Like the alchemists of old, for the past six months I've been trying to turn base metals into gold.
One of my most significant realisations during 2013 was the fast increasing sophisticated of the internal economies of free-to-play mobile games.
So following on from various conference talks, I've been thinking about how to reflect this; a progress that came to some sort of conclusion with our now regular Monetizer column.
Part of the process
To quickly recap, in Monetizer we measure success with some simple ratios in terms of position in the top grossing chart - ranging from 0 to 1, with a score of more than 0.01 representing a generally successful commercial game and 1 representing a game that was a #1 top grossing game in the US and every country in which it entered the top 100.
Meanwhile our main Monetizer ranking runs from 0 to around 400 (there's no fixed maximum, with a score of more than 100 representing a highly monetised game.
There also an additional metric which I call the Discounted Currency ratio (DCr).
This is a measure of how much a unit of in-game currency costs at different real money price points; something that typically increases with IAP price i.e. you get more in-game currency per dollar spent if you spend $99.99 than if you spend $0.99.
Combining these three numbers provides a framework with which to compare the economies of any game that uses in-app purchases and in-game currencies. (It doesn't work for level-based games such as Candy Crush Saga, though.)
Yet as I pointed out at the time, Monetizer was always going to be a process, and so it has proved.
The more I've played mobile F2P games, so the more I've learned and so the Monetizer process has subtly changed.
Of course, for the sake of continuity, I've kept to the process but it's become increasingly obvious to me that I've needed to add additional analysis. This should be no surprise as I've always stressed the point of Monetizer has been to provide a quick and dirty approach to analysing individual games and market trends.
That's a long introduction but in keeping with this philosophy I'm ready to talk in detail about a new Monetizer metric, which builds on the Discounted Currency ratio
Simply put, it's the average of the total cost if you bought every in-app purchase a game offers.
As established by platform holders, there are clear minimum and maximum prices for IAP - $0.99 and $99.99 respectively on the Apple App Store.
Yet, within that range, developers have latitude to set their prices. Despite this, during 2013, a consensus quickly emerged with price points such as $49.99, $19.99, $9.99 and $4.99 becoming commonplace.
Indeed, the majority of games use these values, typically within a 5- or 6-band spectrum of prices.
A typical 5-band IAP range would be $4.99, $9.99, $19.99, $49.99 and $99.99, resulting in a total IAP spend of $184.95. The average would be $184.96 / 5 = $36.99.
A typical 6-band IAP range would add a lower value transaction; either $0.99, $1.99 or $2.99.
In the case of adding a $0.99 transaction, the total IAP spend would be $185.94 and the average $30.99.
Hence, this simple construct provides us with another metric with which to compare games.
A broad sweep
Of course, as previously stated, the majority of games use similar price points and price ranges, but this metric remains useful for distinguishing those that do not, and thus highlighting them for more analysis.
I should also point out that it's only sensible to compare games that use the same IAP economy. Trying to compare a 5-band IAP game with a 6-band IAP game would be inconsistent.
That said, our first graph shows the complete range of analysed titles ranging from games with a 3-band IAP system to those with a 7-band system.
Obviously, the first thing we can see is that few games have a 3-, 4- or 7-band IAP economy.
Also, because a 6-band economy typically adds a low value IAP, such games have a lower average than games with a 5-band economy. But this isn't always the case as we can see thanks to the six 5-band games under the $30 average. This is because they don't use the $99.99 maximum IAP.
New ways to pay
However, it's much more interesting to see the variation between games using the same IAP economy.
Looking at games with a 5-band system, we can see that most are found around the $36.99 average IAP price, as already discussed.
However, there are two outliers; Xryality's Swords & Spells, which has an average of $41.39 thanks to IAPs priced at $54.99 and $33.99, and Kixeye's Backyard Monsters, which has an average of $39.99 thanks to a $29.99 IAP. It's worth pointing out neither game has been commercially successful with this strategy.
In terms of games with an average of less than $30, the maximum IAP is $49.99 or in the case of Nin Jump: Rooftops and Pocket Garden both have a maximum IAP of $19.99.
Using a 6-band IAP system is now the industry standard, and as we can see from this graph, some of the games also combine this with two hard currencies (as shown by blue and green dots), although this is becoming less common.
One interesting game highlighted in this context is Supercell's Hay Day. It's softer hard currency (Coins) uses some strange IAP prices - $7.99, $14.99 and $29.99 - resulting in its low average, $26.16, despite it also using the $99.99 maximum IAP.
In terms of 'high average' games, Red Robot Lab's Friendly Fire is significant for its use of $39.99 and $49.99 IAPs, while two of Kabam's games Dark District and Heroes of Camelot both use the $29.99 IAP price point, as well as $19.99 and $49.99.