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Engagement & Monetization
by Top-Earning Mobile Applications
GSummit 2014, San Francisco
Zer o
Ent er t ai nm ent
PETER HEINRICH
Developer Evangelist, Games
@PeterDotGames PeterHeinrich
heinrich@amazon.com
Amazon does games?
— Many People
Engagement Reports
PC / Mac Downloads
Indie Storefront
Android App Distribution
Kindle Fire
AWS
In-App Purchasing
Direct t...
WHAT MOVES THE
NEEDLE?
IAP ADOPTION IS ON THE RISE
No Surprise to Anyone
Projected Total IAP Revenue
Source: Gartner, September 2013
2011 2012 20...
What are the top-grossing
developers doing
differently?
COHORT ANALYSIS
Difficult to Compare Apps Directly
• Based on Behavioral Analytics
• Shared experience
• Usually limited t...
COHORT ANALYSIS
Top Earners vs. Everyone Else
Looking at customers who installed
a Freemium game on March 1, 2014,
Split i...
INSTALLED VS. ACTIVE, FIRST 30 DAYS
Normalized as a Percentage across the Appstore
Source: Amazon Appstore, March 2014
100...
INSTALLED VS. ACTIVE, FIRST 30 DAYS
Top 50 Highest Grossing
Source: Amazon Appstore, March 2014
100
Installed
Active
Time
SESSION COUNT & LENGTH
Time In-Game
6.9
7.4
17.9
21.5
2.6
2.9
# of sessions / active
session total / active
(minutes)
× =
...
Source: Amazon Appstore, March 2014
6.7
7.7
21.4
27.0
3.2
3.5
# of sessions / active
session total / active
(minutes)
× =
...
5.9
7.9
15.3
25.32.6
3.2
# of sessions / active
session total / active
(minutes)
× =
avg. session length
(minutes)
Day 3
T...
5.7
7.4
14.8
23.72.6
3.2
# of sessions / active
session total / active
(minutes)
× =
avg. session length
(minutes)
Day 7
T...
5.7
7.3
14.3
22.62.5
3.1
# of sessions / active
session total / active
(minutes)
× =
avg. session length
(minutes)
Day 14
...
5.9
7.3
14.2
22.62.4
3.1
# of sessions / active
session total / active
(minutes)
× =
avg. session length
(minutes)
Day 30
...
SALES & REVENUE
In-App Purchases
Day 0
112%
136%
152%
100% 100% 100%
# of items / paying avg. selling price ARPPU
=×
Top 5...
Day 1
106% 107% 113%
100% 100% 100%
# of items / paying avg. selling price ARPPU
=×
SALES & REVENUE
In-App Purchases
Sourc...
Day 3
107%
122%
131%
100% 100% 100%
# of items / paying avg. selling price ARPPU
=×
SALES & REVENUE
In-App Purchases
Sourc...
Day 7
102%
121% 123%
100% 100% 100%
# of items / paying avg. selling price ARPPU
=×
SALES & REVENUE
In-App Purchases
Sourc...
Day 14
111% 108%
120%
100% 100% 100%
# of items / paying avg. selling price ARPPU
=×
SALES & REVENUE
In-App Purchases
Sour...
Day 30
103%
128% 132%
100% 100% 100%
# of items / paying avg. selling price ARPPU
=×
SALES & REVENUE
In-App Purchases
Sour...
Does item quality alone
account for the difference in
average IAP transaction
amount?
ASSORTMENT BY PRICE POINT
Total Marketplace
Source: Amazon Appstore, March 2014
31%
29%
7%
12% 11%
5%
3%
1%
14%
11%
6%
3%
...
ASSORTMENT BY PRICE POINT
Top 50 Only
28%
15%
10%
13%
11%
9% 9%
5%
32%
19%
7%
4%
10%
12%
5% 4%
0%
5%
10%
15%
20%
25%
30%
3...
