Monetizer

What is Monetizer?

A guide to our new F2P ranking process

What is Monetizer?

The genesis of Monetizer came from a speech I gave at the F2P Summit in London in early 2013.

This was a wide-ranging look at the free-to-play business model through the lens of the history of technology.

You can read all about it here.

One concrete result of preparing and giving the speech was I wanted to come up with a more rigorous way of ranking different F2P games.

Clearly, consumer-focused reviews weren't (and aren't) providing any consistency in this area, and anyhow I wanted a business-focused tool that could look for connections between the various ways (and things) these games sell and their commercial success.

Mark 2

From that starting point, I gave another speech at the Develop in Brighton conference in the summer of 2013, where I tried to explain how such a process could be constructed.

Interestingly, this speech was a disaster because despite my argument that developers should be working on their own processes for analysing F2P games, the only thing most people wanted to know was what my ranking system look like.

That set-back was the spur to our weekly Monetizer column.

The plan

Refining my process week-by-week, my aim is to come up with a system that can be used to rank F2P games in terms of their level of monetization (from high to low), plotting it on a graph against commercial success.

That's not the only metric we can measure, however, and so hopefully the process will result in other numbers we can compare.

Finally, something I want to make very clear is that this is designed to be a quick and dirty process.

Certainly I want (and need) it to be rigorous, but only rigorous enough to throw out decent and consistent results.

It is not designed to be in-depth analysis. Ideally, I want to play the first 10 minutes of a game, take a quick look at the key monetization options used, and compare these with open-sourced data about top grossing chart ranking.

The math bit

Bearing this in mind, these are the ways I'm currently using to rank F2P games.

1. Success coefficient

To provide some idea of success in western markets, I use the following formula

S = (No. of countries a game ranks top 10 top grossing / No. of countries a game ranks top 100 top grossing) / peak top grossing position in US

The point of this number is to provide a measure of top grossing momentum, which is heavily skewed towards success in the west's most important market - the US. Obviously, if you're interested in other markets - Japan, Korea or China - you can substitute this for the US top grossing peak.

2. Monetization coefficient

Looking at how a game monetizes we look at the following...

M = ((Maximum IAP purchase * minimum IAP purchase) / No. of times we're offered a hard currency transaction within first 5 minutes of play) * No. of in-game currencies

This number looks at some static values - i.e. the amounts of money consumers can spend in single transactions, plus the number of in-game currencies - something I call currency confusion.

This is combined with a 'dynamic' number, in terms of whether a game tries to get us to spend real cash within the first 5 minutes of playtime; something that can be viewed as defining a game as being 'highly monetized'.

3. Discount ratio

An addition to the original Monetizer process, I now also look at how much more of an in-game hard currency a game gives a player who spends the maximum amount of money compared to the unit cost of hard currency if they spend the minimum amount.

D = ((Maximum IAP purchase * minimum IAP purchase) / How many minutes before we're offered a hard currency transaction within first 5 minutes of play) * No. of in-game currencies

Note; if a game doesn't offer a hard currency transaction in the first 5 minutes of play, we give it a value of 10

What it all means

In this way, we can work out 3 numbers for each game.

More significant is what these numbers mean.

In terms of Success, the range runs from 0 to 1, and having analysed a lot of games, I consider anything over 0.01 to be a commercially successful, with anything over 0.1 very successful.

For the Monetizer coefficient, the range runs from 0 to around 500 (but potentially up to 3,000), while a similar suck-it-and-see approach suggests that 100 is the benchmark above which a game can be called highly monetizing.

In terms of the Discount ratio, the observed range to-date runs from 1 to 4, with most games falling in the range 1.3-1.7.


Changes

Of course, as stated, this process is a work-in-process, and so this analysis may well change as we look at more games, and indeed, as developers change how they make games.

One important thing to raise about the Monetizer equation is that it works best for resource-based games i.e. games in which you spend money buying in-game currency. 

It isn't designed to rank games like Candy Crush Saga, in which players spend multiple small amounts on specific virtual items to complete levels.

This is because they tend to limit their maximum IAP transactions, reducing a game's Monetizer score. However, it is very difficult to score the difficulty of each level; which would be the only way to try to estimate the number of small transactions a player might make. 

Perhaps we could look at the number of levels available?

//last updated: 21 November 2013


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Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

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