leads to a small, very short term dip in percent buyers. The dip confounds the ARPU – promotion can end up hiding the gain in ARPPU. The ARPU definitely does grow over time, but this case study is more about how to monetize your paying players than how to get first time buyers. Over the next few months, new “zones” (areas for the players to explore, usually with new enemies and loot) were added, which combined with players getting farther into the game helped grow the ARPPU to a better but still modest $8.50. After that, very few updates were made and the ARPPU stagnated in the low $8 range.
  • The launch of guilds gave users a new way to interact with one another and more incentive to buy items to show off or make them more valuable allies. The ARPPU increased rather significantly in that one month to about $13. This was not a short term spike, but instead served as a new tier of monetization, with additional new features growing it even more to $18.66 by June 2011.
  • At this point, we started encouraging the developer to investigate higher price points to enable his whales to spend more in the game. He released the first of a series of “uber” items priced at a premium level ($30+) that came with status and stat bonuses. He also added “Gem packs” that were essentially unique bonus items that you could only get by buying the bigger packs of premium currency. The results were tremendous, nearly doubling monthly ARPPU to $32.80. More incremental releases and events built on this jump, increasing to $36 by November. Then in January 2012 guilds were given a competitive mechanic, which helped drive sales and competition in the game, hitting a new peak of nearly $42.
  • Here we have the monthly ARPPU since launch on Kongregate.
  • Here we have the monthly ARPPU since launch on Kongregate.
  • While nothing here is too surprising, they are all supported strongly by the data. The incentivized purchases for larger buys of currency and whale appeal especially are very powerful for improving ARPPU.
  • While this may seem obvious, keeping your players engaged and happy is crucial to your bottom line. Where it gets less obvious is frequency. Adding 6 major features once every year is completely different than one major new feature every 2 months in the eyes of a player. You can also use things like events and special deals to stagger dev-heavy content and features while still keeping an active community.
  • Here is another view of Fantasy Online, this time graphing weekly revenue. The spikes occur due to increased interest from players and promotions run by Kongregate, but then the low end after each spike gets higher. Players react well to a game that feels like it is alive and growing, and are more willing to invest in it when they feel that their investment will retain value in the long run, or perhaps even gain in value as the game develops.
  • By contrast, here is an Asian MMO that started off doing extremely well – far better than Fantasy Online (so far!). They were featured early and built a big audience, but then not much happened with the game. The only major update was launched over a year after the game released on Kongregate, and while it built up a relative spike of interest briefly, the momentum was lost and the game, while still profitable, hasn’t been able to regain its earlier glory days. Meanwhile, Fantasy Online has grown and now outperforms this other game by a fair margin.
  • Taken to an extreme, here is Dream World, which is a mostly text-based MMORPG that developed a bit of a (large) cult following on Kongregate. Initially the game did well, though was not outstanding and definitely was below the aforementioned Asian MMO. A single expansion was launched after a few months, and then not much until 9 months after release. At that point, content updates become much more frequent, with new features, promotions, and events appearing on a monthly basis. Large spikes followed by higher valleys grew revenue tremendously. The only real downturn was late 2011 when the Playmage team focused their efforts on their new game (Time World) and didn’t update Dream World significantly. As predicted, sales trailed off a bit, until after Time World launched. Just recently Dream World launched a New Server with a special event and the revenue appears to be heading back upward.
  • This is about how you think about your business.

Transcript

  • 1. Maximizing Player Retention and Monetization in Free-to-Play Games: Comparative Stats for Asian & Western Games David P Chiu Director of Developer Relations & Business Development (Kongregate) Principal, Business Development (GameStop Digital Ventures)
  • 2. What is Kongregate? • Open platform for browser-based games – Flash, Unity, HTML5, Java, etc. – 93%+ of users already have Unity installed • 18M monthly uniques visitors worldwide • Core gamers – 85% male, average age of 22 • MMOs, RPGs, CCGs/TCGs, TD, shooters, etc. • Platform level virtual currency “Kreds” for F2P games • Acquired by GameStop July 2010
  • 3. What is Kongregate? • Mobile publisher of F2P games for core gamers
  • 4. Some of Kongregate’s Existing Developer Partners
  • 5. Stats both reflect & shape mind-set So what statistics does F2P focus on? Daily Active Users, DAU $/DAU 1- & 7-Day Retention To a lesser extent MAU & 30-Day 30-Day Retention is a good stat, but 30 days is not “long-term” retention, it’s the start.