OTHER OBSERVATIONS
0 24 48 72 96 120 144 168 192 216 240 264 288 312
EARLY ENGAGEMENT IS CRITICAL
In-App Purchasing by Hour
Source: Amazon Ap...
TIMING = MORE MONEY
Time = Money, but
Source: Amazon Appstore, March 2014
Engage customers early
37
%
of a customer’s valu...
69%
100%
145%
0%
20%
40%
60%
80%
100%
120%
140%
160%
1-5 Items 6-10 Items 11-15 Items
SELECTION DRIVES REPEAT ORDERS
More ...
80%
90%
100%
110%
120%
130%
140%
150%
160%
170%
1 4 7 10 13 16 19 22 25 28
PRICE SENSITIVITY DECLINES
As Price Increases o...
MANY PRICE POINTS MAY BE
CONFUSING
Offer Price Variety, but Not Too Much
Source: Amazon Appstore, March 2014
Conversion Ra...
BEST PRACTICES
WITH A TUTORIAL EXPLAINING
HOW TO PURCHASE ITEMS
Teach players to buy
The best tutorials show features and benefits of
eac...
THE ITEMS CUSTOMERS HAVE
PURCHASED, IF APPROPRIATE
Explain how to redeem
Good post-purchase tutorials can have a
dramatic ...
WITH A TABULAR INTERFACE TO
ALLOW SHOPPING BY FEATURE
Make a simple store
Use tabs and tiles to allow users to shop by ite...
TO BALANCE PRICES AND PRICE
POINTS, KEEP IT FRESH
Tune your catalog
Offer high-value items for your best customers,
but do...
ENGAGEMENT
MULTIPLIERS
OBSERVATIONS
Recap
1. IAP is accepted and will only grow
2. More time in game = more revenue
3. Players will pay for highe...
BEST PRACTICES
Recap
1. Make engagement your #1 priority
2. Show players how to purchase IAP items
3. Show how to redeem i...
Engagement & Monetization
by Top-Earning Mobile Applications
GSummit 2014, San Francisco
Connect on Facebook:
https://www....
GSummit SF 2014 - Engagement and Monetization by Top-Earning Mobile Applications by Peter Heinrich @peterdotgames
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  • Which metrics might predict successful monetization?

  • No surprise
    Gartner projects – Our observations corroborate
    BUT: IAP revenue growing faster for certain games
    The big question [x]
  • Turns out this is hard to figure out
    Lots of variables
    Hard to compare high/low apps directly
    Turn to cohort analysis
  • Split our entire catalog into two cohorts [x]
    (Removed gambling games to avoid skew)

    Our first theory centered on active users [x]
  • Transcript of "GSummit SF 2014 - Engagement and Monetization by Top-Earning Mobile Applications by Peter Heinrich @peterdotgames"

    1. 1. Engagement & Monetization by Top-Earning Mobile Applications GSummit 2014, San Francisco
    2. 2. Zer o Ent er t ai nm ent PETER HEINRICH Developer Evangelist, Games @PeterDotGames PeterHeinrich heinrich@amazon.com
    3. 3. Amazon does games? — Many People
    4. 4. Engagement Reports PC / Mac Downloads Indie Storefront Android App Distribution Kindle Fire AWS In-App Purchasing Direct to Account Mobile Ads Amazon CoinsAchievements Leaderboards A/B/n Testing Whispersync for Games Login with Amazon Amazon Device Messaging Cross Platform Amazon GameCircle Android App Distribution
    5. 5. WHAT MOVES THE NEEDLE?
    6. 6. IAP ADOPTION IS ON THE RISE No Surprise to Anyone Projected Total IAP Revenue Source: Gartner, September 2013 2011 2012 2013 2014 2015 2016 2017
    7. 7. What are the top-grossing developers doing differently?
