3 lessons from 9 years of locomotive offers: Data based user segmentation and monetization. TrainStation case study.

3 lessons from 9 years of train offers
Data based user segmentation and monetization. TrainStation case study.
15th October 2019

www.pixelfederation.com
Who am I?
Martin Gajarský
•Game Designer at Pixel Federation
•Lead Designer of TrainStation (2017-2019)
•Specialisation:
• System Design
• Production Automation
• Live ops
• Monetization

Game Design perspective on monetisation

Pixel Federation
•Largest game developer in Slovakia
•210 employees in Bratislava
•6 live F2P mobile games
• Transport simulation
• Puzzle
• Idle Games
•34 MIO revenue 2018
Who are we?

•Free to play
•Rail transport tycoon
•desktop & later mobile
•2010 launch
•35 MIO lifetime registrations
•45+ MIO lifetime revenues
•4000+ trains, 16000+ ingame items

Monetisation
•IAPs
•Subscriptions
•Rewarded Video
Depends on
•long-term engagement
•frequent content updates

3 lessons from 9 years of TrainStation monetization
1. Monetize what players WANT even if it hurts your game design
2. Monetize MORE than you think you should
3. Using rules 1-2 will break your game. Fix it afterwards.

Early monetization - Plan
•Monetization through mechanics – 90 %
•Premium content – 10 %

Data based user segmentation and monetization. TrainStation case study
Early monetization - Reality
•Monetization through mechanics
•Premium content
•Why?
Graph: TrainStation Gems Spent Speedup vs Shop 1-8/2019

Our player base

Early monetization - Decisions
•Monetization through mechanics
•Premium content
• Labor intensive
• Creates endless content mill in-game
• Balance inflation
• Increases app size and loading times
• Unsustainable in the long run
• It‘s what the players want to buy
Graph: TrainStation Gems Spent Speedup vs Shop 1-8/2019

Early monetization – More Content
•Special Offer
•New content every 3 days, time limited
•Most powerful content in the game
•Large variety of content
•Production pipeline optimization -> hiring more artists and level designers

Result - Players love new content
•66 % of Gems spent in 2019 -> Special + Vintage Offer
•6 % Speed-up
Graph: TrainStation Gems spent in all categories 1-8/2019

Adding content to money offers
•GUANO offer added in 2014
•1 pack , time limited
•Gems + unique locomotive
•Conversion ~5.7 %
•42-58 % conversion in VIP segment
• 200 USD pack (locomotive value: ~15 USD )

Psychological value of content
•SUAKO offer
•3 packs to choose from
•Best Gem value in the game
but no locomotive
•Conversion ~1.1 %
•32 % conversion in VIP segment
•Choice + better value than GUANO
but no content = worse conversion

Data based user segmentation and monetization.
Offer segmentation
•At first manual, later automated
•5 criteria
• Max payment / time
• Total payment / time
• Time since last payment
• Activity - login frequency
• Player progression – level / upgrades

Data based user segmentation and monetization.
Offer segmentation
•4 main segments
• non-payer
• standard
• VIP
• reactivation
•AB testing of constants
• Activity time, payment brackets etc.
• 2,5x revenue thanks to segmentation

The result
•More pop-up offers = ARPU growth
•High acquisition of new players
•Enough room for years of inflation
Graph: TrainStation profit (revenue with marketing costs subtracted)/MAU 7/2016 - 8/2019

Game developer mindset
•We want to create amazing worlds and experiences for others.
•“Do what you love and the money will follow.“
•That‘s why we work in the gaming industry and not a bank.

Game developer mindset
•We want to create amazing worlds and experiences for others
•“Do what you love and the money will follow.“
•That‘s why we work in the gaming industry and not a bank.
Result:
•Developers only focus on monetization when the money is short.
•They don‘t want to look ‘greedy‘ by (CEE standards).

However...
Source: Norton, Michael I., and Dan Ariely. in Perspectives on Psychological Science 6, no. 1 (January 2011): 9–12.

