Re-design of my old presentation about free-to-play games monetization

1. GAME MONETIZATION
Overview of monetization methods for free-to-play games

2. Agenda
• Monetization loop. Action -> Incentive -> Expansion. Structure of paywall.
• Key elements of Engagement. Mechanics, Progress & Goals, Social Factors, Game Evolution.
• What do players pay for?
• How to sell virtual items. Steps to sell virtual items, desirability parameters, economy & pricing.

3. Monetization Loop
Transition from one phase to another
blocked by paywall.
Action – core gameplay (“Action phase”, basic actions of the player).
Incentive – what does the player wants (win the match, finish the level, get new item, get the highest
score etc.).
Expansion – player’s progress (level up, new content, new difficulty levels etc.).

4. Paywall structure
Player can overcome paywall by three main ways:
Grind, Spam and Pay.
Grind + Spam = 80% of progress
Player Grinds, then Spams and asks friends for
help, after that player has to Pay “just a little bit” to
finish the task and finally overcome a paywall.
Grind – player can overcome paywall spending time, make numerous attempts, grind in-game
currency.
Spam – player can overcome paywall by asking friends for help (and advertise the game and
improve retention by viral mechanics).
Pay – player can overcome paywall by buying premium content.

5. Engagement
The key element for successful monetization is player’s engagement. The more player engaged in
your game, the more times player moves through monetization loop. More times the player moves
through the monetization loop, the higher is the chance that the player will pay.
There are four key elements of the
player engagement:
1. Mechanics
2. Progress & Goals
3. Social factors
4. Game evolution

6. Mechanics: Core Loop
First and the most important key element of player engagement is
the core gameplay loop.
Properties of good core gameplay loop:
• Fun 1 time — fun 1000 times. “Endless” mechanic with
“uncertain outcome”.
• 4-6 steps max. “Magical seven” of human memory limitation.
• Clear and immediate feedback.
• Layers of complexity. Base layer of the mechanic is very clear
for casual players, but deep enough for skilled players. “Easy to
learn — hard to master”.
• Elements of “emergence”. Interdependent elements with
simple behavior which creates much more complex behavior.
• Viral requests tied to the core loop.
• Rewarded by the main game resource (usually, soft
currency).

7. Mechanics: “Fun pain”
One of the of ways to monetize core game mechanic, is to make it simultaneously fun and little bit
annoying. Zynga calls it “Fun pain”. Player can buy items that reduce pain. Surprisingly, such items are
very popular.
Good example of such mechanic was a Tractor
from Farmville. Base gameplay action of crop
gathering is fun and rewarding for the player,
but if the player has a lot of farm tiles, it’s pretty
annoying to gather crop from all of them.
And the player can buy a Tractor to gather crop
faster!

8. Progress & Goals
Second key element of engagement is feeling of progress:
• Keep the player busy. The more interesting activities the
player has, the higher is the chance that the player will stay
in game.
• Allow players to plan their time. Allow them to choose
period between sessions. Asynchronous multiplayer.
• Every game session ends with feeling “I've done all I
could”. Reward players after returning to create feeling
“I've done all I could, reward will be awaiting me when I
return”. Player starts a loop during the first session, close it
during next session and create new loop.
• Create long-term goals: Leaderboards, Quests &
Achievements, Events.
• Look for intrinsic motivation. Game mechanics that
allow players to create their own goals can lead to much
higher engagement (Competition, User-generated content).

9. Social Factors
Third key element of player engagement is sociality. Strong
social mechanics can create a huge natural growth of game
audience and can be an important element of re-engagement
for existing players.
• All social mechanics are retention mechanics. It's not
only about audience growth, it's about re-engagement.
• Executing a social mechanic creates a reason for the
player to come back. Player opens loop during first
session, close this loop during next session and create
new.
• Game events and core gameplay loop should be
designed with ability to be “viral”. Social mechanics tied
to core gameplay loop.
• Clear and visible metrics of competitional mechanics
(Leaderboard, Friend panel)

10. Social Factors: Viral Loop
One of the most important parts of the social mechanic is virality.
Usually, viral mechanics are based on such loop:
The key elements of virality:
• Social Proof. People see behavior as more
correct when see others performing it.
• Persuasion. Viral message should be very
clear and motivate people to respond on it.
Create “loglines”.
• Reciprocity. Virality exploit human “social
obligation” to respond on favors from other
people.

11. Social Factors: Viral Messages
Viral messages is a way for the players to express their motives — getting help, gaining tools, show
achievements etc. Two main properties of the viral message are Shareworthy (it's worth sharing from
player's perspective) and Clickworthy (it's persuasive enough to respond/click).
Shareworthy conditions of the viral message:
• Message has prospect of reward
• Message shows personal achievement
• Participation of other people grants mutual
benefits
• Element of charity, player can help others
for free
Clickworthy conditions of the viral message:
• Message has prospect of reward
• Message provokes competition, curiosity or empathy
• Message is socially obligating, motivate player to
respond on social gesture
• Message is visible in main communication channels
Three the most popular viral messages:
• Offering partnership
• Cry for help
• Sharing reward/resources

12. Game Evolution: Schedule
Forth and very important key element of engagement is Game Evolution.
70% of players left the game because there are no new updates.
Common schedule of game updates:
• 3-6 months of content on the launch.
• Major expansion every 3-6 months (new game modes, new experience).
• Minor expansions every 4 weeks (new items).
• Daily events (quests, challenges, tournaments).
• Multiplayer and user-generated content can reduce amount of content

13. Game Evolution: Community
Be caring – listen to player concerns, communicate with the game community, it will create
loyalty. If players invest many hours into your game they begin to feel some ownership. The
game now is their experience, even if it’s your game.
• Be visible – forum, chat, e-mail. Policy of “one voice”.
• Handle things quickly.
• Give players notice about future changes in advance.
• Be generous with compensation.
• Don’t do something unless you’re willing to do it for everybody.
• You can make any promises only after you’ve already made next update. Before that – no
any clear deadlines.

