Wednesday, March 8, 2017

China Bans Korean Games in Political Move



In what many believe to be a response to US-Korean deployment of THAAD--the defensive anti missile system being set up in response to recent launches by North Korea--China has suddenly placed a ban on licensing for all new Korean games in the mainland.

This coming just over a year after China banned foreign media companies from publishing in China, essentially forcing all publishers to partner with locals to gain access to the world's largest mobile game market. Although this ban will not affect games that have already been released in China, companies who have already spent time & money developing are likely to be hit by the ban.




Netmarble (who were preparing to launch Lineage 2 Revolution) and Nexon (who were preparing to launch Spirit Dungeon Fighter) are both likely to be affected by the ban. Currently 40% of Nexon's sales are in Mainland China, and their stock has dropped 7% since the news broke.

The Chinese government has a history of closely regulating the gaming industry to give advantages to domestic developers. For more about Publishing Games in China, check out China's Winning Strategy of Copying All Your Hard Work. 

Mobile Gaming Industry Breakdown Part 3: Monetization

This weeks post will cover the basics of monetization strategies in Mobile Gaming--with a strong focus on Free to Play monetization. Catch up on the basic industry jargon, learn about the psychology behind monetization design, and learn the high-level reporting and optimization strategies to maximize your game's revenue.



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Monetization Channel: How the game makes money. Usually in-app purchase, advertising network, or upfront purchase.

F2P: Free to Play(Pay) Players can download the game for free but are later monetized with in-app purchases.

IAP: In-App Purchase

ARPU: Average Revenue Per User. IE. Revenue / Players.

ARPPU: Average Revenue Per Paying User. Most users don’t make in-app purchases. This metric is useful for seeing the (mean) value of a game’s paying players. 

LTV: Life Time Value of a user, perhaps the most important metric. It is a combination of Retention, Monetization, and Virality (how many new users does one user bring to your game). 

Free to Play Monetization Strategy


F2P is the dominant monetization strategy for all top-selling games on all mobile platforms, and has been that way since 2011. F2P reduces the CPI to the lowest possible because players are more willing to try a free game than a paid one. Once a player is playing the game, there are many strategies that can be employed to convince them to spend money.

Monetization is designed into the games core compulsion loops. Game progress or content is gated behind paywalls. These paywalls come in 2 types. A soft paywall allows a player to achieve the same results by spending more time with the game (grinding, farming, or waiting). Hard paywalls give players access to content unavailable to non-payers. 

Layering & Abstraction - multiple levels of abstraction will help obscure the transactional element of the game from the player’s mind so they are more willing to spend money in the game. It also makes it more difficult for the player to calculate the real cost of in-game items. This is commonly achieved with Premium Currencies. 



Premium Currencies - a currency in a game (like gems or diamonds) that can be purchased for real money. When a player spends premium currency on in-game items, the abstraction from real currency helps the player forget they are spending real money on virtual items. 


Hard Boost vs Soft Boost - If an IAP item provides a temporary benefit to the player it is a soft boost Example - An extra life. The advantage of soft boosts is they can be sold repeatedly. If an item provides a permanent benefit to the player it is a hard boost: Example - Legendary Armor. 

Time-Wall - making players wait for something unless they make an IAP.

Variable Rewards - Studies in operant conditioning ("Skinner Box") have shown that mammals are more enticed to perform an action if it results in variable rewards as opposed to fixed rewards. If there is a random element to the rewards a player receives (with a small chance to win big rewards), this will keep the player more interested than if rewards are fixed and transparent.

Gacha System: Often games will build variable rewards into other systems (like receiving random prizes after a battle). Gacha systems offer a direct "slot machine" type variable rewards minigame, often in exchange for premium currency. By combining several monetization strategies together, Gacha systems can be highly profitable. They are a favorite among Asian developers. 