    8. 8. COHORT ANALYSIS Difficult to Compare Apps Directly • Based on Behavioral Analytics • Shared experience • Usually limited to a specific time period • Related individuals form "cohorts" Examples: People who had measles at age 9 Tall pilots who flew for United in March Customers who purchased within one week of download
    9. 9. COHORT ANALYSIS Top Earners vs. Everyone Else Looking at customers who installed a Freemium game on March 1, 2014, Split into to two populations (cohorts): Cohort 1: Top 50 Game was one of the Top 50 Highest-Grossing titles Cohort 2: The Rest Game was NOT one of the Top 50 Highest-Grossing titles
    10. 10. INSTALLED VS. ACTIVE, FIRST 30 DAYS Normalized as a Percentage across the Appstore Source: Amazon Appstore, March 2014 100 Installed Active Time
    11. 11. INSTALLED VS. ACTIVE, FIRST 30 DAYS Top 50 Highest Grossing Source: Amazon Appstore, March 2014 100 Installed Active Time
    12. 12. SESSION COUNT & LENGTH Time In-Game 6.9 7.4 17.9 21.5 2.6 2.9 # of sessions / active session total / active (minutes) × = avg. session length (minutes) Day 0 Top 50 The Rest Source: Amazon Appstore, March 2014
    13. 13. Source: Amazon Appstore, March 2014 6.7 7.7 21.4 27.0 3.2 3.5 # of sessions / active session total / active (minutes) × = avg. session length (minutes) Day 1 Top 50 The Rest SESSION COUNT & LENGTH Time In-Game
    14. 14. 5.9 7.9 15.3 25.32.6 3.2 # of sessions / active session total / active (minutes) × = avg. session length (minutes) Day 3 Top 50 The Rest SESSION COUNT & LENGTH Time In-Game Source: Amazon Appstore, March 2014
    15. 15. 5.7 7.4 14.8 23.72.6 3.2 # of sessions / active session total / active (minutes) × = avg. session length (minutes) Day 7 Top 50 The Rest SESSION COUNT & LENGTH Time In-Game Source: Amazon Appstore, March 2014
    16. 16. 5.7 7.3 14.3 22.62.5 3.1 # of sessions / active session total / active (minutes) × = avg. session length (minutes) Day 14 Top 50 The Rest SESSION COUNT & LENGTH Time In-Game Source: Amazon Appstore, March 2014
    17. 17. 5.9 7.3 14.2 22.62.4 3.1 # of sessions / active session total / active (minutes) × = avg. session length (minutes) Day 30 Top 50 The Rest SESSION COUNT & LENGTH Time In-Game Source: Amazon Appstore, March 2014
    18. 18. SALES & REVENUE In-App Purchases Day 0 112% 136% 152% 100% 100% 100% # of items / paying avg. selling price ARPPU =× Top 50 The Rest Source: Amazon Appstore, March 2014
    19. 19. Day 1 106% 107% 113% 100% 100% 100% # of items / paying avg. selling price ARPPU =× SALES & REVENUE In-App Purchases Source: Amazon Appstore, March 2014 Top 50 The Rest
    20. 20. Day 3 107% 122% 131% 100% 100% 100% # of items / paying avg. selling price ARPPU =× SALES & REVENUE In-App Purchases Source: Amazon Appstore, March 2014 Top 50 The Rest
    21. 21. Day 7 102% 121% 123% 100% 100% 100% # of items / paying avg. selling price ARPPU =× SALES & REVENUE In-App Purchases Source: Amazon Appstore, March 2014 Top 50 The Rest
    22. 22. Day 14 111% 108% 120% 100% 100% 100% # of items / paying avg. selling price ARPPU =× SALES & REVENUE In-App Purchases Source: Amazon Appstore, March 2014 Top 50 The Rest
    23. 23. Day 30 103% 128% 132% 100% 100% 100% # of items / paying avg. selling price ARPPU =× SALES & REVENUE In-App Purchases Source: Amazon Appstore, March 2014 Top 50 The Rest
    24. 24. Does item quality alone account for the difference in average IAP transaction amount?
