Game Design is Business Design


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The game industry has changed. A rapid shift is underway as we move from a packaged goods dominated past to a digital, free to play dominated present. More players then ever enjoy the widest range of games of any time in our industry's history. In this new world, the designer’s role has changed dramatically. The successful designers of our digital present are not only masters of fun, but also masters of business models and monetization. This lecture talks about the changing role of game designers and presents case studies of how they can successfully apply business design to their practice.

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  • I have been a profession game developer for nine and a half years. During that time I have been a part of over 20 shipped titles in a variety of roles. I have worked in startup game developers/publisher like PlayFirst and iWin where I worked on downloadable, casual games. AAA studios like Pandemic Studios where I got my start as an intern and tester. Big public companies like EA where I worked for Rich Hilleman, the Chief Creative Director. I have spent the past 4 years at EA/BioWare where I was the first employee at the internal, startup style studio that became BioWare Social. My responsibilities have spanned production, design, management, consulting and metrics. In fact, I began my time at PlayFirst over 6 years ago by implementing their first metrics gathering and analysis program for games in beta. I worked as a design and metrics consultant on something like 10 games, helping establish “KPIs” before that was a thing. Just to gauge the audience, raise your hand if you know what KPIs are. K, [point] can you tell me a KPI target on your current game?Most recently I have been working as BioWare San Francisco’s Design Manager where I spent the past 8 months working on a new project. Before that shift I was producer of 3 Dragon Age branded browser games, including Dragon Age Legends on FaceBook and Google+. My personal vanity metrics is that those 3 games have been played over 50 million times. When I have a really bad day, that’s what I tell myself to cheer myself up.My core competencies are game design, presenting powerpoint decks and innappropraite humor, the combination of which will be clear very soon. Anyways, I’m very proud to share that as of a week and a half ago, I have gone Indie.
  • Produced sequester for armor games, bastion style full VO puzzle game where a dead sister guides her sleeping brother through an introspective journey
  • Advising former Bioware intern Nick and his partner Jason Church, two college students who won start up San Diego with Craftyy an html5 game creation and mixing tool. Follow them for updates so you can support the forthcoming kickstarter
  • Super Pixel Time with John Lee, we’ve got a beta out now. Pixelize pictures using the palettes from classic gaming systems (also html5)
  • Hyper casual, iOS/Android game Pop Red Balloons, probably launching in September
  • But enough about me, I’d like to begin today’s talk, as all talks should
  • with a story about talent. Let’s talk about this woman, a once in a generation artist, Katy Perry. More accurately, this is a story about talent, and talent’s publisher EMI.
  • I’ve lifted this story from an episode of NPR’s planet money podcast, which is a tremendous economics podcast I listen to regularly. As you could tell from the title of the talk, I really geek out about economics. I mean, I’m a game designer, so you know I love numbers and spreadsheets. I’m Jewish; my father is both an accountant and a tax lawyer, it’s just in my blood.Anyways, in this episode of Planet Money titled Katy Perry’s Perfect Year, the planet money team investigates the business behind this album, Teenage Dream.
  • Teenage Dream had 5 #1 singles. It is the first album since Michael Jackson’s Bad to accomplish that feat. She was the most played artist on the radio. When you have a #1 single, that means that on NYC Top 40 radio, they play your song 19 times a day. Depending on whether or not you were crunching at the time, you may or may not remember a summer where California Gurls was inescapable (I can’t…). Anyways, when you talk about a hit driven industry like Music, Movies or Games, this is it. This is the holy grail. It doesn’t get bigger than Teenage Dream. So the Planet Money team set out to investigate whether or not this album made any money for it’s publisher, Capitol/EMI. So, they asked a Capitol/EMI record Exec “Did you guys end up in the black, did you recoup?”
