This document discusses game design and business models for online games. It covers various business models like pay-by-the-minute, subscriptions, one-time purchases, and free-to-play with microtransactions. Each model impacts game design and targets different audience sizes and demographics. The document also discusses issues like balancing time and money, revenue and fairness, and advancement speed vs content production. It proposes using conjoint analysis to segment players and match different attribute values like damage and speed to player types to maximize revenue from microtransactions.

1. Game Design & Business
Models
Neil Harris
neil@heroengine.com

2. HEROENGINE 3D ONLINE GAMES
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3. MY LIFE IN ONLINE GAMES
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4. LESSON I WISHED MY FATHER HAD TAUGHT ME
NEVER FALL IN LOVE WITH YOUR
BUSINESS MODEL!
THEY ARE FICKLE AND WILL LEAVE
YOU BROKE AND BROKEN HEARTED.
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5. BUSINESS MODELS I HAVE LOVED
❤ Pay-by-the-minute
❤ Monthly subscriptions
❤ Buy the box, pay no more
❤ Microtransactions
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6. BUSINESS MODEL IMPACTS
GAME DESIGN
AUDIENCE SIZE
DEMOGRAPHICS
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7. ISSUES FOR GAME DESIGNERS
TIME VS MONEY
REVENUE VS FAIRNESS
ADVANCEMENT SPEED VS
CONTENT PRODUCTION
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8. BUY THE BOX AND PLAY FOR FREE
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9. ONE-TIME PURCHASE ADVANTAGES
LOWEST SERVER COST
FITS STRENGTHS OF
PUBLISHERS
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10. ONE-TIME PURCHASE DRAWBACKS
• No Recurring Revenue:
Frequent Expansions & DLC
• Heavy Focus on PvP = VERY
Hard Core
• P2P = Instanced =
Hacking/Cheating
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11. WHY I LOVED PAY-BY-THE-MINUTE
More Fun = More Time
More Time= More Money
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12. PAY BY THE MINUTE
$60
ARPU!
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13. BAD GAME MECHANICS TO MAKE MONEY
Increase Travel Distances
Slow Healing
Training Separate from Combat
Punish Players
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14. #1 DESIGN CHEAT IN ONLINE GAMES
BY SLOWING PLAYER PROGRESS
DESIGNERS WORK LESS HARD
TIME BECOMES LESS FUN
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15. DISADVANTAGE OF BY-THE-MINUTE
HIGHEST ARPU BUT
SMALLEST AUDIENCE
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16. ANNUAL REVENUE POTENTIAL
• BY THE MINUTE
– High ARPU, Audience 1,000-50,000
• SUBSCRIPTION
– ~$15 ARPU, Audience 50,000-millions
• FREE-TO-PLAY MICROTRANS
– <$1 ARPU, Audience potential tens of
millions
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17. BUSINESS MODEL IMPACT:
SUBSCRIPTIONS
• ARPU HAS A FLOOR AND A CEILING
• No chance to benefit from “whales”
• Low value for light users
• HAPPIEST USERS = LOTS OF TIME
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18. PREMIUM SUBSCRIPTIONS
GEMSTONE INCREASED ARPU TO
$27
– PREMIUM SUBSCRIPTION AT
$40/MONTH (35% of audience)
– SPECIAL EVENT TICKETS (up to
$100 each)
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19. SUBSCRIPTION GAME DESIGN ISSUES
SLOW DOWN PLAYERS = GRIND
HUGE WORLD = HUGE EXPANSIONS = HUGE
COST
PvP END-GAME (LESS CONTENT REQUIRED)
WoW IS SPEEDING UP ADVANCEMENT TO
BROADEN AUDIENCE
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20. FREE TO PLAY + MICRO TRANSACTIONS
• Huge Audience!
– More Casual
– Needs Low Hurdle
• Balance Paid Goods with Fairness
– Annoyances + Cures
– Speed or Convenience
– Vanity Items
– New Areas / Content
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21. MAXIMIZE REVENUE & FUN IN FREE-TO-PLAY
A MODEST PROPOSAL
WHAT IF…?
YOU COULD DIVIDE YOUR PLAYERS INTO
SEGMENTS
AND OFFER EACH GROUP ONLY THOSE
ITEMS THAT THEY VALUE MOST HIGHLY?
CONJOINT ANALYSIS
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22. CONJOINT SURVEY EXAMPLE
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23. CONJOINT METHODOLOGY
• CHOOSE ATTRIBUTES
–Damage, XP, Specials, Speed…
• DEFINE ITEMS AS
COMBINATION OF ATTRIBUTES
–Sword, 5 DPS, Fire Spell, etc
–Attributes can include
appearance
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24. SEGMENT PLAYER AUDIENCE
PER BARTLE:
– ACHIEVERS
– EXPLORERS
– SOCIALIZERS
– KILLERS
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25. MATCH ATTRIBUTE VALUES TO SEGMENTS
BEAUTY DAMAGE SPEED TOTAL
VALUE
ACHIEVERS $4 $3 $2 $9
EXPLORERS $2 $4 $5 $11
SOCIALIZERS $5 $2 $1 $8
KILLERS $1 $5 $4 $10
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26. HEROENGINE 3D ONLINE GAMES
neil@heroengine.com
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27. Game Design & Business
Models
Neil Harris
neil@heroengine.com