    25. 25. ASSORTMENT BY PRICE POINT Total Marketplace Source: Amazon Appstore, March 2014 31% 29% 7% 12% 11% 5% 3% 1% 14% 11% 6% 3% 16% 16% 11% 9% 0% 5% 10% 15% 20% 25% 30% 35% $0.99 $1.99 $2.99 $4.99 $9.99 $19.99 $49.99 $99.99 % of Assortment % of Sales
    26. 26. ASSORTMENT BY PRICE POINT Top 50 Only 28% 15% 10% 13% 11% 9% 9% 5% 32% 19% 7% 4% 10% 12% 5% 4% 0% 5% 10% 15% 20% 25% 30% 35% $0.99 $1.99 $2.99 $4.99 $9.99 $19.99 $49.99 $99.99 % of Assortment % of Sales Source: Amazon Appstore, March 2014
    27. 27. OTHER OBSERVATIONS
    28. 28. 0 24 48 72 96 120 144 168 192 216 240 264 288 312 EARLY ENGAGEMENT IS CRITICAL In-App Purchasing by Hour Source: Amazon Appstore, March 2014 Hours since download
    29. 29. TIMING = MORE MONEY Time = Money, but Source: Amazon Appstore, March 2014 Engage customers early 37 % of a customer’s value is realized on the first day Keep them in the game 48 % of repeat purchases happen within one hour of a previous purchase Give them a reason to come back 64% of revenue comes from 3rd order + 74% of revenue occurs after the first 7 days 56% of revenue occurs after the first 30 days
    30. 30. 69% 100% 145% 0% 20% 40% 60% 80% 100% 120% 140% 160% 1-5 Items 6-10 Items 11-15 Items SELECTION DRIVES REPEAT ORDERS More Is Better Source: Amazon Appstore, March 2014 # of In-App Items for Sale ARPPU INDEX: Average = 100% 1.14% of customers generate 30% of sales
    31. 31. 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 1 4 7 10 13 16 19 22 25 28 PRICE SENSITIVITY DECLINES As Price Increases over Time Source: Amazon Appstore, July 2013 Days Owned +60% average selling price
    32. 32. MANY PRICE POINTS MAY BE CONFUSING Offer Price Variety, but Not Too Much Source: Amazon Appstore, March 2014 Conversion Rate INDEX: Average = 100% 147% 101% 52% 0% 50% 100% 150% 200% 1-5 6-10 11-15 Price Points
    33. 33. BEST PRACTICES
    34. 34. WITH A TUTORIAL EXPLAINING HOW TO PURCHASE ITEMS Teach players to buy The best tutorials show features and benefits of each items so the customer can gauge value, boosting conversion by up to 150%.
    35. 35. THE ITEMS CUSTOMERS HAVE PURCHASED, IF APPROPRIATE Explain how to redeem Good post-purchase tutorials can have a dramatic impact on repeat sales. The best ones we saw showed 65% more repeat purchases.
    36. 36. WITH A TABULAR INTERFACE TO ALLOW SHOPPING BY FEATURE Make a simple store Use tabs and tiles to allow users to shop by item type, function, and price. Catalogs following this format raised ARPPU 75% over the store average.
    37. 37. TO BALANCE PRICES AND PRICE POINTS, KEEP IT FRESH Tune your catalog Offer high-value items for your best customers, but don't confuse the price list. Add new items to expand catalog and renew interest.
    38. 38. ENGAGEMENT MULTIPLIERS
    39. 39. OBSERVATIONS Recap 1. IAP is accepted and will only grow 2. More time in game = more revenue 3. Players will pay for higher-priced items 4. Balanced catalogs monetize better 5. Repeat customers are critical 6. Selection drives repeat purchases
    40. 40. BEST PRACTICES Recap 1. Make engagement your #1 priority 2. Show players how to purchase IAP items 3. Show how to redeem items after purchase 4. Create a simple, visually appealing store 5. Tune your catalog
    41. 41. Engagement & Monetization by Top-Earning Mobile Applications GSummit 2014, San Francisco Connect on Facebook: https://www.facebook.com/groups/Amazonstudentgamedev/ Follow me: @PeterDotGames
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