  • Could you imagine those words possibly coming out of Bobby Kotick’s mouth? Could you imagine him saying “I believe that Call of Duty: Black Ops: Dead Reckoning-oning, the 13th installment of the storied franchise, broke all sales records, sold through 15 million units at retail, and I believe we recouped…”
  • When I look at stats like this, I can. When it takes 5 developers to ship MW3, plus a sixth to develop and run it’s online survey. When it’s competitor has to spend 50 million in marketing to take a dent out of its market share. I can imagine a world where a publisher has the best selling AAA game of the year and is unsure if it made any money. So, how can something like this happen? How can you have the only album other then Bad to have 5 #1 singles and not turn a massive profit?
  • If you listen to the episode, there are some incongruities between the percentages they site and the values, but according to what they found, the 2m albums and 22m song sales turn into about $44 m in revenue. 30% goes to the platform holder, being apple, 15% are artist royalties, 30% are song writing fees, leaving the publisher with a pool of $11m. But if you factor in the $2m in recording costs and the $2m of “promotional materials” basically the various forms of payola to make sure all 5 of this hits get played 19 times a day, you’re left with 7m in pre tax revenue. Nothing to sneeze at, but if $7m is your take on the best case, then you can see why the music industry is collapsing. But they talked to the business manager for the Jonas Brothers and he said that when you’ve adapted to the new reality, you barely care about the record revenue.Planet money posits that this happened because the publisher, big, slow moving, traditional, signed Katy Perry to a traditional publishing model failing to capitalize on the tremendous success of her album.
  • When you’re a big brand like Katy Perry, or Justin Beiber, or Angry Birds, you might do $150 to $200 m in touring revenue. You might do $30 to $50 million in merch. Compared to the $3 to $4 million you get from recording revenue, you just don’t care about the old publishing model when you’ve adapted to the new reality.Now obviously, he didn’t represent the Angry Birds, but I bet he wishes he did. I saw the dolls as a top prize at the California State Fair last summer… I have to image that Angry Birds on Ice is just around the corner. They’re going to be bringing on so much of that sweet, icecapade dollar they’ll be like “App store what? Android who?”
  • But in all seriousness, has to be one of the most successful 360 degree entertainment brands on the planet. Just recently, I saw this quote that they are going to do over $400 mil in toy sales in 2012.
  • Now, that’s a long way of saying that it is important in a creative industry to adapt to new business models. Don’t take me for a doomsayer. I don’t believe that AAA, $60 games are going extinct. I think that as a core gamer, I’ll still be paying $60 and up for Assasin’s Creed 11. But I do believe that as the total audience for games gets larger and larger, as it has over the past couple of years, and as new business models and technology platforms cater to this segment, the portion of the market AAA games represent will diminish.Here’s the headline from a story that came out Monday. NPD estimates 38% of the total US population ages 2 and up plays freemium games, and 40% of them have paid at least once. That means just over 15% of the US population is estimated to have spent money in a free to play game.
  • Hopefully, by this point, you understand my view on the landscape, and the importance of freemium business models. Hopefully, about now, you’re thinking “Ethan, that’s all well and good, but how can I get some of that sweet, sweet, virtual currency action?”I certainly hope so. Because the purpose of this talk is to empower designers by teaching them to incorporate free to play business models into their practice. You may think “that’s for management, that’s for the business people, that’s for product management. Its my job to make it fun.” And it is your job to make it fun. But I promise you two things. One, if monetization is bolted on at the end, instead of designed into the core loop of the game from day 1, you are likely to fail. The second is that if you let someone else design your monetization, you are giving power over your game design to that person.When revenue is measured as a daily stream that everyone in the studio can see, if that line starts trending downwards the person who figures out how to make it go up is the person who dictates what the team will be doing next. Incorporating monetization design into your practice is the best way to ensure that you retain control of your games design and are able to maintain a clear, cohesive vision that is best for the player and the business.
