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.
Kongregate - Maximizing Player Retention and Monetization in Free-to-Play Gam...
4 Years 300 Games - What We've Learned About Free-to-Play
1. 4 Years, 300 Games:
What We’ve Learned About Free-2-Play
Casual Connect Europe 2013
Emily Greer, Co-Founder & COO
2. Brief History of Kongregate
Launched in 2007 as developer-
friendly, open platform for free
web games
– Only source of revenue was
advertising
– Almost all games single-player &
Flash
– Level & achievement system
attracted core, male audience
3. The New New Thing
We’d heard about something called
“microtransactions” that were a huge source of
revenue 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. 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 friction
2. Players will be buying cosmetic items, gifts,
power-ups & content
3. Multiplayer/social elements are crucial
4. US/English speaking much more valuable than
any other market
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. 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. Launch to Failure
Our currency “kreds” launched in November 2008
“Premium” games
launched gradually
over the next 6-9
months with decent
ratings but minimal
sales
8. Open Sesame
First FB Game
1st Asian MMO
1st MMO
11. What Were We Thinking? Revisited
1. 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. 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 trx
In general the higher the friction of the payment type, the
lower 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. “Players will buy cosmetic items, gifts,
power-ups & content”
Almost all sales (95%?) are for items that affect
gameplay
– ~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. “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
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. Multiplayer is very important, but it’s not the most
crucial element.
Turns out the single most important aspect of a
game is strong RPG/character progression.
Type % 50 Plays % Buyers ARPPU ARPU
Multiplayer RPG 2.6% 0.75% $69 $0.51
Multiplayer Non-RPG 1.0% 0.45% $9 $0.05
Single-player RPG 1.8% 1.29% $12 $0.10
Single-Player Non-RPG 0.2% 0.53% $4 $0.02
18. So what genres work best?
Some of the best sub-genres:
% 50 Plays % Buyers ARPPU ARPU
Empire Builder 3.9% 0.87% $104 $0.78
CCG 2.6% 1.01% $65 $0.71
Lootfest 3.3% 0.88% $67 $0.66
Some of the weakest sub-genres:
% 50 Plays % Buyers ARPPU ARPU
Pet Battlers 1.9% 0.97% $19 $0.18
Artillery 1.3% 0.61% $26 $0.14
Shooters 1.7% 0.56% $19 $0.11
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 $ 8.19
our revenue comes from Austria 5.49% $ 143 $ 7.88
Norway 4.43% $ 143 $ 6.34
English-speaking Germany 5.77% $ 100 $ 5.75
United Arab Emirates 1.07% $ 512 $ 5.46
countries. 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 $ 4.44
Individual smaller Denmark 4.03% $ 106 $ 4.27
Belgium 4.94% $ 74 $ 3.64
markets outperform the Japan 2.99% $ 118 $ 3.54
United States 4.20% $ 81 $ 3.40
US, however, especially Australia 3.29% $ 102 $ 3.37
Finland 2.73% $ 122 $ 3.32
Northern & Western Canada
United Kingdom
3.81% $ 86 $ 3.29
3.54% $ 84 $ 2.97
Europe Russian Federation 3.64% $ 78 $ 2.83
20. Keep Going, Keep Learning
We struggled for nearly a year (two including
development) before we saw any success.
Your first game isn’t likely to do well either. Free-2-
play is hard, and many important elements are
counterintuitive. But once the elements come
together the improvement is exponential
21. Die Ende
To learn more/find links to other talks visit developers.kongregate.com
Topics include:
• retention
• big spenders
• item pricing
• promotion management
• more
For web games contact us at apps@kongregate.com
If you’re interested in mobile publishing it’s mobile@kongregate.com
Follow me on Twitter: EmilyG
Editor's Notes
So far, so good, but we didn’t want to limit ourselves and our developers to just ad revenue
There was actually a lot more going on than we realized in our Silicon Valley bubble, especially in Europe, where Bigpoint, Innogames, etc were already building strong businesses
So without much research we made a whole lot of assumptions
Addplatformer with coins image
The great redistribution of VC money to indie devs. We worked with some great teams who’ve gone on to success (Hundreds, Solipskier, Bubble Safari, the Papa’s Pizzeria series) but most of the teams were over their head doing multiplayer, and we were giving advice about things we didn’t yet understand.
By summer of 2009 we were pretty depressed about the prospects of this ever working, though FB games were making real money and generate a lot of energy in the space.
In the end the openness of the Kong platform saved things. An indie MMO called Sacred Seasons became a sleeper hit on Kongregate over the summer and once they integrated kreds, the first non-funded game to do it, we suddenly had some traction, and a roadmap of the kind of games that could work.
After 4 years we have a broad variety of core & mid-core games, from developers large & small, East & West, designed for FB or for stand-alone sites or Kongregate itself. And with that many & variety of games we can do a lot of great analysis. Looking back at our original assumptions here’s some of what we’ve learned.
For CC buyers median transaction is$20, average of $31. 20% of our transactions are $100+, same % as $5, and those $100+ account for nearly half our revenue.
That’s a 3x difference in LTV! Now there’s some selection bias going on, someone who unclicks the “store cc” box is probably a more careful spender, but it’s hard not to believe it’s a substantial portion of the difference. I expect storing is why CC buyers are about 20% more valuable than Paypal buyers, where the default is “not stored”.
Team Fortress 2 and WoW may be able to sell significant amounts of cosmetic items but it takes a huge, passionately engaged audience to work at all.
Don’t think both is a worse than just asynchronous. Adding some synchronous to a successful async game is generally successful. But some games with both focus too much on the synchronous.
Explain bubble chartSome synchronous games do very well, but on average async does betterSingle-player games low ARPU but can do a decent amount of revenue, especially in-line with how much easier they are to make.
PvE helps drive engagement and retention, PvP drives deeper spend, combo is additive perhaps because PvE is a good stepping stone to PvP.
A single-player with strong RPG elements will outperform a multiplayer game without them. This is one of the biggest mistakes we made in our initial games. It shows up most strongly in retention and ARPPU. Regardless of how much you like a game you’ll invest more (whether time or money) where you feel a sense of progress.
I don’t think genre is destiny. All three of the weaker subgenres are very popular with players, but the structure of the games makes the monetization less automatic. Character progression tends to be weaker, and there’s less reason to continue to invest. Once I have a couple of guns/pets I like, why buy more? But if done right they can
Again some selection bias – those willing to use a site/play a game in English are likely more committed and more educated.