Comment & Opinion

The seven rules of monetisation design

The seven rules of monetisation design

Oscar Clark is an evangelist at Unity Technologies and co-founder at Rocket Lolly Games.

Making games used to be straight forward.

We only had to think about the game experience and whether what we have made was fun.

However, since the rise of digital distribution and especially Free-to-play, every designer has to also think about commercial issues – even if in the end they reject the idea of making money.

In this article we will look at the seven rules of monetisation.

Click on the link below to learn about the first rule of monetisation: Utility.

This was part of the MGU course Mobile Games University: Monetisation Design. For more articles in this course click here.


Click here to view the list »
  • 1 The first rule of monetisation is Utility

    For me, what separates a designer from an artist is the ability to focus on the Utility of the experience for their audience rather than their own act of expression.

    Utility is that intangible perception of value that comes when form follows function. In a game this is about more than just finding the fun, but fully understanding your game and how it is experienced.

    In the loop

    This starts with the Mechanic (the core of what we do to progress play) to the Context Loops (our sense of purpose and progression) to the Metagame (such as player lifecycle, social context, performance comparison, devices used, etc.) in order to know the right options for monetisation.

    We don’t buy ‘Gems’ in a game, even if that’s what we pay for; we buy an expectation of gameplay value*.

    The idea of Utility has to be at the heart of every stage of the player decision making process from the initial download, playing past the Tutorial, returning the next day to play, watching an ad or making an in-app-purchase.

    This isn’t something we can afford to leave to non-game designers.

    We need to break down our gameplay and look at how we can add value. This is difficult if your gameplay is linear, so instead try to look at the game in terms of the following types of ‘Good’:

    • Sustenance – What are the elements we require to continue playing?
    • Shortcuts – What factors increase our chance of success or reduce the impact of failure?
    • Socialisation – How can players express themselves and their progress in the game?
    • Strategy – Can we introduce new playing options (without breaking the game)?

    These types of good can add additional game design value if you think of each one as coming in the following forms:

    • Consumable – A one-time use item.
    • Capacity – Something which limits growth/play
    • Permanent – A permanent upgrade or unlock item
    • Generators – An increase in the supply of a consumable

    This way our in-app purchases (and indeed the rewards we give for opt-in ads) can actually enhance gameplay without being seen as a tax on playing; by focusing on their Utility.

    *Bong-Won Park, Kun Chang Lee: Exploring the value of purchasing online game items. Computers in Human Behavior 27(6): 2178-2185 (2011).


  • 2 The second rule of monetisation is Anticipation

    It doesn’t matter how good your monetisation design is if players never work out that it’s there or why it should matter to them.

    That means that as part of monetisation we have to communicate the value and create a sense of anticipation; even foreshadowing why spending at all Is beneficial. A good way to understand this is to look at general buyer behaviour*:

    For the most part we don’t “just” buy anything. The context around our potential acquisitions really matters.

    Firstly, we don’t exactly know what we are going to get (can we trust the description?), we as don’t know what we are missing out on if we choose “this” item as opposed to something else and we don’t know how it will effect how others see us.

    Demonstrating value

    Finally we have other things affecting our lives and we can’t ignore those external needs.

    When we understand the core Utility of our game at each stage, we should be able to answer these questions and turn them on their head.

    In a pay-up-front game it’s obvious that we have create an expectation of delight when we promote a game; why is this any different than with an IAP?

    In fact it should be much easier in a free-to-play game to demonstrate the value, creating the desire and enticing the player to act especially if we make smart tactical use of opt-in ad rewards.

    Again putting our focus on the Utility for the player stops this becoming cynical.

    *Based on the Journal of Marketing - James W. Taylor “The Role of Risk in Consumer Behavior” which quoted Raymond Bauer’s 1960 work on consumer behaviour as risk taking

  • 3 The third rule of monetisation is Scarcity

    The fear of missing out is a powerful motivator to purchase and something which shouldn’t be taken lightly.

    “Buy Now While Stocks Last” triggers an instant reaction in many of us. We get a similar reaction when we see “Buy One Get One Free – Limited Time offer”. Some designers feel averse to using such ‘tactics’.

    One time deal

    However, it’s important to understand that these have a practical value and help communicate to a player why they need to act now.