  • The first point is that Emotion is the key to getting players to unlock their wallets. In a freemium game, it is not a rational decision to pay; for the most part you can get everything you want if you play long enough. Players don’t need to spend money, but they do, and a lot of it. Now, I’m not going to talk about all possible emotions that you can manifest in your game, but I will focus on seven key emotional experiences that enable monetization particularly well.
  • * Explain what the game mechanics of War Commander * Point out the UI items on bottom left * WC provides 3 simultaneous actions happening in real time
  • * In this screenshot, I already have a dozer going * I try to upgrade another building
  • * I can only undergo one type of action at a time * But, for $0.20 I can finish now * How much does all this Impatience net the company?
  • * 3 games, $100 m in revenue* Not big, 72nd biggest on facebook in terms of MAU* Harbin says 20x average ARPU* Article says 4c is average, 6c is zynga, Harbin says KixEye is making 80c per player per day
  • * Next emotion is Revenge* Mafia Wars 1 - Still has a following today, even though it is a text rpg
  • In fact, it is performing significantly better than its graphic sequel and has outstripped it on a DAU basis for a while
  • This is the hit list. If someone is beating you up to much, place a bounty on their head
  • * When you add someone, there is a 20% security fee taken by the system. This is a fantastic sink.* Explain importance of sinks and taps when designing a F2P economy* That 640,000,000 means 800 mill put down, system took 160 mil* 34k costs me 10 rp. 1 rp is 7 cents, that’s about $3,388k worth of currency if I bought it (prices may be different)* Likely Earned currency, not purchased, but to get people to put money in, it’s important to drain money out* Average about 270,000 hits per day (Internal source – mid april statistic)
  • * Next game is bejeweled blitz* 1 min rounds played for high score* Weekly leaderboards* Personalized, filtered to just my friends, each unique* Weekly competition – wipes at week end
  • * Use currency, earned or bought to buy boosts* At start, you earn plenty of currency* Once you get hooked to those high scores, you can run out very quickly* Spending money is completely in the players control, and they can grind if they want boosts but don’t want to spend
  • Jealousy in The Sims SocialDo stuff, earn money, decorate my house, this is my dinky little house
  • * Every day, I can visit my friends, interact with them* See their awesome house and get jealous “I want that”
  • * Where can I get that? In the store.* Once you’re invested in something, emotionally attached to something, emotions take hold. Emotions like jealousy are just as powerful in games as in real life.* If you want jealousy to work, then visiting your friend and seeing their stuff has to be part of the core loop* It has to be backed in, part of the every day activity chain. I visit friends houses * Another thing they do very nicely in the store is to intermix earned currency with premium currency
  • * Pogo service: Play games, chat, earn badges, avatars* Premium Subscription with MTX on top (and ads on bottom)* In Q3 2010 quarterly report, EA reported that Pogo was “the #1 online game site worldwide measured by user engagement.”
  • * MTX on top of subscrption. My favorite is the idea of Premium Badge Albums.* You buy a set of achievements so that you can earn them, for real money (screenshot from badge addicts)* Could you imagine that being sold on the 360? Talk about the ultimate horse armor. [They made me pay for extra achivements, plus they were already shipped on disk. I bought it though… total rip off]
  • Combat Arms is an freemium, counterstrike style shooter by Nexon, hugely popular
  • * One of the things that makes a lot of money is Supply Crates. They have published lists of the types of items you could get and the rarity level. They do a lot of interesting things like rotating the availability items, and jackpots that can be the only way to get certain items as permanent items.* They give the same exhilaration of inconsistent rewards as a pack of Magic Cards. * Nexons games are huge money makers, they generally involve a form of mystery case or lucky bomb. Q1 FY12 $381 mil in revenue* In the Combat Arms Postmortem session at GDCO 2011, it was stated that these mystery crates accounted for slightly over 17% of revenue (myst-n case 4.48% of rev, gp hazard case 4.81%, Black Hi-Sec Case Keys 7.8%)
  • My final emotion is belonging. I chose Auditorium 2: Duet, but really you can insert most successful game kickstarters here. This is an extremely exciting new business model. At cursory glance, you make think Kickstarter has just become a pre-sale platform, is probably a fad, and will evaporate at some point. That may or may not be true, but what I think is compelling about many successful Kickstarter campaigns is that they make the kicker feel like they belong to part of a special community, like indie game fans, adventure game fans, classic game fans, and the kicker’s desire to donate is tied directly to the feeling it gives her of belonging to that special group.
