[casual_games] Different Payment Models

Sun Oct 8 14:58:03 EDT 2006

One thing that Vladimir brings up is the concept of "how do we extract money
from a customer who is unwilling to pay $20 for a casual game" - and I think
this is likely the most critical question in our industry right now. 

The current 1-hour demo then big ass payment model is the #1 reason why we
have an industry where 20-30 games out of hundreds are making 80+% of all of
the profits. Our users are playing the other games and getting an hour (or
more with portal-switching) value out of them, but they are only paying for
the very best games. This is the death-knell for a lot of smaller studios
who are doing more innovative products that may lack some of the final
polish the AAA Top-10 games may have. Sure, some people are breaking this
mold, but I play great games from small indie developers every day that I
know will never make back their dev costs, and that makes me sad.

And the truth of the matter is - for many people, they only WANT to play a
game for 30 minutes or so, and then move on to the next game. That is a
valid entertainment, and there are valid products that fill that niche now.
In fact, our industry was built on games like this - the classic stand-up
arcade games of the 70's and 80's. Imagine how those arcades would have
failed if they had said "you can pay $20 for any ONE game here, and then
play it as much as you want." Nobody would have paid that $20. Or if someone
had said "Play any of these games here for an hour, but then you have to
stop playing that game and play a different one unless you want to pay $20."
Again - people never would have paid for a game. They would have just milled
around the arcade going from game to game. And with 1% turnover, that's
exactly what our casual users are doing right now - the vast majority of
them are just window shopping games and never paying for any of them - even
the good ones.

So instead of banging our heads against the wall of "how do we make a Zaxxon
clone have enough features to make it worth 20 bucks" maybe we should just
admit to ourselves that a Zaxxon clone is worth 25-50 cents a play, tops,
and figure out how to monetize that?

The most innovative and realistic solution I have heard to this was from
Alex St. John from Wild Tangent at the Austin Game Conference, when he was
walking through the reasons for the new "Wild Coins" payment system.
Essentially, it's $0.25 "per play" - which sounds low, but when you consider
the horrible turnover even GOOD games have (in most cases 1% or less), it
may be a really good model for a lot of us. 

For instance, I know that our last game had many, many, many thousands of
downloads in a single weekend on Big Fish. At one point our highscore server
was registering over 100 unique users a MINUTE. However, our conversion was
terrible, and we didn't really see a lot of monetization from that weekend.
Which is very sad for us as a developer. 

Now, if I look at the "quarter a play" model for the same game and
extrapolate that even 1/10 of the people who have played our game since
release had paid us a quarter, that game would have been deeply profitable -
even after splitting that quarter with our distributors. If I could do that
on every game, it would free us up to do some really new innovative
things... And that's good for fresh young innovative developers, no?

And looked at from the point of the consumer, I think this is a good way to
get a lot of those people who are currently leeching off the 1-hour model
into paying something. Sure - we'll lose a lot of people who are only
playing the game for the demo periods and have no intention of EVER paying
for a game, but that's no great loss. But I think there are a lot of people
who would be willing to put that same 20 bucks they are now spending on the
1 game a month they actually buy in an account that they would draw from at
a quarter a pop every time they play a game. And I think THAT audience is
going to be a lot easier to expand than the current audience of people who
are willing, at some point, to pay $20 for a single casual game.

When I talk to my parents, business school friends, etc. about it they all
agree heartily that they would NEVER pay $20 a game, but they would happily
pay a quarter a game. This is our audience speaking to us - telling us what
they want. They don't want a bigger, better game that is somehow "worth"
$20. They want a lot of small games and a lot of variety, and they want to
pay a small amount of money for each of them. 

You can see some of this now in the Big Fish "game club" where they are
getting MUCH higher sales by selling the games at ~$7, but forcing the
player to buy a bunch of them. But even then, the consumer is "getting the
milk for free" with the 1 hour demo - but knowing that they HAVE to buy a
few every now and then, and that they get it at a much lower price point is
proof that the basic idea has legs. You can see a similar model in XBLA,
with people having a 1-click payment method for lower price point games,
with a much, much higher conversion. Orders of magnitude on some titles.

My understanding from Wild Tangent's lecture in Austin was that they were
doing very well with the beta of the Wild Coins model, and that they saw a
huge future in it. One of the most interesting things was that it opened up
a world of advertising opportunity that DID NOT INVOLVE SCREWING WITH OUR
GAMES. Instead of making some lame "coca-cola polar bear game" full of
branding that does not build meaningful IP for the developers, they could
give away coins for the same games we're making right now under coke lids,
etc. You get a generic-branded "Wild Coin" evry time you fill up your gas at
Citgo, and then you can download whatever you want from the site. Citgo gets
a cheap giveaway, the deveklpper gets to build interesting original IP, and
the distributor gets paid. We all win.

By having a small monetizeable unit to buy games with, we can start doing a
lot of new and interesting things that allow us to maintain our IP while
still working with big advertising companies. And again, for fresh young
developers, that's good too, no?