Gacha Example: Players purchase Gems (Premium Currency) and can spend them on “Summoning Tokens”. These “Summoning Tokens” allow the player to summon random heroes. The heroes provide a permanent benefit to the player (hard boost), but because they are summoned at random the player has no control over which heroes he receives. The same psychology that drives gambling addiction can also drive some players of Gacha games to spend large amounts of money for the chance to win rare, valuable, in-game items. 

Reward Removal - A powerful technique of presenting the player with a reward for their achievement and then threatening to take it away if the player does not make a purchase. 

Difficulty Spikes - Allow players to feel masterful at the beginning of the game by making it easy. After they have invested some time into the game, increase the difficulty so that IAP becomes necessary to continue forward. This technique is especially used in Single Player F2P games. 

Competition and Social Pressure - Many players of multiplayer games are naturally competitive. This can be monetized by offering the advantages over other players as IAP. If the game has a cooperative element (like alliances) then teammates may put social pressure on each other to spend money for an advantage in the game. 

Case Study - Clash Royal’s  monetization strategy is a combination of  Premium Currency, TimeWalls, Reward Removal, Gacha, and Competition. After winning a match against  another player you are presented with a reward—treasure chests. The contents  of a treasure chest are unknown (Gacha) and they cannot be opened until their timer runs out (Time Wall). The player only has a few slots to store their treasure chests while waiting for the time to run down. After that, any treasure chests the player receives will be discarded (Reward Removal). The only way around this is to spend Gems (Premium Currency) to remove the timers and open the chests early. 


When analyzing your monetization data, there are a few key ways to look at it. Cohort Revenue analyzes the spending habits of different groups of players in your game. Item Sales looks at where money is spent in your game. First Payer Conversion looks at the process of converting non-paying players into paying-players.

Cohort Revenue

Divide players into specific cohort groups rather than averaging them all together. Some useful Cohorts to look at are:

Install Date - players that installed the game on the same date. See below picture…





In the above graph you can see that Day 4 monetization flattens. Therefore  optimizing the monetization of Day 4 should be a priority for this game. 

Player Level - Note the player level at time of purchase. Sum up all revenue by player level. Divide out by installs to normalize and look for any dips in the chart. Those are the places to optimize. 

High Value Players (“Whales”) - 98% of a game’s revenue will come from 2% of its players. Some of these players have extremely high LTV, and may pay hundreds to thousands of dollars for IAP over time. Acquisition, retention, and monetization of these players is extremely important.


Item Sales


Monitor Performance - Summarize spending by categories. Look at trends over time. Does spending stay steady or decrease? Does the trend make sense with the mechanics of the game?

Analyze Distribution: look at the spending percentage breakdown by item category. Distribution across multiple areas will lead to a higher spending because players will have multiple things they can spend money on. Is the category capped? Limited areas should have less revenue than unlimited areas. 

First Payer Conversion


The majority of players will never make a purchase in a Free to Play game. Once they do, however, they are far more likely to make additional purchases in the future. First Payer Conversion focuses on converting free players to paying players. 

The earlier a player makes their first purchase the higher their LTV will be. Larger first purchases at heavy discounts lead to higher engagement with the game. It is important to convert players to payers before majority drop-off points in the game. For Example if 70% of players stop playing on Day 2, but your payer conversion efforts start on Day 3—that is a problem. 

Beginner’s Sales are a great way to drive early conversion. 

Game Difficulty must be properly balanced. If it’s too easy then players won’t make purchases. If it’s too difficult then players will quit the game.
High Spend Options should be made available early, as High Value Players (whales) are looking for ways to spend. And make sure capacity for spending is unlimited, so that if players like to spend money in a particular area there is no limit. 

Forecasting


LTV is difficult to calculate early on. In order to forecast a player’s LTV look at baselines for other similar games. Analyze spending ratios…

      • Day 1 to Day 7
      • Day 7 to Day 30
      • Day 30 to Day 90
      • Day 90 to LTV

Using these ratios you can predict LTV from day 1.

