Understanding Players Who are Payers | Nick Berry
•Download as PPTX, PDF•
1 like•162 views
Delivered at Casual Connect USA 2018. The Lion's share of developer revenue comes from in-game micro transactions, with money being spent inside games that are free to download. What percentage of people pay? How often do they pay? What is the breakdown of whales and minnows? Nick has boiled the ocean and counted every penny spent on every web-based game on Facebook, around the world, for the last six years. In this presentation he will reveal what's behind the curtain and present this data.
Recommended
Recommended
More Related Content
What's hot
What's hot (19)
Similar to Understanding Players Who are Payers | Nick Berry
Similar to Understanding Players Who are Payers | Nick Berry (20)
More from Jessica Tams
More from Jessica Tams (20)
Recently uploaded
Recently uploaded (20)
Understanding Players Who are Payers | Nick Berry
- 1. Nick Berry M.Eng, ARAeS, CIPP – Data Scientist Players who are Payers
- 3. Hi, my name is Nick, and I’m a Data Scientist …
- 4. Data Scientist: “The sexiest job of the 21st Century”
- 5. Image Credit - Hong Seon Jang
- 6. Agenda 1.Quick History Lesson 2.Facebook Sales Pitch 3.Deep Dive into Purchase History Data
- 8. Retail boxed Product Evolution of Computer Games Revenue Sources Browser based online games Deluxe download games Freemium ModelPremium mobile and tablet games $19.99 $15.99 $9.99 $2.99 $1.99
- 10. Source: App Annie 2013 retrospective report It’s been a F2P world for most developers for a while
- 11. Make people want to pay, not have to pay! (not the other way around) Players become payers
- 12. The economic beauty of micro-transactions Volume Price $19.95 $6.95The long tail The tall tail
- 13. Micro-transaction types: +10% • Avatars • Fashion • Accessories Things that do not adjust the balance of the game Kill 10 more Orcs = or = Pay 10 gold coins Time Money Bling Accelerators Power-ups Pay to get 10 gold coins to get +10% attack bonus for 12 hours
- 14. User acquisition costs are probably your single biggest expense?
- 16. 740 new games released every day in 2016 270,000 per year
- 18. If you build it, they will come (NOT!) If you have the greatest game in the world, and nobody knows about it, it’s just the greatest game in the world that nobody knows about!
- 19. Image: jcolman (flickr) Visibility is oxygen “We were kind of naïve. We thought if we made a really good product it would just sell, but that’s not the case” Quiz Up
- 20. Facebook Worldwide Monthly Active UsersMM 0 250 500 750 1000 1250 1500 1750 2000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q3
- 23. ARM How much water is in the bath?
- 24. DAU is a measure of the water in the tub
- 25. What problem are you trying to solve …? …very different problems to solve.
- 26. Lifetime analysis of spending on Facebook games
- 27. What defines a whale? What defines a successful game? Is high volume of small transactions better than a smaller number of big transactions?
- 28. It’s not all about the whale • Great games are needed to encourage people to spend • Different games monetize at different rates, and for different amounts • Need the correct mechanisms to exploit this (game design) A billionaire spends the same money at fast food restaurant as a you and I.
- 29. Lifetime Spend
- 30. Different volumes of lifetime spend Less than $2 lifetime spend $2 - $5 lifetime spend $5 -$10 lifetime spend $10 - $50 lifetime spend $50 - $100 lifetime spend $100 - $500 lifetime spend $500 - $5,000 lifetime spend More than $5,000 lifetime spend
- 31. 1. Look at every transaction, by every game, and every user, on Facebook web (Canvas) between 2010-2016 2. Calculate TPV (lifetime value), anonymously aggregated 3. Bucket into LTV categories, by game Mechanism
- 33. The long tail, or the tall tail?