To be honest, I was really excited about this model when I heard them walk
through it - and was hoping:
1) To hear other opinions on the model or other possible models for
extracting money at lower price points.
2) If there is a Wild Tangent person on the mailing list, maybe they could
chime in? I'm not really the best spokesperson for it, having only gone to
the lecture... :) 

Cheers,
Cn

-----Original Message-----
From: casual_games-bounces at igda.org [mailto:casual_games-bounces at igda.org]
On Behalf Of Cole, Vladimir
Sent: Sunday, October 08, 2006 10:53 AM
To: IGDA Casual Games SIG Mailing List
Subject: RE: [casual_games] Version jumping

Is the assumption about this "version jumping" prevention idea that
customers who currently version jump will choose to purchase the game
instead of version jump? Is that a valid assumption? Would these
customers just leave the market entirely if they were prevented from
version jumping? At the very least, these folks are generating
monetizable page views right now. If "version jumping" is a significant
issue, perhaps it points to strong consumer demand for ad-supported play
(or even pay-per-level) instead of downloaded games at $20 a pop. 

Maybe instead of trying to lock casual gamers out of games via a
coordinated anti-version-jumping effort, the focus should instead be on
how to better monetize customers who are willing to play, but unwilling
to pay $20.

Questionable assumption aside, if there were an easy way to prevent
version jumping and if everyone implemented it, what would happen?

Portals would race to be "first" with new titles, as the portal that
convinces customers to install a game first will have prevented rivals
from offering a fully-featured demo. That could get ugly. One result
might be that portals will fight harder (i.e., pay more) to acquire a
game exclusively for some window of time. Maybe portals would be more
aggressive about marketing the game during that exclusivity window. 

But the rivals who lose a bidding war for exclusive access to a game
might be less willing to market or merchandise a game if they know that
it's been exclusive at RivalX's portal for some period of time. Why
market or prominently merchandise a product that your customers won't be
able to enjoy? 

The end result of a truly effective "version jumping" prevention program
might be single-portal exclusivity for new games, with lower aggregate
sales for each developer (but with perhaps greater payments to
developers as portals bid for exclusivity).

Still, a world in which portals regularly score exclusive content might
allow sites to differentiate themselves according to content choices.
That could be interesting.

- v

-----Original Message-----
From: casual_games-bounces at igda.org
[mailto:casual_games-bounces at igda.org] On Behalf Of Ron
Sent: Sunday, October 08, 2006 12:01 PM
To: IGDA Casual Games SIG Mailing List
Subject: Re: [casual_games] Version jumping

> - Has anyone experimented with this? What do the
> portals feel?

I have spoken to one portal about a way for the game to know if it's in
the try-to-buy period, and they were very against it, mainly because
they didn't feel that the devs would use it effectively (i.e. turn off
the wrong features, show an incomplete game, etc).  They felt that the
user should have a true experience in the try-to-buy period.  I don't
agree.  I think building "demos" that people can play (maybe forever) is
a much better idea that just letting them play the whole game for an
hour.  As I've stated before, I think the try-to-buy model is very
broken and costing us a lot of sales.

I think the issue you bring up could turn into a huge problem.  I have
used this technique many times when I need to explore a competition's
title for longer then an hour, but I always figured the "casual user"
wasn't going to go to the trouble, but that might be changing.

Hopefully this is something the portals will get on top of quickly.

Ron

Allan Simonsen wrote:
> We're seeing a lot of our users bypassing the 60
> minute demo-timeout by changing providers (getting 3
> or 4 different 60 minute sessions downloading the same
> game from Reflexive, BigFish, etc).
> 
> I'd argue that this endangers part of the casual games
> business model; if we wanted the user to have a 5 hour
> trial period, we'd probably offer him or her that in
> the first place. 
> 
> We're seeing a lot of players focusing on the
> single-player campaign (the story mode, or similar).
> Once they've finished the campaign, their motivation
> for actually purchasing the product drops
> dramatically, even if there's still additional puzzle
> or community modules that they haven't explored. That
> some of the portals don't interrupt the play-time at
> 60 minutes (effectively allowing the user to play as
> long as he/she wants, provided they don't close the
> program) doesn't help.
> 
> So.. solutions. The simplest path is probably to
> implement a maximum playtime in demo-mode, using a
> registry key or similar to ensure that irregardless of
> distributor, the demo-version can only be played for
> max 60 minutes. You'd need to check against the DRM
> wrapper(s) to ensure that purchased versions don't
> have this problem. 
> 
> - Has anyone experimented with this? What do the
> portals feel?
> 
> - What are the DRM APIs that you'd need to support on
> this? Has anyone looked at doing an abstraction layer
> to simplify supporting all of the common APIs?
> 
> Thoughts?
> 
> Allan Simonsen
> 
> __________________________________________________
> Do You Yahoo!?
> Tired of spam?  Yahoo! Mail has the best spam protection around 
> http://mail.yahoo.com 
> _______________________________________________
> Casual_Games mailing list
> Casual_Games at igda.org
> http://seven.pairlist.net/mailman/listinfo/casual_games
_______________________________________________
Casual_Games mailing list
Casual_Games at igda.org
http://seven.pairlist.net/mailman/listinfo/casual_games
_______________________________________________
Casual_Games mailing list
Casual_Games at igda.org
http://seven.pairlist.net/mailman/listinfo/casual_games