What is Dynamic Pricing?

Posted on Posted in Blog - Insights

This article builds on previous articles I've written and talks I’ve given. In particular, it is a follow-up to my recent article on Dynamic Pricing, Personalized Offers, and Modern Gaming. That article was an extended discussion of the recent uproar around randomized price-points in Zynga’s CSR 2 and a survey of how prevalent sophisticated data-driven merchandising techniques already are in mobile gaming.

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Four Trends in Mobile Game Retention

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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.
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Bill Grosso talks about “Getting to Continue Optimization”

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Here at Scientific Revenue we enjoy sharing what we learn. We usually do this in the form of interacting with customers, writing articles for industry publications, and speaking at industry events. It is extra special when we are invited to give a colloquium talk at a major university.

On November 11, 2016, our CEO Bill Grosso spoke at the University of San Francisco Seminar Series in Analytics, where he presented “Getting to Continuous Optimization.”
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Looking at Pay to Win

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This post was originally published in Gamasutra

By now, mobile gaming has mostly transitioned to free-to-play. But while most games are free-to-play, it’s still the case that free-to-play games, and the free-to-play business model, are often misunderstood. In this blog post, we’ll examine some of the mythology around one of the most common complaints about free-to-play games: that they are "Pay to Win."

What is "Pay to Win"

One of the most common objections to the free-to-play business model centers around the idea of "Pay to Win" (hereafter pay-to-win).  For example, a person making this objection might say

Free-to-play multiplayer games tend to favor wealthy players that will simply "pay to win", buying up all the power-ups or items they need to edge out the players who can’t afford to compete (or who don’t want spend). Ultimately, most of the players feel the game is unfair and get "crowded out," thus making it hard to build a long-lasting community for free-to-play games.

There’s a lot in there, and it can be hard to tease apart. But it boils down to the following 4 claims:

  1. Wealthy players will spend more in a game.
  2. Spending more gives people a significant advantage in multiplayer games.
  3. The most successful players are the players who have spent the most (which is unfair and it discourages new players from playing or participating).
  4. Therefore, when you avoid pay-to-win, you wind up making a game that either doesn’t monetize well, or isn’t very interesting.

If these were always true then, taken together, they would imply that multiplayer games which are strongly free-to-play don’t build long-lasting or large-scale communities.  Since that’s not true (there are free-to-play games with very strong monetization which measure user lifetimes in years), it’s worth examining these claims a little more closely and talking about how to use the free-to-play model effectively without destroying the gameplay.

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Pokemon GO’s Impact on Smaller Developers

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The launch of Pokémon GO saw it race to the top of the charts at unprecedented speed. It seems like everyone and their uncle are playing and talking about Pokémon GO.

One would naturally surmise that this monster hit would have a negative impact on other mobile games. However, according to App Annie that is not the case. Instead, they report that “Pokémon GO’s success has not come at the expense of other mobile games or apps,” and conclude that its impact has been additive to overall usage and revenue.  This analysis covered all games and so included games at the top of the charts, which claim the lion’s share of overall revenue.

What about direct impact to games further down the rankings?

Scientific Revenue Economist Isaac Knowles analyzed three very different mobile games in our system and shared his findings in his Gamasutra post “Pokémon GO's Impact on Smaller Developers.”  He found that there was an impact on smaller game developers. He also noted that there are things that developers can do to protect themselves when faced with the next massive mobile game release.  Read his Gamasutra post for more details.

Why Industry Standard Game Metrics Don’t Matter (Enough)

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We have lots of conversations with game publishers. Oftentimes, those early discussions about dynamic pricing turn to a discussion about data what they’re seeing in their analytics. They’ve got dashboards filled with “the standard KPIs” and now they’re wondering: what do those KPIs mean, and how do they act on them.

The challenge is that most analytics tools people use are just measuring big picture results. While it is good to have fingertip access to metrics like ARPDAU and conversion rates, they don’t deliver actionable insights or help guide decision-makers trying to improve game performance.

To help address this, Scientific Revenue CEO Bill Grosso wrote an article in Gamsutra on Why Industry Standard Game Metrics Don’t Matter (Enough). In it he explains why some of the more common analytic metrics used are not sufficient for making good decisions, and provides tips for what can be helpful.

We will be following this up with a series of blog posts around Key Performance Indicators that we think game owners should be looking at regularly. Stay tuned.

Scientific Revenue Publishes First Mobile Game Monetization Best Practices Report

Posted on Posted in Blog - Insights, Blog - Solutions

As PocketGamer's Jon Jordan is reporting today, we are very proud to release our first mobile game monetization benchmark report. It draws on in-depth surveys of leading game developers and publishers -- most with millions or hundreds of thousands MAU -- along with Scientific Revenue data and recommendations. A free copy is now available to everyone in the industry: Click here to download and read.

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Rescues, Buffs & Skips: How to Design Mobile Game Power-Ups for Optimal IAP

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When our mobile game partners ask us about the best strategies for monetizing through in-app purchases, we often recommend connecting IAPs more directly to in-game power-ups (e.g. designing power-ups with monetization in mind).  While the term "power-up" is well-known in game design, there’s actually no standard ontology for power-ups (there have been some academic papers on the topic but very little terminology that’s been widely adopted by the industry). 

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Bill Grosso on VentureBeat: Seven Mobile Game Industry Trends for 2016

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Just published on VentureBeat, our CEO Bill Grosso predicts the following seven mobile game industry trends for 2016:

  1. Google Play goes back to China, and Android games thrive

  2. Hampered by mobile, global console sales less than expected

  3. Boosted by mobile, PC game sales fail to decline

  4. Mobile game revenue goes (more) global

  5. Evolution toward refreshable & extendable mobile games

  6. Rapidly rising CPIs for high-ARPU Genres

  7. Pre-order provokes rise of traditional marketing on mobile

Bill expands on these predictions in greater depth, incorporating insights from colleagues including Steve Sadin of Turbine and Joost Van Dreunen of SuperData.

Be sure to read and share the full post here.



How to Turn Free Viral Apps Into "Feeder" Apps That Actually Make Money

Posted on Posted in Blog - Insights

When mobile game developers think of apps which monetize well, they tend to name three categories:

  • Games with a natural power-up or items-based strategy to generate in-app payments. (I.E. Clash of Clans, Candy Crush.)
  • Games with high engagement and traffic over time, but little or no opportunities for IAP, earning revenue from ads. (I.E. Flappy Bird.)
  • Premium download games with a strong consumer identity or branding component. (Fewer and fewer these days, though they sometimes do well for traditional publishers.)

There’s another type of app which doesn’t neatly fall into any of these categories, but is important to monetization: Popular free apps which are simple but highly polished and engaging. Because their gameplay is so simple, there are usually few places to add natural hooks for IAPs, while ad-based monetization would probably feel intrusive, angering players and hurting viral growth (not to mention sending players to other games). Viewed properly, however, apps like these have the potential to be an important component in a network of games strategy.

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Why Mobile Games Must Look Around the World for Revenue

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I often tell mobile game publishers that they need to think about how their games can be monetized not just in their top 5 markets, but throughout the entire world. Here are a pair of images which illustrate the point. The first shows a daily density map of user payment activity from an Android game, showing where the most in-app purchases for it are being made -- in Europe, Africa, Asia, and the Pacific Rim:

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