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R2 Games - F2P Monetization Deck (May 2015 COMPRESSED)

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R2 Games - F2P Monetization Deck (May 2015 COMPRESSED)

  1. 1. Stats, Best Practices and Common Mistakes for F2P Core Gamers David P. Chiu Vice President
  2. 2. Reality Squared Games • R2Games is a leading international publisher of free-to- play browser and mobile games for core gamers • Games includes hits like Wartune, League of Angels, Blade Hunter, Dragon Pals and Monkey King Online. • R2Games.com is a leading platform for F2P games serving 40M+ users in 8 different languages worldwide • #1 publisher on Kongregate.com, Kabam.com and many other platforms
  3. 3. Reality Squared Games • One of the fastest growing online game companies • May 2010 – Reality Squared is founded • Sept 2011 – 1st exclusive game Crystal Saga launches in NAR, USD$1M in 1st quarter • Aug 2012 – R2 publishes Wartune in NAR, breaking $1.5M in its first quarter and $7M in its 2nd quarter • $100M+ projected revenue for 2014 • 200+ employees with offices in Hong Kong, Shanghai, Shenzhen, Seoul and the San Francisco Bay Area • CEO Jared Psigoda named 2014 Forbes China 30 Under 30
  4. 4. More Than 35 Games Published
  5. 5. Who Am I? • Former Senior Director of Business Development and Developer Relations at Kongregate heading BD worldwide for Kong web and mobile • Worked with hundreds of developers on F2P games • Presented at MIGS 2013 on F2P monetization and differences in metrics between 2D vs 3D games and Asian vs Western F2P games • Now VP of R2Games USA
  6. 6. • Asian F2P games have much higher ARPPUs versus Western F2P games • What can a Western developer learn from the Asian F2P games to improve their monetization? • Remember that F2P was born in Korea • And perfected in China (and quickly became the dominant biz model due to piracy) Last years’ talk at MIGS: Asian F2P vs Western F2P
  7. 7. • I can now tell you that the giant bubble on the top right is a Chinese MMO game called Wartune, published on Kongregate.com by R2Games • 25+ months since Wartune launch and still going strong • ARPPU has increased to $533 (11/6/2014) • Why is Wartune so successful? Graph From Last Year’s Talk
  8. 8. Source: Kongregate Long Term Retention Matters
  9. 9. • The more someone plays a game, they more likely they are to convert from a player to a buyer. • Becomes a hobby and most committed fans can choose to spend • Real world example: You can watch baseball for free on TV but hardcore fans choose to spend money on tickets Long Term Retention Matters Wartune Lifetime % Buyers by Monthly Cohort
  10. 10. • The more someone plays a game, the more they spend • More time = More transactions Long Term Retention Matters Wartune Lifetime ARPPU by Monthly Cohort
  11. 11. • Therefore, user LTV increases with time Long Term Retention Matters Wartune ARPU or User LTV by Monthly Cohort
  12. 12. • Therefore, user LTV increases with time Long Term Retention Matters Wartune ARPU or User LTV by Monthly Cohort
  13. 13. Majority of Spending Comes From Most Committed Players (Wartune)
  14. 14. Best Practices from Wartune and Asian F2P Design for Increasing Retention
  15. 15. • MMORPG with turn-based battles, city-building and isometric-perspective exploration • Top grossing game in China before making it to the West Wartune Quick Intro
  16. 16. • Solo and team PvE • Solo and team PvP • Asynch raids • Guild battles • World boss raids • Farming • Fishing • City Building • Weapon/Gear • Synthesizing & Upgrading • Astral Collecting and • Combining • Etc. Pace the introduction of new features/gameplay modes to not overwhelm players with a long and intimidating tutorial. Keep Players Busy! More things to do = more players staying
  17. 17. • Simple Daily Tasks to earn rewards • Scheduled Limited Time Events • Daily Quests Keep Players Busy! More things to do = more players staying
  18. 18. • Daily play bonuses are good to get users coming back regularly • But improve on the typical 5-7 day daily bonuses • Wartune players get a stamp for every day of the month they play the game • Rewards for playing 2 days up to 26 days • Incentivizes longer term play • Doesn’t “punish” players for missing a day Keep Them Coming Back
  19. 19. Keep Players Busy! Mini games with additional free plays each day to earn rewards
  20. 20. • 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 • Deep RPG mechanics and multiplayer matter: • 25x ARPU for Multiplayer RPG vs Single Player non-RPG! Data From MIGS Last Year 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
  21. 21. • Motivate players to get to the next milestone • Leveling up unlocks features, content, rewards • Positive reinforcement for progressing Aim for the Stars
  22. 22. • Character level provides a sense of progress • But also give players ways to measure their strength  Wartune’s Battle Rating Aim for the Stars
  23. 23. • And tap into their sense of competition • Leaderboards for everything Aim for the Stars • Lifetime, daily gain and weekly gain • So players can compete in many ways
  24. 24. Best Practices from Wartune and Asian F2P Design for Increasing Monetization
