For years now mobile games have largely used the free-to-play model supported by in-app purchases as the primary source of monetisation.
Yet while it’s a business model that’s been used for years, and developers have found both player-friendly and more aggressive forms of monetisation, there’s still a lot to be learned about player psychology and how best to implement IAPs.
Sure, there are many industry standard game design choices that lend themselves to monetisation, but some games keep things simple with their in-game currency, while others offer multiple routes to monetise.
One key method to get people buying that’s used by physical and digital retailers across most sectors, including various games platforms, is that of the sale. Offering discounts on items increases their value to the customer.
But just running any old sale at any time is not the most effective way to successfully get people buying in to your product.
A matter of timing
Scientific Revenue CEO William Grosso, who spoke back in September at Pocket Gamer Connects Helsinki on the issues of pricing (and will also be at Pocket Gamer Connects London in January), says companies need to think the timing and point of sales through.
Stores are willing to take a hit to their margins because you weren't going to go to the store if they didn't have a sale.William Grosso
“There are some times you have to do it,” says Grosso, referencing well known international retail discounting days like Black Friday, where customers may be expecting a good deal.
He continues: “If you're running sales and they're coordinated with advertising, so the point of the sale is to give your marketing something to talk about and give your marketing a call to action, that's a reasonable thing to do.
“If you're running targeted flash sales against customers you expect will not spend, that's a great idea.”
But one thing he cautions against however is the weekend sale, which he says is usually a bad idea for mobile games.
He explains that the idea of the weekend sale was invented post-World War 2 for shopping malls, which needed a way to get foot traffic at the weekend.
“People rarely say 'you know what, I'm just going to spend all day at the store',” says Grosso. “So on the weekend you've got some spare time, the store wants to get you into the store, and they have to give you a call to action that has value.
“They're willing to take a hit to their margins on those goods because you weren't going to go to the store if they didn't do that.”
Grosso explains however that for most mobile titles, it’s a different ball game, as spending is “much more of a voluntary entertainment action”.
“The marketing and merchandising from WW2 malls where you were trying to get people to get in the door at the mall are not necessarily appropriate [for mobile game stores],” he says.
“And with sales you should be very careful. They can work and they can work well, but you should be very careful about measuring them, and they should be done a lot less often than they're done in gaming.”
Thinking outside the industry
While the free-to-play mobile games market is unique, there's clearly a lot to be learned from how other sectors set up their shops and sell their wares.
At the end of the day what we're doing is very different from what most people do with prices.William Grosso
During his talk at PGC Helsinki, Grosso suggested to developers to go outside of typical gaming literature to discover more about effective pricing.
"I don't think developers do that nearly enough," he says, adding that developers also don't interact with psychology departments enough to understand player behaviour.
When it comes to monetisation, Grosso suggested a few books that could be useful for those in the games business to understand how other sectors go about pricing. One book is Pricing Strategies: A Marketing Approach by Robert Schindler, and another for those really looking to take a deep dive into the subject is Princples of Pricing: An Analytical Approach by Rakesh Vohra and Lakshman Krishnamurthi.
But he warns that developers could go too far down the rabbit hole.
"At the end of the day what we're doing is very different from what most people do with prices," he explains.
"We sell bags of imaginary coins. And that's just a very different problem than how much should I charge for the stapler or table top."
Though he maintains it's good to keep up with the literature surrounding pricing, he notes one of the key differences with virtual and physical gods is the motivations behind buying and using them.
"When you have a lot of gold coins you spend them faster," he says. "But when you have a lot of vitamins, you don't go 'time for my fourth vitamin C of the day'."
Scientific Revenue CEO William Grosso and VP Ted Verani will be at Pocket Gamer Connects London 2018, taking place on January 22nd and 23rd.