    Done authentically, this is no different to making it difficult to obtain certain objects or achievements; scarcity and the effort to obtain items is part of the Utility players are seeking (and that they can show off).

    Designing an in-game economy is not easy; but scarcity (and resource sinks which use up scarce items) helps to handle whether players spend money or not and ensure that both retain positive utility or players stop playing.


  • 4 The fourth rule of monetisation is Timing

    Knowing when to offer an item is as important as understanding what to offer and again it’s the game designer who is in the best position to make the right decisions for their players.

    Key to this is looking at changes in players’ behaviour at difference stages in their lifecycle. Something we can only do with smart analytics.

    I’ve written extensively about the player lifecycle*, but for the purposes of this article let’s just focus on the key lifestages of any player.

    When players are about to Discover your game – our principle objective is to get them to install that game; whether you choose a pay-up front or free-to-play business model. We have to create a level of anticipation and ‘fear of missing out’ in order to get that player to act before they are offered something else (and forget about our game).

    Call to action

    When there are hundreds of new games each day on the app stores, this is a massive challenge. Those players will have no emotional commitment to your game so this can be an uphill struggle.

    The art style and concept have to ring out to the player as a ‘call to action’ in order to gain their attention. No surprise that many developers invest in third-party ‘IP’ such as movie or comic brands to help convert existing fans of those licenses.

    We can’t assume that any of the people who download will continue to play; let alone pay.

    After Download we enter the Learning stage and our objective is three-fold:

    • Create reasons to return.
    • Help players find out where your game fits into their daily routine.
    • Set expectations that paying in the future will be worthwhile.

    Only after the player has shown that they continue to play can we really say they have reached the Engaged stage, a point where we can significantly impact them spending money with us.

    That doesn’t mean people won’t pay beforehand; in fact many do. There is even a pattern of spend notably in South Korea where players will ‘Front-Load’ in order to get ahead of their friends before the game takes off.

    Super-Engage

    However, there is a significant risk that these players will only spend once - something we should all consider to be a failure of design.

    Opt-in ads can play a positive role in the Learning stage - not just because this is a period with the most eye-balls but we don’t want to go over the top (esp. with non-opt-in ads) as this can trigger early churn.

    That being said putting a price or an opt-in ad in front of a power-up, for example, can communicate its utility (even if you give some away for free).

    After we are sure they have Engaged we can work out how they might Super-Engage (often confused with the gambling ‘Whale’), which only happens when your game allows those individuals to become true fans.

    Only a small percentage will and we need to consider how we can satisfy their desire for ever more added value.

    Let’s not forget that players will eventually leave us so we need to identify when the hit the re-engagement phase when our focus has to be on sustaining their attention and often reminding them of what they will miss out on if they were to leave.

    This often means looking for goods which breath new life into the game.

    *Check out “Games As A Service: How FreeToPlay Design Can Make Better Games” on Focal Press (available on Amazon, Kindle, Kobo, etc)

  • 5 The fifth rule of monetisation is Repetition

    Life Time Value (and hence Retention) is key to the success of any free-to-play both in terms of Payers and Players. The frequency we play plays an important part in engagement.

    Within the concepts of Flow and Operant Conditioning there is the idea of ‘Schedules of Reinforcement’ where repetitive actions can become intrinsically rewarding and this can also help build positive habits.

    This is why highly repeatable game mechanics are so important, especially on mobile where the accessibility of your device means we can played repeatedly throughout the day.

    Avoiding fatigue

    The more frequently Players use power-ups and watch-video ads the more familiar they will be with their value and can lower the barriers to making subsequent purchase. However, we have to be careful to avoid player fatigue (and payer fatigue).

    It’s important to give players natural breaks. The idea of repetition can also be at odds with more traditional Ad formats; too many developers over saturate players with banners or interstitials which instead of generating value, blocks play increases the chance of churning.

    Opt-in Ads don’t have the same issue; but it can still be useful to create a sense of scarcity and value – not unlike with IAPs.

    Whatever monetisation method you use its important to consider why the Player would do it again.

    Often this can come down to creating a sense of Unfinished Business, leaving the player a reason to come back and complete the activity they started so whether they are in a natural break or having to watch an Ad prior to continuing, we have to ensure there is a lure which motivates us to carry on.