TrainStation revenue distribution
• 25 % of revenue -> 1 % of payers
• 50 % of revenue -> 6 % of payers
• Top10 life-time payers 50K+ each
Graphs: cumulative number of payers and revenues 6-8/2019

Pracital implications
• You need a monetization system that matches your player‘s revenue distribution and unique monetization
behaviour
• Manually you can never set up enough offers for your top payers
• Increasing monetization pressure on everyone is counterproductive

Pracital implications
• You need a monetization system that matches your player‘s revenue distribution and unique monetization
behaviour
• Manually you can never set up enough offers for your top payers
• Increasing monetization pressure on everyone is counterproductive
Conclusion:
• Automated offer segmentation system – Flash Offer

Flash Offer - Design
•Automatic segmentation update
•Double confirmation
•It‘s easier to rise than fall
•2 axis segmentation
•Display frequency
•Price
•Content type (future)
•Significant discount
•Added time pressure – 1 hour

Flash Offer - Design
•Automatic segmentation update
•Double confirmation
•It‘s easier to rise than fall
•2 axis segmentation
•Display frequency
•Price
•Content type (future)
•Significant discount
•Added time pressure – 1 hour
Graph: Flash Offer segmentation in November 2018 (4.99 pack and 7-day frequency excluded)

Flash Offer - Results
-ARPU increase by ~16 %
-Flash Offer segmentation 10 – 15 % monthly revenue 1st year

• Acquisition problems after 8 years live
• Strong and loyal old player base which loves new content
Options:
• Upgrade Flash offer (~16 % revenue, 3 months work) -> more elegant
OR
• Upgrade GUANO (~40 % revenue, 1 month work) -> easier
Conclusion:
• Optimize most popular GUANO offer
• Automate segmentation
• Automate content creation
• Increase frequency (for everyone) – 3 weeks -> 1 week
Adding even more offers - Reasons
Graph: TrainStation payer DAU by days in game 7/2017-8/2019

Adding even more offers - Options
Options:
• Upgrade Flash offer ~16 % revenue, 3 months work -> safer + more elegant
OR
• Upgrade GUANO - ~40 % revenue, 1 month work -> higher potential + easier

Adding even more offers - Options
Options:
• Upgrade Flash offer ~16 % revenue, 3 months work -> safer + more elegant
OR
• Upgrade GUANO - ~40 % revenue, 1 month work -> higher potential + easier
Conclusion:
• Optimize most popular GUANO offer
• Automate segmentation, content creation
• Increase frequency (for everyone) – 3 weeks -> 1 week

Adding even more offers - Results
When you introduce 3x more offers and get an ARPU increase of 15 %
•+15 % ARPU
•could have been better
•we‘re reaching an ARPU limit?

Adding even more offers - Learnings
• Increased offer frequency has always worked for TrainStation (and other Pixel projects)
• +16 % from Flash Offer
• +15 % from weekly GUANO
• Each frequency increase comes with diminishing returns
• Largest revenue spikes don‘t last in the long term
• New offers slowly get old -> old players always need new stuff
• Players have a rought budget

Adding even more offers - Future
• Flash Offer - Each player gets different content based on recommendation engine
• Guano – Content profiles and higher value packs for more preferred content

Fix the mess you‘ve done.
•Value inflation in late game
•Performance gap between payers and non-payers
•Difficulty to balance new content
• Extreme prices needed for seasoned players
• Too high for new players
•Broken progression flow in early game after monetization
•None of these caused the game‘s decline – players are loyal for years

Compensate with new features
Problem Solutions
Power inflation automated balance scaling or segmentation
Resource inflation new resources (+ storage)
Not enough quests auto-generated quests / improve manual production
Imbalance payer vs non-payer leaderboards, league system
Too little ingame content automate content production
Nowhere to spend Gems consumables, Gem subscriptions, VIP content
App too large optimize client, optimize loading

Compensate with new features
• avoid these problems where you can, but you can‘t avoid them all J
• solutions don‘t work forever but do work for 9 years (or 15)
Problem Solutions
Power inflation automated balance scaling or segmentation
Resource inflation new resources (+ storage)
Not enough quests auto-generated quests / improve manual production
Imbalance payer vs non-payer leaderboards, league system
Too little ingame content automate content production
Nowhere to spend Gems consumables, Gem subscriptions, VIP content
App too large optimize client, optimize loading

3 lessons one last time

Thanks for your attention!
Questions or comments?
mgajarsky@pixelfederation.com

3 lessons from 9 years of locomotive offers: Data based user segmentation and monetization. TrainStation case study.

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3 lessons from 9 years of locomotive offers: Data based user segmentation and monetization. TrainStation case study.