  • The second point I’ll make is about the importance of accessibility in monetization design. It’s tantamount to the success of your game that players have a smooth experience around spending money.
  • * Figure out what is sacrosanct to your players, and don’t break that.* DA:O – conversations and relationships* Huge backlash at putting upsell into the conversation tree* Dragon Age Legends – loot is property – changed loot in peoples backpack was a huge mistake
  • Original DAL UI – common question (internal) Where do I go to spend money?Many people told me “I wanted to spend, but couldn’t figure out how”Every person who couldn’t find the store was a lost sale
  • Here’s the newui, look at the bottom barIt’s much easier to see that the red tent with the waving flag is the “Go here to spend money” button
  • War Commander does an excellent job of making monetization present. How the player can spend money is built into every UI. It’s a little more in your face then I like, but I can’t argue with the results. They’re very metrics driven, and I think they wouldn’t be doing these things with UI if it didn’t work.Not antithetical to the Integreity part. I think it is pretty tastefully integrated into the ui. But on every screen where I can spend earned currency, I can spend premium currency.
  • Start the game, notice the temple on bottom, it is locked
  • Maybe 10 games in I hit level 5
  • And I unlock bombs, which is a boost similar to those used in bejeweled blitz, which we talked about earlier
  • And, here’s the brilliant part, I am immediately shown how to access the temple, where I spend my virtual currency
  • I am forced to take an action which is the cornerstone of monetization in Zuma, which is to activate a boost
  • * The very next round they show me how much more powerful I am* If you don’t teach your player how to spend money in your F2P game, your tutorial has failed (imo)
  • Traditional may think it is distasteful (charlesduhig’s book on habit?)Your game is a hobbyYou want to allow for your devoted fans to love your gameCousins “guy who owns every t-shirt of a band”If it makes you queasy, get over itStory of the car dealership whale from BioWareSacrementoDesigners must allow for the possibility of whales[Section needs update – community management for Team Fortress 2]
  • Boosts, consumables, path to infinite monetizationA dedicated fan can spend money every day they play if they wanted to (with no additional content creation)
  • Realm of the Mad God allows players to buy super-hard, super rewarding dungeons they need other players to conquerIt’s a permadeath game, so you really can’t win without your friendsAllow rich friends to be generous, social, make them the champion instead of the antagonistRich players should be able to “buy friends a beer” not “pay to win”
  • Fifa Ultimate Team does a spectacular job of cultivating whalesIn the FY12 earnings statement, EA tougted Ultimate Team for over $108 mil in MTXTournaments and events to rally the community, drive engagement and monetizationPair tournaments with new items, new exciting things to sell, limited time promotionsThis tactic is good for whales and non-spenders alike
  • Once you have whales in your game, a key to keeping both whales and free players alike is creating a player ecosystem providing excellent customer service. Here’s an example outside of gaming of how horrible customer service drove me away from a terrible service I was paying over $1,200 a year towards and became an evangelist for another service due to better customer support.
  • Valve’s TF2, for example, does an incredible job of creating an ecosystem of players inside and outside the game. I love the “meet the” series of videos that have expanded the universe. I love the comics they use as teasers to the content of upcoming updates, as is happening right now around a 3rd faction supposedly being added. It’s just brilliant. Something I saw firsthand on Dragon Age was the ability of a community manager to keep players engaged outside of the game during the sometimes long delays between content updates.
