4 Years, 300 Games: What We’ve Learned About Free-2-PlayCasual Connect Europe 2013
Emily Greer, Co-Founder & COO$$$$$$$
Brief History of KongregateLaunched 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
The New New ThingWe’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
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
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
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)
Launch to FailureOur currency “kreds” launched in November 2008
“Premium” games launched gradually over the next 6-9 months with decent ratings but minimal sales
Open Sesame
1st MMO
1st Asian MMO
First FB Game
4 Years, 300 Games
“Transactions will be really small, <$1”
20%
22%
37%
11%
7%
2% 1%
Transactions
$5 $10 $20 $50 $100 $250 $500
3%
7%
24%
17%23%
14%
11%
Revenue
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%
You Always Need More Storage
Type LTV Avg Trx # of Trx % of
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%
– 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:
“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.
“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 ARPUSynchronous 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
ARPU & ARPPU
“Multiplayer/social elements are crucial”
What about PVP vs PVE? Both!
Type % 50 Plays % Buyers ARPPU ARPUPvP 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.
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 ARPUMultiplayer 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
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 $0.66
Some of the weakest sub-genres:% 50 Plays % Buyers ARPPU ARPU
Pet Battlers 1.9% 0.97% $19 $0.18Artillery 1.3% 0.61% $26 $0.14Shooters 1.7% 0.56% $19 $0.11
“US/English speaking much more valuable than any other market”
Broadly true – 65% of our revenue comes from English-speaking countries.
Individual smaller markets outperform the US, however, especially Northern & Western Europe
Country % Buyers ARPPU ARPU Switzerland 6.96% $ 248 $ 17.24 Kuwait 1.64% $ 499 $ 8.19 Austria 5.49% $ 143 $ 7.88 Norway 4.43% $ 143 $ 6.34 Germany 5.77% $ 100 $ 5.75 United Arab Emirates 1.07% $ 512 $ 5.46 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 Denmark 4.03% $ 106 $ 4.27 Belgium 4.94% $ 74 $ 3.64 Japan 2.99% $ 118 $ 3.54 United States 4.20% $ 81 $ 3.40 Australia 3.29% $ 102 $ 3.37 Finland 2.73% $ 122 $ 3.32 Canada 3.81% $ 86 $ 3.29 United Kingdom 3.54% $ 84 $ 2.97 Russian Federation 3.64% $ 78 $ 2.83
Keep Going, Keep LearningWe 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
Die EndeTo learn more/find links to other talks visit developers.kongregate.comTopics include:
• retention • big spenders• item pricing• promotion management• more
For web games contact us at [email protected] you’re interested in mobile publishing it’s [email protected]
Follow me on Twitter: EmilyG