  • 6. A little background • All stats are lifetime, min 6 weeks on platform • ARPU: average revenue per user • ARPPU: average revenue per paying user • Player: a Kongregate registered user who loaded the game page at least once • Plays = Sessions: our preferred method to measure retention
  • 7. ARPU and ARPPU
  • 8. Big spenders matter
  • 9. Linear Growth x Many Years = Awesome Business
  • 10. Asian F2P vs Western F2P
  • 11. ARPU and ARPPU
  • 12. ARPU & ARPPU • ARPPUs for single-player games cluster around $5-$10 • Multiplayer games range $20-$350 • Average ARPPU for a multiplayer game from Asia: $181 • Average for Western multiplayer game: $51 • Only 9 Western games have an ARPPU above $100 • ARPPU is the main factor in high ARPU for Asian games, important factor for all games
  • 13. ARPU and % Buyers
  • 14. ARPU and % Repeats
  • 15. ARPU and % 50+ gameplays
  • 16. Asian vs Western Style • Asian games: High ARPPU, tight player funnel – Monetization caters well to big spenders • Western games: Lower ARPPU, wide player funnel – Monetization focuses more on initial retention and broad conversion to paid at lower prices – Pay 2 Win is not as accepted by Western devs • Mixed games: can combine the best of both – High conversion, wide funnel, still create big spenders
  • 17. F2P Best Practices
  • 18. Best Practices for Optimizing Retention: Keeping players engaged
  • 19. Daily Play Bonuses • Daily play bonuses are good to get users coming back regular • But improve on the typical 5-7 day daily bonuses • Reward playing game regularly in longer term • Doesn’t reset after 5-7 days • Doesn’t “punish” players for missing a day
  • 20. Daily Play Bonuses • Add an element of chance - make it exciting! • Repeat logins opens up bigger potential rewards
  • 21. Don’t punish people for taking a break • Psychologically, punishments or the possibility of punishment deters unwanted behavior • Base/castle raided, loot stolen, crops withered, troops dead, account de-activated, etc. deter players from being away too long • But it can be a two-edged sword • Players sometimes need to take a break (exams, vacation, illness) • Punishment may drive re-activated users away again “I just got back from vacation/work conference/being sick but my base is completely destroyed, my resources are gone, troops are dead. No point in getting back in the game since I lost everything already.”
  • 22. Don’t punish people for taking a break • It can sting but it shouldn’t handicap you permanently • Limit amount of resources that can be looted or # times you can be attacked while gone • Enable shield or protection time if you lose a significant amount • Mix positive reinforcement with punishment • Quick one-button rebuild • Resources still available for harvest • Gain XP or gold while away
  • 23. Keep players busy! More things to do = more players staying • Solo and team PvE • Solo and team PvP • Asynch raids • Guild battles • World boss raids • Farming • Town Building • Weapon/Gear Synthesizing & Upgrading • Astral Collecting and Combining • Etc. It is important to pace the introduction of new features/gameplay modes to not overwhelm players with a long and intimidating tutorial.
  • 24. Without progress you have nothing • The foundations of a F2P game are a strong RPG elements and a sense of progress over time • Building up account, leveling up, adding/improves skills and stats, etc • Surprisingly it’s more important than multiplayer Type % 50+ Plays % Buyers ARPPU ARPU Multiplayer RPG 2.6% 0.75% $69 $0.51 Multiplayer Non-RPG 1.0% 0.45% $9 $0.05 Single-player RPG 1.8% 1.29% $12 $0.10 Single-Player Non-RPG 0.2% 0.53% $4 $0.02 Deep RPG mechanics and multiplayer matter: • 25x ARPU for Multiplayer RPG vs Single Player non-RPG!
  • 25. Asynchronous > Synchronous Type % 50 Plays % Buyers ARPPU ARPU Synchronous 1.4% 0.54% $43 $0.25 Asynchronous 3.6% 0.80% $88 $0.66 Both 2.9% 1.07% $51 $0.55 Single-Player 0.8% 0.85% $7 $0.05 • Multiplayer keeps players engaged and busy in the long run • But not all types of multiplayer are created equal • Top games have both synchronous and asynchronous multiplayer (more is better) • Asynchronous is better than synchronous because it allows players to play at their own pace and convenience
  • 26. Best Practices for Optimizing Monetization: A happy customer is a paying customer
  • 27. Shopping should be easy and frictionless • Location, location, location – make the store easy to find! • Make it easy to find the right item – Meaningful categories and item descriptions – No massive scroll bars • Mix soft currency and hard currency items • BUT – don’t try to sell too hard, too fast. First few sessions should focus on fun & giving players reasons to come back to play and get hooked.
  • 28. Buy Screen • Bonuses % or/and items provide incentives for buying larger hard currency packages • Clearly call out bonuses of larger packages! • Make all packages visible in one page • Hide $100+ packages until after first purchase
  • 29. Making the shopping experience interesting • First time buyer/ Starter packages • Seed players with some paid/hard currency and guide “intro purchase” • Deals/events to get people into the habit of spending regularly • Offer items that enhance the gameplay experience (not just speedups) • Intro the right items at the right time – Lvl 1 players should not be shown the lvl 100+ holy sword that’s on sale for $100) • Keep them coming back – keep store fresh by adding new items, unlocking items as players level up and featuring seasonal and time-limited items
  • 30. Make sure players can spend as much as they want • The longer someone plays your game the more likely they are to buy and the less price sensitive they become • Give committed players the ability to spend at $1,000+ if they want • Have lots of items that are appealing and useful to a committed player and price them higher (if possible) than items meant for early/mid-game play. [Higher means $30-100, not $1000] • If you make a fun game, someone may want to spend an infinite amount. • Don’t create a situation where spending is capped by availability or utility. • Again, remember to make it easy for players to buy!
