In most of my previous posts (for example here, here and here) I insist on the fact that your biggest fans are the ones driving your revenue the most: they play the most, have the highest LTV, convert the fastest, etc. Specifically, the fact that your best customers convert soon after install is very revealing of some of the key monetization triggers in F2P games (and I can’t insist on this enough: they are your best customers because they are your biggest fans). The fact that your biggest fans convert so soon after install (usually on install day) can be very revealing. If your biggest fans convert quickly, that means a) they make their first purchase before they encounter a clear need to spend to progress and perform better and b) they make their first purchase even though they don’t have the best understanding of your game mechanics and the impact of what they are purchasing.
From these – pretty universal – monetization patterns, it feels reasonable to conclude that your biggest fans don’t convert because there is a need or because they want to achieve something specific. In other words, monetization for your best customers is not about being instrumental (spending to achieve something in-game). It’s something emotional – your biggest fans love your game and want to engage with it further. So that’s what you should be putting forward the most on install day (ideally from the very first session): the cool things that make your game stand out; something aspirational that a fan would want to have. What that is will depend on what your game is (but probably it’s not going to be a consumable or something generic and functional). You need to think the way a fan would: if you’re in the app store and see the game, what is driving you to install? What is someone who just installed the game expecting to see? That’s what you should be putting forward and trying to sell – because that’s what got your player to be in your game in the first place.
When you are making a game, you need to focus on making the most fun and engaging game possible (and for that part data can definitely be helpful, but it probably will never be enough – you need to trust yourself and believe in something). Any game that sees a few millions of installs will generate some individual fans. The challenge of making a mass-market success is making a game that will generate the most fans possible. The goal of the game-making part is to be fun and engaging. The goal of your monetization efforts needs to be to capitalize as much as you can on the engagement of the fans of your game. Capitalizing on the engagement of your biggest fans is crucial, and you need to identify when to be proactive and what to offer that segment of users. One thing I haven’t discussed yet is what to do with your players who don’t convert (early or late).
The free-to-play business model is based on the premise that you can get more people to engage with your product based on the promise of free entertainment. And with that larger volume of players in the game, the expectation is you end up with more individual payers that make your game a financial success (not to mention that if there is no upper-limit on spending, you can end up generating much more revenue overall). Because you are getting so many players to install based on the promise of free entertainment, it’s no surprise a non-negligible portion of your players – including fans – never spend. That was the initial promise that got them to engage with your game in the first place.
There is a segment of engaged fans who don’t spend in your game. And what you can observe is that the longer a nonpayer is in your game, the lower the probability of seeing that player convert (you can go into more details here and here).
To be successful your monetization strategy needs to capitalize on the spending potential of your biggest fans. That means you need to offer them the things they will find relevant and aspirational, and price it in a way that your biggest fans get the best value for their money (incidentally, providing value doesn’t mean making things cheap – your fans might rather spend $49.99 for a top tier character than $4.99 for a garbage character or character shards they can’t do anything with). But there is also an opportunity to capitalize on long-term fans who have not spent yet. The reality is the revenue you can get from those players is probably relatively modest (so you shouldn’t be spending a lot of your time and effort to get them to convert). But once you’ve identified those users, if you can segment your offers you can easily put an IAP in front of them compelling enough to get them to convert.
The main guiding principle to monetize those long-term nonpayers is that it’s unlikely they will spend in your game. By extension it means you are not getting any revenue from these players (you can’t get less than you are getting from them – there is no need to be worried about any theoretical cannibalization). So, there is really nothing to lose when trying to get these users to spend – you can throw everything you got at them. With these long-term, “stubborn nonpayers” there are 2 things you should keep in mind for any offer you might want to send their way.
1. You should sell them something functional and top tier
The longer players have been in a game, the more IAP are driven by functional and instrumental considerations. One way to confirm that is to see what % of purchases occur after a loss. While soon after install most purchases occur after a win, as days since install increases, more and more purchases occur after a loss (the interpretation here then becomes that players are spending specifically to overcome that blocker they encountered). Furthermore, the longer a player has been in the game, the more you can expect him/her to have a very good understanding of the game’s dynamics. So if you want to get an old non-payer to spend, you need to be selling him/her top tier quality items only (ideally something exclusive you can only get by paying). You need to put forward something top tier and highly functional/instrumental. The kind of thing that will change the way your nonpayers play the game.
2. You need to make the price very low
Pricing of your offers is crucial for both the reach (how many players will purchase the offer) and total revenue your will get from those offers. The reality is, the longer your nonpayers have been in the game (as nonpayers) the more resistant they will be to make any purchase. So, while you always want to be aiming for the highest price point possible – and find the content that will make that offer valuable – that’s a luxury you don’t have when you are trying to convert long-term nonpayers. The value proposition to get that group of users to convert requires a top tier item, and also a very low price point. While it can be counter-intuitive and feel risky to sell your best items for very low price points (by very low, I mean close to the lowest price-point in your game), the reality is the prospect of ever making any IAP money off old nonpayers is extremely low (and even with ad revenue, you can expect eCPM to decrease as users age). There is little money to be made from older nonpayers who are naturaly resistant to making an IAP. But if you want to make that little money, you will need to make them an offer at a price point you probably don’t want to be implementing across the board. The good thing is, because of the user segment you are targeting, you are really not compromising any future revenue (and ideally, you can design this conversion offer to break the strongest resistance with a follow up offer in mind).
Alexandre Macmillan 