Core Games, Real Numbers: Asian & Western Games

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Kongregate is a distributor of more than 200 virtual-goods games developed by developers small and large, Eastern and Western, casual and hardcore. As such, it has a unique perspective on what types of mechanics and characteristics of games have the most success monetizing. This talk will focus on similarities and differences in performance between Asian & Western games, look at site-wide trends and dig into specific game metrics and mechanics to understand what makes games succeed & fail with Western audiences. This talk was given at GDC China 2012

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  • Emily Greer is the co-founder and COO of Kongregate, with a background in statistics and economics. Anthony Pecorella is the Producer for virtual goods games on Kongregate, with a background in indie game design and development.
  • Most of the 60k games are single-player, most of the VG games are multiplayerRevenue is extremely concentrated – just 0.3% of games do majority of the revenue
  • As the Kreds platform has grown, so has the breadth of games on it. Mix of social games and stand-alone MMOs, both western & asiandevs. RPG, strategy, & collectible card games have done the best.
  • What makes a game successful? Advantage of having a platform is comparative stats.
  • These are lifetime #s, the size of bubble represents lifetime revenue. Single-player games ARPPU cluster around $5 ARPPU, multiplayer game $20-$200. Most games with ARPPU > $100 are Asian MMOs.
  • What makes a game successful? Advantage of having a platform is comparative stats.
  • These are lifetime #s, the size of bubble represents lifetime revenue. Single-player games ARPPU cluster around $5 ARPPU, multiplayer game $20-$200. Most games with ARPPU > $100 are Asian MMOs.
  • These are lifetime #s, the size of bubble represents lifetime revenue. Single-player games ARPPU cluster around $5 ARPPU, multiplayer game $20-$200. Most games with ARPPU > $100 are Asian MMOs.
  • These are lifetime #s, the size of bubble represents lifetime revenue. Single-player games ARPPU cluster around $5 ARPPU, multiplayer game $20-$200. Most games with ARPPU > $100 are Asian MMOs.
  • What makes a game successful? Advantage of having a platform is comparative stats.
  • These are lifetime #s, the size of bubble represents lifetime revenue. Single-player games ARPPU cluster around $5 ARPPU, multiplayer game $20-$200. Most games with ARPPU > $100 are Asian MMOs.
  • These are lifetime #s, the size of bubble represents lifetime revenue. Single-player games ARPPU cluster around $5 ARPPU, multiplayer game $20-$200. Most games with ARPPU > $100 are Asian MMOs.
  • Secret of the virtual goods business: the majority of revenue comes from a small group of big spenders
  • Very little correlation here, with a nearly flat trendline. The average person can totally dislike your game and you can have a high arpu, and the reverse is true as well. Meaningful increases revenue appear as you increase repeat %, as it correlates well with rating & spread. Games with >50% repeat generally do very well (with the smaller, low ARPU bubbles being single player games that don’t monetize at the same level regardless of popularity due to capped ARPPUs).(Even with low correlation to ARPU, it’s still a good stat to look at though – correlates well with rating and spread)
  • What makes a game successful? Advantage of having a platform is comparative stats.
  • Very little correlation here, with a nearly flat trendline. The average person can totally dislike your game and you can have a high arpu, and the reverse is true as well. Meaningful increases revenue appear as you increase repeat %, as it correlates well with rating & spread. Games with >50% repeat generally do very well (with the smaller, low ARPU bubbles being single player games that don’t monetize at the same level regardless of popularity due to capped ARPPUs).(Even with low correlation to ARPU, it’s still a good stat to look at though – correlates well with rating and spread)
  • Very little correlation here, with a nearly flat trendline. The average person can totally dislike your game and you can have a high arpu, and the reverse is true as well. Meaningful increases revenue appear as you increase repeat %, as it correlates well with rating & spread. Games with >50% repeat generally do very well (with the smaller, low ARPU bubbles being single player games that don’t monetize at the same level regardless of popularity due to capped ARPPUs).(Even with low correlation to ARPU, it’s still a good stat to look at though – correlates well with rating and spread)
  • What makes a game successful? Advantage of having a platform is comparative stats.
