Comment & Opinion

5 steps to optimize the first in app purchase

Fuse Powered's Jon Walsh provides compelling advice

5 steps to optimize the first in app purchase

Jon Walsh is CEO and founder of Fuse Powered.

Originally a mobile developer of titles such as Retro Pinball, Jaws Revenge and Scarface, the publishing tools it built became so powerful and popular with development partners that Fuse transitioned from publisher to platform provider in the spring of 2013.

Fuse now helps mobile app publishers make more money everyday with AdRally, a fully managed ad mediation solution with integrated analytics and publishing tools that optimize both advertising and IAP revenue.

With more than 250 million installs, Fuse has partnered with some of the world's leading mobile app publishers to acquire, retain and monetize users on iOS and Android.

For free-to-play publishers, having a holistic, well planned strategy for monetizing players that includes both advertising and In App Purchases (IAP) is crucial given ever rising user acquisition costs.

When done well, in app purchases are made by an average of 2 percent to 3 percent of your players.

The first purchase is always the toughest.
Jon Walsh

Advertising therefore can't be overlooked as a significant source of revenue and the only way to monetize the 98 percent of your players that will never pay for anything in your game.

The 2 percent of paying players will still drive significant revenue; usually more than half of the total you can expect to generate, so getting IAPs right is critical.

Every paying player has to make a first IAP.

As the saying goes, the first purchase is always the toughest. That's why it's critical to spend the time getting the first IAP right. That means spending the time to test and analyze what when where and how to promote that first item that a player should buy.

This article will focus on driving that first in app purchase, but the same concepts can be applied to any future IAP purchases any time in a paying player's life cycle.

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  • 1 Soft launch slowly and gather data

    You may have a good idea of how players will be playing your game, but you need to be sure and let players confirm your hypothesis.

    A long soft launch is an important part of the design process.

    Two months with a solid trickle of new players will help you identify patterns that may not have appeared during in-house testing and allow you to tune your economy so that players can afford to spend premium currency freely.

    This is a critical and often overlooked concept - getting your players to understand and spend premium currency.

    In countless tests we've been able to conclude that games that are more generous with premium currency (the currency most often sold as in app purchases) generate players that more often purchase and spend this currency. Creating a more 'free flowing' premium currency game can be done by boosting the amount of currency that players start with or by reducing the cost of items across the board.

    The former is typically more effective in most games, likely because players spend more if they feel they have more.

  • 2 Know what your players should buy

    You should be able to answer the question 'What should my players buy first in my game?' very clearly. After all, if you don't know what players' should buy, how can you expect players to know?

    You should also be able to prove you have answered this question properly with real player data during soft launch.

    Use analytics to confirm the first item that really resonates with players. Analytic events surrounding frequency of use are essential here. Added variables that include where a player is in the game when the purchase is made will also help to create a clear action plan to properly price and merchandise the item.

  • 3 Demonstrate value early and often

    Once you are confident you know what a player should buy and when, demonstrate the item's value in the game early and often. If the item is a 'frequent use' versus 'one time benefit' item, having a player interact with the item several times during the early stages of the game is ideal. Players need to be accustomed to using the item and they should see how it can help them progress through the game.

    A powerful incentive to buy

    The Lollipop Hammer (a premium IAP item) in King's Candy Crush Saga is an excellent example of this practice; in the first ten to fifteen levels you have already used the Hammer multiple times for free.

    You inevitably come to a point in the game where progression is nearly impossible without buying one and you clearly know how it works, the benefit it provides in the game.

  • 4 Make it easy for them to buy and use premium items

    The next step is to create an IAP that will allow players to purchase and use the item immediately. The lowest price IAP in your store should give at least the right amount of currency to buy the item.

    Clash of Clans does this very well. The worker, their high value item that provides a 50% increase in productivity, costs 500 gems.

    Clash of Clans' Third Builder

    It is no coincidence that the first IAP in the store gives 500 gems. Clash of Clans does an excellent job of presenting, marketing and selling this first item just as you need it in the game. Setting your game store up this way provides a clear value proposition and decreases the likelihood that players will be paralyzed by choice. It should be very clear to players what they need to buy in the game, the benefit it provides, how much it costs, and how to buy it immediately when needed.

  • 5 Use that data to optimize the value of other IAPs

    Now that the value of your game's currency has been set, you can use that information to adjust the value of the other IAPs in the game.

    It is a good idea to offer some bonus currency as an incentive to making a larger purchase. Having the percentage of bonus currency increase at a consistent rate makes it easier for the player to understand the store, pricing and the premium currency's value. While the tendency might be to create nice round numbers for the currency, the bonus percentage should dictate what the amount of currency granted should be.

    Table 1: A standard IAP economy

    Note in Table 1, the $9.99 price point grants 240 units of premium currency and a 20 percent premium currency bonus over buying the $4.99 IAP.

    If the currency amount given was 250 instead of 240, the bonus currency granted would be 25 percent rather than 20 percent. The result is that the value of the $19.99 IAP wouldn't be as appealing to players.

    Logical inconsistencies in IAP pricing tiers create confusion and make players second-guess their decision to buy. Before launching, take a close look at your IAP store and make sure it's a smooth experience for the player. The guiding principles should be to keep things clear and simple, and provide good value for money.

    Get your premium items, the timing and pricing of them right, clearly demonstrate their value, and you'll get a lot more paying players.

    Keep watching their play and working within the same principles to deliver the right items and game experience for the right value, and you'll be well on your way to many more engaged and happy 'paying customers'.

    Consider that in a game with 2 million players, increasing paying players by only 1 percent and increasing their average lifetime purchases from $30 to $50 would result in an additional $400,000 in revenue. regularly posts content from a variety of guest writers across the games industry. These encompass a wide range of topics and people from different backgrounds and diversities, sharing their opinion on the hottest trending topics, undiscovered gems and what the future of the business holds.