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4 Years 300 Games - What We've Learned About Free-to-Play

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Talk from Casual Connect Europe 2013. Delves into the performance of synchronous & asynchronous multiplayer, PVP vs PVE, best- and worst-performing genres, and LTV of different payment methods.

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4 Years 300 Games - What We've Learned About Free-to-Play

  1. 1. 4 Years, 300 Games:What We’ve Learned About Free-2-PlayCasual Connect Europe 2013Emily Greer, Co-Founder & COO
  2. 2. Brief History of KongregateLaunched in 2007 as developer-friendly, open platform for freeweb games – Only source of revenue was advertising – Almost all games single-player & Flash – Level & achievement system attracted core, male audience
  3. 3. The New New ThingWe’d heard about something called“microtransactions” that were a huge source ofrevenue for web games in Asia Not many games had tried them in the US, but virtual worlds like Second Life, Gaia Online, Habbo & IMVU were doing well with them
  4. 4. What Were We Thinking?1. Transactions will mostly be <$1, therefore – Payment processing costs are a big deal – Incenting larger purchases will be valuable – Stored credit cards and existing balances will be a powerful way to reduce friction2. Players will be buying cosmetic items, gifts, power-ups & content3. Multiplayer/social elements are crucial4. US/English speaking much more valuable than any other market
  5. 5. Let’s build a platform!• Because of the transactions costs & friction we should build a site-wide currency for our developers to use• There’s no point to creating a currency if there aren’t games to use it
  6. 6. The Blind Leading the Blind• Funded 6 games, focusing on synchronous multiplayer & unique gameplay• Monetization elements tacked on, shied away from pay-to-win elements: – Cosmetic Items (Dinowaurs & Remnants of Skystone) – VIP subscriptions with more content (Skystone, Battalion) – Some power-ups & currency (Zening, Skystone, Battalion)
  7. 7. Launch to FailureOur currency “kreds” launched in November 2008“Premium” gameslaunched graduallyover the next 6-9months with decentratings but minimalsales
  8. 8. Open Sesame First FB Game 1st Asian MMO 1st MMO
  9. 9. 4 Years, 300 Games
  10. 10. “Transactions will be really small, <$1” Transactions Revenue 2% 1% 3%$5 11% 7% 7%$10 20%$20 11% 14%$50 24%$100$250 22%$500 23% 37% 18%
  11. 11. What Were We Thinking? Revisited1. Transactions were going to be really small, <$1 mostly, therefore  LOL! – Payment processing costs will be a big deal  Only on mobile – Incenting larger purchases will be valuable  Still very true. Testing has shown that bonusing larger purchases raises revenue by 14%, increases buyers who spend $100+ by 25%
  12. 12. You Always Need More Storage – Stored credit cards and existing balances will be a powerful way to reduce friction  Also very true LTV on non-stored credit card buyers: $66, 3.6 trx LTV on stored credit card buyers: $195, 7.8 trxIn general the higher the friction of the payment type, thelower the value of the buyer: % of Type LTV Avg Trx # of Trx Revenue Credit Card $ 130 $ 28 4.7 50% PayPal $ 110 $ 25 4.4 32% Mobile $ 43 $ 8 5.7 7% Prepaid Cards $ 69 $ 19 3.6 6% Offers $ 10 $ 2 4.4 5%
  13. 13. “Players will buy cosmetic items, gifts, power-ups & content”Almost all sales (95%?) are for items that affectgameplay – ~70% purchases are for permanent items and upgrades, about 30% go to consumables like energy – Cosmetic items have minimal sales, but cool-looking items sell better than more ordinary ones – Gifting behavior is quite light with our 85% male audience – Content sells somewhat in single-player games, but sells best mixed with a package that includes skill points or another power-up.
  14. 14. “Multiplayer/social elements are crucial” Yes! But it still doesn’t look like we expected it to. In the early games we funded we focused on synchronous multiplayer, both PvP and co-op PVE. That was a mistake. Type % 50 Plays % Buyers ARPPU ARPU Synchronous 1.4% 0.54% $43 $0.25 Asynchronous 3.6% 0.80% $88 $0.66 Both 2.9% 1.07% $51 $0.55 Single-Player 0.8% 0.85% $7 $0.05
  15. 15. ARPU & ARPPU
  16. 16. “Multiplayer/social elements are crucial” What about PVP vs PVE? Both! Type % 50 Plays % Buyers ARPPU ARPU PvP 2.2% 0.63% $61 $0.38 PvE 2.4% 0.56% $24 $0.14 Both 2.8% 0.91% $71 $0.65 Single-Player 0.8% 0.85% $7 $0.05 Guilds make everything better – all top games have them. Guild wars & guild leaderboards are very powerful.
  17. 17. Multiplayer is very important, but it’s not the mostcrucial element.Turns out the single most important aspect of agame is strong RPG/character progression.Type % 50 Plays % Buyers ARPPU ARPUMultiplayer RPG 2.6% 0.75% $69 $0.51Multiplayer Non-RPG 1.0% 0.45% $9 $0.05Single-player RPG 1.8% 1.29% $12 $0.10Single-Player Non-RPG 0.2% 0.53% $4 $0.02
  18. 18. So what genres work best?Some of the best sub-genres: % 50 Plays % Buyers ARPPU ARPUEmpire Builder 3.9% 0.87% $104 $0.78CCG 2.6% 1.01% $65 $0.71Lootfest 3.3% 0.88% $67 $0.66Some of the weakest sub-genres: % 50 Plays % Buyers ARPPU ARPUPet Battlers 1.9% 0.97% $19 $0.18Artillery 1.3% 0.61% $26 $0.14Shooters 1.7% 0.56% $19 $0.11
  19. 19. “US/English speaking much more valuable than any other market”Broadly true – 65% of Country % Buyers ARPPU ARPU Switzerland 6.96% $ 248 $ 17.24 Kuwait 1.64% $ 499 $ 8.19our revenue comes from Austria 5.49% $ 143 $ 7.88 Norway 4.43% $ 143 $ 6.34English-speaking Germany 5.77% $ 100 $ 5.75 United Arab Emirates 1.07% $ 512 $ 5.46countries. Singapore 2.26% $ 203 $ 4.59 France 5.34% $ 85 $ 4.56 Cyprus 2.18% $ 207 $ 4.53 Netherlands 4.66% $ 96 $ 4.47 Sweden 3.95% $ 112 $ 4.44Individual smaller Denmark 4.03% $ 106 $ 4.27 Belgium 4.94% $ 74 $ 3.64markets outperform the Japan 2.99% $ 118 $ 3.54 United States 4.20% $ 81 $ 3.40US, however, especially Australia 3.29% $ 102 $ 3.37 Finland 2.73% $ 122 $ 3.32Northern & Western Canada United Kingdom 3.81% $ 86 $ 3.29 3.54% $ 84 $ 2.97Europe Russian Federation 3.64% $ 78 $ 2.83
  20. 20. Keep Going, Keep LearningWe struggled for nearly a year (two includingdevelopment) before we saw any success.Your first game isn’t likely to do well either. Free-2-play is hard, and many important elements arecounterintuitive. But once the elements cometogether the improvement is exponential
  21. 21. Die EndeTo learn more/find links to other talks visit developers.kongregate.comTopics include: • retention • big spenders • item pricing • promotion management • moreFor web games contact us at apps@kongregate.comIf you’re interested in mobile publishing it’s mobile@kongregate.comFollow me on Twitter: EmilyG

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