Marketing Channel is also important for forecasting. Some marketing channels will yield high quality users while others will provide you with much lower quality. If users are incentivized to download your game they will be much less likely to make purchases (and their retention will be lower as well).



Wrapping it up 


If you're going to charge an upfront price for your game, then monetization is as simple as choosing the right price. But if all the industry leaders example is to be followed, you should monetize your game using F2P strategies with in app purchases. In F2P, monetization needs to be built into the game's core loops, using strategies like those outlined in this article. Your monetization efforts should be divided into 2 parts: converting players into payers, and achieving maximum LTV from your paying players. 

Next week we will cover Part 4 of this series: Live Operations. Learn about how to build upon your game's core monetization strategy with special events. If you'd like to be notified about new blog posts, check the bar on teh right. You can subscribe for email updates or follow me on Twitter. Thanks for reading! 

Wednesday, March 1, 2017

Mobile Gaming Industry Breakdown Part 2: Player Retention

Identify where players are leaving your game and fix it. Retention is all about quantifying player metrics, finding problems and forming hypothesis to understand and ultimately fix these problems. If User Acquisition is about funneling water into the bucket, retention is patching the holes in the bucket. 


Vocabulary


Day 2 Retention – Day 2 retention measures what percentage of people return to you app. This is generally the fastest drop in retention rate. An extremely high-performing game like Clash of Clans has a day 2 retention rates of 60% (meaning 40% never open the game again). Other successful games have been known to have retention as low as 10% - 20%. 

Day # Retention – Retention is often measured days 2 – 7 (the first week), then Day 14, then Day 30. 


In the previous chart, you can see the biggest drop in retention is between Level 1 & Level 2. From this we can surmise that there must be a problem with this step, and can start forming hypotheses about why players are dropping out here. 

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Day Based Retention should look like this chart. The curvature should be smooth and flatten out over time. If you see in sudden dips in your retention—that’s where you have room to optimize. Most of the optimization opportunity occurs early in the lifecycle, because that’s where the most players are lost. 

Secondary Levels – break down your retention numbers by hour, by play session, by achievements in the game. The more data you can gather about your players activity in your game the more data you will have for identifying and fixing sources of player abandonment. 

Compulsion Loops – are in game cycles that keep players engaged. Each stage of a compulsion loop should enhance the next stage to keep players interested. 


Compulsion loops are strongest when they are small and simple. Players want to know how to make progress and how to compare it against others. Too many loops will create confusion and dilute players’ engagement with the game. Loose cycles with a lack of player agency will create player apathy.  The player needs to feel they are progressing through the loop because of their own skill & decisions. 

If your game does not offer clear indicators of progress, consider adding an abstract indicator of progress—like points or XP.

Data Driven Approach to Optimizing Retention


Fixing a game costs time and money so it’s important to prioritize these tasks by their ROI. Fixes that will result in the greatest ROI should be prioritized first. 

Step 1: Identify a Problem

Analyze saved reports to identify issues. Look at relative retention over time and over player achievements. Find the biggest drops and address those first. Define a success metric or KPI to summarize what results a fix for this problem should deliver. 

Example: Day 2 retention is 20%, after analyzing data we find that the biggest drop in retention happens between the loading screen and completing registration (90% - 40% absolute or 44% relative retention). A fix for this issue should increase relative retention at this step to 80%)

Step 2: Form Hypothesis 

Create a hypotheses how to fix the issue. Forecast the lift or improvement that would come from implementing your hypothesis and weigh that against the estimated cost & effort to implement the issue. If possible, seek additional data to verify your hypothesis, such as Player Surveys & Focus Groups. Once you feel confident that your hypothesis will solve the problem according to your established success metric, it’s time to move on to the next step. 

Example (Continued): Players find the registration process off-putting. Having never played the game before they fail to see the value of taking a few minutes to register in order to play our game. Many players abandon at this step without ever giving the game a chance. Solution: Allow player to play the first level before asking them to register. Effort Level: 2, Estimated Lift: %60. 

