One Price Does NOT Fit All Games
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Did the biggest fans of your game spend more money on it than someone who played it just a few times? If not, you're leaving a huge percentage of money on the table. This session will talk about how digital distribution has made fixed prices obsolete and how you can take advantage of flexible pricing through in-app purchases in your games. We'll also talk about the consequences (good and bad) of making a game free to play. The session will present hard data from iOS platforms, but applies to all digital distribution platforms.
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One Price Does NOT Fit All Games
- 1. One Price Does NOT Fit All (or how games are different from vegetables) Noel Llopis @noel_llopis http://gamesfromwithin.com
- 2. Who am I?
- 3. Who am I? Worked in the games industry for many years.
- 4. Who am I? Worked in the games industry for many years. Went “indie” 4.5 years ago
- 9. TL; DR
- 10. TL; DR Your game with fixed price
- 11. TL; DR Your game with Your game with fixed price flexible price
- 15. Price Units Cost of manufactured goods
- 16. Price Initial design costs Units Cost of manufactured goods
- 17. Price Initial design costs Units Cost of manufactured goods Price Units Cost of digital goods
- 18. Price Initial design costs Units Cost of manufactured goods Price Units Cost of digital goods
- 19. Value
- 22. $$ ?
- 23. Price $60 People interested
- 24. Price $60 People interested
- 25. Price $60 Area == revenue People interested
- 26. Price $60 Area == revenue $40 People interested
- 27. Price $10 $5 $1 People interested
- 28. Price $10 $5 $1 People interested
- 29. Price $10 $5 $1 People interested
- 30. Price $10 $5 $1 People interested
- 31. Price $10 $5 $1 People interested
- 32. Price $10 $5 $1 People interested
- 33. Price $10 $5 $1 People interested
- 34. Price $10 $5 $1 People interested
- 35. Price $10 $5 $1 People interested
- 36. Price $10 $5 $1 People interested
- 37. Price $10 $5 $1 People interested
- 38. Price $10 Revenue (ouch!) $5 $1 People interested
- 39. Price Flexible Pricing $10 $5 $1 People interested
- 40. Price Flexible Pricing $10 $5 $1 People interested
- 41. Price Flexible Pricing $10 $5 $1 People interested
- 42. Price Flexible Pricing $10 Power curve $5 $1 People interested
- 43. [...] offer a variety of premium packages for sale and make them limited editions / scarce goods. Base the price and amount available on what you think you can sell. Make the packages special - make them by hand, sign them, make them unique, make them something YOU would want to have as a fan. Make a premium download available that includes high-resolution versions (for sale at a reasonable price) and include the download as something immediately available with any physical purchase. Sell T-shirts. Sell buttons, posters... whatever.
- 44. [...] offer a variety of premium packages for sale and make them limited editions / scarce goods. Base the price and amount available on what you think you can sell. Make the packages special - make them by hand, sign them, make them unique, make them something YOU would want to have as a fan. Make a premium download available that includes high-resolution versions (for sale at a reasonable price) and include the download as something immediately available with any physical purchase. Sell T-shirts. Sell buttons, posters... whatever. http://forum.nin.com/bb/read.php?30,767183
- 49. Price $60 People interested
- 50. Price $60 People interested
- 51. Price $60 People interested
- 52. Price $60 People interested
- 53. Price $60 People interested
- 54. Price $60 People interested
- 55. Price 5% extra revenue? $60 People interested
- 57. Price $60 People interested
- 58. Price $60 People interested
- 59. Price $60 People interested
- 60. Price $60 People interested
- 61. Price $60 People interested
- 62. Price $60 People interested
- 63. Price $60 People interested
- 64. Price $60 People interested
- 65. Price $60 People interested
- 66. Price $60 People interested
- 67. Price 8-10% extra revenue? $60 People interested
- 68. Price $60 People interested
- 69. Price $60 People interested
- 70. Price $60 People interested
- 71. Price $60 People interested
- 72. Price $60 People interested
- 73. Price $60 People interested
- 74. Price $60 People interested
- 75. Price $60 People interested
- 76. Price $60 People interested
- 77. Price 2x revenue? $60 People interested
- 78. Price
- 79. Price
- 80. Price
- 83. $?? 2x extra revenue? Price What’s that? $150, $300, $1000? $60
- 84. The Power of Free
- 85. As an artist you want as many people as possible to hear your work. Word of mouth is the only true marketing that matters.
- 86. Price $0 People interested
- 87. Price $0 People interested
- 88. Price $0 People interested
- 89. Free Players Are Very Important!