  • Very little correlation here, with a nearly flat trendline. The average person can totally dislike your game and you can have a high arpu, and the reverse is true as well. Meaningful increases revenue appear as you increase repeat %, as it correlates well with rating & spread. Games with >50% repeat generally do very well (with the smaller, low ARPU bubbles being single player games that don’t monetize at the same level regardless of popularity due to capped ARPPUs).(Even with low correlation to ARPU, it’s still a good stat to look at though – correlates well with rating and spread)
  • Very little correlation here, with a nearly flat trendline. The average person can totally dislike your game and you can have a high arpu, and the reverse is true as well. Meaningful increases revenue appear as you increase repeat %, as it correlates well with rating & spread. Games with >50% repeat generally do very well (with the smaller, low ARPU bubbles being single player games that don’t monetize at the same level regardless of popularity due to capped ARPPUs).(Even with low correlation to ARPU, it’s still a good stat to look at though – correlates well with rating and spread)
  • What makes a game successful? Advantage of having a platform is comparative stats.
  • This doesn’t mean you should price items at $1,000, though some games do. Lower priced items ($5-20) that are worth buying repeatedly work fine for most games. It also doesn’t mean that you should focus only on your whales – rather, just make sure that your whales can spend big bucks if they want while keeping everyone else happy too, and be confident with pricing.
  • This doesn’t mean you should price items at $1,000, though some games do. Lower priced items ($5-20) that are worth buying repeatedly work fine for most games. It also doesn’t mean that you should focus only on your whales – rather, just make sure that your whales can spend big bucks if they want while keeping everyone else happy too, and be confident with pricing.
  • Without a strong endgame, the value proposition for spending money in your game is pretty weak. People want to make long-term investments in something they are passionate about. Having strong social features like Guilds, and competitive PvP and leaderboards, helps take a game to the next level, keeping players interested and engaged far past the pre-written campaign has been completed.
  • 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.
  • 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.
  • If your traffic drops over time, you get down to your core users and so your ARPPU, and especially your ARPU, will grow artificially. Fantasy Online maintained high and consistent traffic levels, so these numbers are all meaningful. Purchase rates were good, though not great, generally ranging from 1.1% to 1.5%. As mentioned earlier, promotion brings in a lot of new users who may not monetize right away, so the purchase rate drops briefly.
  • 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.
  • Thanks for reading! We hope this is helpful as you analyze existing and new games for the virtual goods market.
  • Core Games, Real Numbers: Asian & Western Games

    1. 1. Core Games, Real NumbersComparative Stats for Asian & Western Games Emily Greer November 2012
    2. 2. What is Kongregate?• Open platform for browser-based games – Flash, Unity, HTML5, Java, etc.• 60,000 games, 1300 uploaded monthly• ~200 games selling virtual goods• Revenue from virtual goods (70%) & ads (30%)• 15M monthly uniques, core gamers• Traffic is 40% US, 40% Europe, 10% Asia• Acquired by GameStop July 2010
    3. 3. Select Developers
    4. 4. Background• All stats are lifetime• ARPU: average revenue per user• ARPPU: average rev per paying user• User = Player: a registered user who loaded the game at least once• Games included have all been on Kongregate at least 6 weeks• Bubbles on charts represent size of total revenue
    5. 5. ARPU & ARPPU• ARPPUs for single-player games cluster around $5-$10• Multiplayer games range $20-$230• Average ARPPU for a game from Asia: $118• Average for Western multiplayer game: $40• ARPPU is the main factor in high ARPU for Asian game, important factor for all games
    6. 6. ARPU & % Buyer• % Buyer ranges from 0.05% - 3.6%, much larger range than ARPPU, average is 0.63%• Single-player average 0.9%• Multiplayer game average 0.57%, slightly higher in Western games, slightly lower in Asian games• Much greater range from top to bottom in % buyer in Western games• High revenue multiplayer games 1.5% or higher
    7. 7. Big Spenders are a Big Deal• 4 out of the top 5 games get the majority of their revenue from those spending $500+• All top 10 games get the majority of their revenue from players spending $100+
