Free-to-play whales more rational than assumed. Analytics are great at telling developers what players are doing in their games, but the numbers aren't quite as adept at telling them why.
For insight on that, Ubisoft turns to a pair of research scientists it brought on board a year and a half ago: Nicolas Ducheneaut and Nick Yee. At last month's Game Developers Conference, the pair sat down to speak with GamesIndustry International about their latest research into the heaviest spenders in Ubisoft's free-to-play game Ghost Recon Online.
"It's an interesting point in time in the industry because everyone is talking about big data," Yee said. "I think a lot of companies inside and outside the game industry are getting access to these big pools of data and they're starting to get analysts to look through that data. A Long Tail of Whales: Half of Mobile Games Money Comes From 0.15 Percent of Players. Oh, you’ve spent a couple dollars on Candy Crush?
How cute. In a mobile monetization report released today, app testing firm Swrve found that in January, half of free-to-play games’ in-app purchases came from 0.15 percent of players. Only 1.5 percent of players of games in the Swrve network spent any money at all. The latter finding is in line with what the advocates of free-to-play have been saying for years: Players don’t have to pay anything to enjoy the game. But the former stat underscores the importance of big spenders, or “whales” in industry lingo, to the app ecosystem. Broken out as a percentage of only players who pay anything at all, Swrve’s report still points to whales. Some game companies talk openly about the fact that they have whales, but others shy away from discussing them publicly. That’s an extreme outlier. Among longtime gamers, companies that profit from whales often get accused of ruining games. Turmell laughed and quickly moved on to another topic. To monetize early, or not to monetize early?
Don’t Confuse Growth with Success, and Don’t Delay the Revenue Model. There is a difference between success and growth.
It used to be that growth was the result of success, but now, – companies are equating growth with success, and by doing so, they are taking risks in delaying the realization of their business model,- arguably the most important part of success. The reality of the Growth-Success conundrum is that growth is half the success. The other half is really revenue. Mark Suster wrote an emotional call to entrepreneurs to not forget about revenues in Why You Need to Ring the Freaking Cash Register. His warning was about not being too lax on revenues, because you’ll be right in .01% of the cases if you delay for too long. Back to the Business Model I’ve long argued that the ultimate success for a startup is the Business Model Realization, not growth, or a great product, Forget the Product, Start Focusing on the Model. Snapchat and that old no revenues debate.
Like many others in the field I was left scratching my head about Snapchat recently.
Not because of the reported $4 billion offer but because of the explosion of age-old arguments about how scandalous it is for a company with no revenues to be valued that highly. I really thought we put that tedious debate to bed a while back, but I guess not. Grown-up warnings about how real businesses have real revenues were yet again littering my twitter feed in recent weeks. It's as if the last ten years of consumer innovation never happened. Here's a selection: "why do investors think a silly app with no clear revenue model is worth so much money? " Be a student of recent history Slamming zero revenue companies seems to happen every time a large, zero revenues company emerges. It was true at the time YouTube started out; Google was ridiculed for the price it paid.
A few years down the road, YouTube is clearly a phenomenal acquisition. Soft launch product development using the Minimum Viable Metrics. Soft launching a mobile title, which is the process of releasing a game in a test market and iterating upon it based on user data, has become an integral part of development strategy for large and small developers alike.
The reasons are numerous: Ratings have a significant impact on an app's discoverability, perception, and, ultimately, download volume, so a game needs to be tested by a sizable number of users before it is hard launched in order to make sure that people enjoy it. By soft launching in a test market, a developer can receive negative feedback – and address the sources of that feedback -- without hurting its title's long-term discoverability in the markets that hold the most revenue potential.User acquisition is expensive.
In order to take advantage of a soft launch, a developer needs to be able to capture and report on the data users will generate. The biggest hurdle some developers face in soft launch is composing a narrative from the metrics they're tracking.