- 90. Free Players Are Very Important! • Word of mouth
- 91. Free Players Are Very Important! • Word of mouth • Other people compare against them
- 92. Free Players Are Very Important! • Word of mouth • Other people compare against them • Some % will convert to paid players
- 93. Price $0 People interested
- 94. Price $0 People interested
- 95. Fill in the blank
- 96. Fill in the blank • 80-90% of profit comes from ____% of users
- 97. Fill in the blank • 80-90% of profit comes from 0.5 of users ____%
- 98. Price People interested
- 99. Price People interested
- 100. Price Magic number: 2% People interested
- 101. Hard Data
- 102. Hard Data 1% of users responsible for 25-50% of Zynga revenue http://www.businessinsider.com/zynga-whales-2011-7
- 103. 6% of Skype users account for almost all revenue http://techcrunch.com/2010/08/09/skype-ipo/
- 105. 3.8% users purchase some IAP
- 107. Introduction of IAPs
- 108. Introduction of IAPs
- 109. Flower Garden
- 110. Flower Garden • Some disclaimers:
- 111. Flower Garden • Some disclaimers: • Counting only purchases (bundles count as 1)
- 112. Flower Garden • Some disclaimers: • Counting only purchases (bundles count as 1) • Counting only UDIDs (not App Store accounts)
- 113. Flower Garden • Some disclaimers: • Counting only purchases (bundles count as 1) • Counting only UDIDs (not App Store accounts) • Counting only 6 months (starting from the time only a few IAPs where included)
- 114. Users vs. number of purchases 30,000 22,500 Number of users 15,000 7,500 0 Purchases
- 115. Users vs. number of purchases 100,000 10,000 1,000 Number of users 100 10 1 Purchases
- 116. Users vs. number of purchases 100,000 10,000 1,000 Number of users 100 Wow! 10 1 Purchases
- 117. Purchases vs. users 120 90 Purchases 60 30 0 0 7,500 15,000 22,500 30,000
- 120. Drawbacks
- 121. Drawbacks • Negative perception by some players.
- 122. Drawbacks • Negative perception by some players. • Mostly hardcore, and mostly because it’s different than the model they grew up with.
- 123. Drawbacks • Negative perception by some players. • Mostly hardcore, and mostly because it’s different than the model they grew up with. • No different than subscriptions when they came out.
- 124. Drawbacks • Negative perception by some players. • Mostly hardcore, and mostly because it’s different than the model they grew up with. • No different than subscriptions when they came out. • Lots of traditional game developers also feel threatened by this model.
- 125. Ethical Issues
- 126. Ethical Issues • Some people think this kind of games are “evil”.
- 127. Ethical Issues • Some people think this kind of games are “evil”. • The way I see it, you’re giving a chance for players to get more of what they want.
- 128. Ethical Issues • Some people think this kind of games are “evil”. • The way I see it, you’re giving a chance for players to get more of what they want. • Forced waits is common, but not evil. Other ways to make consumables.
- 129. Game Design
- 130. Game Design • Not all games fit well into this model.
- 131. Game Design • Not all games fit well into this model. • A lot of freemium games feel the same.
- 132. Game Design • Not all games fit well into this model. • A lot of freemium games feel the same. • Still in its infancy. Devs figuring it out.
- 133. Game Design • Not all games fit well into this model. • A lot of freemium games feel the same. • Still in its infancy. Devs figuring it out. • Harder with competitive games.
- 134. Game Design
- 136. Game Design Your mission: Create a compelling freemium game that respects the player and provides an engaging experience.
- 137. Things Learned
- 138. Things Learned • Extra game content isn’t a very good seller.
- 139. Things Learned • Extra game content isn’t a very good seller. • Things displayed in social setting very important (TF2).
- 140. Bundles
- 146. Flower Garden Bundles Sales Revenue 80 60 40 20 0 Fert 20 ($0.99) Fert 80 ($2.99) Fert 200 ($5.99)Fert 1000 ($14.99)
- 147. Tiny Tower Bundles Sales Revenue 70 52.5 35 17.5 0 10 bux 100 bux 1000 bux
- 148. Give It All For Free
- 150. Introduction of IAPs
- 151. Introduction of in-game currency to earn credits Introduction of IAPs
- 152. Conclusion
- 153. Conclusion • Abandon fixed-price games.
- 154. Conclusion • Abandon fixed-price games. • Hot in mobile and web games. Soon will expand to PC and consoles.
- 155. Conclusion • Abandon fixed-price games. • Hot in mobile and web games. Soon will expand to PC and consoles. • Engage your players, delight them with your game, and let them spend as much money as they want.
- 156. Thanks! • Noel Llopis • noel@snappytouch.com • Twitter: @snappytouch • http://gamesfromwithin.com
- 157. Thanks! • Noel Llopis • noel@snappytouch.com • Twitter: @snappytouch • http://gamesfromwithin.com Questions?
