On January 16th our CEO William Grosso will be a featured speaker at Pocket Gamer Connects in London, where he will explain ‘How to Design A Simple Annuity’. Pocketgamer.biz interviewed him to get an early preview and better understand why annuities are a powerful monetization tool which maximizes IAP revenue and which mobile game developers should consider adding to their games. The interview begins by discussing the basics of annuities:
How to get commitment from your players
We tend to think of retention as the way we measure commitment (in the same way that temperature measures heat). Ultimately, what you're looking for is for people to feel like the game is their game, and that the game is an extension of their identity. When you see a 10 year old boy walk up to another boy, ask "What do you play?", and get back "I play Clash Royale" ... that's when you know you've gotten commitment.
Once you have commitment, players are more comfortable with making in-app purchases (IAP). At this point, game developers can then begin to think about pricing as way to better monetize their mobile game. But, first you need to have good retention.
In thinking of retention as commitment, there are four very clear mobile game trends:
The continued rise of daily rewards systems. They've been around a long time (6 of the top 7 mobile apps had them in 2012, for example). But I'd venture to say that fewer than half of the games out there right now have a daily rewards system, and I'd be willing to bet it clocks in at 80% of new games by the end of 2017.
The emergence of annuities. Here at Scientific Revenue, more and more of our customers are using annuities. The idea is simple: sell the daily login reward, rather than give it away. But it works astonishingly well, and it increases the user’s commitment (after all, now they've spent in the game) while giving them a reason to return on a daily basis. More on how annuities can be useful in increasing F2P mobile game revenue and retention can be found here.
Companion videos. Twitch has been around for years, and YouTubers have been chronicling games for years. But, 2016 was an inflection point. At this point, whenever a significant mid or core game does an update, the first thing most players do is head to YouTube to learn more. There isn't a large-scale endorsement system yet, but it's only a matter of time before Molt has a Nike sneaker he can sell to his 2 million subscribers. And it goes without saying -- the existence of large-scale and popular YouTube communities and coverage more than doubles the time the player spends thinking about the game.
The Creative Reuse of IP. We've seen franchises for a long time. Madden N+1 will follow Madden N as surely as night follows day. But the way Clash Royale reused the characters and IP from Clash of Clans was a bit of a revelation. Not only did it simplify acquisition for Clash Royale, but I'm willing to bet that Clash Royale measurably improved Clash of Clan return and retention rates. Simply put: every time you play Clash Royale, you get a little more invested in the same universe as Clash of Clans (and Supercell, by cross-releasing new characters and experimenting with long form videos like Clash-A-Rama, is accentuating the trend).
The above four trends help players to demonstrate their commitment to their favorite mobile game. This increased commitment then leads naturally to increases in actual playing time as well. With greater retention, you can now better monetize your players with in-app purchases or in game advertising.
“Scientific Revenue’s dynamic pricing technology is a huge win for developers. We’re very pleased they are now pre-integrated into SDKBOX and can easily be added to any Cocos2d-X game or application. Chukong has been working with Scientific Revenue for 2 years, and we’re excited to take the relationship to the next level.”
“Scientific Revenue can help any publisher maximize their hard earned development dollars. I'm proud to be associated with such a ground breaking company.”
“Scientific Revenue's combination of machine learning and predictive analytics provide developers with the equivalent of a 25-person team of expert data scientists and engineers focused on boosting profits. They enable game designers to focus on making great games while feeling secure that they will meet and exceed their revenue goals.”