  • 31. Best Practices for Community Building: When you’re here, you’re family!
  • 32. Make it easy for community to build Chat, forums, player-to-player messages are all great Real relationships build when people interact. The more ways they can do it, the better.
  • 33. Guilds are awesome • 100% of our top games have guilds • Guild members spend 10-20x more than non-guild members • Strong correlation as guilds improve retention and monetization with late stage players Some reasons they make a difference • Social incentives to return  I want to see my friends • Social pressures to return  I don’t want to disappoint them • Improves the psychology of purchases  I’m doing it for the team, not me • Upends the dynamics of pay-to-win  can set up a symbiotic relationship between buyers and non-buyers where both add value to the same group
  • 34. Community Management and Customer Service If a player invests many hours into a game they begin to feel some ownership. It may be YOUR game, but it’s THEIR experience 1. Be visible – forums, chat, email 2. Listen to their concerns and acknowledge their emotions 3. Be transparent, honest, and accurate 4. Give advance notice of changes and downtimes 5. Don’t feed the trolls
  • 35. Opportunity Complains Customer service is a chance to surprise and delight • Handle things quickly • Be generous with compensation • But don’t do something unless you’re willing to do it for everybody
  • 36. Surprise and delight • IGG rewards its players with some resources after each of its weekly 30-minute maintenance
  • 37. Have fun with your community
  • 38. Case Study Fantasy Online: A Coming of Age Tale • By Pixelated Games (Jeromy Stroh) • Launched May 2010 • 4.20 rating • 10M+ gameplays
  • 39. Fantasy Online: A Humble Start • Game was popular, highly rated and good retention • But couldn’t monetize well (only sold aesthetic equips) • Jun 2010 – First month  Monthly ARPPU: $5.50 • Sept 2010 – New zones, modest growth to $8.50 • Nov 2010 – No updates, Monthly ARPPU down $8.11
  • 40. Fantasy Online: Release the Guilds! • Dec 2010 – Guilds launched Monthly ARPPU jumped to $12.93 • June 2011 – Crafting, mining, XP potions, new zones added, kept Monthly ARPPU in that higher range, growing to $18.66
  • 41. Fantasy Online: Whale Hunting • Jul 2011 – “Gem Packs”, expensive “uber” items ($30+) were added to court big spenders  Monthly ARPPU soared to $32.80 • New content, new equipment slots, Halloween event, grew to $36.23 in Nov 2011 • Jan 2012: Guild Warfare, peak of $41.86 • Mar 2012: New high level content, $54.37  New high level features, content and items catering to committed players + big spenders allowed players to spend more if they wanted to
  • 42. Fantasy Online: Monthly ARPPU $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00
  • 43. Fantasy Online: Monthly ARPPU Guilds Mining / Crafting Chance Box Gem Packs & Uber Items New Equip Slots Changed Gem Pack Items Changed Gem Pack Items, Guild Wars New High-Level Content $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00
  • 44. Fantasy Online: Takeaways • Monthly ARPPU grew from $5.45 to $54.37 • Monthly ARPU grew from $0.04 to $0.70 • Social features like guilds drive long term retention & monetization • Incentivizing purchases leads to bigger spends • Make sure you appeal to your big spenders • Keep content fresh to keep players interested • If a core game is fun, you can probably make it monetize. The converse isn’t necessarily true.
  • 45. The Value of Developer Activity Keep feeding your players • Regular updates, new features, and events yield greater engagement and reduced fatigue. • Sales and specials can offer significant jumps in revenue.
  • 46. The Value of Developer Activity Hot New Games Badges added Custom User Items New zone, XL, etc. Equips, Guild bonuses Halloween, sale Christmas event Guild wars FantasyOnlineRevenue
  • 47. The Value of Developer Activity Front Page Badges Item promotion New Version Revenue Fantasy Online Asian MMO
  • 48. The Value of Developer Activity Front page Badges added Expansion Labor day event Expansion Christmas update Expansion Easter event Expansion Expansion New Server Revenue Fantasy Online Dream World Asian MMO
  • 49. Opportunities for Japanese Developers • Combine the best of both worlds: – Asian developers  higher monetization, F2P expertise – and Western developers  fun + engaging gameplay • Japanese game developers have valuable console games experience to draw from and AAA production values • But important to understand the fundamentals of F2P design and build a game from the ground up while thinking out long term retention and monetization
  • 50. THANK YOU For a copy of the presentation or questions, email davidchiu@gamestop.com For more talks & data visit developers.kongregate.com For web games contact us at apps@kongregate.com If you’re interested in mobile publishing it’s mobile@kongregate.com Follow us on Twitter: @EmilyG & @KongregateDevs