The Hidden Evil of the Micro Transaction
Over the last year a lot of time has been spent thinking, writing and developing my thoughts on social gaming and by extension micro transactions. The last few months of my professional life have involved some fairly complex and sometimes scary monetisation designs and discussions. Moving from consoles to social web games has been an interesting path to walk, with many lessons to be learned.
Micro-transactions are not Evil!
The classic line from Hamlet, “for there is nothing either good or bad, but thinking makes it so” is the one which applies here. MTX is a valid business model which, when used correctly, can enhance a game experience and bring a product to a wider audience.
A key barrier to entry for so many people is breaking open their wallet. For this reason I love Facebook games, but also XBLA games. The trial mode enforced by Microsoft does not get enough credit for upholding really good accessibility and up-sell standards. It enforces the “try before you buy” on developers and does some really intelligent things.
That being said poor monetisation design or a mismatched business model can destroy a product. Some quick examples:
- ESports != Game Affecting Micro transactions
- Experimental MMO != Upfront Cost + High Sub Cost
- Awareness Raising Serious Game != Fixed Cost Model
Greed is NOT Good
Many, not all, business and marketing characters I’ve met are so focused on the bottom line they cannot see the product. Now in some cases, this is just greed but more often they are not gamers, they do not partake in the craft nor enjoy its fruits.
Some quick numbers and explanations for you.
|ARPPU||Average Revenue Per Paying User is measured on a per month basis.||It varies a lot and is one of the less visible numbers in the industry.|
|LTV||Lifetime Value of a User||Varies MASSIVELY|
|Engagement||DAU / MAU||20% Average|
|DAU||Daily Active Users||Top 40 all above 1 million|
|MAU||Monthly Active Users||Top 40 all above 7 million|
|Conversion Ratio||Monthly Conversion rate of Players to Payers||2% Average|
|Organic Traffic||Amount of Traffic you get that isn’t due to Ads, Purchased Traffic or Partnerships.||Hard number to pin down and the real value is often hidden behind marketing dollars.|
First thing that your money people are going to focus on are those numbers, especially the ARPPU. As a game designer your key metric should be the Engagement, Lifetime value and some of the softer metrics.
Instead of gobbling the raw ingredients like a lazy fat child, put in some work to cook up a feast. Take some risks, aspire to improve the game so people want to play it rather than feel compelled to play it. Drive up the engagement, word of mouth buzz and reduce the churn (loss of players). In short, take the long view.
Grey Areas are Green-lit by Greed
The problem with all this is this it is an ambiguous, grey area. The real kicker is that grey areas are always green-lit by greed. In the interest of a “little more”, so much wrong has been done. So many ideas ruined, communities broken, and teams overstretched by wanting that little bit more. The old sustainable farming arguments come into play here.
The massive problem is that you as the Games Designer or other development members do not always have the final say, but you can still fight your corner. You can build your arguments and try to provide some strong research and data to help your money people see the long term view.
The problem is this Green lighting of Grey areas doesn’t only hit the money people can filter into your team. Money is a great excuse to put your toe over the line.
Strong Vision Holder
The saving grace is if your company founder, CEO or similar authority is a strong vision holder. Failing that, you can have a hard-headed idiotic bitch of a lead designer in heels with a baseball bat and a South African sized chip on her shoulder or your local equivalent, who is willing to fight your corner.
The design and vision has to remain consistent, lines must be drawn and values upheld. From this position you can try to innovate and develop. It’s scary and frightening and there is no guarantee you will get it right. Trust, Integrity and Values can be sold if you’re starving. They can never be bought if you’re fat and wealthy.
Girl’s gotta Eat
So all this being said we aren’t making games for free and we need to eat. I’ve never met anyone in the trenches of game development who wasn’t filled with passion for their craft. I’ve got a whole other blog post to write about: compromise, tips on winning people over and facing the harsh realities.
At this point, however, I will just recommend this brilliant, fiery rant of awesome.
GDC 2011: No Freakin’ Respect! Social Game Developers Rant Back by Brenda Brathwaite
Along with this counter point argument
Redesigning Wild Ones into Playdom's Top Game: A Social Game Design Reboot by Joshua Dallman
We do it because we love our games, not the money… but a girl’s gotta eat.