    Just one more thing

    The classic 1970’s TV Show, Columbo, provides us with a way to look at how to leverage content to sustain the attention of the audience. They confounded the classic Whodunnit by showing you the murder and the murderer. Instead our focus is on the detective.

    Peter Falk’s eponymous character appeared to be a bumbling fool but we know that five minutes before the end he would say the immortal words “Just one more thing!” to the murderer. This is when we know our time is up.

    Our job during the programme is to work out how Columbo works it out. Because we know what to expect we fill every moment observing every minute detail and fill that with meaning.

    Your game needs an element of this kind of predictable uncertainty to maximise the playing and revenue potential. A perfect example of this is the Treasure Chests in Clash Royale.

    I have earned the rewards contained in them but I can’t obtain them till I unlock them which is free but takes time. The fact I will be rewarded is predictable, but the contents remain a surprise I can only speculate at.


  • 6 The sixth rule of monetisation is Evidence

    So far the rules we have described are about principles of the psychology of play using a quite theoretical way of looking at game design.

    However, there is a point where none of your theory matters: The moment a player who has no emotional connection to you gets their hands on your game.

    At that point nothing matters except what they actually do. Its important to remember that a design is a hypothesis informed by our experience and expectations of what players might do.

    Informed decision-making

    The skill of a designer comes when they apply the breadth of their understanding of game element to what player really do. We need evidence. Data which is properly framed in order to allow us to make conclusions and provide insight.

    That requires us to understand the flow of our game an identify points in that flow where player make decisions which affect their engagement with and churn from our game.

    We need to understand the moments of gameplay and design the data model so it will highlight where in that flow we have problems and when we change the game be able to see both their short-term and long-term consequences.

    After all we probably don’t want to add a monetisation model which creates a small short-term increase at the expense of Life-Time Value.

    Testing is an art in itself and deserving of its own write-up. However, we do need to remember that although data allows us to get the best out of design; it can’t predict what might have happened if we did something else.

    We also must remember that we only know what the players who remained playing did (and how many more we retained) - we can’t test what would have worked for those who didn’t stay playing.


  • 7 The seventh rule of monetisation is Scale

    The most troublesome rule; and perhaps the one rule to rule them all. Scale matters. Hugely.

    Think about the volume of ads we need players to consume to gain a living wage on ads alone.

    Similarly, the number of players who remain playing your game after 30 days will probably be less than 10%. The number of players who ever spend in your game may be 2-3%.

    The average spend on any item in some games can be as little as $1. We need significant numbers to break even and again this underlines the need for strong analytics.

    Putting the problem simply we have three options:

    1. Get and keep more players.
    2. Get our players to do more things.
    3. Get our players to do more things more often.

    You can’t get away from the fact this this is an industry lead by Acquisition, Retention and Monetisation; but we can be smarter if we focus on Utility for our players and increasing the opportunity for them to act frequently in our games.

    This was part of the MGU course Mobile Games University: Monetisation Design. For more articles in this course click here.


Comments

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Wendelin REICH Founder & CEO at Companion Labs
Thanks Oscar, this is super-useful as always. If you take anticipation, scarcity and timing seriously, which I agree you should, you get quite far from the simple notion of IAPs as "things purchaseable in your in-app store". How you connect them to gameplay as it unfolds over time become really important... any resources for learning how to achieve that?
Gaming Unicorn Marketing Director
Oscar, this is a very well written, thoughtful article. But you left out the most important monetization rule of all: Always provide customers with enough information to make informed purchasing decisions!

TRANSPARENCY is critical in order to build relationships with players that are based upon trust.

With that in mind, customers are always entitled to the following:

1. A base currency that is NOT offset from real dollar value. CSR2 offers this: the 300 Gold Coin pack is $3, and the 500 Gold Coin pack is $5. This makes it easy to understand that a car that costs 1500 Gold Coins costs $15.00 in real dollars.

2. Detailed drop rates for blind packs/gacha. This allows players to understand, on average, how much they would have to spend to get a specific card. This is compulsory in Japan... and that market is still very profitable.

Less critical, but nice to have:
3. A running total of your spend in-game... I love this feature in the Starbucks App!
4. The average lifetime spend of the top 10% of paying customers in a game - updated weekly. We know as customers that the shallow end of the pool is "free", but we would greatly benefit by understand how deep the pool is, too.
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