Editor's Notes
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- Stumbled on flexible pricing with Flower Garden, which went on to be (and still is) very successful\n
- Lots of in-app purchases\n\n
- Most recently made Casey’s Contraptions... which is fixed price.\nSo this talk is about “don’t do what I did” :-)\n
- Do I have your attention? :-)\n
- Do I have your attention? :-)\n
- I love my road bike. I bought it 10 years ago and I must have ridden 50,000 miles on it. I paid $2000 for it. Exactly the same as someone who bought it and used it only a few times.\n
- It makes sense for manufactured good. They have an associated cost with making each of them.\n
- What about digital goods though?\n
- Price plots (initial design cost, plus manufacturing per unit)\nDigital goods virtually free to duplicate\n
- Price plots (initial design cost, plus manufacturing per unit)\nDigital goods virtually free to duplicate\n
- Price plots (initial design cost, plus manufacturing per unit)\nDigital goods virtually free to duplicate\n
- Price plots (initial design cost, plus manufacturing per unit)\nDigital goods virtually free to duplicate\n
- Price plots (initial design cost, plus manufacturing per unit)\nDigital goods virtually free to duplicate\n
- The price of most things we buy in the store are tied to the cost of producing them.\n
- Astute salesmen have known for a long time that the value of an item is not its manufacturing cost, but how much it’s worth to the user.\n
- Astute salesmen have known for a long time that the value of an item is not its manufacturing cost, but how much it’s worth to the user.\n
- Of course, we’re all different. Some people might pay more than others.\nThe area of those sections is the revenue\n\n
- Of course, we’re all different. Some people might pay more than others.\nThe area of those sections is the revenue\n\n
- Of course, we’re all different. Some people might pay more than others.\nThe area of those sections is the revenue\n\n
- Of course, we’re all different. Some people might pay more than others.\nThe area of those sections is the revenue\n\n
- Of course, we’re all different. Some people might pay more than others.\nThe area of those sections is the revenue\n\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- So we need to be asking, how many people would be willing to pay $x to play the game?\nNow imagine we pick one fixed price point. That’s the revenue!\n
- Flexible pricing let’s people who enjoy your game spend as much as they want.\n
- Flexible pricing let’s people who enjoy your game spend as much as they want.\n
- Flexible pricing let’s people who enjoy your game spend as much as they want.\n
- Trent Reznor had great advice about this for new musicians years ago\n
- We have been doing this in a small scale in the games industry for a while with collector’s editions\n
- And more recently with DLCs\nWhich incidentally, I worked on one of the first games with DLCs\n
- And more recently with DLCs\nWhich incidentally, I worked on one of the first games with DLCs\n
- And more recently with DLCs\nWhich incidentally, I worked on one of the first games with DLCs\n
- And more recently with DLCs\nWhich incidentally, I worked on one of the first games with DLCs\n
- DLCs are clumsy. Only a few, only extra content (how many people finish a game), very limited audience (had to pay $60 to start)\n
- DLCs are clumsy. Only a few, only extra content (how many people finish a game), very limited audience (had to pay $60 to start)\n
- DLCs are clumsy. Only a few, only extra content (how many people finish a game), very limited audience (had to pay $60 to start)\n
- DLCs are clumsy. Only a few, only extra content (how many people finish a game), very limited audience (had to pay $60 to start)\n
- DLCs are clumsy. Only a few, only extra content (how many people finish a game), very limited audience (had to pay $60 to start)\n
- DLCs are clumsy. Only a few, only extra content (how many people finish a game), very limited audience (had to pay $60 to start)\n
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- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- For this to work, we need many DLCs\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Even more importantly, we need to lower the entry barrier.\nLet people decide how much they want to spend along the way\nBut we’re not done. Because more people got to try the game, more people are willing to go beyond what used to be regular price.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
- Let’s zoom out a bit and look at the top. 7 DLCs. That’s a lot.\nConsumables make it infinite. It could easily be 2x revenue\nYes, people can spend as much. But never if that’s the entry cost.\n
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- The result is that many more people will be willing to take the next step from free, so curve is scaled horizontally.\nThis is the “freemium” model. Often used in “social” games.\n
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- Usually around 2% of players choose to spend some money in game.\n
- Usually around 2% of players choose to spend some money in game.\n
- Let’s back up the claim\n
- Let’s back up the claim\n
- Skype isn’t a game, and you can’t get everything for free, but it still shows the power law.\n
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- Not nearly as successful, but I have a lot of data on it :-)\n
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- Textbook power curve\n
- Fixed price. Don’t do this!\n
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- A lot of “social” games are too much on your face about posting messages and doing useless stuff.\n
- A lot of “social” games are too much on your face about posting messages and doing useless stuff.\n
- A lot of “social” games are too much on your face about posting messages and doing useless stuff.\n
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- Having a few options, makes the consumer more likely to buy\n\n
- Having too many has the opposite effect\n
- People like to get a good deal\n
- Bundles also represent an investment in your game\nThey’ll keep coming back\n
- It also means that your app will get more exposure and has a chance to spread more\n
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- Counterintuitive: Don’t make some things pay-only. Allow people to work to get everything in the game.\nFG anecdote if there’s time.\n
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