  25. 25. Depth of Spend • 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 all players from beginners to elder players who have played for months or years • Unlock new items to buy as players level up • But must also create reasons to want the elder items • Don’t create a situation where spending is capped by availability or utility.
  26. 26. • Location, location, location – make the store easy to find! • Show balance of hard currency (Balens) • Shortcut to buy more (Recharge button) • Make it easy to find the what you want o Meaningful categories and item descriptions o No massive scroll bars Make the Shopping and Buying Experience as Frictionless as Possible
  27. 27. • Bonuses % or/and items for larger hard currency packages • Clearly call out bonuses of larger packages! • Make all packages visible in one page for easy comparisons (no scroll bars) • Hide large packages until after first purchase Buy Currency Screen
  28. 28. • 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) Make the Shopping Experience Interesting • 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/ sales
  29. 29. Create Sense of Urgency
  30. 30. Other DO’s and DON’T’s
  31. 31. Timing is Everything: Server Times • F2P: games-as-a-service with players all over the world in different time zones • Don’t let players wondering what time zone the game is in • Specify time zones or set a server time and have it be visible so there is no confusion leading players to miss events/sales • Minimizes confusion and player frustration • Bar on top of all of R2’s games clearly lists: • The server time • The next event’s start time and a countdown to it
  32. 32. Timing is Everything: Server Time Zones • DON’T do separate servers if your CCUs are too low • DO ensure the CCUs are high enough for competition, and merger servers if needed • DO have at least 2 instances of an event if you do not split servers by time zone • For event-centric games, consider separate servers by time zone Wartune (English) servers • DON’T forget to make adjustments for Daylight Saving Time changes
  33. 33. • Events drive up player engagement • Schedule events during periods of highest CCU • For core gamers, primetime is in evenings and weekends Timing is Everything: Primetime Monkey King Online PCU by day
  34. 34. Keeping the Balance • Have a robust matchmaking algorithm • Prevent elder players and big spenders from slaughtering new players • Offer protection time or shields after getting attack
  35. 35. Why is it Important to Understand F2P?
  36. 36. The Mobile Landscape • F2P is the dominant business model - iOS Top 50 Grossing Charts has 1 paid game (Minecraft) - iOS Top 100 Grossing Charts has 2 paid games • Players used to downloading free games now • Free games offer minimal barrier to entry and yield much higher download rates
  37. 37. Mobile F2P vs Paid • Threes was an original puzzle game priced at $1.99 • 2048 was a copy of a clone of a clone of Threes and was free • Threes found moderate success while 2048 became a worldwide phenomenon Creator of Threes:
  38. 38. Mobile F2P vs Paid • Difficult for paid games to compete with free games • And F2P is complex • Takes time and live servicing a F2P game to really learn • Particularly difficult if you are used to making paid games instead of games-as-a-service
  39. 39. Mobile User Acquisition is Expensive • Need solid grasp of F2P to have high monetizing game • Need a lot of capital to do paid UA
  40. 40. App Store Features are Incredibly Powerful • Minor feature: 10k to 100k+ installs • Medium feature: 100k-500k+ installs • Major feature: 500k to 2M+ installs ***For F2P games, not paid
  41. 41. Best App Store Features Are Hard to Get # of Apps 1,369,386 Approx. # of apps each week 6,350 # of Games 283,170 Approx. # of games each week 2,177 Promo slots of new games 16
  42. 42. The Mobile Landscape • Mobile distribution is very challenging • Competition is fierce: o 283k existing games and thousands new games each week • App store features are hard to get • Viral hits are rare (Flappy Bird) • User acquisition is expensive • Can lower CPIs with big IP (also costly)
  43. 43. Self-Publish? Evaluate your game and team: • What are your goals for the game and studio? • Does your team understand F2P? • Do I have the key talent to do a F2P game? • Do you have enough runway to learn F2P and iterate game in test markets? • Do you have enough capital for paid UA?
  44. 44. Is a Publisher Right For Me? • How can a publisher help me? • Allow you to focus on the game while they handle: • Marketing • App store relations • Analytics • QA • Localization, etc. • Royalty advances to help you finish the game (not all publishers do this) • Or/and provide marketing guarantees (not all publishers do this) • May help negotiate and secure IP for the game
  45. 45. Is a Publisher Right For Me? Evaluate the publisher: • Are your goals and interests aligned? • Are they putting some skin behind the game (advances, marketing, resources for localization, QA, analytics, etc)? • Potential for long term partnership (e.g. strategic investments) • Do they understand F2P and have a track record of success? • Do they have the right talent at the company? • Does the publisher have 1st party and 3rd party games? • Does your game fit into their audience and portfolio (casual vs core)?
  46. 46. In Conclusion • F2P is hard to conquer • Ensure that you have the right tools, talent or/and partner(s) to succeed
  47. 47. THANK YOU For a copy of this talk, you can email david@r2games.com

