Oscar Clark on whales, damn whales, and statistics

F2P success isn't about percentage points

Oscar Clark on whales, damn whales, and statistics

Recently there has been a lot of discussion about the role of spenders in mobile gaming.

Most notably was the Swrve Monetisation Report which revealed in January 2014, only 1.5 percent of players surveyed spent any money in a freemium mobile game.

The mean value of a purchase was $5.94 with an average 2.57 purchases per month.

This is fascinating data but it's hard to know how to put it into context without knowing a lot more about the methodology of the survey, and in particular if the use of such average values is useful.

There is a problem with using averages like this because they assume the results follow the classic bell curve where there is an even distribution of results.

They are not so useful, where the results are messy; such as where there are a large number of poorly performing games and a small number of much more successful ones.

This kind of skewed data renders a blanket interpretation almost useless. However, I don't want us to dismiss these results as I still think they are a useful lesson or rule of guideline.

Some perspective

During my time at PapayaMobile, we saw vastly different results with some games getting up to 15 percent of players spending, plus 4 percent spending over $100 per month; whilst others languished with less than 0.6 percent of players spending at all.

Of course that's now nearly 2 years ago and the market has changed, not least with a huge rise in competition. But there is a truism that we have a model where the revenue is substantively biased towards a tiny minority of players.

If you are making a free-to-play game and don't understand that the vast majority of players don't pay then you are deluded and will fail.

However ask yourself this - what percentage of people pay directly for television programs?

I find it interesting that this specifically excludes revenue from advertising. Those games I referred to as having only 0.6 percent of paying users happened to be highly successful, but generating revenue through advertising rather than in-app purchases.

Okay, it's not a model I would suggest most developers follow as I've only seen it deliver around 25 percent of the potential of a balanced business model, but it still can work if you manage to get a wild success and millions of daily active users.

Growing something big

If we accept that data is complicated then it's doubly so when it comes to the next stat: 50 percent of revenue comes from 10 percent of the paying users; our true fans or 'whales'.

Actually, this stat seems to me to be fairly consistent with my previous experience. However, there is a big danger. If we just make the game better for these whales, we will entirely miss the point.

The easy, even lazy, assumption will be that if we make the game for our whales we will earn more money. The problem is that whales aren't a player type; their paying behaviour is a symptom of a stage in their player lifecycle.

We all go through different stages of engagement with a game: Discovery; Learning; Engaging then Churning.

It's the gap between the Learning stage where we find out not just how to control the game, but also how the game fits into our lives (which is more critical). As designers we have to keep players engaged, not scare them off or frustrate them with our UI or learning curve and foreshadow the value of continuing to play regularly.

Only then do they become engaged and only then converting them to spending will have a chance of developing them into whales.

As I have written before, we have to stop hunting whales and instead create the conditions that any player can grow their passion for our game enough to want to spend more money (which they will do only as long as they continue to see the value from the game!)

Long player

For me, then, there most worrying aspect of the Swrve report was it reports on the first 14 days of play.

For example, one stat is that the average time to the first purchase is 23.97 hours. Again I'm not questioning the data.

It fits my previous experience, but what we saw back in the Papaya days was that those players who spent early, typically only spent once. Those who took a little longer spent more.

Indeed, we saw that the first purchase for a whale was somewhere between 8-12 days.

These were the players who continued to spend each and every month. However, don't just trust me. Test this for yourself and think about how important it is to engage players repeatedly.

Churn reduction

As I say in my book, if a player only buys from me once, then what I am selling in my game isn't good enough. I'd rather have a repeat player than a one-time payer because they bring with them more life time network value.

This is the idea of the social connection and 'life' they bring to the game, which creates the conditions which allows whale spending patterns to happen.

Where we see 'successful' games which lose up to 60 percent of their players on day one; up to 80 percent by day 7 and up to 90 precent by day 30, is it any surprise that we only have 1.5 percent of people paying?

In fact, think about how few people will still be playing in 90 days and guess how many of them will be whales?

Then turn the whole idea on its head. What if 90 percent of people who might have been interested in my game don't make it over the paywall every day? Those people can never contribute value to the game. They won't recommend it, they won't give it life, they won't engender the conditions that help other players evolve into whales.

I'm proud to be one of the 1.5 percent but asking 'What percentage of players spend?' is the wrong question. The right question to ask is 'How am I going to get the best engagement out of my potential audience?'

How are you going to answer that without looking at retention, without looking at service, without making a better game?

Oscar Clark is evangelist for Everyplay and Author of Games As A Service: How Free To Play Design Can Make Better Games.

To find out more about what Oscar is evangelising about go to blog.everyplay.com

If you are attending GDC San Francisco, check out Jussi Laakkonen's talk on "Why Whales Sing: Heavy Spenders Drive Virality and Retention" on Tuesday 18 March at 17:05 in West Hall 2001, and Oscar's session on "Games As A Service: How Free To Play Design Can Make Better Games" on Thursday 20 March at 12:30 in Room 2014.


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