Step 3: Implement and Analyze Results

The development team should be able to give an estimate for the amount of time & effort that will be needed to implement the fix. Once they complete all steps necessary and it’s been tested for basic functionality, update the game and watch the retention numbers closely. Analyze the new data and restart this optimization process. 

Early Game Retention


Early game retention is the most important. Players here are most likely to abandon your game as many are still evaluating it for the first time. 

  • A/B Testing should be done for everything
  • Endless design iterations until everything is optimized to its maximum
  • Game must be intuitive and easy to play
  • Technical Stability is especially important to new players. No bugs or crashes will be tolerated. 
  • Difficulty must not drive away new players. Game should start easy but also offer challenges for advanced players to achieve.
  • Other players are often the best content. Include social features to let players develop a community within your game. 


Late Game Retention


Optimizations to late game retention will affect the lowest number of players, but these players are likely to be the most dedicated and easiest to monetize.

  • Low Cost Content: Late game players have already consumed most of your game’s content. When they feel the game has nothing left to offer them they may move on to other games. Try to add as much low-cost late-game content as possible such as higher building and character levels. These changes require very little effort to implement. 
  • Events can drive engagement and provide novel experiences for advanced players who have already finished most of what your game has to offer. Good events should be repeated at intervals. 
  • New features and gameplay modes will keep late-game players interested, but are costly to implement. 

Wednesday, February 22, 2017

Mobile Gaming Industry Breakdown Part 1: User Acquisition

This guide covers high level success strategies and also the basics, so there should be something for everyone from industry veterans to first-time indie devs. If you like it check back next week for part 2!



User Acquisition or "UA" is now the dominant marketing paradigm in mobile gaming. App Stores are crowded and the chance of users finding your game organically is minimal (unless you're lucky enough to be featured). For many mobile games advertising is their only hope of growing their user base.

Important Keywords and Acronyms:



CTR - Click Through Rate of an advertisement. Number of Clicks/Number of Impressions. A CTR of 2% would be considered very good.
IR - Install Rate. After a user clicks your ad and lands on the App Store landing page, how many of them will go on to install your game?
CPI - Cost per Install. Amount of money you spend on advertising/Number of Installs. This is essentially how much you pay for each player.
A/B Test - Test 2 different versions of creative content such as your app's icon to see which delivers better results.


User Acquisition is often the most expensive part of a game's cost. It can be up to 10x more expensive than developing the game! Here are some good ways to lower a games CPI

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Success Factors

Target the right players (the type who will be playing your game) and TEST if the following materials are appealing to them:

Name: The name should be memorable and stand out compared to other names. It should match the games theme and give players an idea about your game. Make sure to utilize any IP or popular trending elements of your game. Test the name and refine until you have a name that your target audience will be drawn to.

Icon: Your game's icon is the #1 most important factor in determining whether a player will decide to download it. Like the name it must be tested and refined. Simple designs work best because icons are small. High contrast will make your icon stand out. Utilize A/B testing to see what works best for your game.

After this, it's very important that your game is easy to download. Large games are often abandoned and forgotten about mid-download. Take a page from Nintendo with Super Mario Run - let the user download the app, play the first level, and then ask them to download the rest of the game.

After you've optimized your name, icon, and file size it's time to look at the rest of your Store Page's contents.

Reviews: These are key, as players will look to the review of other players to determine your game's quality. Make sure to incentivize your players to leave your game a good review. Don't forget reviews are reset with every update.

Screenshots, Description, SEO: Several articles can be written about each of these. Test, test, and test again to make sure everything on your Store Landing Page is optimized for the highest Install Rate. Optimize your SEO to maximize organic search traffic.

Being Featured: Although this should be at the top, it is so difficult to do nowadays that you certainly can't rely on it. Top 5 featuring on the App Store will yield you 1 million free downloads a day from players who just open their App Store. Featuring depends on your game's uniqueness among its competition, the "fun factor", and having a full feature-set that fully utilizes the device (for example if you release special versions at iPad Pro resolution you have a shot at being featured in the iPad Pro apps section). Finally: Platform matters. Being featured on Amazon is far easier than being featured on Apple's App Store.