Editor's Notes

  • This presentation will draw R2’s vast experience in F2P and my own experience in my previous role at head of BD at Kongregate
  • Before we get started a quick intro about R2Games

    R2Games is a leading international publisher of free-to-play browser and mobile games for core gamers

    Games includes hits like Wartune, League of Angels, Blade Hunter, Dragon Pals and Monkey King Online.

    R2Games.com is leading platform for F2P games serving 25M+ registered users in 7 different languages worldwide

    #1 publisher on Kongregate.com, Kabam.com and many other platforms

    R2's biggest strengths are scaling revenues and userbase rapidly, localization/culturalization into many languages, UA, app store features and most importantly, F2P monetization.  R2 does F2P monetization better than anyone else and are masters at it. 
  • Last year at MIGS, I shared a lot of data including this graph of Kongregate F2P game data as of Nov 2013
    Each bubble represents a game and the size of the bubble represents the amount of revenue
    A lot of people last year asked me what game the big bubble was but I couldn’t say so at that time
    The big outlier at the top right is an R2 game
    That game is now even more of an outlier with an ARPPU of $533 and a LTV close to$10!
    R2 has 4 of the Top Grossing 20 games on Kongregate
  • The most important factor to F2P success is strong long term retention.
    The more someone plays a game, they more likely they are to convert from a player to a buyer.
    Time investment and emotional attachment can lead to a financial investment.
    This is data from Kongregate showing different purchasing behavior depending on the # of times a player loads the game.
    Someone who plays 500+ times converts at nearly 40%, spend $270 on average, makes 14 transactions at $19 a piece.
    And even though they are 1.1% of players, they account for 62% of revenue.
  • Wartune lifetime % buyers by monthly cohort
    The more someone plays a game, they more likely they are to convert from a player to a buyer. Time investment and emotional attachment can lead to a financial investment.
    Becomes a hobby and most committed fans can choose to spend
    Real world example: You can watch baseball for free on TV but hardcore fans choose to spend money on tickets
  • Can now share game specific data
  • Can now share game specific data
  • Can now share game specific data
  • Left: % breakdown of spenders by how much they spend
    Right: % breakdown of revenue by amount spent
    Big spenders ($500+) account of the vast majority of revenue
  • Top Grossing Game in China
    Localized for Western markets and top grossing game in Western markets as well
  • Retain users by keeping them busy and engaged
  • Can now share game specific data
  • Motivate players to get to the next milestone
    Leveling up unlocks features, content, rewards

    Positive reinforcement for progressing in the game
  • RPG-like stats provide a sense of progress
    Character level is a good measure of progress, but not necessarily strength
    Wartune also has a Battle Rating stat which is located next to the Character Level
    You can have two players at level 30 but with very different strength depending on their weapons, gear, units, etc.
    Battle Ratings determined by # of matches won in PVP and the strength of those opponents.
    Remember that I mentioned last year that there was a 25x difference in the ARPU of a multiplayer game with RPG-like progression vs a single player game with no RPG elements
  • Tap into their sense of competition and desire to be #1. They want to be the very best like no one ever was!
    But not everyone can be the very best there ever was. They can be the very best in many ways.
  • You can price items geared for elder players higher,. Price elastic of demand becomes more inelastic the longer someone plays a game and becomes more invested time-wise and emotionally.
    Don’t sell super Oped weapons that make the game too easy and destroy the sense of achievement and progress. Can backfire if player feels that is all they need to buy
  • 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.
  • For special bundles that are really good deals, you can limit to only 1 per player to not flood the economy with too much hard currency (otherwise you are just shifting revenue forward and will see a dip afterwards)
  • Besides minimizing friction in shopping, you want to also create a sense of urgency
    Countdowns to when a hot sale expires
    Offer limited quantities

  • If all players are in the same server (not split into US vs EU servers), then have at least 2 instances of an event so players in different time zones can join
  • Events drive up user engagement but schedule them at PCU to get the most out of them
  • I have gotten 11 games (out of 12 Kongregate mobile games) more almost 40 separate app store features in the Apple and Google app stores. I have seen first hand the # of downloads that they can drive.
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