  • Close out with a story about a friend of mine, Dan Chao, who produced me once upon a time at PlayFirst
  • Close out with a story about a friend of mine, Dan Chao, who produced me once upon a time at PlayFirst
  • Close out with a story about a friend of mine, Dan Chao, who produced me once upon a time at PlayFirst
  • First game, New Legends, launch title, team with high pedigreeFlop, studio closeShow of hands: whose been laid off on project close, either because no projects, team downsized, studio shuttered, etcDan said, never again
  • Lead Designer of Crime City and Kingdom Age – both huge successes on the chart
  • 3 games, $210 million dollar acquisition, built on the back of successful business design coupled with successful game design. Dan is now “director of product”
  • Otherwise, q&a
  • Game Design is Business Design

    1. 1. game developer conference | f2p design & business summit | mar 13ethan levy | cofounder @quarter spiral | consultant @famousaspectGame Design is Business Design
    2. 2. A brief history of Ethan Game Design Game Production Design Consultant Metrics & User Test• 10 years experience as a game developer• 30+ shipped games, multiple awards and
    3. 3.
    4. 4. what do you want to get out of this session?Desired
    5. 5. my motivation for giving this talkBetter freemium designBetter
    6. 6.
    7. 7.
    8. 8.
    9. 9. KingsRoad by Rumble
    10. 10.
    11. 11.
    12. 12.
    13. 13.
    14. 14. Emotion is key to
    15. 15. Impatience Clash of Clans by
    16. 16. Impatience Clash of Clans by
    17. 17. Impatience Clash of Clans by
    18. 18. Envy CSR Racing by Natural
    19. 19. Envy CSR Racing by Natural
    20. 20. Envy CSR Racing by Natural
    21. 21. Dominance Bejeweled Blitz by
    22. 22. Dominance Bejeweled Blitz by
    23. 23. Dominance Bejeweled Blitz by
    24. 24. Accomplishment Bubble Witch Saga by
    25. 25. Accomplishment Bubble Witch Saga by
    26. 26. Accomplishment Bubble Witch Saga by
    27. 27. Exhilaration The Last: Stand Dead Zone by Con Artist
    28. 28. Case Study -
    29. 29. The paragon of success DragonVale by BackFlip
    30. 30. #4 iPhone | #1 iPad grossing of
    31. 31. Core loop Gate Dragon level Build Breed Build a park Breed dragons Sink gold & time Sink food Tap food Tap gold & time Gate Town
    32. 32. Impatience DragonVale by BackFlip
    33. 33. Exhilaration DragonVale by BackFlip
    34. 34. Events DragonVale by BackFlip
    35. 35. Control DragonVale by BackFlip
    36. 36. Need DragonVale by BackFlip
    37. 37. On accessibility of
    38. 38. Ease of access Dragon Age Legends by
    39. 39. Ease of access Dragon Age Legends by
    40. 40. Be present War Commander by
    41. 41. Show me the money Zuma Blitz by
    42. 42. Show me the money Zuma Blitz by
    43. 43. Show me the money Zuma Blitz by
    44. 44. Show me the money Zuma Blitz by
    45. 45. Show me the money Zuma Blitz by
    46. 46. Show me the money Zuma Blitz by
    47. 47. Whale
    48. 48. Possibility of infinite monetization Temple Run by Imangi
    49. 49.