Invest in Good Creative: Having a constant source of good banner art and videos is one of the cheapest ways to reduce your CPI. Good creative makes everything in the process cheaper, because it makes players more excited to try your game. If you're doing targeted advertising you should not show a player the same piece of creative more than 3-5 times. So every 1-5 weeks you'll need a completely new set of artwork and creative to stay fresh. Creative is the best ROI because it lowers your CPI across the board.

Bottom Line:

User Acquisition is the most expensive part of the game monetization funnel. Reduce your costs here by investing in good creative content for advertisement and your store landing page. Test everything to find out what works and what doesn't, and use your test data to refine and improve your creative.

Next week we will be covering Part 2 of this 5 part series: Retention. Learn the most cost effective ways to keep players playing your game for a long time. If you find this information useful please subscribe or bookmark and check back next week!

Sunday, January 8, 2017

Could VR Bring Back the “Golden Age of Arcade”?


Back to the Future, Terminator 2, War Games… These classic 80’s movies might be your only place to go to see Arcades in all their glory nowadays. It was a time when gaming was social and took place in public places, because the computing power to bring you Pac Man was just too expensive for the home.

In this video we’ll take a look at a potential resurgence of commercial gaming spaces, thanks to VR technology. 



For the first time since the 80’s, VR technology has made playing the latest in video games unaffordable. The majority of gamers I know have not even tried commercial VR headsets like the HTC Vive or Oculus Rift yet. 

Enter the VR Arcade, an affordable way to play the newest games with your friends. VR Arcades are popping up around Asia in places like Japan, China, and South Korea. Gamers in these countries are already accustomed to gaming away from home in “Net Cafe’s”, so the jump to VR Arcades is a natural one. 

While it remains to be seen whether VR Arcades could gain any traction in North American and European markets, where the entrenched gaming paradigm is gaming at home—there are several advantages to this model of gaming: 

1. Players don’t need to worry about purchasing expensive technology that becomes quickly outdated. Players can always play the latest VR systems at the arcade. 

2. Players don’t need to clear a large area in their house to play. While some games exist that have you simply stand or sit in place, these games are far less immersive than ones that have you move around in virtual space. Some VR games can be great exercise too! 

3. VR becomes more social. People would be more likely to go with their friends and play together. Games could be played together or even just watched, like the green-screen clip in the video. 

4. VR Game Designers can take advantage of Arcade-Level systems, custom-game controllers, and large spaces. A major restriction for HTC Vive games, for example, is confining gameplay to a small area. Immersive VR requires tactile feedback and freedom to move around. 

2016 saw a few VR arcades pop up around the US. San FranciscoChicagoD.C. have all seen VR Arcades open in the past month. The standard rate seems to be about $30 per hour. Business seems to be doing "alright", and reported customer satisfaction is quite high.

What do you think about the possibility of VR Arcades in the near future? Feel free to post your ideas in the comments! 

Thursday, November 24, 2016

Ubisoft's 30 days of giveaways LIST UNCOVERED.

I gotta say, Ubisofts "30 Days of Giveaways" AKA "advent calendar" is a great take on the "daily login rewards" we often see mobile games doing these days. But many people who share my disdain for Uplay are wondering if it's going to be worth it to login daily for a random reward. Well here's your answer:



And here's the link to the Advent giveaway:

Ubisoft 30 Days of Giveaways

I've got my eye on day 14, and 22 - 25 personally.

Friday, May 20, 2016

What Do your Gaming Habits Say About You?


Modern games call for a diverse skillset. Problem solving, dexterity, spatial reasoning, memory, and communication are just a few of the many intertwined abilities our brains are juggling at 60 frames per second. But why?


Will your super-gaming skills save the human race one day?











If you're a "gamer" statistics say you spend about 6-7 hours a week playing video games. Most of us have probably never stopped to ask ourselves why we do this, but a lot of research has been done on the topic. A great place to start is here...