14. What do players pay for?
Identity expression – players will pay for
items that are socially surfaced in the game
and presenting player somehow (farm, city,
avatar etc.).
Vanity – players will pay for exclusive items,
limited in number or to get things before
other players.
Competition – hardcore players, especially
males, will pay to get a competitive
advantage against their opponents.
Social value – players want their friends to
play and want to help them. Items that have
social value are much more valuable to pay
for it.
Chance – random chance is a huge
incentive for people to buy. Lotteries
(GACHA) and “Mystery Boxes” might be a
great monetization features.
Progress – players will pay for progress
(“time for money”) or temporary power in a
game, especially a competitive one. Very
stable and consistent way of monetization.
Story – players will pay very well to advance
the story (quests). They feel a sense of
progress when completing quests and will
pay to overcome roadblocks in that
progression.
Fun – items that make the game more
convenient and remove “pain”.

15. How to sell virtual items
There are four main stages of selling virtual item:
1. Awareness — item must be visible, players needs to be aware of existence of this item.
2. Understanding — item functions need to be explained to the player. The more intuitive item
functions, the better.
3. Desire — increase desirability of the item. Usually, based on the item functionality or artifical
scarcity.
4. Ability — access to the item must be easy. Payment methods and structure of the shop must
support player's desire to buy item.
Awareness Understanding Desire Ability Sale

16. Awareness
Awareness methods:
Shop
• Mix premium with non-premium
• Non-payers see the products
• Products are comparable
• Clearly distinguish premium items
• Lead player to the shop, highlight it
Advertising
• Can be used in many UI screens
• Be careful with being too annoying
• Need to be interesting
• Mix with regular game info
• Refresh frequently
• Might be personalized

17. Understanding
Understanding methods:
Tutorial
• Can explain complex content
• Requires significant work
• Useful for very desirable items
Demo products
• Is very effective
• Using item makes its value well understood
• Very good for high desirable items
• Special abilities of the item must be very clear
• Works great when mixed with in-game events

18. Desire
Desire methods:
Events
• Limitation by number, sale duration, availability
• Limited unique/special items
• Limited bonuses/discounts
• Artificial scarcity increase perceived value and
reduce time for judgment
Pricing
• Free products are seen as worthless
• High prices create a feeling of quality
• High prices reduce availability
• Prices are relative and make sense only compared to
others

19. Desirability parameters
There are ten attributes that influence item desirability:
• Customizability – players have higher feeling
of ownership to items that they can customize.
• Cultural references – items that attached to
the real world can be very popular (holiday
items, national flags, popular jokes etc.)
• Licenses – items that based to popular
licenses might be popular among fans of that
IP.
• Rarity – limited items can be very desirable
and valuable for player.
• Price – items with high prices can be desirable
only because of their high prices.
• Performance – item parameters (dmg, armor,
income etc.)
• Functionality – how useful is the item for
gameplay.
• Visuals and sounds – “look and feel” of the item.
• Background fiction – items that are tied up to the
story are more valuable.
• Provenance – items that are tied to in-game
stories.

20. Economy
Economy guidelines:
• Fluid economy. Amount of sources and sinks must be balanced. Do not allow players to
save a lot of resources. Player’s resources are always limited, it’s never enough resources to
finish all the activities.
• Entice users to make more than one purchase, people spend money easier 2nd time.
>50% of revenue are repeat consumers. First buy must leave a positive impression.
• Create shopping baskets (low/medium/high spender) then correct them based on statistics.
You can set prices based on these shopping baskets.
• Use principle of “central resource”. All game resources are tied to premium currency/time
and have prices in premium currency/time.

21. Pricing
Pricing guidelines:
• Keep in mind psychological barriers: 49, 99, >100, >1000 etc. Use these barriers for item
grouping into price categories.
• Keep in mind price similarities. 889, 899 and 999 are all similar prices in the user mind as they
look similar.
• Use numbers similarity. Users don’t seem to care if they pay 449 or 490, but they do care between
a 449 or 549 prices.
• Price discrimination policy. Prices set based on current statistics (ex. amount of soft currency of
every player).
• Start with high prices, test them as soon as possible, then change.

22. Ability
Ability methods:
Payment options
• Clear and accessible.
• Provide variety. Players can choose favorite
payment method.
• Options with the best revenue set as default.
Starting bonus
• Teach player how to use payment system.
• Player can take a look on the premium content.
• Integrated into tutorial.
• Try to avoid situations of “wrong spending”, it
might be frustrating for the player.

23. QUESTIONS?