- 34. Distribution of Payers (Number of players) Mist Sprinkle Drizzle Shower Rain Drench Monsoon Supermonsoon Mist Sprinkle Drizzle Shower Rain Drench Monsoon Supermonsoon Mist Sprinkle Drizzle Shower Rain Drench Monsoon Supermonsoon Mist Sprinkle Drizzle Shower Rain Drench Monsoon Supermonsoon
- 35. Mist Sprinkle Drizzle Shower Rain Drench Monsoon Supermonsoon Mist Sprinkle Drizzle Shower Rain Drench Monsoon Supermonsoon Mist Sprinkle Drizzle Shower Rain Drench Monsoon Supermonsoon Mist Sprinkle Drizzle Shower Rain Drench Monsoon Supermonsoon Distribution of TPV
- 37. LEVERAGE • Out of top 100 all time revenue grossing games on Facebook (Canvas) • 90.3% revenue comes from players who spent more than $100 • 98.9% more than $10 • (1.1% of revenue comes from people who spend <$10 lifetime on any game) • Warning: Don’t read this the wrong way, it’s a leverage thing
- 38. $10.00
- 39. It’s pretty consistent • Analysis of top 1,000 games 98.6% TPV comes from >$10/game • Over every game, ever released on Facebook canvas 98.4% of TPV comes from players who spent >$10 in a game Freemium
- 40. Don’t leave green on screen #1 Some games offer nothing in their stores you can purchase for less than $2 0% 10% 20% 30% 40% 50% 60% 70% Mist Sprinkle Drizzle Shower Rain Drench Monsoon Super Monsoon <$2 $2-$5 $5- $10 $10- $50 $50- $100 $100- $500 $500- $5,000 >$5,000
- 41. Don’t leave green on screen #2 Some games cap out what you can buy 0% 10% 20% 30% 40% 50% 60% 70% Mist Sprinkle Drizzle Shower Rain Drench Monsoon Super Monsoon <$2 $2-$5 $5- $10 $10- $50 $50- $100 $100- $500 $500- $5,000 >$5,000
- 42. • Only 3 games in all-time top 300 grossing games did not have players >$5,000 • 15 games in top 300 that made no money from people who spent <$2 • Only 1 game in top 1,000 did not have players who spent >$1,000 • Only 12 games in top 5,000 did not have drenchers ($100-$500) Leaving Green on the Screen
- 43. TPV by time
- 44. Rolling 28 day average Daily TPV
- 47. Players spend over time
- 49. Cumulative Spend
- 52. It’s cheaper to bring someone back from the dead than find someone new Resurrection Nordeus spent $3.5k on re- engagement campaign on Facebook … … gained over $121k in immediate return.
- 54. Feed the machine, a quarter at time, and again, and again … … or deposit a pile of cash, and slowly burn through it. • Low transaction value • High volume of transactions • Roadblock removers • Deposit cash, burn down over time • Smaller volume of transaction • Convert real money into tangible in-game assets
- 55. Examples (All in top 200 games) Average Lifetime User Spend: $68.13 Average Transaction Value: $2.18 Average Lifetime User Spend: $574.86 Average Transaction Value: $4.95 Average Lifetime User Spend: $80.51 Average Transaction Value: $1.26 Average Lifetime User Spend: $298.51 Average Transaction Value: $22.87 Average Lifetime User Spend: $26.07 Average Transaction Value: $5.48 Average Lifetime User Spend: $694.12 Average Transaction Value: $19.95
- 57. Understand what “Average” means 38 people spending $10 each $5,000 $137.95
- 59. Cross-Correlations – How many different games do you play a week?
- 60. Weekly active users on top 100 games
- 61. Loyal users Enjoys many different games
- 62. Summary • Hundreds of millions of Facebook users play games every month. • It’s brutal out there for developers. • Visibility is hard, and customer acquisition costs are high. • Freemium is the business model. • Players become payers, not the other way around. • Your game has to be compelling enough so that people want to pay, not have to pay. • The tall-tail generates more revenue than the long-tail. • BUT, without the long-tail, there is no reason for the tall-tail. • Different games monetize in different ways. Understand your users. • Use complex metrics; understand distributions, not just averages. • Builders tend to be more monogamous. • Don’t leave green on the screen; offer things at all levels. • It’s cheaper to bring someone back from the dead than find someone new.
- 63. The End