Your brain is wired to prioritize needs this way for survival. When you fulfill a need, you're rewarded with happy feelings. Often we must sacrifice higher needs to maintain lower ones. For example you might continue working a dead-end job (financial security) and sacrifice pursuing your dream (self actualization).

But video games allow us to simulate need-fulfillment without any risk! That's why they're so addictive. With a video game you can live your dream of becoming a warlord without any of the repercussions. Conversely, you can enjoy fulfilling needs that have already been fulfilled in real life, like building yourself a shelter--while sitting comfortably in your house! 


Not everyone enjoys the same kind of games. The following 2 studies demonstrate relationship between age, sex, personality, and your gaming preferences. Read on... 


[AUTHOR'S NOTE] Social science is an extremely "soft" science, it is based on conclusions derived from statistical evidence (read: generalizations) and it demonstrates trends, not rules or laws. The following studies were not performed by me.



Personality and Video Game Preference. (Click to See The Study)
  • Extroverted players tend to like casual games and games with party or music themes. 
  • Introverts (marginally) preferred Action RPGs, MMORPGs, and Strategy Games.
  • Sports, Racing, Simulation, and Fighting games are best liked by "conscientious" people (punctual, orderly, high test scores)
  • Action, Adventure, and Platformers scored highest with people who are looking for new and unique experiences.
  • (From a Different Study) First Person Shooters and Action games correlate with aggressiveness in young males.


People also change as they age. Here's some interesting data, charting players' mean age & gender across different game genres.


But What about Me? 

It'd be impossible to psychoanalyze every gamer on the planet in one blog post. But I'd like to help you do it yourself! Below is a list of common game genres, and the type of experiences they typically offer us. This list was compiled from reading developer interviews, game design guides, and published articles about each of the genres.

If you find that you generally gravitate toward a certain genre this could indicate:

  1. Your cognitive strengths. Maybe you like to solving problems with creative solutions, or by sheer skill, maybe you're inclined to be nurturing. Your choice of games might indicate which cognitive abilities you are most inclined to use (and maybe you don't get enough chance to use in everyday life).
  2. A need in your life that is unfulfilled. Simulating the fulfillment of this need makes you happy.
  3. A need in your life that is too easily fulfilled. Our brains evolved to build shelters, form tribes, hunt & gather food and raid other tribes. Modern life has removed the need for any of this without providing our animal instincts an outlet to express themselves. 

Game Genres

  • Action - Use skill to dominate. Feel your safety threatened, then feel powerful as you overcome your enemy with dexterity & reflexes. This anxiety-release mechanic releases adrenaline and puts you in "flow state", a zone where your mind fully concentrates free of distraction.
    • First Person Shooters - Use your primal instincts, fight-or-flight decision making. By mimicking human point-of-view and using the most realistic graphics possible these games simulate real life and fully immerse you in the action. They also allow you to be aggressive without consequences.  *Source New Yorker "Why Gamers Can't Stop Playing First Person Shooters"
  • Strategy - Use intellect & creativity to dominate. Make meaningful decisions that determine the course of events. The slow pace of strategy games allows you to use your higher intellect and reasoning, dexterity should not be a large factor in determining the victor of a strategic match. *Some very helpful ideas from Criteria for Strategy Game Design
    • Tower Defense - Defend territory; create a safe space. The Tower Defense phenomenon is basically a grown-up version of children's love of building box forts.  *The Saturday Paper: Wherever Whenever
  • RPG - Nurture & grow, use empathy, be part of a great story, be somebody else. RPGs immerse us in the minutiae of another's' life. By guiding your character's' growth by making both big decisions and small, you psychologically build an attachment to your character's and feel invested in their success.
    • Adventure - Experience novelty. Use problem solving. Do things at your own pace. Adventure games focus on story and travel. They often force us to slow down in order to solve a puzzle, then reward us for solving it with access to new areas.