    8. 8. How We Look at Retention• % Repeat – What % of players ever return – Shows initial impressions/interest in the game• Repeat  Reg – What % of players who repeat become regulars (10+ plays)? – How strongly is the player hooked in the early-middle parts of the game?• Reg  Commited Player, aka % Commitment – What % of regulars become committed players (50+ plays)? – Engagement of end-game content
    9. 9. ARPU & % Repeat• Surprisingly little correlation with ARPU – Games that lose 75% of players immediately are just as likely to have a high ARPU as one that keeps 75%• But games with higher repeat rates have higher revenue at the same ARPU – Games that have high repeat rates get higher ratings and viral spread, more players more revenue• Average for Western games slightly higher than Asian games but top performers much higher
    10. 10. ARPU & % Commitment• Strong correlation with ARPU – Smaller bubbles to the right are generally newer games, their revenue & ARPU will grow with time• Correlation slightly weaker with Asian games, but Repeat  Regs very strong – Longer sessions lengths & stronger early-game monetization probably explain
    11. 11. 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 accepted• Mixed games: can combine the best of both approaches – High conversion, wide funnel, still create big spenders
    12. 12. Commitment REALLY MattersType of Player % Buyers Avg Trx ARPPU ARPU % Players % of RevNon-Repeats 0.03% 2.10 $ 24.69 $ 0.01 43% 0%Repeats (2-9 plays) 0.40% 1.85 $ 19.61 $ 0.08 40% 3%Regs (10-49 plays) 4.68% 2.61 $ 21.35 $ 1.00 10% 12%Committed (50+ plays) 16.53% 7.03 $ 96.92 $ 16.02 7% 84%
    13. 13. First Advice#1 Don’t push too hard too fast – People are not going to buy the first time they play your game. In the first few sessions focus on fun & giving them reasons to return, not upsells. – Western players expect & value some level of fairness – pay for advantage (and reduction in grind) okay but non-buyers should feel they have some chance to compete#2 Don’t underprice, don’t intimidate – There is very little price elasticity below $5. It‟s an emotional decision to spend for progress and status, focus on that. – Use intro paid currency, first time buyer packages & deals to get people into the habit of purchase – Really expensive items early may scare players away who might accept them later
    14. 14. Big Spender Advice#3 Make sure players can spend $1,000+ – Games are hobbies, no different from golf, cooking, live music – Those who get deeply involved devote significant time, energy, and money – 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 will want to spend an infinite amount. Don‟t create a situation where spending is capped by availability or utility.
    15. 15. The Most Important Lesson#4 – Retention, Retention, Retention• Every high ARPU and high revenue game on Kongregatehas a strongly social and competitive end-game. Commonfeatures (mix and match): – Guilds/leagues – Guild warfare or leaderboards – PvP (either synchronous and asynchronous) – Visible status & character progression – Guilds/leagues (it bears repeating)• You have to keep feeding the game – New content, new modes, new events – New servers are good but not enough
    16. 16. Fantasy Online: A Coming of Age Tale • By Pixelated Games (Jeromy Stroh) • Launched May 2010 • 4.20 rating • 7.2M gameplays
    17. 17. Fantasy Online: A Humble Start• Popular and good retention, but couldn‟t monetize well. Only sold aesthetic equips. First month (Jun „10) Monthly ARPPU: $5.50• Added new zones for modest growth to $8.50 in Sept. Minimal updates for next few months.• Nov 2010: Monthly ARPPU faded to $8.11• Dec 2010: Guilds launched, Monthly ARPPU jumped to $12.93• Jun 2011: Crafting, mining, XP potions, etc., kept growing to $18.66
    18. 18. Fantasy Online: Big Growth• Jul 2011: “Gem Packs”, expensive “uber” items ($30+) were added to court whales. Monthly ARPPU soared to $32.80• Nov 2011: New content, new equipment slots, Halloween event, grew to $36.23 in• Jan 2012: Guild Warfare, peak of $41.86• Mar 2012: New high level content, $54.37• June 2012: 2-year anniversary event. Lots of revenue, still high ARPPU at $43.97.
    19. 19. Fantasy Online: Monthly ARPPU
    20. 20. Fantasy Online: Monthly ARPPU
    21. 21. Fantasy Online: Summary Stats• Traffic stayed strong through high rating and repeated Kongregate promotion• % Buyers generally ~1.1% with promotion, ~1.5% without• Monthly ARPPU grew from $5.45 to $54.37• Monthly ARPU grew from $0.04 to $0.70
    22. 22. Fantasy Online: Revenue
    23. 23. To learn more visit developers.kongregate.comContact us at apps@kongregate.com

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