    50. 50. Social elder game Life is Crime by Red Robot
    51. 51. Luxury
    52. 52. Currency package pricing The Last Stand: Dead Zone by Con Artist
    53. 53. Weekly events Fifa Ultimate Team by
    54. 54. Putting theory into
    55. 55. Sample game: Smash TV Saga• Classic score based arena shooter re-imagined for Mobile• Bite sized levels played for high score• Compete against friends’ scores, earn achievements and medals
    56. 56. X statement• Single sentence that describes the essence of the game• “Razor” used to make decisions• Punchy & memorable Meaningless X statement Return of the arcade classic Meaningful X statement Compete and cooperate in an over the top, reality TV
    57. 57. Analogs, antilogs and leaps of faith• Idea taken from Getting to Plan B• Analogs: successful games you want to be like• Antilogs: similar games you want to avoid• Leaps of faith: elements unproven in the
    58. 58. Smash TV analogs• Ratchet and Clank ✦ Leveling weapons ✦ Fast and furious gunplay• Bubble Witch Saga ✦ Short, rewarding levels ✦ Leader board competition ✦ Earned currency and
    59. 59. Smash TV antilogs✦ Smash TV Arcade ✦ Don’t be a quarter monster ✦ Engagement not frustration✦ Simcity Social ✦ Social network integrity ✦ Multiplayer not friend
    60. 60. Leaps of faith mobile/tablet CRAVEsynchronous
    61. 61. Monetization philosophy doc• Identify player types• Identify a small # of monetization emotions (2-3)• Don’t try and do everything, make a small number of distinct choices• Each emotion should be a razor moments the future to evaluate monetization you use in• Razors are used when writing feature briefs• Define core loop, sinks and
    62. 62. DominanceSmash TV Saga is a score based game where each level is a uniqueleaderboard that the player competes to dominate against his friends.Leaderboards are heavily emphasized in game: they are shown before andafter levels, in-game notifications show when you’ve passed a friends scoreand the game encourages you to brag on your friend’s wall after toppinghis score.AchievementSmash TV Saga has multiple achievement systems to entice the player.Each level, he can earn a number of predetermined levels. In addition,there is a global achievement system similar to XBLA. Points earned bycompleting achievements and earning medals are used to purchasepowerful weapon
    63. 63. Core loop• Simple diagram that lays out core experience• What are the sinks (player spends consumable)?• What are the taps (player earns consumable)?• What are the gates (what gates progress in each section of the game)?
    64. 64. Smash TV Saga Gate Player level Kill Guns Kill hordes of enemies Purchase and upgrade Sink ammo, time Sink gold, stars Tap stars, money, xp Tap guns, ammo Gate Lifetime
    65. 65. Business model canvas• Created by Alex Osterwilder• Interesting tool for business model innovation• Helps imagine all the factors of a business model simply on a single page• Holistic view of your service•
    66. 66. Canvas for Smash TV Saga Provides insight and value very
    67. 67. Feature brief• High concept• Success metric ✦ Monetization, engagement, virality, retention, quality• Single screen mock up• Sinks and Taps•
    68. 68. Proposed feature - smash pad• During each round the player picks up money and home goods• In between levels, the player can visit his SmashPad to decorate it with items earned• The player’s friend can visit his SmashPad, choosing to “Bro Out” or “Blow Out”• Monetization: The player can buy premium home goods using the game’s purchased
    69. 69. Using our razor•Feature rejected!• Proven mechanic – houses in Sims Social• Based on emotion – Jealousy/Vanity• Social interaction with “Bro Out” vs “Blow Out”• Does not map to our key
    70. 70. Proposed feature - phone a friend• In level, there are buttons to “Phone a Friend”• Each type is a super ability with a cooldown time• Example: “Lifeline” fills you to 200% health• Using “Phone a Friend” costs a Smash Token• Smash Tokens are earned on level up, but can also be purchased in large
    71. 71. Using our razor•Feature accepted!• Super abilities will help the player earn high scores• Super abilities will help the player earn medals• Super abilities are consumable based• Super abilities are available to free and paying
    72. 72. How much can I make?
    73. 73.
    74. 74.
    75. 75.
    76. 76. Gasketball by
    77. 77. Punch Quest by Rocket Cat
    78. 78. Ask yourself• How many players will I get?• How many will convert to payers?• What LTV do I expect from the average player?• How much will I pay to platform holders?
    79. 79. Super simple forecast Try for yourself with Forecast
    80. 80. F2P forecast calculator
    81. 81. Continue the conversation...• Tools and templates• Follow @QuarterSpiral• Contact